Frequently Asked Questions

IPART has prepared these FAQs as part of a summary of relevant parts of:

- the Act (WICA) - Water Industry Competition Act 2006
- The Regulation - Water Industry Competition (General) Regulation 2008 and Water Industry Competition (Access to Infrastructure Services) Regulation 2007

The FAQs are designed to be read in conjunction with the above legislation.

These FAQ's and any information provided in links from these FAQs should not be relied on as a substitute for legal advice.

WICA

What is WICA?

The Water Industry Competition Act 2006 (NSW) (WICA) seeks to harness the innovation and investment potential of the private sector in the water and wastewater industries. At the same time, the Act establishes a licensing regime for private sector entrants to ensure the continued protection of public health, consumers and the environment. Among other things, WICA sets out: 

  • when a licence is required

  • the procedure for applying for a licence how applications for licences are determined

  • how licensees' compliance with their licences is monitored and enforced .

WICA establishes mechanisms to resolve disputes between private sector bodies and their customers, and to protect customers in the event of the failure of a new market entrant.

WICA also establishes: 

  • an access regime under which an applicant may seek access to existing water industry infrastructure (see WICA Access regime for further details)

  • IPART as the arbitrator of disputes over access to infrastructure services and sewer mining disputes. 

WICA is supported by the Water Industry Competition (General) Regulation 2008 (NSW) and theWater Industry Competition (Access to Infrastructure Services) Regulation 2007 (NSW).

Who needs a licence under WICA?

A person must obtain a licence under WICA to:

  • construct, maintain or operate any water industry infrastructure a network operator’s licence, or
  • supply potable or non-potable water or provide sewerage services by means of any water industry infrastructure a retail supplier’s licence, unless an exemption applies.

If you intend to undertake both types of activities, you must obtain a network operator’s licence and retail supplier’s licence.

An application for a licence may only be made by or on behalf of a corporation.  Either the owner or operator of the relevant water industry infrastructure can apply.

An application for a licence must be made to IPART. IPART will assess the application and then recommend to the Minister whether the licence should be granted and the licence conditions that should apply.

To be granted a licence, an applicant must satisfy the Minister that it has, among other things, the technical, organisational and financial capacity to carry out the activities that would be authorised by the licence (if granted).  One potential consequence of this requirement is that non-technical applicants may have difficulty in passing the technical capacity assessment unless they have engaged, and nominated in the application forms, suitably qualified third parties.

What is "water industry infrastructure"?

Water industry infrastructure refers to “water infrastructure” or “sewerage infrastructure.”

“Water infrastructure” means any infrastructure that is, or is to be, used for the production, treatment, filtration, storage, conveyance or reticulation of water, but does not include any pipe, fitting or apparatus that is situated:

  • downstream of a customer’s connection point to a water main, or
  • upstream of a customer’s connection point to a stormwater drain.

"Sewerage infrastructure" means any infrastructure that is, or is to be, used for the treatment, storage, conveyance or reticulation of sewage, including any outfall pipe or other work that stores or conveys water leaving the infrastructure, but does not include any pipe, fitting or apparatus that is situated upstream of a customer’s connection point to a sewer main. 

Who is exempt from WICA's licensing requirements?

You should not rely on the following as a substitute for legal advice about whether you are exempt from WICA’s licensing requirements.

If you wish to determine if you are exempt from the licensing requirements of WICA, you should seek your own legal advice on whether you meet the exemption requirements in WICA or in Schedule 3 of the Water Industry Competition (General) Regulation 2008 (NSW).  Schedule 3 provides a complete list of water industry infrastructure that is exempt from the licensing requirements.

