WATER SUPPLY
16 November 2006

Mrs PENFOLD (Flinders): The comments by the Premier, by various ministers of the Labor government and by Anne Howe, CEO of SA Water, encouraging people to install tanks, implementing severe water restrictions, installing limiting shower heads, cutting shower times, limiting garden watering but not enabling private desalination plants to provide water for everyone, justify examination of SA Water's role in water issues affecting South Australia.

     The policy of the government and SA Water in South Australia is, in my view, a shambles. The government-owned SA Water owns and is supposed to manage South Australia's water. Last year the Labor government put $291.8 million from our water rates back into general state government revenue as a dividend on top of the 30 per cent of net profits in tax.

     People have the right to manage with tanks, have drought-resistant gardens or none, and have dribbling showers if they wish. Other people have just as much right to have the pleasure derived from large gardens, using normal shower heads and having a good shower; and even having fountains, spas and pools.

     There are several factors that I base this comment on. We are not a third world country. We may be the driest state in the driest continent, but should that make us the most miserable with such a basic commodity as water? It is the community's right to have adequate water supplies at the cheapest cost. Water is unlimited; it covers more than half the earth's surface. Unlike most commodities, it is totally recycled when used.

     Modern technology enables unlimited supplies of water to be provided by desalination at a cost that is expected to be under a dollar a kilolitre. Using renewable energy means that insignificant amounts of greenhouse gases are produced. There are well over 7 000 such plants around the world. Stormwater collection and similar methods may be economic in special circumstances. However, they usually require costly collec­tion facilities, large storages and a duplicated supply system, which can be very expensive.

     Throughout Australia water is controlled by similar government monopolies to SA Water. Sydney Water is reputed to have spent $1.5 million trying to prevent private enterprise supplying water to its system. We remember what occurred in the former USSR, now Russia, 20 years ago when there were shortages and people queued for everything. Our market system, for all other commodities, matches supply with demand through price. A shortage increases the price, which makes the greatest supply possible and eliminates the shortage. This cannot happen in South Australia due to the price-setting mechanism plus SA Water's limiting outside supply to its pipeline systems.

     SA Water, while still owned by the government, is corporatised and should act like a public company. It pays tax on its profits to the state government of 30 per cent, plus 95 per cent of the balance of the profits to the government as a dividend. Thus, 96.5 per cent of its profits go to the government as general revenue. Public companies normally retain 50 per cent of profits for reinvestment in their busines­ses, but not SA Water. SA Water in 2005 paid $291.8 million in dividends to the government, up from $164.1 million or 77 per cent from the previous year, and decreased capital works expenditure by 42 per cent over the same period. In five years the government has transferred about $850 million from SA Water to general revenue instead of providing additional water. Last financial year SA Water increased the number of employees earning over $100 000 by 32 to 98, with the top pay being $370 999, and a total cost of over $10 million for just the top managers—more than the cost of wages for all state politicians—and SA Water is now building a new, ecologically friendly office block costing about $46 million to house them.

     For some years SA Water has overdrawn the current underground supplies in my electorate covering Eyre Peninsula. As a result of excessive draw-down, some basins have become saline. This is the risk with excess drawing from the basins now in use south of Port Lincoln, yet the Coffin Bay underground water lens has still not been assessed to see if there is the water to supplement the supply, despite millions of litres flowing into the sea. Instead, SA Water is building a $48.5 million pipeline to bring River Murray water 470 kilometres through Kimba on Eyre Peninsula, with all its consequent pumping costs. This will supply 1.4 gigalitres. People in South Australia need to consider the future of water supplies. There is considerable—

     The DEPUTY SPEAKER: Order! The honourable member's time has expired.

     Mrs PENFOLD: —pressure to deny supply of this basic commodity.

SUPPLY BILL (SA Water)
10 May 2006

Mrs PENFOLD (Flinders): As people living in the driest state in the driest nation in the world, I implore South Australians to wake up. Their future development depends on a good quality water supply for all, and our future is being stolen by an incompetent government that is using water as a cash cow and not reinvesting in our future, as it should be. We have the biggest `Yes Minister' fiasco where no one minister is responsible, and our most valuable resource is at the whim of everyone and no‑one. Until last week I could not understand why I could never pin anyone down. Then `The transparency statement: water and waste water prices in metropolitan and regional Adelaide 2006‑07', was tabled in parliament and I understood a major part of the problem for the first time. It is summed up in what is called in the report `the institutional framework'. It is certainly not a business framework. The document states:

     The 1994 COAG strategic framework requires separation of the roles of water resource management, standard setting and regulatory enforcement, and service provision. This separation principle is met through the following institutional arrangements. The Minister for Administrative Services, who is responsible for SA Water providing water and waste water services, brings to cabinet matters relating to water and waste water price setting, including the price setting methodology. The Minister for Environment and Conservation and the Minister for River Murray are responsible for water resource management policy. The Treasurer is responsible for budget deliberations and financial performance monitoring relating to SA Water's functions. The Treasurer, as the minister responsible for ESCOSA, refers water and waste water pricing decisions to ESCOSA. ESCOSA is an independent statutory authority.

