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House of Assembly - Fifty-First Parliament, Second Session (51-2)
2007-11-21 Daily Xml
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SA WATER

Mrs PENFOLD (Flinders) (15:37): I put on record what I perceive to be a serious constraint of trade by SA Water and the state government that is negatively affecting the development of our state. I refer to the promotion of the BHP desalination project at Whyalla over other private developments at Ceduna, Port Augusta and elsewhere.

I drew these issues to the attention of the National Competition Council, which referred them to the National Water Commission. In particular, the issue of access to the pipelines by private desalination companies is still not being facilitated, while the water situation continues to deteriorate in regional South Australia.

I intend, therefore, to complain to the Australian Competition and Consumer Commission, asking it to mount a court action under section 46 of the Trade Practices Act 1974, arguing that SA Water is misusing its market power. I will raise this issue with the ACCC, because I know the negative impact that the SA Water monopoly is having by preventing these developments, and I believe that private companies do not have the time, resources or powers to fully investigate and successfully litigate against this state-owned entity.

Also, SA Water and the state government are so powerful that, despite living in a democracy, I believe that small companies would be frightened to complain for fear of covert retaliation. Accordingly, I have not sought their cooperation in advance in the hope that the ACCC might be able to guarantee them some protection from possible victimisation.

Herewith are some of the concerns that I have raised with the NCC. My electorate of Flinders, like much of regional Australia, is suffering from a severe drought. The need for new water is critical for many communities to survive, let alone do the value-adding and diversification that is so necessary to drought proof them in the future. Last year, the state government appropriated $300 million from SA Water into general revenue, thus restricting critical infrastructure upgrades and expansion.

SA Water does not allow private companies to access their pipes, thereby preventing private companies from providing desalinated water to regional communities. Two projects—Cynergy at Ceduna and Acquasol at Port Augusta—illustrate the problem. Both companies could provide desalinated water at about the same estimated cost per kilolitre as is charged by SA Water—and at much less than the cost of piping water from the River Murray—but have been unable to gain access to SA Water pipes, despite trying for a number of years. The Cynergy desalination project would replace much of the virtually undrinkable, foul water that is presently reaching this area and clogging pipes solid with calcium. That is costing people thousands of dollars. Stock troughs have to be checked daily in hot weather to ensure that water is getting through, which is another huge cost in fuel and time. It is also keeping people from finding off-farm work, as they cannot leave their properties.

The Acquasol project could take the Upper Spencer Gulf towns of Whyalla, Port Augusta, Port Pirie, and also Kimba, off River Murray water. According to the press release by the Premier of South Australia, Mike Rann, on 17 February 2006, supporting the BHP project, this would 'see vast quantities of water returned to the River Murray—as much as 30 million litres a day'. The Acquasol project offered to provide two gigalitres of water free to the government for two years, yet it was rejected. It could have provided all the water needed. SA Water will not put in a desalination plant itself, nor allow others to do so, except for the desalination plant proposed by BHP at Whyalla, which, even if it gains all the necessary approvals, will not be built until around 2012.

Private projects would already have been built by now if approvals had been forthcoming. The Yorke Peninsula council project at Marion Bay, which did not require access to SA Water pipes, is already up and running. It has been so successful that another one is proposed at Price.

I believe that there is a significant constraint of trade issue in the government's supporting the BHP proposal, complete with confidential MOU, when other more environmentally friendly projects are not being supported. The Minister for Water Security, Karlene Maywald, is quoted in the West Coast Sentinel of 27 September this year as saying:

Our priorities are the [BHP Billiton] desalination project for the top end of the Spencer Gulf, which we have committed to, and the Iron Knob pipeline to bring water from the Murray River to the Eyre Peninsula. We believe those projects are the best placed to provide water to the communities on the peninsula. We are not prepared to put other projects ahead of those, but if they [Cynergy] can make it more attractive for the state then we might reassess the timetable.

Cynergy is asking for nothing more for than access to the pipes, so how can it make it more attractive for the state? This project is totally environmentally friendly, being powered by solar power, with saline waste being used by Cheetham Salt. Cynergy is not asking for funding from the government, nor for it to buy the water—

The SPEAKER: Order!

Mrs PENFOLD: —just to allow it access to the pipes, and it will find its own customers.

Time expired.

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