Baillieu adviser urges new desal contract

Royce Millar, Ben Schneiders

April 7, 2011


    A KEY Baillieu government water adviser has called for renegotiation of Victoria’s multibillion-dollar desalination contract, insisting the controversial plant is unnecessary under the Coalition’s policy of boosting rainwater collection, and recycling, in Melbourne.

    Academic and engineer Professor Peter Coombes told The Age that, as leverage with the desal builder/operator, the government should make use of the heavy penalties that apply if the consortium misses deadlines for completion.

    ”Victoria does not need a desal plant of this size supplying water every day. It should be a water security option, an emergency option. And the government should be renegotiating the contract to get that outcome.”

    He said that under the government’s ”strong” water reforms that emphasise rainwater tanks, stormwater collection and recycling, the desal plant would not be needed from 2014, except in serious drought circumstances. Even then, the 150 billion litre-a-year capacity of the plant commissioned for Wonthaggi would be unnecessary.

    His comments follow yesterday’s Age revelation that the desal plant is now six to 12 months behind schedule.

    Professor Coombes also said that the government should reconsider its hard line against using water from the former Labor government’s contentious north-south pipeline, arguing the pipeline water would be cheaper than from the desal plant. Both, he said, should be viewed as fallback options.

    Last night Water Minister Peter Walsh said it was too late to scale back Australia’s largest desal plant.

    ”We cannot break the contract for the Wonthaggi desalination plant as to do so would expose the state to unacceptable sovereign risk. Funds are more than 90 per cent

    appropriated and the plant is more than 50 per cent built.”

    But at a press conference yesterday the minister left open the possibility that the government would not order water from the desalination plant from mid-2012, despite the facility costing taxpayers up to $750 million a year to run.

    Nor would Mr Walsh comment on the likelihood of the Thiess Degremont consortium meeting its December deadline for producing desalinated water or the government’s preparedness to hold the consortium to that deadline.

    Mr Walsh’s office later confirmed the government would enforce the December deadline and there would be a ”non-payment” of $14 million if it was missed.

    However, for the first time, the government yesterday began to stress a second deadline of June 2012 at which time the plant was supposed to be fully operational or face the loss of $1.8 million a day in payments.


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