Issues are wider than just water
Thursday 9th February 2012, 2:32PM GMT.
A DECISION by the States to put off commercialising Guernsey Water until there is more information available about what that would mean was probably sensible – but for the wrong reasons.
Deputy Matt Fallaize’s amendment seeking the postponement received overwhelming support and there is no doubt that there is concern in the mind of islanders, too.
In some respects, government has painted itself into a corner on the wider issue of commercialisation. On the one hand, it is committed to providing only those services which the private sector cannot or should not offer – a wholly correct position to take – while on the other not having any idea on what it wants from those business units it shakes free from civil service bureaucracy.
The existing utilities are a good case in point.
Guernsey Post is now much leaner and fitter than it was, to the point of being prepared to back its gold-plated, civil service-based pension scheme. It is in every respect a classic example of a successful commercialisation.
But that has happened only because its revenues started to dry up. The economies, job cuts and elimination of sweetheart deals with the unions are exactly what the regulator proposed some years ago – and which the howls of protest from the then management, supported by an Assembly itself unable to implement meaningful savings, neutered.
Royal Mail’s higher charges, combined with the prospect of losing the fulfilment sector, galvanised Guernsey Post where its supposedly commercial management, the regulator and Treasury and Resources as shareholder could not.
Seen in that light, how lean is Guernsey Electricity? How rigorous would Guernsey Water be with its costs in a newly-commercialised world? What benefits can islanders expect if the harbours and airport are similarly freed up?
The underlying issue is that there are no expectations or targets applied to the businesses removed from direct States control and T&R is not filling the role as shareholder in getting a return – on behalf of islanders – in terms of either dividends or lowest possible prices.
Until that is addressed, commercialisation will never be truly successful.
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