The NSW government has set a deadline of early December for parties to register their interest in buying the long-term lease of the Kurnell desalination plant - before a key pricing review is completed.
That review, by the Independent Pricing and Regulatory Tribunal, will establish the price at which water produced at the plant will be sold to Sydney Water.
Sydney Water invested $2 billion in building the Kurnell desalination plant, which the government wants to lease off, effectively using the money to fund a new round of infrastructure spending. A range of parties have signalled an interest in bidding, although until IPART decides the price of water produced bidders are likely to be on the back foot.
IPART will not finalise its review until December 9. The deadline for those wanting to register their interest is December 4. The government is keen to finalise the deal in the first half of 2012.
The transaction has already run into criticism because the government wants to ensure the successful bidder is paid even when the plant is not operating. This will help to maximise the price received and could add to the burdens of Sydney residents, who will be paying for the plant to be producing water even when it is not needed.
Under operating guidelines, the plant is to operate when dam storage levels fall below 70 per cent and be switched off when they are above 80 per cent.
The Treasurer, Michael Baird, said there would be no increase in water bills as a result of the refinancing.
