The sale of the publicly-owned Water Corp’s construction and engineering unit is a dud deal for taxpayers that comes when its business is projected to rise, the WA opposition says.
The government is selling the division to engineers RCR Tomlinson for $10.4 million but has admitted it will only make an after-tax profit of about $2 million after paying redundancies and consultants’ fees.
RCR Tomlinson highlighted $130 million in guaranteed work over three years when it announced the deal last year.
Opposition water spokesman Dave Kelly said the deal didn’t make sense and urged Water Minister Mia Davies to make the business case for the sale public.
“The minister has been saying … they didn’t privatise this asset to make a profit, they did it because of a declining need for the construction division,” Mr Kelly told reporters.
“The next four years in the (state) budget actually show the Water Corporation’s capital works program increasing each year.
“The benefits to RCR Tomlinson are crystal clear. The benefits to the taxpayer are very dubious.”
However, Ms Davies defended the sale, saying it was never about making a return for the taxpayer but was driven by securing ongoing jobs for as many employees as possible.
“The ultimate decision has ended up with the majority of those employees having ongoing employment,” she told 6PR.
“The board certainly considered one of the options was simply to offer redundancies to everyone.”
Ms Davies was also forced to defend Water Corp chairwoman Eva Skira, who is one of five non-executive directors of RCR Tomlinson.
The opposition took aim at Ms Skira last year as it emerged Water Corp had only disclosed her withdrawal from the decision-making team for the sale six days after it was announced to the ASX.
Ms Davies said on Tuesday the deal had undergone a probity audit.
“We need to be careful we don’t exclude people with the relevant experience to sit on what is a very important utility for the state,” she said.