desal flop...

THE consumer bill for the nation’s largest desalination plant is set to rise to more than $2 billion, as heavy rain and soaring dam levels make redundant tremendously expensive facilities across the eastern seaboard. New figures obtained by The Weekend Australian show the Victorian desalination plant, southeast of Melbourne, will have cost water users $1.2bn by the November 29 state election, rising to $2bn by the end of the next financial year. The cost has soared, despite no water having been drawn from the facility since its opening in 2012 and dams being more than 80 per cent full. The full cost of building, running and maintaining the plant is forecast to climb markedly in the next three decades. The Victorian experience has been replicated across Australia’s east and south. Plants in Victoria, NSW, Adelaide and on the Gold Coast cost more than $10bn to build but their operations have been effectively mothballed. Sydney’s plant is dismissed as a white elephant, with no water produced since 2012, despite costing consumers almost $200 million a year, or about $100 a year for every water user. In Queensland, the Gold Coast desalination plant built by the previous Labor government at Tugun cost $1.2bn but has been effectively mothballed for the past few years. In Adelaide, the 100-gigalitre-capacity desalination plant cost $2.2bn to build and was finished in December 2012 but the plant, publicly owned but operated by private contractors AdelaideAqua, will be mothballed from January 15 next year after a two-year “proving period”. Serious questions are being asked about why state governments past and present have invested billions of dollars in desalination plants when high dam levels — such as 88 per cent in Sydney — make the infrastructure surplus to requirement. The great drought ended in 2010, leaving Victoria with a desalination plant about 130km from Melbourne capable of producing 150 billion litres of water a year and a bill over 30 years of as much as $22.5bn, depending on whether, or how much, water is used. Average yearly water-bill increases in Melbourne of about $200 have been recorded. Assuming no water has been collected from the Victorian desalination plant by 2039-40, consumers will still have paid more than $18bn to keep the plant going when all costs are included, a prospect that is expected to dominate debate in the final stages of the state election campaign. Victorian Water Minister Peter Walsh told The Weekend Australian yesterday that the plant was a “gigantic, permanent stain’’ on Labor and its leader, Daniel Andrews. “Every time a Melbourne household gets a water bill, it is a reminder that Labor can’t manage money, can’t manage major projects, and can’t tell the truth,’’ Mr Walsh said. Data reveals that Melbourne water users will have paid almost $1.1bn by the end of August for the management and maintenance of the plant, with payments rising to more than $1.2bn by the end of the election campaign and $2bn by the end of the next financial year. The payments began in December 2012 but the breaking of the drought in 2010 means the government has opted against making a call on the desalination plant to produce water. The government has placed a zero water order for the supply period ending next June. Under the deal struck by Labor, Melbourne households are still required to pay about $600m via an annual holding charge, regardless of whether water is taken. Melbourne water consumers effectively fund the plant via their water bills, exposing Labor to a cost-of-living campaign in the final weeks of the election campaign. AquaSure was contracted by Victoria to finance, design, build, operate and maintain the plant. The Wonthaggi plant was embroiled in controversy amid claims it was being built on the back of union sweetheart deals and dramatically generous pay and conditions. The NSW government sold its plant to a consortium of Hastings Funds Management and the Ontario Teachers’ Pension Plan for $2.3bn, but with a 50-year lease that guaranteed them payments whether the plant was working or not. Mr Walsh said the fifth anniversary of the Victorian plant had been marked in June and that despite the cost of the water and the plant, it could only ever produce a third of Melbourne’s water needs. “If we are re-elected in November, the Coalition will continue to look at all means of reducing Labor’s desal burden.”source