I will attempt to explain for members; that is, it is one organisation representing all Australian governments—six states and two territories and one federal government—plus four separate state ministers and all their departments and cabinet plus one independent statutory authority. In addition, there are three public/private service maintenance contracts managed by SA Water. It is a very complex monolith. This organisation is expensive, cumbersome and risk adverse, and could not possibly behave like a business. It is no wonder that the decision making is difficult and slow and not working in the best interests of the state.

     There are also the new natural resource management boards and levy—which I have not attempted to put into this water equation—to be considered at some stage. Taxpayers' money should not be wasted by any government, and it is of particular concern that this is happening with the funding that is being paid into SA Water; and not being used by this Labor government for the provision of water and sewerage as the taxpayers believe it is. This is the same problem that was inflicted on ETSA when it was a government controlled but corporatised instrumentality. The funding was siphoned into Labor government coffers to pay State Bank debts and not used to build the businesses, as taxpayers assumed it was. It resulted in the lease of ETSA, which was so run down that it would have cost more money than the government had available to build it up again. However, when it was leased—not sold, as this government would have us be­lieve—this problem was shifted to the private sector to help pay state Labor government debt.

     A similar running down and gutting cannot continue to be allowed to happen to water businesses and assets, as water is the basis of our state's economic survival and our children's future. The 1996 United Water 15 year operations and maintenance contract for the management of Adelaide's water and sewerage systems has been working well, but it is drawing to an end with only four to five years to go. The Labor government is such a master of misinformation that many South Australians believe that SA Water was sold. In reality, only parts of it were contracted—some to United Water. United Water has been able to run a successful business and, through export facilitation, grow the water industry related exports for South Australia.

     The cost of infrastructure and lack of availability of water in South Australia is holding back business development across the state, particularly in the regions. It is also affecting ordinary people through huge augmentation fees and higher charges to cover services that traditionally have been paid out of government revenue, while SA Water is making $196 million in profits in the last year alone. It is not sensible or fair that those people who did not get in early now have to pay for water services, particularly when they are often some of the most remotely located and/or first home buyers.

     I was most interested to hear Mr Stephen Griffiths (who represents Yorke Peninsula) during his maiden speech say in the case of Stansbury, for the development of 50 allotments the augmentation price per allotment was set at $10 900. That is on top of SA Water's connection fee. These charges, and others, are causing developers to delay or withdraw altogether from projects across the state. Is it any wonder that we have a housing shortage across regional South Australia that is reaching a critical level? It is one of the reasons that we cannot attract staff to the regions, not only for private enterprise but also government health, education and police positions. Where there is housing it is often old and substand­ard compared with what these people can obtain elsewhere.

     There is a ripple effect that this government does not or will not understand. This is cost shifting directly to ordinary people from government. However, it is not the only way in which costs that should belong to SA Water are being shifted. Recently, at a local government conference in Adelaide, I was amazed to hear about a deal where the government is allocating a pitiful $4 million per year (subject to CPI) for 30 years to local governments to alleviate stormwater problems. This will be added to councils' contributions to fund the works and, as I understand it, it is not allowed to be used for the purchase of any land that may be needed or projects under a certain size.

     The report that investigated stormwater identified the need for $160 million worth of projects, and noted that much of the existing infrastructure was built just after the Second World War, making it about 60 years old. Many of these projects will involve the capture of stormwater and reuse, and in the long term will save millions of dollars worth of infrastructure and future water requirements for SA Water. In my view, they should be the responsibility of SA Water. It should have economies of scale and be able to prioritise the work needed across the state. I can envisage that only large, wealthy councils will be able to afford to apply for this funding.

