TEN years after it was announced, the $2 billion desalination plant at Kurnell is living up to predictions it would be a "white elephant".
Sydney dam levels rose above 90 per cent after last week's downpours and new figures showed the plant cost taxpayers more than $534 million in less than three years to keep on standby.
Bob Carr announced the project in July 2005 in Dubai, a few weeks before he stepped down as premier.
Every premier since has defended its need as "an insurance policy" for Sydney.
Greens MP John Kaye, who wants the lease terminated, the membranes sold and the plant permanently "mothballed", described the insurance policy argument as "lunacy".
"I don't know anyone who takes out travel insurance 20 years before they travel," he said.
Mr Kaye said even if there was another drought, it would be at least a decade, and more likely 20 years or longer, before the plant might be needed.
By that time its technology would be outdated, the components of little resale value and opportunities lost for conservation measures, including recycling waste water for non-potable uses.
Mr Kaye said while only the government knew what it would cost to cancel the lease, ‘‘my best guess, my feeling is an independent examination would find it better to get out of the contract entirely’’.
Minister for Water Niall Blair said after inheriting the plant the government had sought to get a better deal for taxpayers by leasing it for 50 years for $2.3 billion.
After paying off the construction cost, $300 million had been invested in new infrastructure.
‘‘The government cannot simply tear up legally binding contracts; that would leave the state open to a potentially massive compensation claim,’’ he said.
‘‘As the only significant source of water supply not reliant on rainfall, the desalination plant is Sydney’s insurance policy to ensure there is water available, regardless of rainfall.’’
IPART figures showed the plant cost taxpayers $194.9 million in 2012-13, $192.7 million in 2013-14 and a $147.1 million to March this year.
The outlay included the cost of the maintenance contract with Veolia and payments to the leaseholder, a consortium including the Ontario Teachers’ Pension Plan Board, Hastings managed infrastructure funds Utilities Trust of Australia and The Infrastructure Fund.
Under rules set out in the 2010 Metropolitan Water Plan, which is under review, the plant would begin operating only when dam levels fell to 70 percent.
QUESTIONS REMAIN
Sutherland Environment Centre stalwart Bob Walshe, who argued against the project from the outset, said important questions had never been adequately answered.
They included:
- Why did Bob Carr embrace the desalination concept 10 months after denouncing it as ‘‘bottled electricity’’?
- Why did Mr Carr’s successor Morris Iemma give the go-ahead when dam levels were at 33-35 percent after forecasts the drought was about to break and earlier promising the ‘‘trigger’’ would be 30 percent?
- Mr Walshe said any inference that Sydney’s water supply could be threatened by terrorism was ‘‘fanciful’’ given the enormity of the dam system and it being logical the desalination plant would also be included.
Should the desalination plant be kept as an ‘‘insurance policy’’?
