The French government has made an extraordinary intervention in the saga over Victoria’s desalination plant, urging the Baillieu government to negotiate with companies financially burnt by their involvement in the project - including French water services giant Suez.
France’s ambassador to Australia Stephane Romatet visited the desal plant recently and was briefed about its engineering achievements - as well as the problems that have delayed its completion and contributed to $1 billion plus in losses that are now the subject of a compensation claim to the government.
”I understand there has been extraordinary climatic problems including cyclones and typhoons, an earthquake, record rainfall, and problems with wombats,” Mr Romatet said.
He said he was also aware of disputes with unions. ”It has been a difficult project and all this has affected the timetable.”
This week Victorian Water Minister Peter Walsh maintained his hard line against compensation claims by the desal consortium AquaSure, describing them as baseless.
But the ambassador encouraged both sides to engage in ”frank and open dialogue” toward a compromise. ”When I next meet with the Premier and minister I will raise this issue. Frank dialogue is the best way.”
Mr Romatet described the plant as a ”major achievement in engineering and the use of advanced technology … Frankly this is an important project for France, for the French government and for myself”.
The intervention by France comes as AquaSure steps up pressure on the government for a bail-out. The plant was originally scheduled to begin operating last week, but completion is now not expected until February - a delay that will cost AquaSure and its partners hundreds of millions in payments in coming months.
The intervention also follows the announcement in France of a deal between the parties involved in financing, building and operating the plant aimed at averting bankruptcy of AquaSure, the collapse of the project, and loss of lucrative revenue streams.
In a statement issued last week, Suez - the parent of joint desal builder-operator Degremont - announced a ”standstill agreement” to allow the project to be financed until completed.
French interest in the sodden sand dunes near Wonthaggi has also been fuelled by an article in Le Monde on Sunday that declared Australia had been no ”eldorado” for Suez due to the Victorian desal project.
Suez also said it had had to find another $104 million to finish the project, and that its problems had caused a slump in its profits and its share price.
But Mr Walsh refused to budge on compensation claims. ”The Victorian Coalition government will vigorously defend the rights of Melbourne Water customers. We believe the claims AquaSure have lodged with us have no basis and we will hold the consortium to its obligations under the contract,” he said.
In a statement, AquaSure said the standstill agreement was a ”clear demonstration of the unity of purpose of these parties, and their commitment to delivering the project”.
Mark Robertson, president of anti-desal group Watershed, encouraged the government to resist French pressure. He said AquaSure should not see a cent of government money.
”When Mr Baillieu came into power he said there was no way the state government could get out of the contract because it was a watertight. As far as we’re concerned, that should work both ways,” he said.
Water refunds for people leaving Melbourne
Melbourne Water customers who have moved out of the metropolitan area will be paid their share of the $230 million mistakenly billed for the operation of the unfinished desalination plant, the Baillieu government said yesterday.
Last month, the government instructed Melbourne Water to refund households for the billing blunder, by postponing water bill increases scheduled for July 1.
However, it did not address the situation of customers who had moved out of the Melbourne area, or into nursing homes, or who had died.
Water Minister Peter Walsh said the government was in talks with water retailers,who will consult the Essential Services Commission on the best way to return the money.
