Wonthaggi desalination plant

If we had direct democracy and referendums in this country, the Wonthaggi Desal would never have got up - but we don't, yet. Andrew Chapman is leading a fight for water justice for Victorians to find out how on earth the Brumby government got away with this one. The project is currently estimated to cost $5.7b and it is thought that Victorians will be paying $600m/year for it whether or not the water is required. It will also tax Victoria’s electricity supplies. See also: More on Wonthaggi Desal plant and history of Royal Commission movement

Ted Baillieu MP

Premier of Victoria

1 Treasury Place
Melbourne 3002

Dear Premier,

Victorians are to pay for a desalination plant when Melbourne’s water storages are over 60% capacity and continuing to rise. Because it is unlikely that desalinated water will be required in the foreseeable future Victorians have a right to know how the government made the decision to proceed with this project.

Melbourne's water storages

Melbourne’s water storages are designed to incorporate short and long term fluctuations in climate and provide for population growth and water is retained by introducing restrictions when dryer periods become apparent. The Bracks government failed to take appropriate measures to conserve stored water then decided to construct a desalination plant at Wonthaggi. The decision preceded an EES, public consultation and statutory planning procedures and the subsequent EES did not properly consider alternatives, including the doing nothing option. The project is currently estimated to cost $5.7b and I understand Victorians will be paying $600m/year for it whether or not the water is required. It will also tax Victoria’s electricity supplies.

Given the project’s significant social, economic and environmental impacts I ask that the Premier initiate a public inquiry with the sole purpose of determining just how the desalination plant was approved. The scale of the project is such that the approval process should be examined by no less than a Royal Commission.

A Royal Commission should examine the following:

* The management of Melbourne’s water storages including how and when water restrictions were introduced,
* The reports and data on which the Bracks government based its decision to adopt desalination as a method of meeting Melbourne’s water needs,
* The reports and data on which the Bracks government based its decision to build a desalination plant at Wonthaggi,
* The expert reports which formed the basis of the EES and whether or not they contained bias,
* The EES panel’s consideration of evidence contained in submissions to the EES and
* How the panel report came to recommend in favour of the desalination plant.

On closer examination by your office there will no doubt be additional matters that are found to warrant examination.

A Royal Commission would discover whether or not decisions were guided by appropriate professional expertise and its purpose would be to minimise the social, economic and environmental harm from this project and ensure that this situation does not occur again.

Yours sincerely

Andrew Chapman
Inverloch 3996
Victoria, Australia
Fax: +61 3 56743732
Mob: 0438567412

Andrew Chapman is calling for a Royal Commission into the Victorian (Wonthaggi) Desalination Plant. We publish here his comments and some early discussion. We also publish some correspondence with Tim Holding, the Minister for Water under the Brumby government. There seems to be wide support for a royal commission into the matter, which is perceived widely as corrupt. The matter of desalination plants is a huge one in Australia where such plants, not necessary when we had a population of 17m only a decade ago, have been introduced in nearly every state with the excuse that our growing population requires them. The public have not been adequately consulted on the population growth induced by ill-considered government policy nor on the introduction of these plants themselves. What is for sure is that almost no-one likes these plants and governments are bitterly resented for having forced them on Australians. (More about Wonthaggi Desal plant here.)

Andrew Chapman writes:

The Bracks Government won its last election on a policy of opposing a desalination plant to augment Melbourne's water supply. When Ted Baillieu suggested a small desalination plant the Bracks team ridiculed that suggestion but on election Bracks reneged on its election policy and approved the construction of a large scale desalination plant at Wonthaggi.

Times moved on and water storages are now either full or filling rapidly with Melbourne's storages set to reach 60% capacity in the next two or three weeks. Melbourne's water storages have not increased because of the desalination plant, it is a long way from being finished, but because weather cycles moved from drought to floods, something which civil engineers consider when planning water supplies. Taxpayers and consumers are to pay for this very expensive water supply option regardless of whether or not it is needed. The desalination plant will require large amounts of electrical power to operate. Perhaps if the Bracks and Brumby governments pursued water conservation and recycling this huge cost burden would have been avoided.

Whilst the government held a particular view it is clear the planning process did not adequately consider alternative options or submissions presented to the EES that, with evidence, argued that the desalination plant should not be pursued. Many people will remember how the planning process operated right down to the government authorising police files on objectors being handed over to the contractor.

Melbourne's water storages are now at 58.3% (still plenty of wet weather to come), same time last year 35.0% and the year before 26.8%.

The government did not have a mandate for the desalination plant and the planning system has failed Victorians resulting in huge water debts to be met through the purchase of water that is not needed. This is not a small project with a capital cost originally estimated to be no greater than $3.1 but more recent estimates at $5.7b and suggestions that it may be more like $7b when finished.

There are three appendixes below: Appendix A, "Communications with Tim Holding," and Appendix B, "Comments about a Royal Commission from a circular back in March of this year." Appendix C contains some media coverage.

What you can do

If a Royal commission is to get up and running it will only do so with widespread public support. If you could pass your comments on to Andrew Chapman or post them as comments here on candobetter, we can also work towards canvassing the mainstream media. When the storages hit 60% capacity, the time will be appropriate to launch a major campaign.

So, Royal Commission into the Desal Plant - What do the people think?

CONTACTContact by email Andrew Chapman or telephone 56741266 or 0438567412

Appendix A: RECENT COMMUNICATIONS WITH TIM HOLDING MP, THE MINISTER WHO ADVOCATED THE DESAL PLANT

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As at 19/7/11 there has been no response from Tim Holding.

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14/7/11
Re: Catchment Rainfall and Runoff Forecasts for Melbourne's Dams

Dear Tim,

Perhaps you could confirm whether such information exists?

Regards

Andrew Chapman

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13/7/11
Re: Catchment Rainfall and Runoff Forecasts for Melbournes Dams

Dear Andrew

Thank you for your email.

As I am no longer the Victorian Water Minister it would be more appropriate for you to direct your request to the Department of Sustainability and Environment.

