Territory Stories

Debates Day 3 - Thursday 31 May 2001



Debates Day 3 - Thursday 31 May 2001

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Parliamentary Record 28


Debates for 8th Assembly 1997 - 2001; ParliamentNT; Parliamentary Record; 8th Assembly 1997 - 2001




Made available by the Legislative Assembly of the Northern Territory





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Legislative Assembly of the Northern Territory

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Attribution International 4.0 (CC BY 4.0)

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Legislative Assembly of the Northern Territory



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DEBATES - Thursday 31 May 2001 decision made at the end of 1998 to retain PAWA in public ownership while progressively opening the electricity market to competition. All customers consuming more than two GW hours per annum can now choose their own electricity supplier. As of 1 April 2002, all customers consuming 750 MW hours or more will also be able to choose their supplier. This represents about 47% of the Northern Territorys electricity market. In many respects, the countdown has started to the real competition. Against this backdrop of a vastly changed operational environment, PAWA has achieved substantial savings for Territorians and for the companies that do business here. It has developed a new competitive focus and has remained 100% Territorian owned. Two electricity tariff reductions have been delivered to commercial customers over the past two years, meaning the commercial electricity tariff has declined by 15.7% in real terms over the past 10 years even after including the impact of the GST. Electricity tariffs will not increase this year meaning a further reduction in real terms. This is in contrast to South Australia, for example, where the independent industry regulator has approved a 2.9% increase in AGLs retail electricity tariffs. With the prospect of Timor Gas coming onshore, Territorians can look forward to further reductions in prices. Our southern counterparts prices will inevitably increase as environmental imperatives force the requirement for cleaner fuel sources. PAWA has been able to deliver these savings through the dedication and energy of all staff vigorously pursuing business improvement measures which have enabled costs to be cut significantly without affecting service delivery for the customers and new revenue opportunities to be accessed. Indeed, improvements have been sought across all areas of the business. The outsourcing of stores management has been approved by government following a public tender process, contracts have been awarded to two local companies for the supply and management of materials to PAWA. This move isolates the overhead costs associated with providing the stores function and produces the driver to reduce them. It also provides internal and wider benefits such as cap costs for service, improved service levels and a reduction in capital tied up in inventory holdings and buildings as well as providing the opportunity for local industry and contractor capability to expand. The outsourcing of this function will also produce the significant cost saving of not requiring the construction of a new store facility when PAWA eventually relocates from the Ben Hammond Workshop. PAWAs information technology requirements have also been the subject of a detailed review. Surplus IT equipment has been rationalised and the IT support services have been examined in the context of a whole-of-govemment IT outsourcing arrangement. Significant improvements have resulted to operating systems, particularly those related to works maintenance. In November 1998, PAWA had an approved organisational structure of 820 positions. Following the restructure into more commercial lines of business and the increased focus on efficiency across the organisation, permanent staffing levels currently stand at about 660. This has been achieved with no forced redundancies and the maintenance of similar levels of apprentices, trainees and graduate trainees. A PAWA specific EBA came into force in 1999. The agreement has provided for a number of workplace reforms and places a much greater emphasis on performance management and training across the organisation. This has further strengthened PAWAs already heavy commitment to training, particularly focussing on skills development and occupational health and safety. Further savings have been achieved by rationalising the vehicle fleet, centralising network operational control and improving major contract management. Members will be well aware of the appointment of a five member board 12 months ago to provide both the government and PAWA senior management with advice on the best path towards commercialisation. The board, comprising four non executive directors and PAWAs Chief Executive Officer, has increased focus on PAWAs overall improvement in its bottom line financial measures such as turnover and dividends payable to government together with improvements in services. In this context, PAWA will shortly let a contract, following a public tender process, to replace its financial management system in order to dramatically improve its financial management and reporting capabilities. It is proposed that the Customer Information System be replaced in the coming year in order to further improve PAWAs service to customers. In addition, PAWA is currently assessing tenders received for the provision of internal audit services. A further commitment from the board is to focus on the continuous improvement in the way PAWA goes about its business. The board is also focussed on PAWAs governance arrangements and the improvement of the organisational accountability to government and its owners: Territorians. The eventual result will be a continued emphasis on cost reduction, improvements in service delivery and benchmarking of performance against equivalent electricity and water industry businesses. The introduction of regulation of competition in electricity and the regulation of water supply and sewerage industries will continue to assist in driving the necessary reforms and business improvement. 7793