Third-party access has been available in network-based utility industries such as telecommunications, gas and electricity for some time^[19] but the experience of third-party access in the water industry is somewhat limited.^[20] In England, the Water Act 2003 seeks to extend competition, with s 39(2B) specifically seeking to protect consumers by promoting effective ‘competition between persons engaged in, or in commercial activities connected with, the provision of water and sewerage services’^[21] (DEFRA 2005: 1). Significantly, however, when the Ofwat^[22] framework was set up, provision for third-party access to sewerage infrastructure was not included, apparently because the industry did not foresee the need for it. Accordingly, the Ofwat framework only applies to water supplies.

In California, legislation known as the Katz Wheeling Law was introduced in 1986. It provides for unused capacity, within artificially constructed water-conveyance facilities, to be made available to others (Slater 2005). However, the legislation does not provide clear guidance on how issues of access pricing should be dealt with and this has acted as a disincentive to third parties pursuing access.^[23]

In Australia, there has been only limited experience of third-party access to water. One such example is in the case of Barossa Infrastructure Limited (BIL). That company gained access to transportation capacity in the Mannum–Adelaide pipeline, as well as storage capacity in the Warren Reservoir. The purpose of the access is to provide extra irrigation water from the Murray River for the Barossa Valley. The BIL scheme involved significant upgrading of the SA Water system in order to assist BIL gain a year-round supply of water, and goes beyond a simple third-party access regime (Marsden Jacob 2005: 22).^[24]

In Southeast Queensland, there is another arrangement which could perhaps be described as a form of third-party access. It involves Southeast Queensland Water providing raw bulk water which, in turn, is pumped to Brisbane Water’s treatment plant and then eventually provided to the customers of Brisbane Water, Logan City Council and Gold Coast Water. Brisbane Water’s infrastructure is used by other retailers in this process (Marsden Jacob 2005: 22).

The case of Lakes R Us Pty Ltd represents a thwarted attempt to gain third-party access to water storage and transport services provided by Snowy Hydro Limited and the State Water Corporation.^[25]

Given that state-based third-party access regimes for water services can be made compliant with National Competition Policy and National Water Initiative goals it seems possible that other states will join New South Wales in introducing third-party access legislation of their own, rather than rely solely on the generic Commonwealth access regime under the Trade Practices Act 1974 (Cth).^[26] The New South Wales specific state-based water-access regime is a ‘significant and unique reform’, with ‘no similar regime elsewhere in the world’ (Freehills 2006). It is helpful, therefore, to examine the development of legal frameworks for third-party access, beginning with the Commonwealth scheme.