FOI Unit
Department of Sustainability and Environment
PO Box 500
EAST MELBOURNE VIC 8002

Yours sincerely

Tim Holding

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13/7/11

Catchment Rainfall and Runoff Forecasts for Melbourne's Dams

Tim Holding MP

Dear Mr Holding

Catchment Rainfall and Runoff Forecasts
The adoption by the Bracks/Brumby governments of a desalination plant at Wonthaggi to supply water to Melbourne was no doubt based on that government's perceived need for additional water.

When Melbourne's water storages fell to low levels I expect that you, as Water Minister, would have sought expert advice on the long term rainfall and runoff for the catchments supplying the storage dams.

Could you please provide me with, or direct me to where I would find, copies of all the reports and advice provided to you on the catchment rainfall and runoff?

Regards

Andrew Chapman

__________________________________________________________________________

As at 19/7/11 there has been no response from Tim Holding.

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3/3/11

Royal Commission into Desal Project

Timothy Holding MP,

Dear Mr Holding,

It appears from your comments in the media that you think the desalination plant, originally estimated at no more than $3.1b and now at considerably more, is good value for Victorian taxpayers and consumers. If you think the cost, social and environmental impacts are justifiable then I imagine you will be happy to support a community move to establish a Royal Commission into the planning and approval process for the project.

It could deal with, but not be limited to, the Bracks/Brumby government's involvement in the process, the role of Ministers and party advisers who worked in the public service, any influence they may have had on process, whether or not the evidence produced for the EES was appropriate or balanced and how the process considered submissions by the public.

The answers to these matters may be readily available and if a Royal Commission is implemented you and your fellow ex Ministers would no doubt have an opportunity to commission consultants and lawyers to present your case. It may determine that your decisions were soundly based but could also reveal an opportunity to abandon the project without cost to Victorians.

As you can appreciate people are shocked by the recent revelations that the cost of this project has escalated and that it may cost $23.5b by 2030.

I look forward to you and your fellow ex Ministers supporting a Royal Commission into the desalination plant approval process.

Regards

Andrew Chapman

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Appendix B: SOME COMMENTS IN MARCH THIS YEAR ABOUT A ROYAL COMMISSION INTO THE DESAL PLANT

Andrew Chapman distributed the following statement in an email. Below this statement are a number of very interesting comments from the public.

Andrew Chapman:

"Yes I do intend to go forward with the intention of getting a Royal Commission Inquiry into the desal plant approval process. It is our one and only big chance to expose the planning system for what it is and what occurred under the previous government. If we don't do something the bureaucrats will eventually persuade the new government to go down the same path on newer proposals. The reason I think we should have high expectations is that it affects so many people in a big way.

Remember when it was announced by Bracks and Thwaites on the same day people were told their properties would be taken, the legal costs awarded against campaigners when they were denied any opportunity to appeal against the decision, then when the government found they required an EES the way in which that was done and then handing over police files on objectors to the contractor.

Then there's the Banks. Westpac signed the Ecuador Principle and made it part of their advertising campaign and yet the way this project was handled was not much different to what happens in third world dictatorships.

All the time people argued that they were going down the wrong path but the Bracks/Brumby obsession could not be stopped.

I think as a starter we should be opening up discussion with as many people and groups as possible. If there are enough people interested in a Royal Commission we should then start to let the media know. We are all burdened with this social, economic and environmental disaster so people should feel free to add their bit in any way they feel they can contribute."

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Responses

Thank you very much, Mary. I hoped you would forward it. You might also like to mention my blog http://reengineeringaustralia.wordpress.com. The model I refer to is simply a 1 sq. km grid laid over the entire country, where we use on-the-ground and satellite information to populate each element with relevant data. After that, you can apply all sorts of rules and computations to evaluate the usefulness or the sensitivity of that particular element for a particular usage (including “don’t you dare touch it”!).

Regards
Jim W
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Anything to make them accountable and process transparent is worth it!! This must be prevented if at all ever stopped? Id love to know why the contract cant be terminated?

Sheryl
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yes it does, but I fear the chances are small.

best regards Stephen C

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Of course it's corruption. But the reality of it is that our government is Big Business and our Parliament is powerless to stop us being sold into slavery. Most boiled frogs accept the propaganda that we live in a democracy and that our Parliament is Government.

Even if you do manage to get a Royal Commission, it's terms of reference will not be able to tackle the reasons for how such wholesale corruption could have taken place.

And don't get me started on Laws and the Justice system.

Ray

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I have had a career in civil/structural engineering, town planning and IT, but I simply cannot get my head around what professional, accounting and ethical processes could possibly justify the Wonthaggi desalination plant. I had an exchange of emails with Rosemary West about my blog on sustainable population and I quoted the desalination plant as an example of where the land usage model I proposed could be have been used in the design phase or, given the current catastrophe, to chart all of the problems needing attention. Here is what I said to Rosemary on this topic (with a little subsequent expansion):

Did the State Government investigate every possible site along the coast before selecting Wonthaggi ? If so, what were the criteria used and what were the scores of the various sites ?

If they did not do this, did they select the site for technical, financial, political or governmental reasons ? If so, what were those reasons ?

If they did not select the site, was it selected by the contractor ? If so, were a number of contractors approached to tender for the project ? If so, were they in agreement as to the suitability of the site? If not, did any of them suggest alternative sites ? What were the various contractors’ reasons for selecting any particular site ?

If only one contractor was approached to tender, what were the reasons for selecting that contractor ? If the contractor is a consortium, what due diligence was carried out to satisfy probity requirements ?

I have worked on road and rail projects in the UK, East Africa and Australia. I came to Australia to work on the WA Standard Gauge Railway in 1965, so I do have some idea of where the costs lie in constructing such projects. I have done a little research, looking at the costs/lane (roads) and costs/line (railways) in the 1960s. I projected these to the current time, in accordance with the fall in currency values. Broadly speaking, I believe that infrastructure projects today are mostly costing about double what one would expect. I think this is largely due to the finance models in use today and any investigation should include a discussion on the appropriateness of these for constructing infrastructure projects (as opposed to perhaps managing them afterwards.

