Question Time

Northern Adelaide Irrigation Scheme

The Hon. D.W. RIDGWAY (Leader of the Opposition) (14:22): I seek leave to make a brief explanation before asking the minister for environment and water a question about the Northern Adelaide Irrigation Scheme, known as NAIS.

Leave granted.

The Hon. D.W. RIDGWAY: In a joint press release in April this year, the minister announced the project. The state government will invest $110 million in the project through SA Water. In a briefing with SA Water on 17 May, SA Water representatives confirmed that this $110 million would have to come out of SA Water's existing capital works program. My question to the minister is: can the minister confirm that the state government's contribution to the NAIS will be funded from cash reserves, additional borrowings or from the reallocation of SA Water priorities?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (14:23): I thank the honourable member for his most important question. The Northern Adelaide Irrigation Scheme is an opportunity to expand the use of recycled water for horticultural irrigation in the Northern Adelaide Plains. NAIS is a PIRSA-led Northern Adelaide Plains agribusiness initiative. I understand that the industry would have access to this water to increase horticultural production and exports, transforming the region into the national leader in intensive, high-tech food production.

In August 2015, SA Water released an expression of interest to the market asking for proposals to transport and make use of recycled water in a way that would generate the greatest economic benefit and jobs growth for South Australia. I understand that there is a strong industry interest in purchasing recycled water through the Northern Adelaide Irrigation Scheme. While it is proposed that NAIS will have an initial capacity of 12 gigalitres at this stage, it is planned that NAIS will be built to enable a capacity of 20 gigalitres when future demand exceeds the initial supply.

An economic assessment was done and it was identified that 12 gigalitres of recycled water a year will create about 3,700 jobs, attract about $1.1 billion in private investment and add $578 million a year to the state's economy, I am advised, and the NAIS would make good use of recycled water to create positive outcomes for the environment, as well as the state's economy. Subject to receiving the National Water Industry Development Fund grant, which is a federal government grant, obviously, the project will be funded through a mix of SA Water funds and up-front users' contributions from NAIS customers.

It is undoubtedly an important process for the state to get right, with strong interest in additional recycled water. I am advised that the Department of Primary Industries and Regions SA will continue to work with the proponents, industry groups and growers in the region to discuss how they can participate in additional recycled water allocation to deliver the greatest state benefit. I am advised that PIRSA and SA Water will continue to work with the proponents, industry groups and growers to ensure a fair, equitable and transparent process to determine how they can participate in additional recycled water allocation that delivers the greatest state benefit.

This Australian government funding would enable the water to be provided at an affordable price, enabling growers to be globally competitive. It is important to state that without that extra assistance, Mr Premier—Mr President, I should say—

Members interjecting:

The Hon. I.K. HUNTER: I nearly elevated you, sir. I understand there is no constitutional impediment, of course, but that's for another thing—

The Hon. D.W. Ridgway: Could you answer the question.

The Hon. I.K. HUNTER: I have already.

The Hon. J.S.L. Dawkins: No, you haven't.

The Hon. I.K. HUNTER: I have.

The Hon. D.W. Ridgway: You haven't.

The Hon. I.K. HUNTER: Go back and read Hansard later on and you will find that I have. It is very important to make this project as viable as possible so that the large cost of providing the service so far out to the north of Adelaide can be amortised over a period of time and keep the cost of recycled water right down for the end users. We do need to have that federal government grant, and, as has been indicated to us, in the reduced components of the grant available from the federal government, there is interest, and that was obviously backed in by their grant to us in the first stage to do the body of work required to see if it was a viable project. We are still awaiting advice from the federal government about that but we are particularly hopeful.