Commercialisation of Guernsey Water is 'too early to decide’
IT IS too early for the States to make a firm decision on the commercialisation of Guernsey Water, the Policy & Resources Committee has warned, and has also expressed sceptism about the incorporation of States Works and the Ports due to the volume of work necessary.
In a letter of comment to the States’ Trading Supervisory Board’s proposals, due to be debated this week, P&R president Lyndon Trott said the committee supported the idea of incorporation in principle. But with Guernsey Water, more detailed work would need to be done on the financial implications of commercialising it.
‘Guernsey Water, while it is in the best position of all STSB’s services, will need more detailed investigation of the impacts of incorporation, including financial impacts and requirements, consultation with stakeholders, and preparatory changes in practice, requiring effort from across the organisation, before incorporation can be agreed,’ he said.
On top of this there could be the need for ‘complex employee matters and negotiations’.
As for Ports and States Works, he said that investigating their commercialisation would need STSB to consult with a range of service areas across the States.
P&R said that lessons needed to be learned from the experiences of incorporating Guernsey Electricity and Guernsey Post. ‘Among the lessons learnt from this experience are the importance of an effective governance structure and reporting lines, the time it takes to adapt and develop as a newly incorporated business, and the need for clear shareholder goals,’ said Deputy Trott.
And while one goal might be to allow companies to be more self-sustaining, he said it would be unrealistic to expect them to be financially independent from the start. Commercialising Ports would need ‘significant recapitalisation’ since it currently had a maintenance backlog, as well as other capital requirements, and current and historical deficits.
P&R was planning a fundamental services review across the States, investigating how services might best be delivered, including looking at those that might be better as user pays, or which might better be commissioned by others and which should be delivered by the government.
In this review and in any moves towards commercialisation ‘it is vital that the States does not simply pass cost burdens on to the public and significantly increase the financial pressure on local households,’ it said.
P&R has said that it would work with STSB to ensure that decisions on incorporation and the future operation of any businesses, were informed by the wider States context.
