Chief Minister Andrew Barr has promised to remind Icon Water of their obligation to run a value-for-money business, foreshadowing a push for its multi-million dollar shared service deal with ActewAGL to be put out to tender in 2023.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
A motion filed this week in the Legislative Assembly by ACT Opposition leader Alistair Coe called on the government to force Icon to release details of the agreement, which has cost $300 million over 11 years.
The deal, exposed during Estimates, has been in place since the ActewAGL joint venture was formed in 2000 and sees the energy company provide IT support, human resources, payroll, billing and economic advisers among other services to Icon Water, a wholly territory-owned corporation.
Icon's management were last month criticised for re-signing the $27 million per year deal in 2012 before slashing a quarter of its staff.
Mr Coe said "by virtue" of the services ActewAGL provided at the time, there was an "entrenched vested conflict of interest" for both companies.
He said the deal flew in the face of Icon's own procurement policy, which required contracts above $30,000 to get at least two written quotes.
"To avoid this conflict, Icon Water should have, at the very least, independently market tested before any agreement was struck," Mr Coe said.
"Instead, Icon Water accepted an objective of the agreements was to preserve positions within ActewAGL to the possible detriment of Icon Water.
"Icon Water does not have a mandate to look after ActewAGL. Icon Water has a mandate to serve the people of Canberra and to serve the ACT government."
Icon has resisted pressure to publish details of the agreements, claiming they were commerical-in-confidence.
Mr Barr said while the agreements did indeed contain commercially sensitive data, Icon's board and management would review the agreements to see if there were sections that could be released.
"This is properly a decision for the board and management to make, and it is not one that members of this place are in a position to determine, because we are not involved with the day-to-day running of the company," Mr Barr said.
He said as the sole shareholders of the corporation, he and water minister Mick Gentleman would "make clear" to Icon their expectations for "value for money".
"It goes without saying, Madam Speaker, that all commercial firms seek value for money across their operations, but we will remind Icon's board and management that there is a higher standard required of publicly owned companies that they should be held to and we will particularly request that they examine how they best meet these expectations when entering into new contracts beyond 2023," Mr Barr said.
Greens crossbencher Caroline Le Couteur agreed the deals required scrutiny, but would not support the Liberals' push to release the documents in full.
"Perhaps the agreements are best practice and highly cost‑effective, or perhaps they are a cosy relationship with excess costs being passed on to ACT consumers," Ms Le Couteur said.
"And this is a critical issue; the amount of money here is large. We are talking about agreements worth almost $300 million over 11 years. If that amount is inflated, it is a direct transfer of money from the ACT's water users, which is all of us. And that of course is totally unacceptable."
Both the ACT's water and utilities were once managed by ACTEW Corporation, an acronym derived from ACT Electricity and Water.
In 2000, ACTEW entered a joint partnership, with its retail arm part-owned by AGL Energy Ltd and its distribution arm part-owned by Jemena Ltd, which includes Singapore Power and China's State Grid Corporation.
In 2012 the water supply and wastewater responsibilities were handed back to ACTEW Corporation, which rebranded to Icon Water in 2015.
The shared services deal is a legacy of the linkages between the companies and makes the most of "synergies" between the energy and water providers, Icon managing director John Knox told Estimates in June.
