TAXPAYERS will hand over a billion dollars in the next five years to the consortium that has leased the desalination plant at Kurnell.
Annual payments of between $195 million and $202 million will be made during this period, after which a new price will be negotiated, a government memorandum obtained by the Opposition has revealed.
The payments are a charge for the plant being available — even if it is switched off, as at present.
Earlier this year, the government leased the plant for $2.3 billion.
So after paying off the $2 billion construction cost, it will have $300 million left for new infrastructure.
Government officials said the "availability" charge was subject to a pre-existing agreement determined by the independent pricing tribunal, and the leasing of the plant had no impact on it.
However, Opposition spokesman on water Luke Foley said the document confirmed the government had signed up to "a disastrous deal" which would eventually lead to higher household water prices.
Treasurer Mike Baird insisted the payments would have no impact on customers' bills or water security.
"The desalination plant remains a prudent measure for times of drought and can be switched on and off," he said.
"When the plant is off, Sydney Water's customers only cover the reduced costs of the plant being available."
