Advanced Search

Share Coverage



Category: Electricity Energy and Utilities / Government and Politics

Costs blowout in NT's three utilities companies could cost Territorians

Tuesday, 21 Feb 2017 10:10:33

The PWC split is thought to have cost more than $70 million so far. (Pexels.com)

A quiet crisis is unfolding in NT Government circles with revelations of a staff cost blowout — particularly amongst well-paid executives — in the Territory's three utilities companies.

The ABC can reveal the government-owned utilities have nearly 200 more staff now than before the single Power And Water Corporation (PWC) was split up under the former Country Liberals government in mid-2014.

NT Treasurer Nicole Manison estimates staffing increases alone are costing an extra $20 million a year.

The number of executives — whose salary packages start at $180,000 — have increased by 50 per cent, and board costs have quadrupled over that period.

It puts pressure on Ms Manison, whose new Labor Government promised not to increase utilities bills in its first term.

"It certainly presents another challenge … but we have made that commitment that power prices would not increase higher than the CPI," she said.

Labor MP Nicole Manison Photo: Nicole Manison says reuniting the three bodies would create a bigger financial problem. (ABC: Alyssa Betts)

The structural separation of PWC was promoted by the then CLP treasurer Dave Tollner as a way to improve the efficiency and transparency of a secretive "bloated organisation only sustained by taxpayer subsidies".

Territorians were also hit with utilities bill increases under the CLP reforms, and are now paying 25 per cent higher power prices, on top of normal inflation adjustments.

It raises questions as to whether Territorians are paying higher prices to simply fund a structural separation.

Industry insiders say the staffing increase is not in frontline services, and Ms Manison agrees.

"We've now seen rather than one board, we've got three boards. One chief executive, three chief executives. One chief financial officer, three chief financial officers. One human resource section, three human resource sections. The list goes on," she said.

CEOs asked to come up with cost-cutting measures

Ms Manison has ordered the three chief executives of Power and Water, Jacana Energy and Territory Generation to investigate their costs, and is waiting on their suggestions about how to cut spending.

Mr Tollner's original cost estimates, just months before the separation officially began in July 2014, was that the split would not cost more than "a couple of million dollars to put in place the systems that are required".

Two and a half years down the track, industry insiders estimate that the cost so far is $70 million and climbing.

"I wouldn't say that's out of the ballpark," Ms Manison said.

A photo of an Australian power plug Photo: The NT Labor Government has committed to not increase utilities prices in its first term. (Reuters: Tim Winborne)

"I don't have a price that I can put on it, but clearly when you just look at the price of staffing alone, and if you were just to look at putting a raw figure of maybe about $100,000 per job, when you think of all the costs that add up into that, you've got about 200 extra staff there."

None of the three corporations' bosses responded to ABC requests for an interview.

Despite not knowing the separation's true cost, the Treasurer is resisting the idea of setting up an inquiry to work through the costs and benefits of separation and find a way forward.

"At the moment I'm trying to work through these issues… with the chief executives and the boards," she said, also rejecting the idea of re-amalgamating the utilities.

"I have deep concerns that if we try to stitch everything up back together again that again we would just create more financial messes and issues," she said.

The cash-strapped Government said it was committed to preserving frontline jobs in the three corporations, and was focused on cost-cutting in the back and head offices.

If it does not succeed, the Government could instead cut investment and maintenance, which in 2008 led to catastrophic system failure and bigger bills under Labor. Another option would be to increase government subsidies.

AustraliaPlus


 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend