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Please read this article by Mary Crooks and Wayne Chamley of Watermark Australia
Government’s water projects need independent scrutiny
It is a truism that the health of a democracy is measured by the degree of transparency attached to government decision-making. A key institution for ensuring some level of transparency is the Office of the Auditor General.
The Bass Council recently stopped negotiations with the State Government because it had been impossible to glean any substantive detail from the Government regarding the proposed $3.9 billion desalination plant at Wonthaggi. Likewise, it is impossible to verify the expected water savings claimed by the Government in relation to the Food Bowl modernization project. Yet, such verification is crucial to determining whether there can be the amount of water savings available for piping to the Sugarloaf Reservoir via the proposed North-South pipeline.
These three water projects represent massive amounts of public expenditure on major new infrastructure. At the present time there is insufficient information in the public domain to allow the people of Victoria to be confident of getting value for their tax dollars. Only the Auditor-General can provide an independent and authoritative answer.
This independent scrutiny should start with the documentation held by government, Melbourne Water Corporation and Murray-Goulburn Water relating to the so-called Food Bowl Modernisation Project and the Sugarloaf Pipeline Project. An Auditor-General’s report will at least show whether each of these projects represent cost-effective expenditure of public monies. Likewise, the basis of any future private/public partnership for the desalination plant needs to be scrutinized and reported on by the Auditor-General.
The only public information, from government websites and communication materials, is summary information on proposed expenditure, the expected water yields and the uses to which this saved water is to be put. For example, we are told that the Food Bowl project will be carried out in two stages. Stage One is to cost $1billion, producing 225 billion litres (GL) of saved water by raising the overall efficiency of the irrigation system from 70 to 77%. This water-saving opportunity works out at $4,444 to gain each million litres (ML). Stage Two is uncosted, although we are told it will save a further 225 GL, by raising efficiency to 85%. The $1 billion extracted by Premier Brumby at the most recent meeting of COAG represents part of the costs for Stage Two.
This limited information suggests that someone has determined (or is it simply being assumed?) that there is a linear relationship between incremental increases in efficiency and the volume of water to be gained. In this regard, modeling studies carried out in 2002 considered all of the irrigation systems in the Murray-Darling Basin. They found that for some, this relationship may be linear. For others however, it may be either reciprocal (most water gained at the start and then declines with further expenditure) or exponential (smaller volumes are gained at the start and these increase with increasing expenditure).
We need to know the real situation here because the implications are profound. For instance, if the relationship between efficiency and water to be saved is exponential then there is an immediate problem. Starting from first principles, it can be calculated that the water saving from Stage One might not exceed 120 GL.
This potential discrepancy is critical, because the Government is using the figure of 225 GL to justify sending 75GL to Melbourne via a new pipeline that will cost $750 million. The infrastructure costs to save and then transfer this water to Melbourne work out at $14,440 per ML (million litres). If the water savings in Stage One turn out to be only 120 GL, the infrastructure costs rise to $18,333 per ML. This suggests that 65% of Stage One expenditure will be incurred just to save the 75 GL for Melbourne, with little for irrigators and the environment.
If however, the relationship between efficiency and water to be saved is reciprocal, then while 225 GL may be saved from Stage One, the same volume of water will not be saved from Stage Two. The Victorian government has stated that this water will be shared between irrigators and the environment and now the Commonwealth government appears to have made a down-payment for a 100 GL environmental portion. Again, whether this amount of water can be saved is open to serious question.
There is a second aspect of the Food Bowl Project that also needs to be scrutinised. As the upgrade is carried out, there will no doubt be claims of water savings being made. Are these to be independently verified? This is particularly important in a climate change scenario for Victoria which predicts declining inflows into river systems. Can we really get this water after all this expenditure? What independent monitoring should be put in place so that the Victorian public can feel reassured that their money was well-spent?
It makes sense to upgrade irrigation infrastructure to save water. However, with a possible four-fold range in the cost of saving water and then using or transferring this water, Victoria’s taxpayers are entitled to ask what value will they be getting for their money? On face value, it would appear that the greatest benefit will be achieved if all saved water is made available to irrigators and to reverse environmental degradation. At least there are tangible gains when water is used for these purposes. Transferring water to Melbourne on the other hand, simply means that more precious water is going to be converted into wastewater. Major questions also surround the proposed desalination plant and these too can only be properly answered by independent investigation and scrutiny from the Auditor-General.
Wayne Chamley and Mary Crooks
Co-authors of Our Water Mark – Australians
Making a Difference in Water Reform
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