WATER PRICING

In reply to Mr WILLIAMS (MacKillop—Deputy Leader of the Opposition) (22 July 2010).

The Hon. P. CAICA (Colton—Minister for Environment and Conservation, Minister for the River Murray, Minister for Water): I am advised that:

The Adelaide desalination plant operating costs were transparently declared by SA Water in the Parliamentary Public Works Submissions (November 2008 and June 2009 respectively) and comprised:

1. Gross $91.8 million per annum (or a net of $81 million/a after discounting the River Murray pumping saving of $10.8 million/a) for the 50 GL/a plant.

2. Gross $129.9 million per annum (or a net of $119.1 million/a after discounting the River Murray pumping saving of $10.8 million/a) for the 100 GL/a plant.

The above operating costs were based on Financial Year 2015-16 and based on plant operating at full capacity every year.

In response to the specific matter of annual escalation of the operating costs, SA Water's Parliamentary Public Works Submissions were based on an annual escalation (increasing year on year due to inflation) of 2.5 per cent per annum.

For the financial year 2015-16 extending to next financial year 2016-17, this increase would be approximately $3.87 million. This is much lower than the figure of $25 million per year quoted above.

The current SA Water forward pricing estimates (2010-11) incorporate the dollars as previously declared for the 100 GL/a plant. There is no increase in the operating costs reported to Parliament in June 2009.