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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2012-10-17 Daily Xml
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DESALINATION PLANT

The Hon. M. PARNELL (16:50): I move:

That this council—

1. Notes the decision by SA Water to 'mothball' the Adelaide desalination project;

2. Calls on the government to release—

(a) the total annual cost of the plant in standby mode, including maintenance, staffing, equipment and all financial and interest costs; and

(b) financial modelling on the total impact on residential water bills of the Adelaide desalination project (including all associated works such as the pipeline interconnector), including—

(i) how much has been recouped from SA Water customers so far; and

(ii) the expected date by which all capital costs for the desalination plant will be recouped.

The question over the desal plant has occupied many South Australians over the last few weeks. The debate has tended to centre around a number of questions. First of all, did we need the plant at all? Secondly, if we did need it, did we need it to be as big as it was going to be? Thirdly, now that is likely to be mothballed, what are we paying for it, and how long will it take the South Australian community to recoup its investment in what has been described in the media and elsewhere as a 'white elephant'?

This motion is a simple one, and it calls on the government to release financial information that goes to the ultimate cost of both building and running the desalination plant. The motion calls for the government to tell us what it will cost to run the desalination plant in standby mode, and also calls on the government to come clean with financial modelling on the total impact on residential water bills of the desalination plant. We need to know how much has been recouped so far, and how much is expected to be recouped over what period.

The reason this motion is important to all South Australians is that this piece of infrastructure is phenomenally expensive and if, as the Greens believe, it transpires to have been a wasted investment, then I think that South Australians will quite rightly be outraged. There are of course commentators who say that the desal plant is just like an insurance policy, and people do not complain about the price of insurance and the fact that they did not get to call on the policy because they did not suffer any loss.

I do not think that analogy applies here, because the desalination plant, whilst it might be an insurance policy, was the most expensive insurance policy that was available to the state, and it represents, certainly in the eyes of the Greens, a colossal over-insurance and waste of money. The Greens were the only major party to consistently say over the last several years that we did not believe that a desal plant was necessary to achieve water security for South Australia.

Certainly, the Liberals made a big point of the fact that the original desal plant was their idea, accused the government of copying them, and then criticised the government for building it too big. Likewise, other parties thought that the desal plant was the only solution to Adelaide's water security problem. However, the Greens' approach was to look at the problem in its entirety, and to look at all of the different options that were available to South Australia to achieve water security.

To that end, some four years ago we engaged Sustainable Focus, a consultancy firm, along with Richard Clark and Associates—Richard, of course, as members may know, was a very longstanding employee of the E&WS, and then SA Water—and we engaged them to answer the question: how do we best provide for water security for Adelaide, taking into account social, economic and environmental considerations?

They came up with a chart—or a ranking, if you like—out of 50 where they ranked the various options for water security, and I will just run through some of those. At the top of the list, in terms of economic, social and environmental criteria, was demand management. Now that will come as no surprise to anyone. We have in our homes, for example, in many cases, reduced the amount of electricity we use through changing light globes; in the water field, we are using compact showerheads that use less water—there are demand management techniques across households, across industry and across commerce that reduce our demand on water. That ranked as 41 out of 50.

Equal to that was stormwater harvesting and that is the process which members are familiar with—capturing stormwater run-off, treating it and cleaning it in wetlands, and then pumping it into underground aquifers for later extraction. The sort of project that has been undertaken in the northern suburbs of Adelaide as well, Salisbury and that area. That was 41 out of 50. Third, coming in at 35 out of 50, to continue to use our existing catchments in the Adelaide Hills. Now that makes sense; they are there, they work and they provide a reliable supply of water, but on their own, they are not enough. So we do need to do something else.

Next on the list, 32 out of 50, was the re-use of waste water and that ranked slightly lower than the re-use of stormwater, simply because there is extra treatment required to make it safe for all forms of use. Next, 28 out of 50, came rainwater tanks. Now I will admit that I expected them to rank higher. The reason they did not rank as highly as other forms of water security is simply the expense. It is a large capital cost spread over the whole metropolitan area, and whilst they are effective in capturing water off our roofs, the expense gave it a lower ranking. There was only one other form of water measure that ranked a pass mark, if you like, in other words, higher than 25 out of 50, and that was to use existing groundwater supplies which, whilst they might not be suitable for all areas, they do provide scope for immediate emergency supplies.

The water security measures that failed: desalination came in at 22 out of 50; continuing to rely on the ailing River Murray came in at 19 out of 50; and the worst of all was actually increasing the size of the Mount Bold Reservoir which ranked at nine out of 50, largely because it was going to devastate some of the last remaining intact bushland in the Mount Lofty Ranges for minimal return, given that it ultimately relies on being a storage device for River Murray water.

That was the Greens' position back in 2008, and I know members will be interested, as they often are, in the wise approach that the Greens take to these matters. This report is available for free for download off my website, markparnell.org.au. Just type into the little search engine 'Water that doesn't cost the earth' and you will find that report.

Really what this motion is calling for is that, having made the decision, the government now needs to come clean with the costings. Members might be aware that just today the ABC news website has the story with the heading 'Mothballed desal will make minimal savings'. I will just read a few sentences from that news report. It says:

South Australia's utility watchdog says putting Adelaide's desalination plant on standby will not produce major savings for water customers.

There had been suggestions the move could save $100 million annually, but the Essential Services Commission of South Australia (ESCOSA) says the saving could be as little as $5 million per annum.

Paul Kerin of the Commission says the savings will not be huge.

'It's pretty small savings, probably around $10 million a year, so over that last year-and-a-half that's about $15 million. It's not going to be $100 million a year saving,' he said.

The Commission says major savings would only have been achieved had the plant otherwise run at full capacity.

It's estimates are based on the plant running at 25 per cent capacity.

The other comment of interest in this news report is a comment from water minister Paul Caica where he says:

There was never an expectation that there would be additional costs or savings of $100 million. The best money saved is money not spent.

It is well and good for the minister to say that the best saving is money not spent, but $2.2 billion later, it is a bit rich for the government to say that the best money saved is money not spent. They have spent that money. The community of South Australia is going to have to pay for this desalination plant.

I think that, if the government were to show to the people of South Australia true respect, they would come clean with the costings and they would tell us what it is costing to run this plant, including the cost of not running this plant, because it has now been determined that it is unlikely to be needed in the foreseeable future. I commend the motion to the house.

Debate adjourned on motion of Hon. G.A. Kandelaars.

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