Trevor Farrant and Ian Hunter Debate Western Australia’s Desalination Plans

Trevor Farrant’s argues that the Port Stanvac desalination plant is a costly white elephant, whilst Water Minister Ian Hunter argues that it is a crucial piece of future-proofing infrastructure.

The Case Against; Trever Farrant

The desal plant doesn’t have as many holes in it as the recently published purported history of the plant that credits Mike Rann as the champion of desalination. In fact, it was stolen, like so many other ideas, from the Liberals. Then Opposition leader Iain Evans proposed a modest plant the size and cost of one being built in Western Australia. Mike Rann pooh-poohed it for a year.

His policy, one he took to three elections, was to double the size of Mt Bold reservoir for $800 million, a promise repeatedly broken. By far the best option was stormwater harvesting, but Mr Rann sneeringly dismissed that, too, with the untrue claim that stormwater is unfit for drinking, because it required land and Labor was hell-bent on selling off the city’s open spaces to developers.

On the principle of “mine’s bigger than yours”, Mr Rann doubled the size of the plant to 100 gigalitres, and its price tag to $2 billion, all without a cost/benefit analysis or a new environmental impact statement (EIS).

He gave the constructing consortium, AdelaideAqua, a $90 million incentive to bring completion forward by a year to December 2010. Although the project was delivered a year late, that money was never recovered. Infrastructure Australia rejected federal funding for the plant on the basis that it offered “no economic benefit”, like so many of Labor’s white elephants.

The then Rudd government’s “gang of four”, including Julia Gillard and Wayne Swan, bent the rules to help their state Labor mates out with federal money in the lead-up to an election. At no stage did Labor mention that an extra $400 million would be needed for a network of pipes and pumping stations to distribute the desalination plant water. That story was broken by Brad Crouch in the Sunday Mail.

Nor is it admitted that the metro water system loses up to 13 per cent of its supply via leaks and burst mains, because there’s no money to upgrade ageing infrastructure. A lot of that sparkling, expensive desal water will never reach anyone’s tap. As a sweetener to the Greens, Mr Rann promised the plant would be powered by “all-new wind-generated energy”. In fact, it draws its (much dearer) green electricity from the existing grid, which has to be replaced by dirty coal-fired power.

Mr Rann declared that the desalination plant would end SA’s dependence on the Murray forever. It has made no difference, because taking water from the river to top up our reservoirs remains the first and by far the cheapest option.

Labor’s spin is that the cost of the plant must be added to our future water bills. In fact, the Rann/Weatherill governments have already creamed more than $2 billion from SA Water’s profits as a so-called “dividend” (a swiftie invented by Liberal premier John Olsen).

In effect, it uses SA Water as a tax collector.

The current pretence is that the mothballed plant will cost $30 million a year. This is simply the expense of maintaining it. The true figure is closer to $160 million a year, for decades, which represents an 8 per cent return on capital.

Labor knew this before the 2010 election, but suppressed a 2009 internal report by SA Water, Impact of the Desal Plant on Water Pricing, which showed that by 2015 some 42 per cent of South Australian households would struggle to pay their water bills. As bills double and re-double, Labor claims this reflects its policy of ‘user pays”. The question is: Who is being used by whom?

The Case For; Ian Hunter

When it comes to water and droughts, some people have a very short memory. It is the only explanation for the ill-informed rant about the desalination plant in Friday’s Advertiser. The stark reality for South Australians is that time and again we have seen the devastating impacts of drought.

Just four years ago, the severe drought across the Murray Darling Basin left many of our river communities close to ruin. It became clear during the drought that Adelaide’s water supply – reliant for decades on the health of the River Murray – was vulnerable to the extremes of our climate.

That’s why we decided to work towards “drought-proofing” Adelaide with desalination in addition to stormwater harvesting and aquifer discharge while also reducing demand through water conservation measures. There will be droughts in the future. And there is every chance they will be longer and more severe.

If our capital city is to flourish, and if our economy is to grow so that it can generate job opportunities for our children, then Adelaide must have a defence against drought.

The 100-gigalitre desalination plant is that defence.

Independent advice showed that a 50GL plant would not be enough. Without a 100GL capacity, South Australia was at risk of running out of water in the extremely dry years.

The decision to double the size of our desalination plant was based on our commitment to ensure we have a climate-independent source of water for Adelaide, and to reduce the burden on the River Murray.

And what we know from the experience of other cities with desalination is they usually underestimate how much water they really need. Perth built a 45GL plant in 2006, and then earlier this year, it commenced production at its second plant, which has a capacity of 100 gigalitres. By building a 100GL plant in one go, we saved an estimated $200 million in future construction costs.

And we know the additional cost to water consumers for that extra 50GL is approximately $30 a year. That’s cheap insurance against future droughts by anyone’s account. In terms of the dividend the State Government draws from SA Water, I’m sure Mr Farrant would be interested to learn that, in real terms, the amount collected during the past five years is actually $58.3 million dollar less than that collected by the former Liberal government between 1997/1998 and 2000/2001.

The question for Mr Farrant is: Without desalination, how would he drought-proof Adelaide and secure water and jobs for future generations of South Australians?