Here are a few books which I think are required reading for anyone wishing to participate in this latter discussion:

“Pigs at the trough: lessons from Australia’s decade of corporate greed” by Adam Schwab.

“Zombie economics: how dead ideas still walk among us.” by John Quiggin.

“Our corrupt legal system: why everyone is a victim (except rich criminals)” by Evan Whitton. [Evan Whitton home-page (Ed.)]

This last is a little bit out of left field, but I think it is important because it describes the difficulties (and enormous cost) of the adversarial system used in anglophone countries. An important point is the way in information can be hidden or excluded from consideration by courts and inquiries.

I hope you (and perhaps others) find these remarks helpful in moving things along in this matter.

Regards,

Jim W

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1. The desal Royal Commission is essential for several reasons. Firstly, to extract accountability from the previous government, and, secondly, to limit the excesses of the current government.

2. Its not party political but necessary for restoration of public confidence in politics of all shades.

3. Given my druthers, I would like to see a Royal Commission into all Public Private Partnerships, over the last 30 years.

All strength to your arm,

Don K
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Yes, it is essential. Are there plans?
Your correspondent doesn't mention the funding scandals that implicated the Labor Party all the way to Queensland.
The whole thing was a total disaster and according to the Fin Review, Tuesday 3 March 2011, p. 7,

"Even if Victorians don't use a drop of water from the state's desalination plant, it will cost them more than $600 million a year for a quarter of a century, new documents show."

Sheila N

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I agree that how the DeSal project was handled was appalling….and it’s not the only one. Billions of taxpayers’ funds have been spent on projects that we in the community (those who finance these mega projects) neither want nor need.

DeSal, the NS pipeline and Channel Deepening all had its opponents spied on and well orchestrated campaigns to denigrate them whilst promoting the project as being the only alternative. That our elected representatives and we as a community have tolerated this lop sided “contest” for so long is a worry in itself.

And there’s little doubt there’s be more to come in future if we can’t change the way we do things. E.g. the reported $9.5 billion+ to do to Westernport what a handful of shippers and truckers want.

I keep coming back to my main themes:

· An extra 75,000 people per year into Melbourne and their housing, food and transport requirements can’t have any other outcome whilst ever we are on the “business as usual” trajectory. Population pressures (driven by those few faceless entities that benefit from population growth) are at the root of this endless expansion industry.

· Those vested interest groups and faceless entities have too great an influence on our elected representatives. They enjoy armchair rides through open doors to the offices and dining tables of those we elect – whilst the likes of you and I (and many other well meaning, well informed, well educated and altruistic persons) are left outside wringing our hands and waiting perhaps months for a 30 minute meeting with the Minister or more likely his lackey. Meanwhile the bulldozer flattens Westerfields or whatever other special place we are concerned about)

· Our present governance arrangements have allowed this inequitable access to influence to permeate how decisions are made, because:

· Those we elect once every 4 years are not legally obliged to do any of the things they led us to believe they were committed to during their election campaigns. Generally they have misled and disappointed us, and our only recourse at present is to wait another 4 years to elect the next lot who don’t have any legal obligations to abide by their undertakings either. Our influence - once every four years as we shuffle into the polling booth is perfunctory, indeed illusory.

Somehow or other we need to find a way to have more direct and regular input into the decisions made by our elected representatives – Direct democracy. Contentious issues and those where our local MP doesn’t have his/her own firm view, local polls could be held to guide the MP on how to vote in parliament. State-wide and national sissies could be resolved via referendum. It is working well elsewhere e.g. In Switzerland where voters not only elect the government, they also directly vote on policy issues and legislation passed by the parliament. So why not here?

A very interesting and relevant program on ABC RN Rear Vision recently on how such a system works in Switzerland is well worth reading/listening to. Here’s the link http://www.abc.net.au/rn/rearvision/stories/2010/3047700.htm

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So- If a Royal Commission’s Terms of Reference would address how we could better handle decision making processes on contentious and difficult environmental/social and economic issues like the ones we are so familiar with I’d be all for it.

Thanks for keeping us so well informed and in the loop Mary

Cheers
Jenny W
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I don't think there is any prospect of the current State government deciding on a Royal Commission into the project. The Desal was a decision of the then State government and we might not like the decision but I can't see what the grounds would be for establishing a RC. Bearing in mind too, that a Royal Commission would cost millions to conduct.
Regards, David.

Yes, yes, yes! I'm sure the Greens will support it as well. We knew at the time that if we put in the right conservation strategies, we could generate the same amount of water. This was publicised and ignored so that big corporations could get a Salary from the people of Victoria for life. If the Royal Commission would expose this travesty, let's support it 100%

Gillian C
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Happy to go ahead with asking for a royal commission.

June H

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I agree. Particularly I can not believe that the tax payers of this state are saddled with that massive bill AND the destruction of a lovely area. Talk about a lose/lose situation. I think the terms of the RC should investigate the possibility to minimize $ loss and not go ahead with any aspect of the wretched thing. Remember, the Greens were against it from the start, and the Green candidate for Bass was one of the leading anti-desal campaigners - Neil Rankine. He is a great resource and a fountain of knowledge on the issue.

Cheers
Wendy R

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The argument for a Royal Commission is overwhelming: How was the assessment made-comparing all alternatives? How was the size determined? Was the evaluation of this project fully integrated with other measures, in particular the N/S pipeline and water recycling plans? What was the process for evaluating the most suitable site? What was the basis for selecting the successful tenderer and awarding the contact? What were the true circumstances of commercial in confidence which prevented the Gov't from informing the public beforehand on these issues? What was the basis for electing the extortionist pay rates for this project and what were/are these and all the attendant site awards/provisions? What truth is there to suggestions that the unions involved are selling or seeking other benefits in exchange for the right for workers to work on this project? What was the Gov't policy for managing public opinion and how was this managed and controlled? How much attention did the Gov't give to seeking public opinion and to have genuine consultation with the communities affected? What was the quality of examination of the environmental impacts? What consultants were engaged for this purpose, how was this process handled and what were they paid? There are other issues as well, but surely this is more than enough!

