Guernsey Water heads list for commercialisation

Friday 22 March 2024

Guernsey Water is first in line to be set up as a commercial company under plans that could be unveiled by the end of the year.

It would - like Guernsey Post and Guernsey Electricity - remain wholly owned by the States, but run by a commercial board.

The States Trading and Supervisory Board has been working up commercialisation plans for some of the entities that it is responsible for.

Vice President Charles Parkinson heads that project.

"I believe I can say with reasonable confidence that somewhere probably before the end of this year, if not early next year, we will be coming back to the Assembly with proposals which at this stage I think will involve commercialisation of Guernsey Water," he said in the States yesterday as they debated harbour fees.

"We are looking at three of the trading assets as possible candidates for commercialisation and one of those is of course Guernsey Ports, but Guernsey Water is the most straightforward candidate to take forward as a first project."

Pictured: Juas in the Vale is one of Guernsey Water's storage sites.

Guernsey Ports was complicated by issues like how difficult it would be to create an opening balance sheet for the new company. Not only was there vagueness about what its assets are, there was also considerable uncertainty about what provision would need to be made for dilapidations.

"Realistically I think for Guernsey ports to be commercialised the States would have to provide a very significant dowry to get the new company up to the point where it could be regarded as a going concern."

His confirmation about Guernsey Water at this stage caught the committee's President Peter Roffey slightly off guard.

He told the States he was intending to be more circumspect about the announcement because of the consultation that was still needed with staff groups and unions.

The commercialisation model, where the company is run independent of government, was first used for Guernsey Post in 2001 and Guernsey Electricity in 2002.

This afternoon, STSB confirmed that other options include merging one or more operations, either under the current oversight arrangements or as a separate company.

Guernsey Water, Guernsey Ports, Guernsey Waste, States Works and Guernsey Dairy are all being reviewed.

Deputy Peter Roffey said the trading operations had already been tasked by the States with operating commercially.

It therefore made sense to consider whether they would be better able to do this if they had more independence from the States.

"We have commissioned a study which looked in great detail all of the different trading operations, and considered the advantages and disadvantages of the various different models.

"The options include doing nothing, incorporating one, some or all of the businesses, or merging an existing trading operation with one of our incorporated businesses, such as Guernsey Electricity," said Deputy Roffey.

"I would stress at this stage that no final decision has yet been made. The board was recently presented with the findings of the study, and we hope very shortly to discuss these with the Policy & Resources Committee in the first instance.

"We anticipate presenting policy letter outlining the options and recommendations for debate by the States before the end
of this year.

"Staff will of course be consulted before any final decisions are taken and will be kept fully informed throughout the process."

Full privatisation, where they would be sold off, has been ruled out.