In this Alert of HopgoodGanim’s Infrastructure Charges Reform Series, Partners David Nicholls and Sarah Macoun, and Associate Thomas Buckley discuss the recent reforms to the South-East Queensland Water (Distribution and Retail Restructuring) Act 2009 (SEQ Water Act) in respect of connecting premises to water and sewerage services and levying charges for water and sewerage infrastructure.

The changes to the SEQ Water Act were introduced by the Water Supply Services Legislation Amendment Act 2014 and also the Sustainable Planning (Infrastructure Charges) and Other Legislation Amendment Act 2014.  The majority of the new provisions took effect from 1 July 2014.

Key points

  • A new water approval process has been created for the connection, disconnection and alteration to water and sewerage networks that are managed by distributor-retailers (DRs) in South-East Queensland (SEQ) – known as the ‘utility model’. 
  • From 1 July 2014, development that needs connection to water or sewerage networks will require a ‘water approval’ from a DR.  Development approvals will be still be required for all development which is assessable under the Sustainable Planning Act 2009 (SPA) and local government planning schemes, which includes other infrastructure networks, such as roads, stormwater and parks. 
  • Water approvals are standalone approvals, but will operate in parallel with development approvals issued by local governments. 
  • DRs levy infrastructure charges for water and sewerage networks.  Local governments levy infrastructure charges for other infrastructure networks. 
  • New infrastructure charging and planning arrangements affecting local governments in respect offsets and refunds, credits, conversion applications, conditions and charges notices, and appeal rights will also apply to water approvals and infrastructure charges levied by DRs.

The ‘Utility Model’

There is a now a new streamlined approval process under the SEQ Water Act for water and sewerage connections for DRs.  It is called the ‘utility model’ and it replaces the interim delegated assessment model that the DRs had been operating under since 2010.  Presently, there are two DRs that operate in SEQ – Queensland Urban Utilities and Unitywater.

Under the previous arrangements, local governments issued approvals on behalf of DRs under the SPA.  DRs had concurrence powers under this process, but they were mandatorily delegated back to the local governments.  The local government issued approvals based on technical advice received from a DR.  Now, all matters concerning water and sewerage infrastructure are the responsibility of DRs.

The new utility model provides for all elements of a separate water and sewerage connection process under the SEQ Water Act.  Under this framework, DRs will assess applications and issue approvals for connection to water and sewerage infrastructure – called water approvals.  They will also have their own infrastructure planning instruments (water netserv plans), will be able to enter into agreements about water and sewerage infrastructure (water infrastructure agreements) and can levy charges for water and sewerage infrastructure.  The utility model also enshrines rights in DRs to commence enforcement proceedings for the commission of a water offence and provides applicants with both internal and external rights of appeal (to a committee or the Court) in respect of water approvals, infrastructure charges and water connection compliance notices.

Water approvals

From 1 July 2014, development that needs connection to water or sewerage networks will require a separate ‘water approval’ from a DR.[1]  A water approval is a standalone approval, but it will operate in parallel with development approvals issued by local governments under the SPA.  There is no express requirement to lodge a development application with a local government and a water approval application with a DR at the same time, but in most cases a local government will require a developer to provide evidence that connection to water and sewerage services is available before issuing a development approval.

An application for a water approval will be made directly to a DR.  Applications that meet ‘standard criteria’ will be granted within 5 business days, subject to standard conditions.  Applications that do not meet the standard criteria are assessed against the DRs water netserv plan as well as other design and constructions codes.  The SEQ Water Act also provides for staged water connection approvals for large developments.

Water approvals issued by a DR attach to land and bind the owner of the land and the successor’s in title.

Charging arrangements for DRs

DRs levy infrastructure charges for water and sewerage networks, whilst local governments levy infrastructure charges for other infrastructure networks.  However, to complement the reforms made to the infrastructure planning and charging provisions of the SPA for local governments, similar amendments have also been made to the infrastructure provisions of the SEQ Water Act for DRs.

Where a water approval has been given by a DR and an adopted charge applies for providing the trunk infrastructure, the DR must give the applicant an infrastructure charges notice (ICN).  An ICN attaches to the land and must include the reasons for the decision, including details of applicable offsets and refunds.

Where an offset is available for an item of infrastructure, the value is required to be offset against the ‘amount’ levied by the DR for the development.  However, unlike the amendments made to the SPA (for local government infrastructure networks), the SEQ Water Act is silent on whether there is an ability to offset against the total charge levied by a DR for water and sewerage networks (i.e. cross-credit).

In common with local governments DR’s may levy charges for ‘additional demand’ placed upon water and sewerage trunk infrastructure generated by development, and developers may apply to a DR to have non-trunk infrastructure which is required to be provided under a water approval to be converted to trunk infrastructure.

If a DR and a developer wish to vary or alter obligations in respect of water and sewerage infrastructure charges, they may enter into a ‘water infrastructure agreement’ under the SEQ Water Act.

In the next edition of the Infrastructure Charges Reform Series, we will discuss the State government’s proposal to co-fund the cost of development infrastructure with local governments, distributor-retailers and major developers, known as the Local Government Co-Investment Program.