Feb. 5 (Bloomberg) -- Victoria Water Minister Peter Walsh, whose government is paying A$1.8 million ($1.9 million) a day for an idled desalination plant, said the facility costs too much and the state is considering recycling stormwater instead to meet some needs.
“There are other options to ensure Melbourne’s water supply” including more efficient recycling of drainwater, Walsh said in a telephone interview. “The previous government could have been looking at this rather than making a rash decision on a very expensive project.”
Walsh’s Liberal-National coalition inherited the A$3.5 billion Wonthaggi plant on Australia’s south coast when it beat Labor in the November 2010 state election. Since the plant was ordered in 2007, the nation’s most prolonged drought has broken, leaving nearly dry dams in Victoria state almost full after floods and storms caused at least A$7 billion of insured losses and 40 deaths nationwide the past three years.
Termed “Labor’s white elephant” by the Canberra Times, the plant co-developed by Suez Environnement shows the perils of planning water supplies in the driest populated continent. The desalination plant for Sydney, Australia’s largest city, has been idle since July. The Gold Coast desalination plant in Queensland state was turned on last month after a two-year hiatus to provide water for the third-biggest city, Brisbane.
Since 2006, the nation’s five largest cities have spent billions on desalination plants for a secondary source of water. The energy-intensive plants make the water more costly than that from aquifers and reservoirs.
Adelaide’s desalination plant, built at a cost of A$1.8 billion, completed work to double its capacity to 100 gigaliters in December and is in the process of commissioning, the South Australian state government said in an e-mailed statement.
In Melbourne’s case, AquaSure Pty Ltd. was created to bid for the project in a group that included Suez, Europe’s second-largest water utility, its subsidiary Degremont SA, and construction company Thiess Pty Ltd. to build and operate a plant capable of turning as much as 150 billion liters (39.6 billion gallons) of saltwater a year into potable water.
“The project timetable was always very demanding,” Aquasure said in an e-mailed response to questions. “It was made worse by the rainfall” and industrial disputes.
Suez, which is Paris-based and supplies 30 percent of Australia’s drinking water, has taken 322 million euros ($435 million) of provisions on the project due to delays, cost overruns, strikes and bad weather, according to the company.
Under the contract the previous Labor government signed with AquaSure, the plant, operating or not, now costs Victoria state a minimum of A$1.8 million a day, Walsh said. Should water be ordered, the cost will increase at a fixed rate.
“Our view is there should be a desalination plant as a last resort for Melbourne,” Walsh said Jan. 30 of the country’s second-largest city. “It didn’t need to be as big as or as expensive as this one.”
“In any given year there’s more stormwater that runs off Melbourne into Port Phillip Bay than Melbourne consumes,” Walsh said. “We’re not saying we should be drinking that but we are saying that can be utilized for non-potable purposes,” including watering urban parks and sports fields.
The government has allocated A$50 million in grants to assist water authorities to utilize stormwater and recycled water. A new suburb in East Werribee will predominantly use stormwater for public spaces, he said.
Tony Wong, chief executive officer of the Cooperative Research Centre for Water Sensitive Cities, said securing water supplies for Australia should be beyond politics.
“Notwithstanding the debate on whether it needed to be as large as it is, the circumstances leading to the decision to commission the desalination plant, and its strategic function, are often conveniently forgotten,” Wong said. “I am always concerned that important nation-building infrastructure projects are politicized.”
The desalination plant “will provide Melbourne with an important underpinning water security that enables it to now develop a broader strategy for a sustainable and resilient water system,” he said.
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