Some examples of exemptions include where the water industry infrastructure:

  • is constructed, maintained or operated by a public water utility in its area of operations (public water utilities are defined as State Water Corporation, Sydney Catchment Authority, Sydney Water Corporation, Hunter Water Corporation, a water supply authority within the meaning of theWater Management Act 2000, or a council or county council exercising water or sewerage functions)
  • is constructed, maintained or operated for or on behalf of a licensed network operator or a public water utility (for example, a private filtration plant operated on behalf of Sydney Water Corporation)
  • comprises water management works to which Chapters 4, 5 or 6 of the Water Management Act 2000 apply (for example, water management works installed by an irrigation corporation)
  • is a water supply work within the meaning of the Water Management Act 2000 that is used solely for the purpose of taking water pursuant to an entitlement under various provisions in Chapter 3 of that Act
  • is a work to which Part 2 of the Water Act 1912 applies, or is constructed under a licence issued under Part 5, Division 3 of that Act, that is used solely for the purpose of taking water pursuant to an entitlement created by various licences issued under Part 2 or Part 5, Division 3 of that Act (for example, a farm dam or irrigation channel taking water from a river)
  • is used solely for stormwater drainage purposes.

You are not required to apply for exemption.

Please note that in addition to exemptions from the licensing requirements of WICA, there are transitional arrangements in place that may delay the need to obtain a licence.

What transitional arrangements are in place?

You should not rely on the following as a substitute for legal advice about whether the transitional arrangements in WICA apply to you.

In addition to exemptions from WICA’s licensing requirements, there are transitional arrangements in place that may delay the need to obtain a licence.

For example, under the transitional arrangements, WICA’s licensing requirements do not apply to water or sewerage infrastructure that is wholly situated on premises owned by the one person and owned or controlled by the person owning the premises.

What is a network operator's licence?

Subject to the conditions of its licence and relevant legislation, a licensed network operator may construct, maintain or operate any water industry infrastructure.

Part 6 of WICA outlines the powers and duties of a licensed network operator in relation to its water industry infrastructure.  WICA licensees have powers and responsibilities comparable to those of a public water utility. For example, a licensed network operator may carry out work connected with the erection and placement of water industry infrastructure in or under public roads and public reserves (on certain conditions), and may require landowners to remove trees, structures and other things on their land that may be damaging the licensee’s infrastructure.

WICA and the Water Industry Competition (General) Regulation 2008 set out prescribed licence conditions for licensed network operators. These conditions relate to provision of information, commercial operation of water industry infrastructure, ensuring a safe and reliable network, environmental protection, codes of conduct, and infrastructure operating, water quality, and sewage management plans.  Certain licensed network operators must also belong to an approved ombudsman scheme to deal with disputes and complaints involving entitled persons.  The Minister may also include other conditions in a network operator’s licence.

It is important to note that:

  • where required by WICA, a person must obtain a network operator’s licence BEFORE commencing CONSTRUCTION of water industry infrastructure
  • a licensed network operator must also obtain written approval from the Minister BEFORE bringing any new water or sewerage infrastructure into COMMERCIAL OPERATION. 
What is a retail supplier's licence?

Subject to the conditions of its licence and relevant legislation, a licensed retail supplier may supply potable or non-potable water or provide sewerage services by means of any water industry infrastructure.

WICA and the Water Industry Competition (General) Regulation 2008 set out prescribed licence conditions for licensed retail suppliers. Examples include requirements to:

  • belong to an approved ombudsman scheme to deal with disputes and complaints involving small retail customers
  • implement any applicable government policy with respect to social programs for the supply of water and provision of sewerage services, such as those to ensure that those services are available to people in need, including those suffering financial hardship and those living in remove areas
  • comply with the codes of conduct established pursuant to the Regulation.
What are the penalties for contravening the legislation (eg,not obtaining a licence when one is required) or a licence condition?

When a licensee contravenes WICA or the regulations (eg, by not obtaining a licence when required to do so) or a condition of its licence, the Minister or IPART may take a range of enforcement actions. Such actions could include (among other things):

  • imposing a monetary penalty not exceeding $500,000 for the first day of the contravention, and $20,000 for each subsequent day (not exceeding 25 days)
  • requiring a licensee to take such action as the Minister or IPART considers appropriate, such as notifying customers of specified information or taking specified action to rectify the contravention
  • cancelling or suspending the licence
  • declaring that the licensee is a disqualified corporation, or its directors disqualified individuals, for the purposes of WICA.

Some of these enforcement actions can only be taken by IPART if the Minister concurs.

