I wrote about this very thing (Water Crisis, June 25, 2007) but without the hard facts or elequant prose of Mr Davidson, so I will not sully his message, rather allow you to read it for yourself.
Denying recycling just won’t hold water
WATER Minister Tim Holding is a desperate man representing a desperate government. His press statement last week claimed that a business case undertaken by or for the Government found major recycled water projects too expensive. Rubbish.
In 2002 Melbourne Water found that recycling sewerage water from the eastern treatment plant at Carrum was cheaper than building a dam. It also reflected the growing policy of using where possible recycled water, which flows into 25 per cent of Melbourne’s drinking water.
Even so, avoiding recycling was part of the justification for the Wonthaggi desalination plant, which was sprung on the electorate just after the 2006 election. This is despite Labor campaigning on the promise of no desal because it was too expensive and no north-south pipe because it would take water away from the already distressed farmers in the Goulburn valley.
Many international reports say that any government prepared to negotiate with the desal finalists, Veolia and Suez, to privatise water services without fully understanding the implications, is likely to find consumers ripped off and the Government losing popular support.
The Government has just dumped Veolia/Connex as franchisee of Melbourne’s rail network. Now Veolia is considered favourite over Suez for the desal contract. Connex hasn’t complained about losing the transport contract. Is this because it expects to win the desal tender?
Irrespective of who wins the tender, it is clear that the decision to abandon Melbourne Water’s economically and environmentally sensible plan to recycle water is connected with the desalination plant.
Holding’s press statement last Friday said, “The Latrobe Valley option, to substitute recycled water to cool power stations, would have cost approximately $3.8 billion.”
This claim is so wide of the mark that it could be seen as a cover-up for an even bigger problem. It has long been Melbourne Water and government policy to upgrade the Carrum treatment plant. A long-standing statement still on the Melbourne Water website states: “The options for using the ETP (Carrum) recycled water and the requirements for this business case were foreshadowed in Our Water Our Future (2005). The business case compares the costs and the benefits of taking tertiary treated Class A water and recycling it for … substitution of recycled water for river water being used by the power generation industry in the Latrobe Valley, which currently uses about 100 gigalitres of river water a year … This would secure water supplies for this critical industry as well as release water for the environment, Gippsland and Melbourne.”
The commitment to the desal plant led to the junking of this policy. The generators are the excuse. They have a long-term contract for river water. The contract must be varied to take the water from Carrum. The Government is using the excuse that water from Carrum would risk damaging the generators to justify a lower price even though the water would be quality controlled for power station use, unlike river water, which the power stations must treat at their cost.
This has not stopped the Yallourn generators claiming the recycled water would create unknown risks to their equipment. The Government has fastened on to this dubious argument, aimed at getting cheaper water for the generators, to claim this destroys the case for upgrading the recycling plant to class A water and, even more fantastic, makes desal water cheaper.
Back to reality. If the recycling project is completed in line with the original business case, 100 gigalitres can be pumped to Yallourn, freeing up an extra 100 gigalitres of water from the Latrobe River for Melbourne’s use. This is equal to a quarter of Melbourne’s water demand, currently 380 gigalitres a year, and it is not dependent on rainfall as it recycles existing water.
This makes the 150-gigalitre desal plant redundant. The only additional expenditure needed for recycling is the cost of building the system of pipes and canals to get the water to Yallourn. The distance is 140 kilometres with a rise less than half the rise from Wonthaggi to the Cardinia Reservoir.
The capital cost of pumping water to Yallourn is about $1.3 billion, although the cost could be reduced to $600 million if it used the pipes purchased for the north-south pipeline. In any case, it’s likely there won’t be any water to pump if priority is given to the river, irrigators and the cities of Ballarat, Bendigo and Shepparton. The claim that the Foodbowl Modernisation program will create water “savings” is proving to be a charade.
By comparison, the capital cost of pumping water from Wonthaggi to Cardinia will be in the order of $1.7 billion without including its share of the new capital expenditure needed to bring power underground to the desal plant.
The mind boggles: $3.8 billion to pipe water to Yallourn and only $3.1 billion to build the desal plant and pump water to Cardinia. Even if they gave the Carrum water to the generators for nothing, it would still be cheaper than going with desalination. It could be argued that the Government’s preferred business case is possibly a fraud on the taxpayer and the environment.
Kenneth Davidson is a senior columnist.