Parliamentary Committees

Public Works Committee: Barossa Infrastructure Limited Capacity Increase Project

Debate resumed.

Mr PEDERICK (Hammond) (11:16): I rise to speak to the 570^threport of the Public Works Committee, entitled Barossa Infrastructure Limited Capacity Increase Project. I welcome this increase. The BIL scheme is revolutionary and has been assisting producers in the Barossa area for many years now. It gets water down to a real value that people can add value to because otherwise, if the cost of water, like any other input, is too prohibitive, people may make the decision not to even attempt to go into either a food production area or, as we know with the Barossa, a reasonable winegrowing area. I represent Langhorne Creek, and it is a reasonable winegrowing area and a lot of very good wine is grown there as well.

Coming off the land myself, I think anything we can do as a parliament to support our primary producers we should do. More than sometimes, we hear the argument that water is delivered around the state at postage stamp pricing at the business rate of somewhere around $3.40 a kilolitre. That may be so, but when you have to irrigate a lot of hectares and you run into the use of megalitres it becomes quite an impost on your production, as I said, whether it is food production or wine production.

I certainly welcome what is happening with Barossa Infrastructure Limited and the capacity increase and wish every success for producers in the region in making a profitable return on their investments. I also reflect on what has been attempted in the Clare Valley area. At least four years ago and longer, there were discussions around Lake Albert, which impacts on both the member for MacKillop's area and my area, in regard to people accessing water under a scheme.

I was under the impression, until recently, that those talks were progressing quite well and that we would see some outcomes to assist producers, especially around Lake Albert, which was devastated during the Millennium Drought that began in 2006. The issue there was that there was somewhere close to $40 million of production around Lake Albert before the Millennium Drought and that dwindled to something between 10 per cent and 20 per cent of that amount of production, and that was through no fault of their own but from having water that was too salty to utilise for their capacity.

In the years since, we have seen—because people obviously had water that they could get from their allocation and they could source that from the lake—the emergency pipeline go in, and that was an asset that was definitely needed just to keep stock alive. Certainly young stock, calves and lambs, cannot do well and in some cases do not even survive on water that is slightly brackish with salinity, so the SA Water pipeline went in. I always contract with the contractors—I think it was Leeds, from memory—and they put it in, after all the bureaucracy had been gone through. This is where the real action happened and they got it in in record time, I believe. They did a great job with a lot of crews putting that line in.

What we saw was a major increase. You can imagine, for people who have allocations for megalitres for irrigation and then all of a sudden they are having to buy megalitres at the SA Water price through the pipes, that it puts a real dent in any profitability at all; in fact, it drives some people well and truly backwards. I know during the drought some people were spending $5,000 a week on water, and that is just not sustainable. They were not getting much production back because essentially they were just keeping stock alive in the main.

What we have seen since that time is many private pipelines put in, some valued at only a few hundred thousand dollars—and I do not mean 'just' a few hundred thousand but they were relatively close to the lake. There were farmers who paired up or tripled up and utilised one line. That line would be running on one side of the road and the SA Water pipeline would be running on the other. There have been other proposals for bigger offtakes that will go into the millions of dollars that people are either thinking about putting in or are putting in because they have to have water at a reasonable rate. You are pumping water out of the lake, in some cases, for under 20¢ a kilolitre and sometimes under 10¢ a kilolitre.

If you compare that—and, sure, you have to have the allocation of the water under your irrigation licence—with something around $3.40 a kilolitre, it does not take long to do the maths. It does not take long, even with some of these massive investments, to get your return back. The sad thing is that the state does not get any return really from these private investments, nothing compared with what it would if there was a deal struck, similar to the Barossa Infrastructure Limited scheme, so that these farmers in the Coorong council area could access water at a reasonable rate.

There has been a lot of pushback in the last four years and, from what I understand, SA Water has really pushed this back and the minister is pushing this back. Quite frankly, I think that is disgraceful. It is holding up primary production opportunities in my area and the member for MacKillop's area and added so much potential. So now we will see more private pipelines go in with no money returned to the state.

