How will the regulatory framework deal with the delivery of water or sewerage services if that delivery is prevented because of physical problems with transportation or infrastructure, insufficient water, the financial distress of the operator or the financial distress of the retailer? One mooted solution is the creation of ‘step-in’ rights for replacement operators, often known as ‘operators of last resort’. This approach is common in the electricity sector, for example, where electricity can be fairly readily transferred between grids. However, such transferability is not so simple in the water sector. Indeed, Bakker described water as an unco-operative commodity (Bakker 2003). In practice, therefore, one could imagine that those nominated as ‘operators of last resort’ would not necessarily be poised, ready to step in, should they be needed. The task of supplying the water or wastewater service may well be limited by physical and technical constraints. Operators of last resort would presumably also have their own businesses to run and may be diverted by activities relating to those obligations at the time they are most needed to step in.

A related concern is whether the new private-sector operators (some of whom may have third-party access to infrastructure) will bring with them the technical and management skills to operate their businesses successfully. This is of particular concern where they are entering new fields. Inexperience bears its own inherent set of problems. To explain, one wonders what would be the case if a private operator faced technical problems which it could not solve and so needed assistance from the public utility, who was the operator of last resort, but the expertise traditionally housed in the public utility operator of last resort, had been lost or depleted when its staff were retrenched as a result of a private competitor entering the industry?^[73] Anecdotally, this kind of scenario has been used to explain the position in Adelaide at the time of the ‘big pong’.^[74]

There is also the question of risk-auditing in relation to the payment of bonds under the licensing regime to offset ‘step-in’ costs in the case of an emergency. A scheme for bond payments would require assessments to be made about operators and that, in turn, would raise questions about where the risk should be parked. Should it be placed with the community at large, or should it be borne by the retailer, the end-user or others? Under socio-liberalism, the entrepreneur bore the risk but under neo-liberalism we have seen a shift to democratise risk and have it borne by the whole of society, while profit has remained largely privatised. How best to deal with these issues is something that legislators will need to review constantly in relation to the water sector.