Public Works Committee: Ceduna Supply System and Tanks Rationalisation Project

Mr BROWN (Florey) (11:30): I move:

That the 94^th report of the committee, entitled Ceduna Supply System and Tanks Rationalisation Project, be noted.

The submission from SA Water, also known as the agency, proposes to construct and commission a new 4.5-megalitre tank with a connecting 12-kilometre pipeline to the Ceduna township to ensure reliable water supply to customers in the township and surrounding areas. The project is a high priority for SA Water to ensure sustained water delivery that meets the regulated standards for customers.

Ceduna is situated approximately 780 kilometres north-west of Adelaide and receives its water supply from the River Murray and southern Eyre Peninsula bore field via a pipeline that extends from Tod to Ceduna. The water from the pipeline is transferred to Ceduna via local supply storage tanks located along Kalanbi Road and a larger tank at Pimbaacla. These tanks provide potable water for approximately two and a half thousand customers, and currently provide less than 10 hours of backup reserve in the event of a water outage due to a break in the pipeline.

Due to the remote location, major repairs to the pipeline would take a minimum of 16 hours, and the limited current capacity poses a significant risk to customers' water supply. Furthermore, the current pipeline is above ground and water quality can be compromised by high temperatures. The installation of the new tank and pipeline upgrade aims to resolve these water security and quality challenges.

The agency considered two options during concept development. Option 1 provides a pumped solution, constructing the new 4.5-megalitre tank and a pump station in the Ceduna township. Option 2 utilises a gravity system and would build a 4.5-megalitre tank nearby to the township and a 12-kilometre pipeline to connect the tank to the Ceduna township water network.

After consideration of technical and financial components, and risk assessments, option 2 was the preferred solution. In addition to providing water security and quality requirements, the gravity system design uses less power, simplifies maintenance and operational procedures and will be more cost-effective over the project's life cycle.

The new tank will be built adjacent to the existing Bonython tank site, at Lot 625 Kalanbi Road, on land owned by SA Water. Due to the size of the new tank, a portion of an adjacent private property has been secured. The proposed pipeline is located within the road reserve as well as on the secured private property.

The project is targeted for completion in quarter 1 of 2026 and is expected to cost $37.4 million. The agency estimates an average annual cost of approximately $14,000. The operating and capital costs are funded through SA Water's regulatory determination allowances approved by the Essential Services Commission of South Australia. These costs will have no impact on the agency's overall contributions to government or SA Water customer bills that are set for the regulatory determination of 2024.

The project does not require a benefit-cost ratio because its benefits are not quantifiable in financial terms as they are a continuation of an existing service. A financial analysis of the concept options was undertaken in accordance with Treasurer's Instructions and SA Water guidelines. The preferred option was determined to have the best net present value.

The project is included in the Water North major framework program, and SA Water has conducted procurement processes in accordance with SA Water's policies and procedures, conforming to all applicable government and Department of Treasury and Finance policies. In June 2020, SA Water awarded major framework partner agreements, with these agreements to apply across the suite of SA Water's system-based programs, being Water North, Water South, and Wastewater.

A design-and-construct model was selected to deliver the project, and the award of the design-and-construct package will be in accordance with SA Water's delegation of financial and procurement authority and applicable government policies. The project will be managed by a project manager from SA Water's capital planning and delivery group. The project manager is responsible for the development and delivery of the overall project, including seeking the necessary approvals and management of the selected contractor.

Through a business management framework, SA Water identifies potential project risks, determines related impacts and likelihood, and develops strategies to mitigate risks and remedy problems. This framework will apply over the course of the project, and facilitated risk assessment workshops will be held with the relevant stakeholders. The agency states that the key risks for the project include:

inadequate community engagement and involvement, for which there has been early stakeholder engagement with the local council, impacted landowners and regional Aboriginal councils; and

failure to consider the challenges of the remote location when procuring materials and equipment, for which the project leadership has identified potential long lead times.

There will be ongoing evaluation of design and construction risks during the detailed design, and all project risks will be logged and monitored in a live risk database and addressed as appropriate by the team during the life of the project.

SA Water has developed an environmental control plan to ensure the project is delivered in compliance with relevant regulations and legislative frameworks. The selected contractor will be encouraged to develop processes with due regard for short and long-term, local and global, environmental, and social and economic considerations, including considerations of the use of local subcontractors, the reduction of carbon emissions, the implementation of re-use and recycling to reduce waste, and the efficient, flexible and conserving use of resources and raw materials.

