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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2013-05-14 Daily Xml
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DESALINATION PLANT

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (14:43): My question is to the Minister for Transport. Why is it acceptable to abandon the Darlington project on South Road as it has a cost-benefit ratio of 1, when that is exactly the same cost-benefit ratio that was attached to the expansion of the desal plant?

The Hon. J.W. WEATHERILL (Cheltenham—Premier, Treasurer, Minister for State Development, Minister for the Public Sector, Minister for the Arts) (14:43): I thank the honourable member for her question. Can I say, this is precisely the nonsense that is being spread around by the opposition about the desalination plant which has absolutely no substance.

Ms Chapman: Read the report.

The Hon. J.W. WEATHERILL: Let me explain. The reason why the desalination plant was not pitched to Infrastructure Australia, or to any of the usual buckets of money which are available to be applied to these purposes, is that they would not have met the tests associated with those particular projects for one simple reason: the desalination plant was a water security proposition.

There is one very simple analysis about the water security needs for South Australia that any of the traditional economic agencies will give you, and that is to buy more water from the River Murray. That is the cheapest and most effective way in which you can deal with South Australia's water security needs; it has consistently been the case.

Indeed, it is the same basis on which SA Water always conducted its affairs because the point is: buying an extra gigalitre of water from a licence holder—I do not know what the going rate is at the moment, but it is in the order of $1 million—is a relatively small amount of money for what is a very substantial amount of water. When you look at other mechanisms for gaining water, they become extraordinarily expensive, such as desalination plants.

On any cost benefit analysis, we were never going to be able to make the case to some of those traditional funding agencies, such as Infrastructure Australia, which have particular narrow economic criteria for the evaluation of projects of this sort, so they were not submitted to those bodies because we knew that we would not meet the criteria.

Mrs Redmond interjecting:

The Hon. J.W. WEATHERILL: We made the submission on the basis of a broader public interest about protecting the River Murray. We knew that we wanted to guarantee and warrant the future security of water in South Australia for the long term so that we could say to investors and to people who were coming to South Australia, 'Water isn't going to run out in 2013', on some of the scenarios that were modelled for us, but that we were going to be able to warrant water security for the long-term future of this state. To do that, the only mechanism that was capable of doing that, after a thorough analysis, with the assistance of WorleyParsons and KPMG, was through a desalinisation plant of 100 gigalitres.

Members interjecting:

The Hon. J.W. WEATHERILL: That was the only proposition that makes sense. If you do not accept our analysis for it, look at the evidence of the KPMG report and WorleyParsons—

Mr WILLIAMS: A point of order, Mr Speaker.

The SPEAKER: The member for MacKillop has a point of order, but before he does so, I warn the member for Heysen a second time, call the member for Chaffey to order, and warn the member for Schubert for the first time. Member for MacKillop.

Mr WILLIAMS: Mr Speaker, the Premier has just stated that and made an argument why the South Australian government did not submit a proposal to Infrastructure Australia. I happen to be sitting here reading 'Grants for the Construction of the Adelaide Desalination Plant,' a report from the Auditor-General, who says, 'Back in October 2008—

The SPEAKER: What's the point of order?

Mr WILLIAMS: Well, according to the federal Auditor-General, the South Australian government did make a submission to Infrastructure Australia, and Infrastructure Australia turned them down.

The SPEAKER: That's not a point of order, and I ask the member to leave the chamber for the rest of question time.

The member for MacKillop having withdrawn from the chamber:

The SPEAKER: The Premier.

The Hon. J.W. WEATHERILL: Thank you, Mr Speaker. The expansion of the desalination plant, which is the topic we are talking about, from 50 to 100 gigalitres was not something that would have met the test of Infrastructure Australia or any of the other usual narrow economic criteria that are advanced by the commonwealth for funding of this sort. That is why we sought the funding in the way in which we did, because we wanted to expand the capacity of South Australia's desalination plant in a way which guaranteed water security for the long term.

That meant, on a broader set of criteria, we were seeking to protect the long-term interests of the river because the truth is that we could not continue to grow our state and, at the same time, not bear on those precious resources of the River Murray. We were advancing on two fronts: we wanted to protect the River Murray, and we could not, as a state, hold our head high and fight for the river at the same time as increasing the burden on that river.

We have decreased our take on the river, we have decreased the future pressure on the river, and we have also secured South Australia's water security for the future, and these are not the sort of criteria that Infrastructure Australia were considering.

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