Sydney Water Performance Audit
Mr WEST: My question without notice is to the Minister for Energy and Utilities. What is the latest information on senior management at Sydney Water and related matters?
Mr SARTOR: I thank the honourable member for his question.
Mr Brogden: What is his name?
Mr SARTOR: He is the honourable member for Campbelltown, Graham West.
Mr SPEAKER: Order! The Leader of the Opposition will cease interjecting. The Minister will refrain from responding.
Mr SARTOR: I noted the tabling this afternoon of the report entitled "Auditor General's Report—Financial Audits—Volume One 2003", which includes a review of the Sydney Water customer information and billing system project. Whilst I have had the benefit of seeing the final report for only a short time, I concur in principle with the Auditor-General's critique and recommendations. Let me say from the outset that the process followed has been a very public one. The Government brought the matter to the attention of the public as soon as the relevant Ministers were briefed. I remind the House of the facts of this matter. In October last year the board of Sydney Water resolved to terminate its customer information and billing system project. The board took this action after the former managing director briefed the board on 16 October, reporting that the project could not be completed to an acceptable standard at an acceptable cost and in a timely manner. On 17 October the chairman and the former managing director of Sydney Water briefed the former Minister on this matter. On 18 October the Treasurer was also briefed. The same day the Treasurer publicly announced that he had written to the Auditor-General to ask him to audit the project.
Mr SPEAKER: Order! Members on the Opposition benches will refrain from interjecting.
Mr SARTOR: The Treasurer asked the Auditor-General to report to Parliament on this matter. On 30 October the board of Sydney Water resolved to terminate the information technology [IT] project in its entirety. On 1 November the former managing director, Alex Walker, publicly announced the termination of the IT project. On 20 November the chairman of Sydney Water announced the resignation of the managing director for unrelated matters. Mr Walker left Sydney Water on 29 November. On 11 December Sydney Water formally advised the portfolio Minister in writing that the IT contract had been terminated. The Government acted and started the Auditor-General's audit 13 days before the board of Sydney Water decided to terminate the project in full and no fewer than six weeks prior to formal notification to the Government.
Although I do not wish to apportion fault, which is the subject of litigation commenced by Sydney Water, clearly the performance of Sydney Water has been deficient, especially at the executive level but also, to an extent, at the board level. Today the Auditor-General's report has been tabled, and it does not reflect well on the handling of this project by Sydney Water. I assure the House that the Auditor-General's report is being acted upon. Today the Treasurer directed all government agencies to follow strict new procedures for the management of information and communication technology projects that exceed $10 million.
Mr SPEAKER: Order! I call the honourable member for Upper Hunter to order.
Mr SARTOR: The Government has ordered Sydney Water to establish a committee to review all its major capital works projects and to report to NSW Treasury on its status. I inform the House that, on the advice of the board of Sydney Water, I will recommend to Her Excellency the Governor the appointment of Mr Greg Robinson as the new managing director of Sydney Water. Mr Robinson has extensive experience with major corporations, including Lend Lease; the Federal Airports Corporation; the City West Development Corporation, where he was general manager; and the Sydney Harbour Foreshore Authority, where he was more recently the chief executive officer. The Government has given Sydney Water instructions to implement all the Auditor-General's recommendations. We expect the new chief executive officer to give this issue his priority. New South Wales taxpayers and Sydney Water customers expect nothing less.