The latest cost projections issued by the Gold Coast City Council show that the cost of divorcing from its water retailer has soared from an initial estimate of $60 million to around $200 million.

 

The decision to separate Gold Coast City Council from water supplier Allconnex came after increasing discontent from the council’s ratepayers over rapidly growing water bills pushed a small majority of councillors to vote for a divorce.

 

Gold Coast councillors then voted for a five-year price path that would ensure that water cost increases would remain below inflation, which the council conceded would cost a further $60 million revenue shortfall.

 

The decision was followed by a vote from Redlands Council to separate from Allconnex after it was estimated that the divorce from the Gold Coast City Council would sheer two thirds of the water retailer’s asset values.

 

Logan City Council remains the only local government body currently using Allconnex’s services, but is likely to vote to split after Redland’s vote.

 

Gold Coast will be obliged to cover the costs inflicted on the other two councils by its decision to split from Allconnex.

 

In an attempt to stop further splits, Allconnex identified $500 million in capital and operational cost savings over the coming five years, but failed to entice Redlands to stay with the provider.