The West

$10b Water Corp vow raises debt fears
$10b Water Corp vow raises debt fears

The record State debt is poised to swell further after the Water Corporation flagged a massive spending splurge worth almost $10 billion over the next decade to meet growing demand.

In its annual report tabled in Parliament yesterday, the corporation said it would cost $950 million a year on average until 2021 "to ensure a high level of service and supply security for our customers".

The forecast, which would amount to $9.5 billion over the period, would add to the utility's already burgeoning net debt of $4.6 billion.

It would also compound the Government's record debt bill, which has blown out to $15.2 billion and is projected to rocket to about $23 billion in the Budget out years.

On the eve of the 2008 State election, State debt stood at less than $4 billion.

News of the Water Corporation's planned spending comes after the State-owned enterprise booked a notional $619.3 million profit for the year to June 30.

The figure, which included a direct $396.6 million dividend to Government, was 3 per cent higher than forecast, though it was down on the corporation's $648 million profit last year.

However, the net effect of the corporation's performance was a more modest $169 million return after the massive Government subsidy for servicing high-cost regional areas was taken into account.

Chief executive Sue Murphy noted the corporation had been forced to move to expensive sources of water, such as desalination plants, amid falling rainfall and run-off.

She also said the corporation would be under more pressure in coming years to keep pace with "exponential" growth in the Pilbara, with almost $1 billion earmarked for the region.

Water Minister Bill Marmion acknowledged that WA's rapid growth put pressure on water services and noted the Government had spent about $1 billion a year on water infrastructure.

Shadow water minister Fran Logan queried how the corporation planned to spend almost $10 billion in the next 10 years.

He warned that if such an amount was spent, it would lead to massive rises in water bills.

The West Australian

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