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Icon Water proposes Capital Contributions for urban redevelopment

Icon Water Managing Director, John Knox has today provided the following comment:

“Rather than just growing outwards, Canberra is also densifying in town centres and central areas. We are responding to the demands created by urban renewal and are committed to supporting Canberra’s growth. It is our intention to provide fair, clear and simple arrangements for those developing in established areas so that developer charges relating to water and sewerage infrastructure upgrades can be clearly predicted”.

The ACT Government has a policy of achieving an increased level of development occurring in established areas. This will place further pressure on existing water and sewerage infrastructure. In order to support urban renewal and development in the region, and ensure fair and transparent cost recovery, Icon Water is seeking feedback from relevant industry groups, on a new way of recovering shared water and sewerage infrastructure upgrade costs triggered by urban redevelopment. This would include water and sewerage infrastructure that services a suburb or group of suburbs such as mains, reservoirs and pumping stations. The aim of the new arrangements is to have a fairer and clearer process for developers and the broader community to support the growth and renewal of Canberra.

Currently if a development in an established area triggers a capacity upgrade for water and sewerage infrastructure, the developer is asked to pay for the full cost of the upgrade. Developers who build before or after an upgrade do not contribute to this cost.

To rectify these problems Icon Water is proposing to introduce a capital contributions code under the Utilities Act 2000 from 1 July 2017.  Under this arrangement, the developers share of infrastructure upgrade costs will depend on the size, location and type of their development. Clear cost calculations included in the proposal will provide more cost certainty for developers. To assist in shaping the new code, Icon Water is currently consulting with industry groups about the proposed changes. To date, discussions have taken place with the Property Council of Australia, Canberra Business Chamber, Housing Industry Association, Land Development Agency, Master Builders Association and Australian Property Institute. Initial feedback suggests the new arrangements would be more equitable and provide greater certainty to developers. However, further consideration is required particularly on the transitional arrangements.

Feedback received will be taken into account before Icon Water producing a final submission to the Independent Competition and Regulatory Commission (ICRC). It is envisaged the ICRC will undertake further consultation with the community before deciding on Icon Water’s proposed capital contribution code.

For more information, to have your say, or to find out more about our engagement program “Talking Icon Water” visit iconwater.com.au/capitalcontributions.

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