The consortium building Victoria’s controversial desalination plant will be heavily penalised if it fails to meet this year’s completion deadline, despite heavy rain slowing construction work and reducing the urgency for desal water.
Yesterday, the Baillieu government confirmed it would hold the Aquasure group to contracts signed by the Brumby government in mid-2009, even though Melbourne’s dams are now over half full, and rising.
With Melbourne water consumers scheduled to pay as much as $763 million for the first year’s water from the plant, Aquasure could lose about $2 million for every day over the December 2011 deadline.
”It is the obligation of Aquasure to comply with the project deed,” said government spokeswoman Josephine Cafagna.
”If it is late, the amount paid to it by the state will be reduced, [that is] AquaSure will not be paid until water is delivered.”
The government was responding to questions from The Age about mounting speculation that heavy rain and wind at the Wonthaggi construction site had put work months behind schedule.
Senior union sources yesterday said work on key parts of the plant - but not the pipelines to and from it - was at least six months behind schedule.
Aquasure, contracted to build and operate the desal complex, has repeatedly played down talk of delays. Yesterday, the government said that, to date, there had been no change to the completion time frames outlined in the contract with Aquasure.
Renewed debate about desalination was sparked on Monday by Premier Ted Baillieu’s reluctant honouring of Labor’s contracts for a project he slammed as a ”white elephant”. He released figures showing that desal water would cost consumers $24 billion (in nominal dollars) over almost three decades.
Labor’s desal champion, former water minister Tim Holding, launched a spirited defence of the project and said the government’s review of the desalination contracts had proved to be a ”charade”, offering the public no new information.
Mr Holding, now shadow treasurer, said the $24 billion figure used by Mr Baillieu was the equivalent of the net present figure of $5.7 billion (2009 dollars) published by the Brumby government when it signed the contract in 2009.
”When all of the nonsense that the Baillieu government is putting around is stripped away, this contract price … hasn’t changed by one dollar.”
In opposition the Coalition campaigned hard on secrecy around the desal contracts. But yesterday questions were raised about the Baillieu government’s transparency around desal.
On Monday, the government said it had studied all options, including breaking contracts with Aquasure. However, yesterday it refused to release the research and rationale that led to its decision to stay with Labor’s scheme, including the level of termination payment required to get out of the contracts.
”These are matters of commercial sensitivity,” said Ms Cafagna last night.
”The government wishes to act responsibly and not compromise the proprietary information of Aquasure. We are not able to divulge this information.”
Premier Baillieu and his team used question time yesterday to attack the opposition over the cost of the desalination plant, branding it the ”Holding desal tax”.
”It is quite obvious that the opposition are incredibly embarrassed about its ruinous legacy … this project will cost Victorians for years to come,” said Mr Baillieu.
