Responding to a changing environment created under National Competition Policy, the City of Wagga Wagga in New South Wales has put its gas supply and distribution business up for sale.
The City has a long history of supplying gas to the local area. Dating from 1888, the local Gasworks has provided residents and industry with cheap efficient energy. Construction of a lateral pipeline completed in 1981 brought the benefits of natural gas to both Wagga Wagga, as well as nearby Cootamundra.
This investment in the production and transport of gas has now given the City the opportunity to realise capital gains providing Council with a substantial income base to finance its core activities.
The decision to sell has been described by Wagga Wagga Mayor, Cr Peter Dale, as ‘Council’s biggest decision ever’. A Council delegation to USA in 1995, which examined the operations of utilities in a deregulated environment, helped influence the decision.
Proceeds from the sale, expected to be as high as $50 million, will be invested with dividends used for community facilities and programs. Already several local and overseas companies have shown interest in the sale of the natural gas component of the business.
With tenders closing on 7 February 1997, a decision is expected by the end of February. Negotiations for the sale of the LPG component of the business, being offered separately, are also taking place.
Wagga Wagga is one of only a handful of Councils in NSW to still own and operate gas production, and is the only Council to operate a natural gas distribution network. As prices will be controlled through the State regulatory body, as well as being subject to the forces of competition, Council does not believe there is a risk to consumers of any dramatic rise in prices.
For further information contact Cr Peter Dale, telephone (069) 23 5499.
