Its been a while since water was a topic of interest. The media totally forgot about it after the major cities "solved" their urgent problems with a little bit of rain and a couple of white elephant desal plants. They will be paying the extra cost of them for decades to come...
Desal plant cost could hit $24bn Royce Millar and Ben Schneiders October 8, 2010
VICTORIAN taxpayers and water users will pay up to $24 billion over nearly three decades for the Brumby government's decision to drought-proof Melbourne with Australia's largest desalination plant.
An Auditor-General's report tabled yesterday fleshes out figures for the controversial project, showing that Victorians would pay on average as much as $860 million a year for desalination if the plant operated at full capacity over the 28-year contract.
The government estimates this figure at $5.7 billion in today's dollars when inflation and other factors are taken into account, known as net present value.
It has repeatedly refused to break the figure down and reveal the cost of the plant if water is not needed.
Last month The Age reported on figures buried among more than 200 reports tabled in Parliament revealing Victorians would have to pay $15.8 billion to the Aquasure Consortium to operate the plant before a drop of water is bought. The figure was the equivalent of $4.6 billion in today's dollars.
Yesterday's Auditor-General report went further and for the first time also estimated that if the maximum 150 billion litres of water was produced a year the desalinated water could cost an extra $5.8 billion over the contract or $1.26 billion in today's money.
It also identified that taxpayers would also pick up an extra $2.27 billion bill for costs including underground power supply for the project pipeline, plant refurbishment, land acquisition and compensation payments, and environmental assessments.
In total the maximum nominal cost of the project and water would be almost $24 billion.
Opposition Leader Ted Baillieu said yesterday the desalination deal could be the ''worst financial debacle in the state's history''.
The report said the desalination plant along with spending on other water projects would result in the price that consumers would pay for water nearly doubling in the five years to 2012-13.
In Parliament Mr Brumby said he ''made no apologies'' for the project and the government's measures to tackle water security.
He said the project price was determined after a ''ferociously'' competitive tender and was cheaper than if done by the public sector.
The government has also defended the project by saying that the use of nominal figures was misleading.
Mr Brumby said again yesterday that individuals and governments always calculated the cost of major purchases such as their homes in present-day dollars.
But agencies including the Auditor-General preferred to talk in nominal money because they were the actual cash payments to be made.
The government continues to cite commercial-in-confidence for refusing to release figures in the government contract with the Aquasure consortium.
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