Reg B
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You will recall that the EES process was totally flawed. Rather than it examining all alternatives (including the key one of doing nothing) it was
relegated to an examination of effects after the go ahead had been given.

Bracks in his helicopter said the decision had been made and now there could be an EES.

A Royal Commission could also look at the lack of flexibility (ie cancelling the project) caused by putting it into private hands.

Geoff M
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And when they dug up 5000 artifacts what happened to the 2007 legislation designed to conserve and protect aboriginal cultural history and heritage.?
Bev W
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I certainly wholeheartedly agree with your plan. You certainly have our support. Don't know if I mentioned to you also but I intend going to the Ombudsman to ask him to revisit the manner in which the Macarthur windfarm planning permit was amended in July 2010, with so many changes that it hardly resembles the original plan for which they were given approval in 2006. However that will take me a long time getting everything ready for my request and haven't found a moment yet !!!
Let me know if there's anything I can do to help you.

Annie G.
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Given Victorians are delivering $2m a day towards this project I think an investigation is more than warranted.

There should be an investigation into the role of the union super funds who invested in this lucrative gravy train. Were independent super funds, such as AMP or MLC or even self-managed super funds given an opportunity to weigh up the investment? I doubt it. I believe an investigation would show that the entire exercise has vastly enriched the CFMEU workers, to the competitive detriment of the entire Victorian construction industry, and enriched the super funds.

Are Bracks and Brumby now on the boards of any of those super funds?

I think this trend to enrich “ALP type” super funds will rapidly shift to Canberra and we are likely to see the bulk of rorting going through the Carbon Tax mechanism and particularly the $10bn Bob Brown Green Bank that will be used to prop up these investments.

Tim L
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Of course there needs to be an Royal Commission.

I presented at the Panel giving advice that the expert technological advice in particular about acid sulfate soil and its eventual disturbance, had been distorted and altered to present a picture of no harm will be done by this Desal excavation of this coastal soil..

Words such as probable were altered to unlikely or similar phrases' There were no recommendations about further testing to establish the extent of this Acid Sulfate Soil l which has a potential to destroy water fish and plants when it is exposed to oxygen and water is withdrawn and returned to the aquifer. I have a substantial submission in which I cited such watering down to the point of negligent culpability and lying.

I have been informed and some items in the local news have relayed that Acid Sulfate Soil had become a major problem.. I also believe the National Policies on disposal of this contaminated soil have been ignored. Mitigation with lime has not been used in appropriate amounts.

I spoke with the project Engineer at an open day earlier this year and he was totally ignorant of the type of soil he was digging up and or how it should be mitigated/managed.

I was enraged about the way I was treated at Panel Hearings in Pakenham when the Chairperson - a woman - was extremely rude to me. I believe discriminated against me because during my 10 minute presentation with power point and handouts which had been an effort of extreme intensity, she stated that I was "holding up lunch" for the panel.

I am am applied scientist and retired University Senior Lecturer . I have studied these soils for over 7 years and I was invited to (perhaps to dumb me down) to join the Government committee of the day. I felt patronised and realised that there was no intent to be sincere in this inquiry.

My colleagues in this protest campaign had undertaken to examine all 25 volumes of the Desal EES reports all agreed that the recommendations had been watered down on each and every occasion in the Executive Summary.

I would be happy to attend any Inquiry and make my outrage known.
Bev W
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Appendix C: MEDIA ARTICLES ON THE DESAL PLANT

TRANSCRIPTS FOLLOW:

Stateline, Age, ABC, Transcripts.

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ABC's Victorian Stateline Program of 31/7/09

TAMARA OUDYN, PRESENTER: The State Government announced this week who it’s chosen to build and operate Australia's largest desalination plant at Wonthaggi. It also revealed it’s agreed to act as a lender of last resort to sure up finance for the project, which will be a public/private partnership. Most of the detail, including financial aspects, hasn't been released. Water Minister Tim Holding wasn't available to speak to Stateline, but here’s some of what he had to say to Jon Faine on ABC Radio this morning.

JON FAINE, ABC RADIO PRESENTER: Why’s it being called a PPP if it’s underwritten by Treasury? It’s not really a PPP and wouldn't it really be cheaper and simpler to build it as state infrastructure?

TIM HOLDING, WATER MINISTER: Well it is a public-private partnership. And the question you’ve asked is: would it have been cheaper to build it as a public – provide it as public sector provided project. And as part of this project – or part of this process, we are required to establish a public sector comparator, which is a tool which tells us what it would have cost us to build this project if the public sector had assumed all of the risk and built the project itself. And the public sector comparator tells us that either of these bids - both the Aquasure bid, which is the bid the Government has accepted, as well as the Bass Water bid - were well below the public sector comparator. So that’s the guarantee that the public is getting value for money from the involvement of the private sector in the delivery of this project. ... There will be new renewable energy projects generated as a consequence of the ...

JON FAINE: Where?

TIM HOLDING: Well, of the – the consortium will make that clear through the purchase of their renewable energy.

JON FAINE: So you don’t know? You can't tell us?

TIM HOLDING: Well it will become clearer over time. They will also be purchasing renewable energy credits as part of the process. And that’s the public's guarantee that the power that’s used, the energy that’s used to power this plant has been offset by the purchase of not just renewable energy, but renewable energy in addition to the targets that the Government had already set.

JON FAINE: Can you guarantee that consumers' water bills will only increase by the stated 100 per cent over five years?

TIM HOLDING: We’ve said that over the next price period, bills will double, but not more than double. We reiterate and reaffirm that guarantee. The Essential Services Commission has reaffirmed that. In fact, the price increase will be a little bit less than that. And as I mentioned earlier by reference to the public sector comparator, that both bids came in below the public sector comparator, and that’s a guarantee also that the price impact of this project will not only be less than the full doubling of water prices, but in fact will be less than if the Government had been forced to deliver this project ourselves.

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TAMARA OUDYN, PRESENTER: Tony Shepherd is the chairman of the consortium chosen to build the desalination plant. I spoke with him earlier.

