Sewage, desal plants on sales list

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WA's two desalination plants and its network of sewage treatment plants could be soon put up for a multibillion-dollar sale as part of Troy Buswell's plan to regain the State's AAA credit rating.

The West Australian understands these State-owned utilities will join ports infrastructure as prime candidates for privatisation when the Treasurer releases his pre-Christmas mid-year economic review.

Details of the plan emerged after Mr Buswell joined State counterparts in their first meeting with Federal Treasurer Joe Hockey, who unveiled his own incentives for State asset sales over the next three years.

With a view to generating economic activity, Mr Hockey yesterday promised State treasurers tax breaks if they put proceeds of asset sales into new infrastructure projects.

But Mr Buswell immediately baulked at Mr Hockey's so-called "capital recycling" plan, saying it was inconsistent with the State Government's priority to bring down debt.

"We're in a situation where we're actively trying to reduce debt and asset sales are part of a mechanism by which the States can reduce debt," Mr Buswell said.

"We've flagged that ports are one of the areas we're looking at but it's a little more broad than that.

"We have a very clear message from the ratings agencies about what they expect we'll be doing in and around a whole range of things, including our debt levels."

Ratings agency Standard & Poor's downgraded WA's rolled-gold AAA credit rating in September, citing its belief that the State Government did not have the "political will" to control spending.

The former head of the Water Corporation, Dr Jim Gill, said WA's two desalination plants, which cost a combined $1.82 billion to build, had previously been considered privatisation targets.

"It is certainly possible to sell them but whether or not there is a financial advantage is the important question because State governments can borrow money more cheaply than the private sector," Dr Gill said.

"It purely boils down to financial questions."

Mr Buswell said his immediate infrastructure task was "flat out" seeking clarification on Federal funding for two key WA projects.

On the eve of the Federal election, the coalition appeared to dump Labor's commitments to upgrade the North West Coastal Highway and Great Northern Highway, worth a combined $500 million.

The Abbott Government has since assured the State that the projects would get Federal funding in its mid-year economic statement due next month, but Mr Buswell wants to see proof.

"There's a couple of projects in there that we want to go on with and deliver because we're on tight delivery timeframes and at the moment, we've not been provided with that clarity," he said.

"So we're happy to talk about plans to deliver new infrastructure projects, but we're pretty keen also to resolve issues around current infrastructure projects."

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