I will declare an interest: I live on a property in the Coorong council area and potentially—and I place it on the record, as I have before—I could have benefited from this if they put all rural property owners in on the same scheme in the Coorong area. It is interesting that SA Water and the minister have been saying that there was not enough water going to be utilised with this. I think it is up to something between seven and nine gigalitres a year. That may not be a big amount in the scheme of things, but it is a fair bit of water to put through a pipe and deliver to properties. Whatever water you are using in regard to your primary production, it is absolutely vital.

When it comes to using the volume of water as an excuse, I would have thought it might be a better excuse to actually allow a Barossa Infrastructure Limited-style scheme to go into place in the Coorong council area. It would not have had much of a net loss to the government. As I said, it would not be all loss because there will be total loss as more and more people do it. Certainly, I will not be doing it. My farm would be over 50 kilometres from Lake Albert, so I will not be participating in a private pipeline due to the cost, but who knows?

Into the future, it may happen. There may be a consortium that gets together and decides that yes, Coomandook, Yumali, Ki Ki and even Coonalpyn farmers want to tap into that water source with an allocation, whether lease or purchase, and get on with the job, but that is going to be a little way down the track, if it happens at all, just for the pure distance. Certainly for the farms that are a lot closer, probably within that 30-kilometre range, I know there are definitely things happening, and it will be to the detriment of the state in the end.

It is ridiculous when we have seen what has happened in the past, especially in regard to the Barossa where we had that forethought. The original Barossa Infrastructure Limited plan went in and now we see the capacity increase, which I truly welcome as something positive for our state's farmers, especially those who are paying through the nose through no fault of their own due to environmental outcomes. They then were brought into the shocking world of paying for water at those higher rates compared to just extracting it at irrigation rates. I think there should be more done by the government to assist primary production in this state so we can have more success stories like the Barossa Infrastructure Limited program.

Mr TRELOAR (Flinders) (11:26): I rise today to make a contribution to the Public Works report, entitled Barossa Infrastructure Limited Capacity Increase Project. I was driven to speak on this because, as members would be aware, I have spoken on water, particularly relating to my electorate, many times in this place over the past seven years.

I really picked up on the enthusiasm that came through from the member for Schubert in relation to what impact and what advantages this project will bring to his electorate. It is nice to see positive works that actually contribute to the productivity of the farmlands of our state. Of course, the Barossa is famous for its vineyards and there are other vineyards elsewhere in the state. I understand the member for Hammond has some. The member for Goyder has two. I think I have four. Regardless of that, wine is a significant industry in South Australia, but all of the other agricultural projects around the state also require a good, reliable and affordable supply of water.

The background to this project—and members have talked about BIL, which is short for Barossa Infrastructure Limited—is that it is a shareholder-based, non-profit, unlisted public company formed by the Barossa growers themselves to provide a reliable and quality supplementary irrigation water system from the River Murray. This was an initiative of the growers themselves and I congratulate them on that. The company has also been active in seeking alternative water sources in the interests of sustainability of viticulture in the Barossa, so it is not just about the amount of water that is available for irrigation or for the vineyards but it is also about the affordability of it, I am sure.

SA Water provides the infrastructure that transports the water to and from the Warren Reservoir to facilitate the delivery of water from the River Murray to users. BIL is required to have the necessary River Murray water allocations for the water supplied by SA Water. This water comes from water access entitlements. SA Water entered into a water transportation agreement with BIL in September 2000. The agreement includes price and other conditions for SA Water to transport irrigation water under BIL's water licence from the River Murray to a delivery point off the Warren Transfer Main near Williamstown in the Barossa Valley.

The current physical capacity of the scheme is eight gigalitres per annum, upgraded from seven. In around the third quarter of 2016, BIL approached SA Water to increase the capacity of the system by a further three gigalitres—that is, from eight to 11 gigalitres per annum—to further support the wine region's growth. So it is a project focused on delivering more water and increasing production and reliability in probably our most famous winegrowing region in the state. The upgrade is in response to a request from BIL for additional water for their customers in the Barossa Valley region.

As I said, I am pleased to note this and support it and highlight also, as has the member for Hammond, the lack of effort in other parts of the state in producing and directing water towards agricultural production. I have spoken on water many times in this place, as did the previous member for Flinders, Mrs Liz Penfold, on many, many occasions. She was passionate about it.

