Chris Minns says documents show Liberals considered privatising parts of Sydney Water

<span>Photograph: Mick Tsikas/AAP</span>
Photograph: Mick Tsikas/AAP

Documents canvassing the possible partial privatisation of a Sydney Water asset were compiled at the request of the New South Wales Treasury department, which the state Labor opposition will rely on to argue that the government was contemplating a broader sell-off of the asset.

Chris Minns will mark the start of the NSW election campaign’s final week on Sunday by continuing his pursuit of the Coalition over its record on privatisation, seeking to use documents compiled by the consultancy firm KPMG to argue that the premier, Dominic Perrottet, directed the public service to investigate a possible sale.

At a “save Sydney Water” rally in Parramatta on Sunday, Minns is expected to say that the future of the utility is “on the ballot”.

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“If the Liberals and Nationals get voted back in, Sydney Water won’t survive the next four years,” Minns is expected to say.

The claims have been rejected repeatedly by Perrottet, who has ruled out any sale of Sydney Water while also accusing Labor of running a “scare campaign” in the lead-up to next Saturday’s vote.

With less than a week until the poll, western Sydney remains the crucial battleground for both parties and on Sunday the Liberal party will hold its own rally in the marginal seat of Penrith.

The “keep western Sydney moving forward” rally will see Perrottet joined by the former prime minister John Howard.

While the government is seeking to attack Labor over its failure to commit to major infrastructure projects, such as the two western and south-western Sydney metro lines, Labor will continue to target the Coalition over privatisation.

A tranche of documents released by Labor last week showed the Coalition spent about $400,000 on consultants’ reports before the outsourcing of a Sydney Water treatment plant in western Sydney last year.

The Coalition has said the outsourcing was a “standard industry practice” and that it would be “owned and controlled” by Sydney Water.

But the reports seemed to reveal consideration of a wider privatisation of the utility. A report prepared by KPMG in 2020 outlined “financial challenges” faced by the agency, and said “major structural changes [were] being contemplated”.

In response to questions during a debate on Channel Nine last week about Sydney Water, Perrottet insisted the government had “never conducted a scoping study” on a possible sale of the asset.

“No one has spoken about privatising Sydney Water except Labor,” he said. “We’ve never directed the public service in relation to Sydney Water.

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“We’ve completely ruled it out. We’ve ruled it out at the last election, we’ve ruled it out at this election.”

But one of the KPMG documents, prepared in April 2021 and marked “Sensitive – NSW Government”, notes it was “prepared at the request of NSW Treasury” – when Perrottet was the state’s treasurer.

The document, titled “Majority Interest Asset Financing Model”, outlines the possible ownership structure for the recycling plant, including the creation of a majority interest financing model which would allow Sydney Water to sell a 49% stake in the asset.

“This deliverable has been prepared at the request of NSW Treasury,” the document states.

The shadow treasurer, Daniel Mookhey, accused the government of “misleading the people of NSW for years over Sydney Water”.