Water charges skyrocket to pay for infrastructure

MELBOURNE - Melburnians could be slugged with massive increases in their water bills under recommendations released by the state's economic regulator.

The Essential Services Commission has suggested increases of between 48 and 60 per cent in water and sewerage bills for Melbourne households over the next four years to pay for A$5 billion ($6.4 billion) of infrastructure projects. The price hikes will add about A$300 to the average household's annual water and sewerage bills by 2012-13, the commission's draft report shows.

The skyrocketing water costs come as major infrastructure projects, including the Sugarloaf pipeline and desalination plant, are built to boost Melbourne's dwindling water supplies.

At the same time, Melbourne residents have been slashing their water use to meet water restrictions and comply with the State Government's campaign to limit individuals' water consumption to 155 litres a day.

The commission defended the proposed price rises, saying the figures were less than those pushed for by water companies.

The draft report indicates water retailers wanted increases ranging from 63 to 71 per cent over the four-year period.

Based on a typical household consumption of 165 kilolitres (kl) a year, Melbourne residents will be paying between A$840 and A$936 a year for water in 2012-13.

Currently, the average household pays between A$568 and A$585 a year.

Essential Services Commission chairman Dr Ron Ben-David admitted the price rises were significant but said they were needed to secure the city's water supplies.

"What we're saying is these increases are necessary in order to deliver long-term reliability, security and long-term water supply," Ben-David said.

But he said water companies must make allowances for people struggling to pay hefty bills or they would be forced to make penalty payments to customers treated unfairly.

Consumer Utilities Advocacy Centre policy officer Anita Lumbus urged the Government to ensure concessions, which are currently capped for water, keep pace with the increased prices.

The commission's final report is due in June and the increases start from July 1.

- AAP