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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2012-09-04 Daily Xml
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Grievance Debate

DESALINATION PLANT

Mr WILLIAMS (MacKillop—Deputy Leader of the Opposition) (15:43): Again, I have asked the Minister for Water a series of questions about the desalination plant and, again, the house has not received too many answers. I was somewhat flabbergasted when the minister said on radio yesterday, I think, that there were no unanswered questions and that this was an open and transparent process.

I asked questions of the minister on this particular matter in April and May, and again in June and July. For all those months, I asked a series of questions of the minister, trying to get to the bottom of what has been going on down at the desalination plant. It is obvious that the minister either does not understand what is going on down there or he has plenty to hide. I strongly suspect that it is a bit of both.

Let me just walk the house through the issues. The government signed a contract with AdelaideAqua to construct a desalination plant, and it has been constructed in two phases: stage 1, it is first a 50-gigalitre capacity; and then stage 2, to provide up to a 100-giglalitre capacity. But, they have also signed an operation and maintenance contract.

One would assume that when you are purchasing something that has to be constructed and you sign an operation and maintenance contract, that would come into vogue at the time that the construction was completed. I can tell the house that, for 27 months before first water was achieved at the desal plant, payments started to be made under the operation and maintenance contract. What for? What was being operated, and what was being maintained? The desal plant was still under construction.

In fact, it does not even get handed over when first water is achieved, because it then goes through a rigorous testing process before it actually gets handed over. But, for some reason, the government is either incompetently paying money out under the operation and maintenance contract, or it incompetently signed a contract such that it would be making operation and maintenance payments to the eventual operator well before construction had been completed. I have been asking questions about this for months. I have now requested that the Auditor-General look into this matter and report back to the house.

We also know that the achievement of first water was almost a year after the contract date. The contract date was to achieve first water on 1 December 2010, and first water was not achieved until, I think, 20 October 2011—almost 12 months later. John Ringham, CEO of SA Water, told the community last December—I think it was 2 December—that there were penalty clauses in the contract, and that SA Water, on behalf of the government, would be exercising those penalty clauses. Six months later, we learn that some agreement had been reached and SA Water would no longer be seeking damages because of the delays. Again, why not?

It appears that AdelaideAqua was making a counterclaim against SA Water. On what basis was that counterclaim being made? What has SA Water done or failed to do to give rise to that counterclaim, and how much money would SA Water have recovered on behalf of the long-suffering taxpayers and water rate payers of South Australia but for those mistakes which have obviously been made?

The other problem is that $125 million was not paid to the construction company because of delays by the end of the financial year, and that $125 million was automatically collected by Treasury at the end of that financial year. Lo and behold, we now see a 25 per cent increase in water rates to recover more money from the people of South Australia because they now have to replace that $125 million, because at the end of the day—

The ACTING SPEAKER (Hon. M.J. Wright): The member's time has expired.

Mr WILLIAMS: —it has to be paid to the constructors.

The ACTING SPEAKER (Hon. M.J. Wright): The member's time has expired; thank you.

Mr WILLIAMS: That's a pity.

The ACTING SPEAKER (Hon. M.J. Wright): It is. The member for Port Adelaide.

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