WATER PROJECT COSTS

In reply to Mr WILLIAMS (MacKillop—Deputy Leader of the Opposition) (11 October 2010).

The Hon. P. CAICA (Colton—Minister for Agriculture, Food and Fisheries, Minister for Industrial Relations, Minister for Forests, Minister for Regional Development): I am advised that:

Bird In Hand WWTP Upgrade

The approved Bird In Hand wastewater treatment plant upgrade requires capital expenditure of $60 million to be incurred from 2009 to 2014. SA Water's approved 2009-10 capital budget included an allocation of $35.5 million from 2009 to 2013 for this project with these estimated costs based on early concepts.

An extensive consultation process implemented for this project allowed input from community groups, local residents and government agencies thus ensuring that all stakeholder values were managed. As well, the application of an Early Contractor Involvement (ECI) process during the development phase required refinement of the project costs estimate, construction schedule and risks, and identified the need for an increased project budget.

Bolivar

The original approved budget was based on an early concept, prior to any option being selected. The preferred option adopted included an upgrade to the pump station with additional capacity to meet system growth in the future.

The original scope of the project has increased during the options development and the commencement of detailed design phases which have impacted on the original estimate.

Augmentation of the Middle River Water Supply System

The original approved budget of $10 million was prepared based on an early feasibility study for the Storage upgrade with no site yet identified.

However, with the draft concept design now nearly complete and a valuation for the land acquisition of the preferred site undertaken, a further refinement of the cost estimate was possible in line with the identified technical and commercial risks associated with the project. The current estimate is $20.3 million.

The preferred site is on a slope and close to residential properties. This has added additional costs due to additional earthworks and sound proofing of the buildings.

When investigating the concept design, the mode of disinfection of the water has been recommended to be changed. This will allow more consistent compliance with the Department of Health requirements, but also increase the estimated costs.