Tony Shepherd, welcome to the program.

TONY SHEPHERD, CHAIRMAN, AQUASURE: Hi, Tamara. Nice to see you.

TAMARA OUDYN: How many desalination plants has your company been responsible for and why is this one different?

TONY SHEPHERD: The technology provided to our consortium is Degremont, a French company. Degremont has provided hundreds of desalination plants throughout the world. In fact I think it's the world's leading provider of desalination plants. They’ve done the plant recently in Perth, which is operating and operating very successfully. The difference in this one: I guess it's a modern plant, state-of-the-art, the design and integration into the local environment is different. And the fact that we have to build such a large plant in a very short time is also different.

TAMARA OUDYN: Finance has obviously been a key issue. Whose idea was it for the Government the lender of last resort?

TONY SHEPHERD: Well obviously with the GFC, raising all of this debt and equity was an issue for us. Having raised all of the debt, the banks were concerned about that part of the debt that they wished to syndicate, and we took that to the Government as a suggestion and the Government adopted it. We think it’s a smart way of getting around the issue. But we’re confident that the banks will in fact be able to syndicate that debt.

TAMARA OUDYN: It’s $4 billion worth. Is it true that you plan to offload most of that?

TONY SHEPHERD: No; I think it’s about $1.7 billion that has to be syndicated of that four.

TAMARA OUDYN: So when would you need to finalise your financial arrangements?

TONY SHEPHERD: By financial close, which is in about two months’ time.

TAMARA OUDYN: The price of the project is now being put at $3.5 billion. Will that be the total cost?

TONY SHEPHERD: That's the total cost of the construction of the plant. On top of that, we’ll have things like interest during construction and company costs.

TAMARA OUDYN: So what other sorts of costs are associated with completing the project that aren’t included in that figure?

TONY SHEPHERD: Well mainly interest during construction.

TAMARA OUDYN: And how much would you expect that to ... ?

TONY SHEPHERD: Well I think the total funding will be $4.8 billion, so the difference between the $3.5 and the $4.8 is associated with the financing of the project.

TAMARA OUDYN: Over and above the cost of building the project and getting it up and running, how much will it cost to run each year?

TONY SHEPHERD: I haven’t got the exact number at my fingertips, but it’s into the hundreds of millions a year, including the cost of power.

TAMARA OUDYN: You’ve struck a deal that allows the Government to order as much or as little water as it needs. How do you make a profit in that circumstance?

TONY SHEPHERD: Well, we get paid for having the capacity available. And obviously we get paid for actually producing the water. So, the Government has the flexibility as to how much water they want us to produce, but obviously we have to service our capital in the meantime and keep the plant in good operating condition and we get compensated for that.

TAMARA OUDYN: Are you free to take orders from other customers?

TONY SHEPHERD: No, no we’re not. We can only supply the Victorian Government.

TAMARA OUDYN: So how will you make a profit if we have a big downpour in Victoria and we’re set for water?

TONY SHEPHERD: Well, we certainly take some risks on that. But if you look at the state of the dams at the present time, at less than 30 per cent capacity, it’s highly unlikely that this desalination plant will not be running in a maximum condition for quite a while, in my view.

TAMARA OUDYN: Roughly how much will a megalitre of water cost?

TONY SHEPHERD: We can’t disclose that as yet. This will be disclosed after financial close, when our contract is published.

TAMARA OUDYN: Why can't you disclose that?

TONY SHEPHERD: Because the Government has asked us not to until the contract is disclosed to the public. The price is not exactly finalised until we reach financial close. There could be some slight variations in the meantime.

TAMARA OUDYN: And what’s the price dependent on?

TONY SHEPHERD: The things that might vary in the meantime is the rate of interest and things like that that might vary over this period of time, but relatively minor. We’re talking marginal changes. But the Government prefers to release the details of the contract in one go after financial close, and I think that’s sensible.

TAMARA OUDYN: It’s been reported that the desal plant will produce more than one million tonnes of greenhouse gases each year. Is that irrespective of how the power to run it is generated?

TONY SHEPHERD: That is a hypothetical figure that you’re discussing.

TAMARA OUDYN: More than one million tonnes?

TONY SHEPHERD: Yes, that’s just purely hypothetical. Because the energy that we use – the main energy we use in the plant to produce desalinated water is renewable energy, which, by definition, doesn’t produce carbon. I disagree with the number, yeah.

TAMARA OUDYN: So you can't tell me what the projected emissions would be because ... ?

TONY SHEPHERD: We will be carbon neutral. The plant will be carbon neutral.

TAMARA OUDYN: So what’s your time frame; when do you think you’ll be turning the taps on?

TONY SHEPHERD: December of 2011 is the target, is our contractual commitment, so, that’s a very tight schedule for a plant of this size.

TAMARA OUDYN: And will you be operating at capacity by that stage? Or will it be a gradual run-up to ... ?

TONY SHEPHERD: We’ll be getting close to capacity then.

TAMARA OUDYN: So when do you think you’ll hit capacity?

TONY SHEPHERD: We’re hoping to get it by then.

TAMARA OUDYN: Tony Shepherd, thanks for joining us.

TONY SHEPHERD: Thank you.

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Victorians need evidence they’ll be desal winners - "The Age July 31, 2009"

THE deal is done. Premier John Brumby has announced that AquaSure, an international consortium consisting of Suez Environment, Degremont, Thiess and Macquarie Capital Group, will build Australia’s biggest desalination plant. The decision on the $3.5 billion project — $400 million more than the $3.1 billion price tag that the Government has long quoted — has put paid to suspicions that another French-led consortium might be in line for the contract to make up for Connex parent company Veolia and its potential merger partner, Yarra Trams parent company Transdev, losing their public transport contracts.

The project remains contentious in other ways, not least among local residents fearful of its impact on their environment. The higher cost only increases pressure on the Government to provide solid evidence for why it preferred the costly and environmentally dubious option of desalination — which it scorned before the 2006 election — over water recycling and stormwater capture.