     A similar problem is occurring with the small sewerage systems, called STEDs, that are built and managed by councils. In the cities, SA Water manages sewerage. In country regions the councils, and therefore the ratepayers, are responsible. At the current rate of construction, these systems are 30 years behind, and many of those already installed are getting old and need replacement. The demand on council resources to fund the renewal of infrastructure will escalate over the next 10 to 15 years, as a large proportion of the stormwater and STEDs infrastructure is either in relatively poor condition or is totally inadequate.

     Because I have been so concerned about this issue and the negative effects on jobs, the environment and the welfare of the people of our state, I spent some time putting together a submission to the National Competition Council, with a request for it to investigate the business practices of SA Water and the state government of South Australia. The council's response advised that it has referred my submission on to the National Water Commission which, under the Intergovernmental Agreement on the National Water Initiative of June 2004, `has responsibility for managing the implementation of agreed water reforms'. I suspect that the issues relating to the Murray River will be dealt with first and, in the meantime, a disaster for our state is unfolding with the negative impact on our future caused by SA Water. We cannot afford to wait a moment longer to get changes made.

     SA Water is corporatised and should be behaving like a normal private company, but that is not possible because of the institutional framework which, in my view, must be changed as quickly as possible. Currently, SA Water, as an arm of the government of the state of South Australia, is failing to deliver the water and sewerage services as required by legislation and its charter. A major cause of this dilemma is the pressure from the Treasurer and the government to extract as much money as possible from this monopoly for other purposes. Last year, the net profit after income for the year ended 30 June 2005 was $196 million, with a dividend then paid to the state government of $155 million, that is, 78.8 per cent. According to the Auditor‑General's Report, this will increase to 95 per cent in 2005‑06, leaving SA Water unable to fund the programs it may in fact want to deliver.

     I believe SA Water and the government of the state of South Australia are breaching the competition provisions of the commonwealth Trade Practices Act by restricting competition through the use of their monopoly position to prevent new entrants, except on the terms they set. Adequate supplies of potable water at minimum cost and the safe disposal of effluent are two of the major issues of our time. However, they are not currently being dealt with in an optimum manner in South Australia. I understand that a similar problem has been dealt with in New South Wales and a similar solution may be applicable to South Australia.

     I contend that SA Water exists as a government monopoly being used to raise revenue for the state government and is not fulfilling its charter. This negatively impacts on private companies wishing to enter the water industry in South Australia. Companies looking to supply communities that SA Water does not service, or where SA Water service is inadequate because of flow, quality and the cost of those services, are being excluded from entering the market. This monopoly impacts negatively on businesses, individuals and whole communities that receive overpriced and often inadequate water supplies and sewerage services.

     The SA Water Statement of Cash Flow on page 68 of the annual report states that the dividend of $165.1 million and tax equivalent payments of $82.6 million flow from SA Water to the state government from receipts collected from customers of $632.2 million. That equates to 39.1 per cent, which means that, for every dollar of SA Water revenue taken from the state's population, the government is taking 39¢ into general revenue. That only leaves 61 per cent to operate its core business, that is, to supply water and sewerage services to the people of South Australia.

     The 2005 Auditor‑General's Report, under `New Financial Ownership Framework', states that there will be a dividend payout ratio of 95 per cent based on the after‑tax profit of SA Water. Also of concern is the mention of a revised community service obligation agreement (CSO), which I suspect means even less will be provided by SA Water for regions outside Adelaide. That creates a round robin situation. While the CSO is paid to SA Water, apparently out of dividends paid to the government from SA Water, this is later clawed back to the extent of the tax and the dividend, and returns to the government. This will be exacerbated if dividends are increased to 95 per cent of profits.

     SA Water operations and costs are not transparent, and it will not disclose the cost of supply of water (on Eyre Peninsula, anyway) on the ground of `commercial in confidence'. Therefore, scrutiny and assessment, and the potential for competitive delivery of cheaper water by private enterprise, are prevented. This also prevents any assessment of the application of the CSO to this area.

     SA Water has decreased its expenditure on infrastructure from $174 million to $105 million over the last two years, just when the claimed need for more water has increased and water‑saving legislation is in place, with penalties. It is the South Australian government's policy to reduce water consumption in South Australia by 20 per cent, and that is reflected in expenditure. That would not be the policy of any commercial operation which would seek to satisfy demand and increase the production of water, not decrease it. SA Water practice, despite its charter stating that `All operations of the corporation are commercial operations', fails dismally as a commercial business.