See also IPART’s Compliance and Enforcement Policy which outlines our risk based approach to compliance and enforcement.

What are the fees and costs associated with obtaining and holding a licence?

Fees and costs associated with obtaining and holding a licence include:

Application fees

The application fee for a network operator’s licence is $2,500.

The application fee for a retail supplier’s licence is $2,500.

If you are applying for both a network operator’s licence and a retail supplier’s licence, the fee is $5,000.

Annual licence fees

For licensed retail suppliers, annual licence fees vary according to average daily throughput. Fees range from $1,000 for “small” scale schemes to $6,000 for “large” scale schemes.

For licensed network operators, fees vary according to the volumetric capacity of the supply of the infrastructure to which their licences relates. Fees range from $2,000 for “small” scale schemes to $9,000 for “large scale” schemes.

Audit costs

Audit costs vary, but usually represent the bulk of compliance costs for licensees. 

Please note that audits are required to determine:

  • the adequacy of your licence plans
  • whether the infrastructure is capable of operating safely and in accordance with your licence plans before it is brought into commercial operation (for licensed network operators only) and
  • ongoing compliance (once licensed).

We understand that a compliance audit of a complex scheme can cost approximately $30,000.

Insurance report costs

Applicants for new schemes and licensees of existing schemes must provide a report from an insurance broker who holds an Australian financial services licence under Part 7.6 of theCorporations Act 2001 (Cth) that authorises the broker to provide financial product advice for, and deal in, contracts of insurance within the meaning of Chapter 7 of that Act. This report is required at the time of application (for new schemes) or within 6 months of being licensed (for existing schemes). The cost of obtaining such a report will vary according to the circumstances, but we understand it may cost approximately $10,000 - $15,000 to obtain.

Ombudsman scheme membership fees

A licensed retail supplier supplying water or providing sewerage services to small retail customers is required to join an approved ombudsman scheme. This requirement also applies to certain licensed network operators.

Licensees should contact the Energy & Water Ombudsman NSW (opens in a new window)  (EWON) to determine what membership and usage fees apply. 

 

How long does it take for IPART to process a licence application? What are common causes for delay?

IPART is committed to undertaking a thorough, efficient and transparent assessment of WICA licence applications.

To enable this we have defined a target timeline, or 'clock', of 34 weeks for our assessment.

It is the applicant’s responsibility to ensure its application form is complete and that it has provided all required information (including supporting documentation) to enable IPART to process the application.

IPART will notify the applicant if IPART assesses that an application is incomplete, and will not process the application any further until the applicant provides any required outstanding information (ie, the IPART 'clock' will be off). The 'clock' restarts when an amended application has been approved by IPART as a 'complete' application.

Notionally, our 'clock' will stop whenever the licence applicant has been requested to provide additional information. Requests for a additional information (RFIs) will be issued as required, with the number of RFI's issued directly related to the quality of the information supplied, the nature of the scheme, submissions from stakeholders, and the input of external stakeholders.

If an applicant does not submit a completed application form or supporting documentation, or does not promptly address IPART’s subsequent RFI's, the total processing time can increase.

Common causes of delay in processing applications include applicants providing:

  • insufficient information in the public version of the application.
  • insufficient information about the relevant company structure and relevant contractual arrangements.
  • inconsistent information in the application form.

Applicants should also note that the Minister, after receiving IPART’s recommendation, makes the decision about whether to grant a licence or refuse the application. IPART's target timeline applies only to the time for a recommendation to be made by IPART, and forwarded to the Minister.

See our WICA assessment timeline for more details.

I have read these FAQs and am ready to apply for a WICA licence. What do I do next?

Please download the application form and read the instructions contained within.

If you are considering applying for a WICA licence, we strongly suggest you contact the Water Licensing Team at IPART on 9113 7778 or email erin_cini@ipart.nsw.gov.au to arrange a time to meet with us before you apply.

 

Do you have a question which hasn't been answered?

Have Your Say
IPART routinely seeks public input into our reviews via submissions, public hearings, stakeholder workshops and community surveys.
View all reviews open for submissions