The ACT has missed out on $80million in Commonwealth money earmarked for a big desalination plant in Canberra after the project failed to stack up.
But the Government has vowed to fight for the cash and is casting around for a new water project on which to spend the money.
The Commonwealth offered the money in 2008 to build a desalination plant to cleanse the water that the territory flushed back into the Murrumbidgee River from Actew’s Lower Molonglo sewerage works.
Funding was offered to all the Murray-Darling Basin states as part of a package of Commonwealth reforms aimed at returning the ailing rivers system to health.
At the time it was estimated that the works, which treat 90 million litres of Canberra’s waste water each day, were discharging up to 40tonnes of salt to the river system each day, exceeding the licence conditions imposed by the Environmental Protection Authority to the operation.
The ACT Government says the excessive salt discharge into the river from the plant on the NSW border in the territory’s north-west ”was caused by the reduced level of flows due to the drought and the actions taken by Canberrans to conserve water”.
But the funding deal collapsed when a detailed business case prepared by accountants KPMG found the new plant would cost more than $200million, with the ACT taxpayer making up the $120million shortfall.
The KPMG analysis also found the scheme would have ”significant operational costs” and greenhouse gas emissions and that the benefit to the Murray-Darling Basin system would be a reduction of salt levels by less than 0.5per-cent.
Acting Minister for Environment and Sustainable Development Andrew Barr told The CanberraTimes the deal did not stack up.
”A detailed business case prepared by KPMG with the assistance of my department and Actew and oversight by the Commonwealth found that a plant costing over $200 million with significant operational costs and greenhouse gas emissions would be required to address the transient problem and that within the Murray-Darling Basin the measurable effect would be to reduce salt by 0.03 per cent,” a spokeswoman for Mr Barr said.
”The Commonwealth met the cost of the preparation of the cost-benefit analysis and the business case.”
Actew and its shareholder, the ACT Government, now believes that a return to heavier rainfall conditions has alleviated the salt problem, effectively killing off the idea of a desalination plant for Lower Molonglo.
But Mr Barr told The Canberra Times that he and his colleagues had not given up on securing the Commonwealth money and they were in talks with the Federal Department of Sustainability, Environment Water, Population and Communities to try to find a new way of spending the cash in drought-proofing Canberra’s future.
The spokeswoman said, ”The ACT is still in negotiations with the Commonwealth on accessing funds available under the program for other possible projects that would benefit the ACT and the [Murray-Darling] Basin.
”The ACT’s objective is multi-focused in that we are seeking to secure long-term water supply security under the draft Basin plan for the ACT and undertake projects that are a particular benefit to the Basin in terms of water quality, including salt reduction in a cost-effective way.”