     The state government, in May 2005, announced an extension of the Morgan‑Whyalla River Murray pipeline from Iron Knob to Kimba, a distance of 90 kilometres at a cost of $48.5 million. That was not all new money: $25 mil­lion of that amount was from a failed commitment to put a desalination plant at the Todd Reservoir. The extended pipeline had an initial 1.4 gigalitres, and even the proposed increase to 2.3 gigalitres at some future time will not bring sufficient additional water to remove existing restrictions on Eyre Peninsula. Since the advent of the Eyre Peninsula Catchment Water Management Board, SA Water was given an overdraw allowance of 5 per cent from the Uley basin on Eyre Peninsula in 2004‑05 and has requested more water for 2005‑06. SA Water has undertaken to `repay' this water at some time in the future. The pipeline water comes from the River Murray which, according to extensive and repeated publicity, is already over‑utilised. Water distribution will have to be reversed at an additional cost. Currently, it runs south from Port Lincoln and north to Kimba.

     The alternative of a privately financed and operated desalination plant at Ceduna, using the existing reticulation system, which could supply ample water to western Eyre Peninsula, was not canvassed as a permanent solution. We now have mines up there that will require 10 gigalitres or more. The government did announce a possible desalination plant that might be built near Whyalla for BHP Billiton at some time in the future. In my opinion, the cost of supply from the Murray pumped to Whyalla and the new pipeline would be considerably greater, when all costs of operating and financing are taken into account, than a commercial desalination plant at Ceduna. if the desalination plant was in Ceduna instead of the possible BHP Billiton facility in Whyalla, a better result would be achieved without the pipeline being necessary. Is this a government‑dictated policy based on an agenda outside SA Water's charter? Once built, the fixed costs are effectively permanent, as the scrap value would be minimal.

     The government is requiring water tanks on every new house. This is again cost shifting to ordinary people and a high cost, ineffective solution to future water shortages in a Mediter­ranean climate where it rains when your tank is full and is dry when your tank is empty. The water could be readily supplied by desalination at a considerably lower cost. Waterproofing Adelaide states that tank water costs $5.40 per kilolitre versus indicative pricing on desalination of possibly less than $2 per kilolitre. The combination of SA Water not investing in new and unlimited water resources using wind power or allowing private enterprise to supply, combined with government policy, is distorting the market and prevent­ing the introduc­tion of lower‑cost solutions.

     The tanks are effectively a tax on new home owners, with SA Water policy being closely aligned to government policy. SA Water takes water from underground resources without charge or consideration, while other potential commercial businesses are denied access to the same resources even if they were prepared to pay an access fee. SA Water is effectively acting as a government monopoly, supported by the state government as a community service, yet selects where it will operate and the terms and conditions of operation. This is illustrated by the water supply west of Ceduna provided by the community and Ceduna council, with some grant funding for the original infrastructure, but there were no concessions for the purchase of bulk water.

     There is also the situation at Port Kenny and Venus Bay where the community and the Elliston council are expected to pay for new water supplies. The Labor government and SA Water treat customers differently depending on where they live which, because of SA Water's monopoly position, it gets away with. Ceduna, in particular, has had to put up with burst water pipes and poor quality water that would not have been allowed to persist in metropolitan Adelaide. The new marina development in Ceduna has, I believe, attracted around $2 million in SA Water augmentation fees, despite no houses yet built and no additional water being supplied to the area, with the existing water supply being of very poor quality.

     The state government has accepted financial windfalls from sewer charges due to rising property values and the amalgamation of property values without any recompense to customers or changes to pricing. I agree with Mr Baddams, who stated in his letter to me:

     My properties are assessed on total value, including adjoining land. This makes no logical sense at all. How does the extent and value of my land have any effect on the sewerage system connected to my house?

At present, SA Water, despite its charter, does not attempt to supply all South Australians with water or sewerage systems.

     Time expired.

PUBLIC WORKS COMMITTEE: EYRE PENINSULA WATER SUPPLY UPGRADE
14 September 2005

This report to parliament followed the committee hearing on 29th June - see Liz's submission to the committee on Reports page.  Liz's speech below also Mark Brindal's (committee member).

Mr CAICA (Colton): I move:
That the 217th report of the committee, on the Eyre Peninsula water supply upgrade, be noted.

