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Is desalination a premature or gallant water supply decision?

Paul Harris — March 2011

Emerging Issue: In 1976, the approval for constructing the Thomson Dam in Melbourne to meet then drought conditions faced public scrutiny. Concerns were raised about how a premature water supply decision would result in unnecessary capital investment and increases in water charges. A report in The Age in January 1976 quoted: “The Government ought to find out whether the dam is needed. It should not let the political nightmare of summer droughts panic it into premature and irreversible financial decisions on the Thomson Dam project.”

By 1982, Melbourne was again in the midst of drought but the Thomson Dam was still not complete. Ironically, less than a decade later, public disapproval has reassigned itself to the ‘poor timing’ of dam completion, rather than questioning the original investment.

By the late 2000s, years of severe drought has caused water storage levels in Melbourne to drop to their lowest on record, almost reaching critical minimal levels. Public disapproval has long been replaced with acceptance, with many acknowledging that if the Thomson Dam had not been built, Melbourne’s water supply would have completely depleted by the mid-2000s.

Governments today face similar public scrutiny over their water supply decisions. The majority of desalination plants in Australia were approved by government in the mid-to-late 2000s when drought conditions were at their peak. Recent flood conditions (on the east coast of Australia) have provided impetus for a concerned public to critically review the link between large capital investment and rising household water bills.

In late 2010, two months after the Queensland government took receipt of the $1.2 billion Tugun desalination plant, it announced the plant would be mothballed amid a state awash in water. Queensland’s Natural Resources Minister, Stephen Robertson, reasoned this would cut rising household bills by approximately $18 million per year. “For a typical household, next year's bulk water charge will be around $5 less than previously announced – $54 down from $59. Further, additional savings will continue for every year and will grow to more than $30 per household by 2017,” he said.

Similarly in Victoria, the construction of the $5.7 billion desalination plant at Wonthaggi is now subject to public scrutiny. Record floods in Victoria have raised questions about whether the plant is needed at all, and the unnecessary impact on household bills. In February this year, consumers reacted angrily when it was revealed that an estimated $100 a year was being added to water bills to pay for the Wonthaggi project. The Victorian Government continues to examine the supply contract in detail to identify savings. Victoria’s Premier, Ted Baillieu, recently announced: “If there is a capacity there to save Victorians from what is going to be an enormously expensive project, and is going to cost Victorians for the next 27 years, we will do it.”

As with past trends, will scrutiny of the government’s recent water supply decisions disappear in the short term? Will the community accept desalination as a viable supply source within the next decade? How can the government better prepare the public to accept these large capital investment decisions to secure a long-term water supply?

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