Australian Government Forced to Slow Water Production

THE Newman Government in Australia cannot find any customers for its drought-shielding water infrastructure because manufactured water is not being discounted for fear of political backlash.

Industrial customers have no incentive to buy plant water because they would have to build their own pipelines and have no expectation of a price break.

All southeast Queensland residents are currently paying higher prices to cover debt on the $3.6 billion plants. The desalination plant at Tugun and recycled water plant at Bundamba, designed to produce more 365 million litres of water a day, are producing only 24 million litres for power stations that already have dam supplies.

Long-term operating agreements with French water giant Veolia are costing the state tens of millions of dollars a year. Faced with that continuing cost, the Government is thinking about shutting down at least the recycled water plant and paying penalties to escape their contract with Veolia.

But industry peak bodies, including Engineers Australia, are calling on the Government to think creatively and discuss their plans for the infrastructure before pulling the plug.

“The plants provide our community with increased water security, allowing us to better manage the risk of drought, population growth and even provide benefits during some floods,” EA state president Steven Goh said.

The Department of Energy and Water Supply said that since the plants began operating a few years ago, there had been “ongoing discussions with a range of potential industrial and commercial customers” whose identities were not disclosed.

“However, no significant new supply agreements have been finalised,” a spokeswoman said.With a decade’s worth of water in 12 dams, the Government would like to encourage people to buy more water by easing water restrictions. And it would like to ease the drain on Wivenhoe by getting customers to use the recycled and desalinated water.

But it also fears backlash from homeowners if industries didn’t have to shoulder their share of infrastructure debt. That leaves the Government with little choice but to shut down Bundamba and slash Tugun to a trickle.

Chamber of Commerce and Industry Queensland general manager for advocacy Nick Behrens said plant water would ultimately be in demand, but there wasn’t enough of a sweetener for industry to buy it now. That could change if attractive pricing or long-term supply incentives were offered by the Government.

“From the chamber’s perspective, we would support some discussion and transparency on the issue,” he said. An AgForce Queensland spokeswoman said plant water wasn’t needed by farmers who generally had good dam and underground water supplies. But AgForce supported an open discussion of what to do with the infrastructure.

The Government is working on a 30-year strategy for the water sector. A discussion paper will be released in December followed by a three-month consultation period.