SA Water will engage a contractor that has an established environmental management plan, and a site environmental management plan will be developed to address site-specific requirements that will be reviewed and endorsed by SA Water. The project has also been designed to minimise impacts on native vegetation where possible, and the agency has submitted a clearance application to the Native Vegetation Council.

The project lies within the Far West Coast native title settlement, and SA Water confirms the works will not interfere with any native title rights and interests. The agency has identified a medium level of risk for encountering or impacting on Aboriginal heritage and requires the construction contractor to comply with SA Water's standard operating procedure for the discovery of Aboriginal heritage during construction work. Construction employees are required to attend a site-specific Aboriginal cultural heritage induction prior to ground disturbance works. The agency's environment and heritage expertise has determined no impact on non-Aboriginal heritage items.

SA Water is in ongoing consultation with external and internal stakeholders and partner organisations, and it has advised that there will be ongoing communication with stakeholders during the project life cycle. Feedback from the relevant government departments indicates support for the proposed project.

The committee has examined written and oral evidence in relation to the Ceduna Supply System and Tanks Rationalisation Project. Witnesses who appeared before the committee were Ross Kameron, Senior Project Manager, SA Water, and Peter Seltsikas, Senior Manager, Capital Delivery, SA Water. I thank the witnesses for their time.

Based upon the evidence considered and pursuant to section 12C of the Parliamentary Committees Act 1991, the Public Works Committee reports to parliament that it recommends the proposed public works.

Mr TELFER (Flinders) (11:37): I rise to speak on this report of the Public Works Committee, specifically pertaining to what I think is an essential investment but also one that should be seen as only part of a suite of necessary upgrades to the water system on Eyre Peninsula, specifically the far west of Eyre Peninsula where we have isolated communities that produce so much and give so much to our state's economy. We need to make sure we get proper investment back into the key infrastructure that enables those communities.

The proposal that has been put in this report is for a replacement upgrade of the existing tank, and there is now going to be a 4.5-megalitre tank next to where the current Bonython tank is. For those locals who would know, that is north of Ceduna, on Kalanbi Road, and the pipeline that feeds the tank.

The water distribution system on Eyre Peninsula is a unique one. As has been mentioned in the report, the original source of water and the continuing source from the south of Eyre Peninsula is unique as a gravity feed system that feeds from the south, down near Port Lincoln, all the way up to Ceduna. I welcome the fact that, in looking at the different options, the SA Water proposal is to replace the tank in the basic existing framework and footprint of the current distribution network, which really is a recognition of the engineering feat of many decades ago.

The 12-kilometre pipeline that will feed from that site at Kalanbi Road is going to be undergrounded. As has been pointed out, it will give a bit more certainty as to the longevity and also minimise the risks to any impact on our supply if something was to happen to that pipeline. It is a pretty significant project proposal.

The member highlighted that it is a $34 million project, which is looking to be delivered by quarter 1 of 2026. Indeed, it was pointed out that there cannot be a specific cost-benefit analysis because it is an existing supply to the township of Ceduna, but we should never underestimate, as I said, what we need to be doing as decision-makers to invest in our regional communities, in particular those that are further flung but that give so much to our state's economy.

The future potential growth and sustainability of Eyre Peninsula as a whole is really predicated on making sure that this community infrastructure, such as tanks, is invested into by the state government. We have seen examples on the West Coast, in Ceduna and Streaky Bay, where there has not been the ability to guarantee supply for residential growth, because there has not been investment like this into the tank system and the pipe distribution for our water.

I welcome this as the local member, an investment into the water distribution network for Ceduna, recognising that currently there is a select committee of the upper house looking at Eyre Peninsula water needs and supply—that is not only the supply source but also the distribution network that is necessary to go across the whole of Eyre Peninsula—and at what potential residential, industrial and commercial growth there is going to be on Eyre Peninsula, so that we can actually be looking forward and have a vision for the investment that is going to be necessary for such key infrastructure as the water network.

This step, which is the 4.5-megalitre tank to replace the tank that supplies the Ceduna township and community, is very much welcomed. I think it fits in well with the big picture perspective, which I hope SA Water and the government are going to continue to have when it comes to the water distribution system for Eyre Peninsula.

Mr BROWN (Florey) (11:42): I just want to take this opportunity to thank the member for Flinders for his contribution to the debate and put on the record how much I am looking forward to working with the member for Flinders as the newest member of the Public Works Committee. I am sure he will continue to fulfil his duties on the committee in the same spirit that the previous member, the member for Hartley, did during his very brief period of time on the Public Works Committee. During his brief period of time, he was a very diligent member and contributed greatly, and I am sure that the member for Flinders will do exactly the same thing.

Motion carried.