An honourable member interjecting:

Mr TRELOAR: Her favourite subject, indeed. Dare I suggest that almost every member representing Eyre Peninsula in this place since 1857 has spoken on water and the need for reliable and continuing supply. Although we are secure for the moment, given that we have had a run of good seasons, we are reliant on 85 per cent of our reticulated water supply coming from the southern basins or lenses, shallow lenses, that are situated west and south of Port Lincoln.

We have a small amount of water coming onto Eyre Peninsula from the River Murray, about 15 per cent, which has become available to us following the extension of the pipeline from Iron Knob out to Kimba, which joins us to the rest of the state in regard to water reticulation. This has opened up the opportunity for River Murray water to supplement the water supply on Eyre Peninsula. Most of that comes in as far as Lock 1 and then is pumped further west from there, reaching as far as Ceduna.

The District Council of Ceduna has actually established what it calls a Water West scheme. The council owns and is responsible for the scheme, providing reticulated water to those landowners and communities that are situated west of Ceduna. For the most part, those farmers and towns would not be able to operate without the Water West scheme. It is a big responsibility that has been taken on by the district council. I know the district council has corresponded with state government on a number of occasions, encouraging SA Water to consider taking over this scheme from the council. It believes that it is not their core responsibility to provide water to ratepayers.

The scheme is further complicated by the fact that the District Council of Ceduna runs out before Penong, about 50 kilometres west of Ceduna, and the council's service is terminated at that point, and then growers themselves have extended the pipeline further west. It ultimately reaches the small township of Penong, where farmers, of course, are looking to operate their businesses, but the town also has a reticulated supply, amongst other things, to water the town oval. It comes at a cost. I think it would be a great positive should the state government decide to take this scheme back from the district council and provide reliable, affordable water to those businesses and towns located west of Ceduna.

I visited out there a couple of weeks ago and was approached by a landowner. I do not know how many people have taken the time to visit west of Ceduna, but in the early days the state government installed a series of below-ground tanks—water-holding facilities. Most of them now have been lined with concrete, and they collected water from both appropriate run-off, but also if a roof was installed, then the roof itself put water into the tank. A lot of these tanks have been let go. Some of them are still holding water and some of them are still being used. Most, if not all, are in need of some repair.

I was approached by a grower out there, and I have since written to the appropriate state government minister requesting that three neighbouring growers be able to purchase a particular tank. If they were able to purchase the tank, they would then be prepared to put investment into restoring the tank so that its long-term future would be secure, because it still can provide a valuable source of water, just one more source of water.

I also know some growers on Eyre Peninsula have installed their own black plastic as catchments, and it is remarkable how effective that scheme can be. The most famous one, probably, is on Boston Island, which is owned and operated by the former mayor of Port Lincoln, Mr Peter Davis. For four decades, I would suggest, he carted water from the mainland to his island in order to water his sheep. It is an operating sheep station, as many of the islands off the coast of Eyre Peninsula were, but he literally carted water to water his sheep. Then at some point he had the bright idea—and a very good idea, which I guess he saw somewhere—of installing a black plastic catchment over a relatively small area. He has been self-sufficient and has had ample water ever since, so it is remarkable how effective these schemes can be.

Regardless of that, if we are to see further increases in population, industry and agricultural production on Eyre Peninsula, we are going to need to secure a larger and good-quality water supply. I know desalination plants have been talked about from time to time—large desalination plants situated on the West Coast. My gut feeling is that this is too expensive and probably not necessarily practical as a long-term solution, but there is an opportunity for small desalination plants to be dotted around coastal communities.

Of course, the elephant in the room is what Iron Road may or may not do with their mining development. They are certainly going to require water and their plan, as part of their proposal, is to desalinate saline groundwater for their mining operation. I would suggest that the opportunity would be there, could be there, for them to produce water surplus to their requirements and feed into the reticulated scheme on Eyre Peninsula. That would come at a cost but, obviously, as of result of legislation passed in this place last year, there is the opportunity through third-party access to SA Water infrastructure for that to occur. It will be interesting to see how the future water security of Eyre Peninsula unfolds, and we will be watching this space with interest.

Ms DIGANCE (Elder) (11:38): I would like to thank the members for Schubert, Hammond and Flinders for their contributions to this and also their support for this project, which will deliver more water to support increased productivity in the Barossa. With that, I recommend that we note the report.

Motion carried.