WBW has $6 million interest bill from transferred loan
A $73 MILLION debt the Fraser Coast Regional Council transferred to Wide Bay Water Corporation in 2011 weakened the corporation's financial position.
That is the conclusion of a Queensland Treasury review of the finances of both the council and WBWC - which came at the request of Local Government Minister David Crisafulli to "end the uncertainty and instability the community had been put through".
His request followed the council's botched 2013 takeover of the water and waste service provider, for which it is the sole shareholder.
Mr Crisafulli said the council charged 8.6% a year interest on the $73 million debt. That meant WBWC paid more than $6 million to the council each year in interest.
"There can be no denying that the income paid to council has weakened the financial position of Wide Bay Water (Corporation)," Mr Crisafulli said.
The report recommends a credit review be undertaken on the financial sustainability of the council and WBWC before it again takes control of WBWC.
It has targeted February 2016 for this, to avoid paying $65 million in stamp duty.
The report also recommends an independent study to determine the "appropriate full cost price that it (WBWC) should charge for its services".
Fraser Coast Mayor Gerard O'Connell welcomed the recommendations and said the council would follow them.
- Independent study to determine the price that WBWC should charge for its services
- Credit review undertaken on the financial sustainability of the council and WBWC before council takes control of WBWC