The Government has been reluctant to release the public sector comparator of the costs of desalination and the greener alternatives. One suspects recycling costings have been inflated by provision for third-pipe infrastructure to keep a politically motivated promise not to use recycled water for drinking — an internationally tried and tested solution that really should be the basis for comparison. Instead, most of Melbourne’s treated waste water will still be pumped out to sea — a waste of roughly 200 billion litres a year.

Of course, the Government is talking up the project’s benefits, including jobs. An underground power supply allays one concern about impacts on the landscape and landowners. On the face of it, the commitment to use renewable energy is welcome, given justifiable community concern about the wisdom of using a power-hungry, greenhouse-gas-producing plant to make up for the scarcity of water in an environment of climate change. Water Minister Tim Holding said Aquasure would build, with AGL, a 63-megawatt wind farm near Glenthompson. However, this falls short of the power required to produce 150 billion litres of water a year and pump it 86 kilometres. Government documents predict an ‘‘average electricity requirement of approximately 92 megawatts’’. At best, actual output of wind power is about 40 per cent of installed capacity, so the wind farm will supply barely a quarter of the electricity required. Victorians must take at face value assurances that the shortfall can be met from other green energy sources. The contract must ensure an equivalent increase in the grid’s renewable generating capacity for the plan to be carbon-neutral.

The other issue is the huge cost. Mr Holding said that by 2013 Victorians’ average water bills would be held to less than double their current level — largely to pay for this project. Both Mr Brumby and Mr Holding insisted the contract would deliver value for money. It would provide for flexibility to produce water in increments of between 0 and 100 per cent of the plant’s capacity, supplying the system only when needed. This provision is qualified, though, by the minister’s recent decision to advise water authorities that the plant would run at full capacity in any of the next five financial years, as long as dams are below 65 per cent at the end of the preceding March — the month when levels are usually lowest.

Victorians are not yet privy to the details of payment arrangements, but no business is likely to agree to its income drying up in a wet year. That is not the only concern for taxpayers. Mr Holding said: ‘‘The capacity of AquaSure to raise the necessary funds in such a tough global economic environment is a testament to the strong Victorian economy,’’ and then, somewhat contradictorily, added: ‘‘AquaSure will now seek to diversify its investor base, with the Victorian Government providing a Treasurer’s guarantee of syndication. This means the state will be a lender of last resort if required, at commercial rates.’’ How much could taxpayers be up for, and on what terms?

Lack of transparency goes to the heart of the difficulty of simply accepting that this and other public-private partnerships offer value for money. Labor has failed to keep its 1999 election promise, prompted by Kennett government secrecy, that commercial-in-confidence provisions would apply only to patents and trade secrets. The Labor-dominated public accounts and estimates committee has concluded that the score of PPPs entered into by this Government ‘‘diminished the accountability of government for substantial state expenditure’’, to the point that Victorians could have no idea whether these projects offered value for money. The bottom line is simple: if the contract truly represents a good deal, it should be good enough to stand up to public scrutiny.

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ABC Online - Failed desal bidder to get compensation

Updated Fri Jul 31, 2009 7:54pm AEST
Bidders for the tender to construct the Wonthaggi desalination plant have until the end of the month

Victoria's Water Minister says without a desalination plant the state could run out of water. (ABC TV)

The failed bidder for Victoria's desalination plant will receive compensation from the state government.

BassWater lost out to a consortium called AquaSure in the tendering process to build and operate the $3.5 billion plant near Wonthaggi in South Gippsland

Victorian Water Minister, Tim Holding, says it is appropriate for BassWater to receive up to $10 million compensation.

"You can't compensate the private sector for all of those costs, but you can recognise that sometimes the projects are so large and the bid proposals that we seek are so complicated that it is appropriate to make a modest contribution," he said.

Earlier, Mr Holding, strongly defended the desalination project on ABC 774's Morning Program.

"Without this project we would not have a non-rainfall dependant source of water, which is exactly what we need in an environment of drought and climate change," he said.

Opposition leader Ted Baillieu told the program that Victorians were now "stuck" with a desalination plant and he voiced concern about the fine detail of the contract.

"The details of these contractual arrangements have to be released in full," he said.

AquaSure's Chairman, Tony Shepherd, says the consortium is ready to start work next month.

"We are quietly confident that we'll be able to raise the money," he said.

Meanwhile, the Bass Coast Shire says it will maintain pressure to ensure the local community is not disadvantaged by the project.

Shire mayor, John Duscher, says the council will continue to advocate for ratepayers.

"We will do everything in our power to lessen the impact on our community and maximise any benefits to our community," he said.

The desalination plant is expected to produce about 150 billion litres of drinking water a year and is due to begin operations at the end of 2011.

AquaSure has promised to build a windfarm at Glenthompson, in the state's south-west, to offset the desalination plant's energy needs.

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A corporate profiteering campaign has spread misinformation about a spurious need for increased skilled migration. Almost daily one hears big business representatives demand that Julia Gillard abandon her promise to dump Kevin Rudd’s “big Australia”. Instead they claim she must remove “red tape” and “increase the skilled migrant intake” to help clean up the disaster.

Community spirit undermined by corporate profit-seeking

Australia's community spirit has been on show during the floods crisis, yet some have used the floods to advance their own interests. And it's not just the odd looter.

A corporate profiteering campaign has spread misinformation about a spurious need for increased skilled migration. Almost daily one hears big business representatives demand that Julia Gillard abandon her promise to dump Kevin Rudd’s “big Australia”. Instead they claim she must remove “red tape” and “increase the skilled migrant intake” to help clean up the disaster.

Well-funded corporate campaign for more immigrants

Big bank 'chief economists' and business 'economic consultancies' form part of this well-funded campaign. The Australia Institute notes that bank profits are now running at $1,000 for every man, woman and child in Australia. The lazy way for big business to make more profit is therefore to increase its customer base, and to drive down wages by importing more pre-trained workers. It helps alleviate training and apprenticeship costs. But would a further rush of skilled migrants help us to clean up and re-house people after the floods – or just add to the problem?

