Redland City Council has become the latest Queensland local government body to withdraw from Allconnex Water after it voted to break from the water retail supplier.

 

The council has voted to re-establish Redland Water for retail distribution in the Redlands district as of July 2012.

 

The decision follows the Gold Coast City Council’s vote in July to split from the water supplier, casting serious questions over the water supplier's ability to continue providing its services.

 

The only other council currently supplied by Allconnex, Logan City Council, has voted to continue using the provider, but may choose to drop the contract after Redland’s decision to opt out.

 

Acknowledging the severe constraints of limited information, time and direction by the State Government, the council determined that the commercial risk of staying in Allconnex Water jointly with Logan City Council was significantly greater than withdrawing from Allconnex Water and restoring Redland Water operations.

 

“Our initial preference was to stay with the full Allconnex Water business, but the decision by Gold Coast eliminated this possibility altogether,” Mayor Melva Hobson said.

 

“Council is convinced that withdrawing from Allconnex Water and restoring our former highly successful and efficient Redland Water operations offers greater advantages and lower risks for the Redlands community for pricing, capital investment and employment,” Melva Hobson said.

 

The State Government’s enabling legislation is expected to be adopted late in 2011 allowing the transfer of operations to restore Redland Water as a Type 2 business by 1 July 2012.

The council has agreed to allocate an initial budget of $3.25 million in 2011/12 for the reintegration with costs to be recovered from the Gold coast City Council with $260,000 allocated to immediately to start the process.

An independent arbitrator will be appointed jointly by Redland, Gold Coast and Logan City Councils to determine the direct and consequential costs to be borne by Gold Coast City Council.

 

Allconnex has announced the formation of a transition team to assist in the company through the process of returning control of the region’s water supply to the councils.

 

State Water Utilities Minister Stephen Robertson admitted that without the continued support of the Gold Coast City Council, Redland had little choice but to drop its contract with Allconnex.

 

“The Queensland Government accepts Redland City Council's decision and that continuing with Allconnex, even in a streamlined version, would not be a viable commercial alternative,” Mr Robertson said.