March 29th 2008

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Articles from this issue:

COVER STORY: The truth about Australia's birth rate

EDITORIAL: NSW electricity to be privatised?

CANBERRA OBSERVED: Opposition needs new policies, not stunts

WATER: Time to build new reservoirs

QUARANTINE: EI inquiry flags major changes to horse quarantine

INTERNATIONAL TRADE: Rudd Government to re-examine FTAs

ENVIRONMENT: Conference rejects climate change alarmism

HIGH SCHOOLS: School: ladder of opportunity or game of snakes and ladders?

HUMAN RIGHTS: Behind Beijing's crackdown in Tibet

UNITED STATES: California court attacks parental rights

DRUGS: Australia's complicity in global drugs menace

UNITED NATIONS: Feminist frolics at the UN

AS THE WORLD TURNS: Muslim attacks forcing Jews out of Paris suburbs / School vouchers flourishing in Sweden / Coal tipped to be world's top energy source

MEDIA: ABC's take on Islamic school controversy

CINEMA: BELLA: A gentle film with a big heart

BOOKS: DARWIN DAY IN AMERICA: How Our Politics and Culture Have Been Dehumanized in the Name of Science, by John G. West


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Time to build new reservoirs

by Patrick J. Byrne

News Weekly, March 29, 2008
Huge areas of Australia are still in a protracted drought, made worse by the poor management of major irrigation systems and decades of neglect of water infrastructure. Patrick J. Byrne reports.

The big dumps of rain in recent months, following a long drought, should have signalled to governments that it's time to build new dams.

Despite the summer rains in north and coastal Queensland, coastal NSW and eastern Victoria, huge areas of the continent are still in a protracted drought, made worse by the poor management of major irrigation systems and decades of neglect of water infrastructure.

Instead, the indications coming from the federal and state governments are that they intend to move towards more open water-trading markets and then privatisation of water infrastructure.

The intention is to allow water to be traded from farmers to cities, along with the vain belief that "market signals" will result in greater private investment in water infrastructure.

In presenting the recent Ian Little Memorial Lecture, Treasury Secretary Dr Ken Henry, presumably with the tacit approval of the Federal Government, indicated the desirability of setting up a water market modelled on the privatised electricity market.

According to Henry, in a well functioning national water market, which he called WaterCo, "drought-induced increases in the price of water would reallocate water among users".

Supply response

He said: "The supply response is even more important. The drought-induced increase in price would provide the signal for investment in the supply, including things like desalination plants, new dams and water-recycling plants. When brought on stream, these investments would reduce the price of water."

In a scathing attack on this proposal, Melbourne Age writer Kenneth Davidson, said: "A water market along the lines envisaged by Henry will lead to reduced competition and higher prices...

"The Brumby Government has apparently signed up to a public-private partnership for a $3.1 billion desalination plant...

"The cost of producing water from the Wonthaggi [desalination] project is estimated to be more than $2,000 a megalitre."

In contrast, he said, "If the Brumby Government had agreed to build a dam on the Mitchell River, the cost of the water would be in the order of $300 a megalitre." (The Age, March 10, 2008).

The Mitchell River recently flooded Bairnsdale twice.

The problem is that the private partners in a desal plant will insist on the plant running continuously for at least 30 years to ensure profitability for investors, even if a number of wet seasons means that it's not needed for years at a time.

Further, a private partner will likely insist on "no compete" clauses that would limit the expansion of competing infrastructure.

"Recent notorious examples," Davidson points out, "include [Melbourne's] CityLink, which prevents government expanding nearby roads without compensation, or Sydney airport, where the private owners have been granted the right of first refusal to build and operate any second airport within 100 kilometres of central Sydney."

Davidson outlined far cheaper alternatives to a desal plant.

Rough calculations indicated that, at a cost of $1,300 per megalitre, a pipeline under Bass Strait from Tasmania could supply all the needs of Melbourne and Geelong.

Another proposal is to use ocean-going tugs to tow fresh water at low speed from New Zealand in huge Medusa bags, which engineers believe would cost 10-20 per cent of that of desalinated water.

State governments instead should be dusting off water plans shelved in the 1980s.

In 1981, the NSW Water Resources Commission produced a Possibilities for Inland Diversions of NSW Coastal Steams, which outlined possible dam sites on the NSW east coast, each capable of providing water by tunnel into the Murray-Darling Basin system. Of these, the most favourable five high-yielding dams could produce 2,027,000 megalitres annually. This would add about 16 per cent more water to the Murray-Darling Basin's average flow. (One megalitre is about the volume of an Olympic swimming pool).

North Queensland's rivers have huge average annual run-offs, about 9.7 times the Murray-Darling Basin flow.

Numerous feasibility studies have been produced. One of the more comprehensive was a report for the Queensland Government, The Bradfield Concept: Further Investigations 1983-84. This, combined with another report for the Queensland Office for Northern Development in 1984 on the revised Bradfield scheme, found that the upper Burdekin, upper Tully and upper Johnstone rivers could yield about 1,691,000 megalitres to irrigate 300,000 hectares on western Queensland's huge, rich, black-soil plains.

Western Australia also has vast supplies of water untapped in its northern regions.

Some so-called experts have argued that it's useless building dams when there is a drought on. To the contrary, this is precisely the time to build dams. Then, when it does rain, there will be more lower-cost water in reserves to weather future droughts. Some dams should be environmental dams, set aside for environmentally sensitive wetlands and rivers.

Australia needs nation-building projects, not more misdirected privatisation and deregulation under national competition policy.

- Patrick J. Byrne

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