Corporate campaign perpetuates problems it pretends to solve

“Australia’s migration program actually exacerbates skills shortages. A dog can never catch its tail,” says Stable Population Party convenor William Bourke. “The real objective is to feed big businesses’ insatiable desire for more consumers and cheaper labour, not to help flood victims. Of course if an immigration category is created for flood recovery skills, the next thing is that some employers will be demanding migrant doctors and hairdressers to service them. It’s a vicious circle. If genuinely required, the cost to our society of training an extra Australian is far less than that of accommodating a skilled migrant with dependents.”

He adds “Our already record high immigration has been a major cause not just of infrastructure shortages but also skills shortages and government budget deficits, and hence has eroded liveability in our major cities.[1]

Demographia’s latest report already classifies Brisbane’s housing (pre-floods) as “severely unaffordable”.[2]

The Department of Immigration's own research finds that if continued it will impose even greater adverse impacts on the quality of our natural and built environments.”[3]

NOTES

[1] http://www.onlineopinion.com.au/view.asp?article=10137&page=0; http://www.abc.net.au/unleashed/39930.html

[2] http://www.smh.com.au/business/the-second-last-straw-in-affordable-housing-market-rankings-worldwide-20110123-1a18f.html

[3] Jonathan Sobels et al., “Research into the Long-Term Physical Implications of Net Overseas Migration” National Institute of Labour Studies, Flinders University report for the Department of Immigration and Citizenship, January 2011 http://www.immi.gov.au/media/publications/research/_pdf/physical-implications-migration-fullreport.pdf

John Roles, an experienced manager in Queensland’s energy construction industry said that importing skilled migrants to help the flood crisis “is simply wrong headed. It takes more than 20 years for the average new migrant to register a surplus in the construction of both public and private infrastructure. Increases in immigration therefore exacerbate the shortage of construction skills in the short and mid term. Yet reducing the immigration level by 50,000 people for a single year would immediately free up funds and workforce for rebuilding.”

Dr Jane O’Sullivan of University of Queensland agrees and notes “A typical dwelling takes 2-4 person-years of labour to build (including off-site manufacturing and materials supply).

Additional infrastructure per person is at least as great. Since in fact only a small fraction of the skilled migration intake are construction workers (60% of this intake are not even workers, but family members of skilled migrants), the labour and housing deficit created by their immigration would last many years.”

She adds that “In flood affected areas, rents are already climbing cruelly, due to demand from displaced families and from tradespeople who have moved in from other regions for the recovery period. The knock-on effect will see rents pushed up throughout Brisbane, putting disadvantaged families under even greater strain. The last thing wanted is an influx of more families into this region.”

As well, says Bourke, “With our $770b infrastructure deficit (according to Infrastructure Partnerships Australia), it is highly inappropriate to burden our already overloaded infrastructure with more people. At a time of inflationary pressures through increased food prices, we should try to minimise further upward pressure on land, rent, water and energy prices that population growth inevitably creates. Recent experience should teach us the folly of letting population pressures lead us to build on flood-prone areas; and also that more people means a far higher cost per natural disaster,” he concluded.

Contact: William Bourke Email: [email protected] Web: www.populationparty.com, ref: Media release: 12pm Tuesday, 1 February 2011

Midday: Anti Desal Plant Rally on steps of parliament, Melbourne. All supporters welcome. After that, go to the Upper House Gallery, Parliament House,and show your support to the Opposition's motion to Overturn Amendment VC71

Anti Desal Plant Rally, Wednesday 6 October, midday until 1.30

Watershed (formerly Your Water, Your Say) – those protesting the now infamous Desal Plant at Wonthaggi, ARE HOLDING A RALLY ON THE STEPS OF PARLIAMENT HOUSE, calling for the very expensive and deeply troubled project to be scrapped. You are enthusiastically invited to support them by being there – after all, its OUR money and OUR future too, not just theirs.

Parliament House – Opposition To Overturn Amendment VC71

Wednesday 6 October (time to be advised but likely afternoon)

Matthew Guy, Shadow Planning, will be moving a motion in the Upper House to get rid of the terrible Amendment VC71 that was approved by Planning Minister Justin Madden last week. VC71 is a terrible amendment and terrible planning which puts Melbourne 2030 across all of Victoria, forcing metro standards on country areas, and makes it obligatory to have high rise and high density across the metro area (these provisions could also be applied in country areas).

Please show your support for getting rid of this horrid amendment by being at Parliament House Upper House gallery if you can. If you haven’t been to parliament before, here’s your chance to see how our democracy works (or not).

Also, please encourage Greg Barber (Greens) greg.barber[at]parliament.vic.gov.au and Peter Kavanagh (DLP) peter.kavanagh[at]parliament.vic.gov.au to support Matthew Guy’s motion by sending a message to both.

Source: Christine Pruneau of Macedon Ranges' Residents Association (MRRA)

Time to come clean on the real costs of water

The original case for Labor's controversial $1 billion food bowl upgrade was rejected by state cabinet because the government's promised water savings could not be achieved for the price tag of $1 billion, it has been revealed. Premier John Brumby has continued to tell Victorians that the savings could be made, despite not having any proof that they were achievable.

Already the project has identified 650 of the system's 6300 kilometres of channels for rationalisation, or downsizing.

Farmers claim millions of dollars of taxpayer funds are being wasted through the installation of unnecessary meters and other irrigation infrastructure on properties that have no use for them.

(cotton seeds being fed to cattle due to drought - source: wikimedia commons)

In April 2009, the Premier told Parliament: It has always been the basis of this project that there would be at least 225 gigalitres of water savings.
According to Plug the Pipe, the truth of the matter is that the pipeline has provided a mere 16.7 billion litres. That translates to a piddling 1% of Melbourne’s current water supply. So far it has only delivered 22% of the proposed 75 Gigalitres water and with only 139 days left available for pumping, the absolute maximum that can now be delivered is 58 billion litres.

To add injury to insult, the desalination plant costs rise to $5.1 billion, and $200 million a year to run. Average annual water bills soon to be $3000!

