Former premier John Brumby has admitted committing $2 billion to upgrade irrigation infrastructure with no feasibility study or business plan.
”We made a decision to do it, so that’s what happened,” he told the Ombudsman, who yesterday released a scathing report into Labor’s handling of the major project.
The Ombudsman, George Brouwer, found Labor - responding to the drought crisis - initially committed $600 million from state taxpayers and $300 million from Melbourne water users based only on talks with irrigators and the experience of previous upgrade schemes.
”It is unclear what documentation, if any, was used by the former government when deciding to commit significant public funds to the [project],” the report found.
The Ombudsman also revealed the foodbowl project, which is upgrading an irrigation district in northern Victoria the size of Tasmania, has an ”ongoing battle” with technical problems, poor contractor work and faulty equipment. The new water meters, which measure water use and control flow to farmers’ properties, are powered by solar panels, some of which were wrongly installed in the shade and have failed.
Audits by the water authority Goulburn-Murray Water and inspections by the Ombudsman’s office indicate nearly 40 per cent of meters are infested with ants, which cause premature failure of the communication equipment and gate motors. One in four are infested with mice, rats or snakes, which damage the cables, and one in five could have a motor failure, a problem that will cost $3 million to fix.
The Ombudsman undermined years of claims by Mr Brumby and his water minister, Tim Holding, that they had correctly calculated the project’s water savings, about 445 billion litres. Mr Brouwer said that while the project’s first stage was achieving its targets, the terms ”water loss” and ”water saving” were problematic because they allowed water to be described as ”saved” when in fact sometimes there was no saving, such as counting water that was previously used by farmers.
The foodbowl project involves automating, repairing and upgrading 100-year-old irrigation networks in northern Victoria and splitting the water savings between farmers, the environment and Melbourne water users.
Water bill rises funded Melbourne’s $300 million investment but, under the Baillieu government, the water is only likely to flow down the north-south pipe in times of extreme drought. The Commonwealth has recently committed $1 billion to Stage 2 of the project.
The Ombudsman’s finding that Labor committed hundreds of millions of taxpayer dollars with little financial planning comes only a week after Victoria’s transport secretary, Jim Betts, told a conference that the $5 billion Regional Rail Link was ”basically haggled over between the state and the Commonwealth one weekend and we end up with a number written on the back of an envelope”.
Claiming cabinet confidentiality, Labor leader Daniel Andrews refused to give the Ombudsman access to the business case for Stage 1 and the cost-benefit analysis.
Under the Ombudsman Act, Mr Brouwer cannot demand cabinet documents be handed over. He said Labor’s decision had hampered the investigation and called for this section of the Act to be repealed.
The Ombudsman also found:
■Treasury warned the government to do a full feasibility study prior to the project.
■The government awarded $77 million of work to the channel technology company Rubicon without a tender, against government guidelines.
■Documents from a crucial meeting between a lobby group of irrigators and then treasurer Mr Brumby have gone missing.
■Treasury officials admitted they provided briefs to the Treasurer on the project based on ”what we read in the press” and they had trouble ”nailing what the proposal was”.
■The government-owned enterprise set up to administer the upgrade created unnecessary duplication with the local water authority.