Cuts to irrigation farmers

Farmers have slammed an independent report that says Murrumbidgee and Murray irrigators should make big sacrifices to help revive the Murray-Darling Basin. The cut would drain at least $2.7 billion out of the basin's economy, however the scientists say the pain would not be shared equally across the basin's 18 catchments. In most catchments, the required reduction is less than 10%.

However, in two catchments - the Murray and Murrumbidgee - the reductions are significantly greater, in the order of 39% and 65% respectively.

The Wentworth Group of Concerned Scientists' report proposes that the Murrumbidgee and Murray regions have their water caps cut by 65 and 39 per cent respectively. 

The Wentworth group recommend to restore environmental flows:

1 Restore and maintain all major rivers and flood plains in the Murray-Darling Basin in a healthy condition;

2 Manage the Coorong and Lower Lakes as a healthy functioning river estuary; and

3 Improve or maintain the health of wetlands of national and international significance.

Cost of saving the Rivers' Health

In late 2006 the ongoing drought in the Murray-Darling Basin combined with a lack of action on the implementation of the National Water Initiative highlighted the need for a clear statement on the reality of Australia's water predicament.  According to the group, We built our modern Australian economy in a period of much higher rainfall and we assumed that it would keep on raining. But it hasn’t.

(Wentworth-Marray darling rivers source: wikimedia commons)

Scientists for the Murray Darling Basin Authority say the cost of saving the river's health will be a $2.7 billion drop in profits from communities throughout the basin - a drop of 26¢ for every dollar in the Murrumbidgee catchment and 12¢ for Murray communities.

The Murray-Darling is a floodplain river system. However, the Basin is under enormous stress as a result of past water-allocation decisions, prolonged drought, natural climate variability and emerging climate change. A lack of water and the absence of natural flooding are having a significant impact on many key environmental assets - rivers, streams, wetlands, forests, floodplains and billabongs. 

The Living Murray program was established in 2002 in response to evidence showing the declining health of the River Murray system. It is a partnership of the Australian, NSW, Victorian, South Australian and ACT governments.  The River Murray is currently experiencing its lowest in-flows on record and periods of drought need to be considered in delivering The Living Murray program.

We face a real risk that the ecosystems supporting the river system will collapse, undermining the businesses and communities that depend on it.

The best-available science suggests there is a substantial risk that a working river will not be in a healthy state when key system level attributes of the flow regime are reduced below two-thirds of their natural level. It selected water from the least profitable activities in each catchment so that the required volume of environmental water could be obtained at the lowest economic cost.

Wetlands and economic threats

The Australian Conservation Foundation estimates as much as 90 per cent of all floodplain wetlands in the Murray Darling Basin having been lost or severely degraded. The agricultural economy of the Murray-Darling Basin earns $9 billion a year in export income. Without the Murray-Darling Basin wetlands and rivers, the great productive base of our agricultural bread basket would not exist.

To achieve a level of two-thirds natural flow in all the catchments of the Basin the environment’s share of the existing Cap on diversions would need to be increased by approximately 4,400GL. This represents a reduction of approximately 40% of the current Cap on diversions.

Dairy farmers need constant rain to ensure regular milk production. It is dairy and their fodder crops that have been consuming most of our irrigation water.  Australia’s milk production is enormous, and with good prices available overseas, much of it is exported. About 600 litres is used to produce a litre of milk.  The Murray-Darling food bowl has been upholding our economy for a long time.

President of the NSW Irrigators Council Col Thomson said the report should be disregarded because there would be some areas that probably almost cease to exist.  So easy just to dismiss wetland, river systems and a life-support system?

Melbourne's water storages

Water storages supplying Melbourne are 32.7 per cent full compared with 26.3 per cent at the same time last year, meaning dams are holding an extra 126 billion litres.  However, water restrictions have been eased!

When the drought was at its worst a pipeline was conceived to bring water from the State's North to Melbourne but recent wet weather, continuing water restrictions and the revelation the city has enough water for two years without rain has some questioning the project.

The protest group, Plug the Pipe has been most vocal in opposing the project. It says people, particularly farmers in the North of the State, are having their water rights taken away in favour of Melbourne's gardens.  Someone should be pointing out how we have been forced to build a $5 billion desalination plant because we forgot about water.  In Melbourne's population explosion, the Brumby government forgot about water so they've had to make the north-south pipeline over the hills to steal water from the bush!

 It is all about politics, not logic or caution. We cannot be addressing climate change and water shortages while we are heavily dependent on unsustainable dairy industries and exports. However, it seems that producing food is a minor industry compared to the building industries and property development, supported by swelling numbers of city people who obviously pay more taxes and contribute more to the economy!

United Nations Report

Energy and Agriculture Top Resource Panel's Priority List for Sustainable 21st Century is a new and hard-hitting report concludes that dramatically reforming, re-thinking and redesigning two sectors-energy and agriculture-could generate significant environmental, social and economic returns. The report prepared by the International Panel for Sustainable Resource Management, have reviewed all the available science and conclude that two broad areas are currently having a disproportionately high impact on people and the planet's life support systems-these are energy in the form of fossil fuels and agriculture,
especially the raising of livestock for meat and dairy products.

Agricultural goods, particularly products from animals, which are fed more than half of all world crops. Agricultural production accounts for 70% of the global freshwater consumption and 38% of the total land use. Food production accounts for 19% of the world's greenhouse gas emissions and 60% of the phosphorus and nitrogen pollution and 30% of toxic pollution in Europe;

This is a very informative wrap up of the problems - political, economic, production and environmental - of the desalination plant that the Victorian Government is forcing on Victorians.

We hear the history of Labor Party promises about how they would deal with water scarcity and of how they have 'backflipped' on their promises.
We hear how the local protesters took the matter to court, lost, and how the government pursued them for costs.
We hear how the cost of water has already doubled and will keep rising.
We hear how the government has denied that the area where the desal plant is to go is a whale habitat, when it clearly is.
The government preference for poorly costed, big-scale corporate engineering 'solutions' versus multi-objective sustainable local or individual ways of getting water is discussed.

And so on.

Very educational, excellent program.

File Download (28:58 min / 13 MB)