Eyre Peninsula's water supply system is insufficient to supply existing townships or allow for further development. This project provides the most cost-effective solution to allow existing and future residents to secure a water supply of improved quality. SA Water proposes to construct a new interconnection pipeline by February 2007 between the Morgan-Whyalla pipeline system and the Eyre Peninsula water supply distribution system at an estimated cost of $48.5 million. The annual recurrent costs will be $1.1 million. The proposal comprises a new ductile iron concrete lined 375 millimetre pipeline from Iron Knob to Kimba, a pump station at Iron Knob to boost flow from the Iron Knob tank, a booster disinfection station at the new pumping station at Iron Knob and another at Knotts Hill storage in the existing Eyre Peninsula system. In addition, booster pumps will be required in the existing line between Kimba and Lock to ensure that existing customers are not affected. Water will be transferred through the new pipeline to Kimba—1.4 gigalitres a year in stage 1 and a total of 2.3 gigalitres a year in stage 2—by duplicating a section of the existing pipeline between Kimba and Lock.

     Desalination of brackish surface water diverted from the Tod catchment to Tod Reservoir was once the preferred option. However, significant changes were necessary, and this altered the cost relativity and the alternatives. Intercon­nection with the Morgan-Whyalla pipeline system is now the least cost option. All viable options have been evaluated on the basis of scope and requirements to meet an ultimate capacity of 2.3 gigalitres of water a year to the Eyre Peninsula. This capacity also allows flexibility to meet demand, should growth be greater than forecast. The committee was told that the proposal is the most cost effective option and has a number of advantages over the Tod desalination alternative. Connection to the Morgan-Whyalla pipeline has the lowest power consumption and, therefore, the least environmental impact from greenhouse gas emissions. Also, there is no waste discharge stream and no EPA licence requirement. Consequently, there is no risk of impact on the marine environment or the valuable aquaculture industry, which is an important part of the state and regional econo­mies.

     The proposal offers more certainty for long-term growth needs and protection of ground water resources because augmenting booster pumping requires lower capital invest­ment than increasing the capacity of desalination options. The proposal may also enable increased environmental flows to the downstream wetlands and/or the use of the Tod catch­ment water to support economic development within the region. Finally, the operational risks with a pipeline are significantly less than for a desalination plant and reliability is inherently higher. In the short term, SA Water will increase its licence holding for extractions from the River Murray. However, it intends to purchase additional licences from interstate users, who will cease to extract water from the River Murray. This water will be utilised for Eyre Peninsula with an environ­mental benefit, because the water will flow further down the Murray River prior to extraction.

     Following the development of additional water resources, SA Water will replace the existing water restrictions on the Eyre Peninsula with the measures that apply elsewhere in the state. The benefits of the project are expected to be:

×improved water quality and reduced restrictions within the Eyre Peninsula townships;

×reduced impact upon the environment;

×community acceptance in terms of affordability and quality;

×reduced pressure on the ground water basins; and

×the preservation of horticultural and agricultural activities with associated benefits to small business in the community.

The project has a net present value loss of $38.3 million on the entire community. The next cheapest option exceeds the preferred solution by more than $20 million.

     It has been suggested to the committee that the proposal does not meet the needs of the area—in particular, that it lacks vision—and South Australia should be looking to MVC desalination plants at Ceduna and Port Lincoln to create new water instead of continuing to rely upon the River Murray and the area's underground basins. A desalination plant at Ceduna could utilise the new graphite block technology that would be of benefit to the state. It has also been suggested that the proposal will not provide sufficient additional water to enable population growth and new economic development to occur and will be more expensive to upgrade. These points have been rebutted by SA Water. The agency has advised that:

×the projections for future demand for water in the Eyre Peninsula water supply considered population growth and the known potential economic developments;

×the pipeline is able to have its pumping capacity expanded in future years beyond the expected upper limit of need by installing additional inter-stage booster pumps and add-on surge protection;

×the MVC desalination process is still at the pilot trial stage in Australia and presents a clear process risk. There are also significant approval, cost and location issues that will require significant time to resolve, which will require further stress upon the ground water basins; and

×there is no cheap waste heat source close to the SA Water networks and systems that could be exploited for a possible MVC process.

On the balance of the evidence available to it, the committee is not convinced that a desalination plant at Ceduna is a better solution to the current water supply problems on Eyre Peninsula than the proposed pipeline. In reaching this conclusion, the committee recognises that there is increasing pressure upon the state's water supplies and that new and cost-effective solutions to this problem should be explored. Therefore, the committee recommends to the minister that consideration be given to assessing:

×the viability, cost and potential locations of desalination plants in South Australia as economic means of increasing the supply of potable water in the state; and

×the benefits, if any, of the MVC desalination process and improved graphite block technology, and the most suitable locations in South Australia for their use.

Pursuant to section 12C of the Parliamentary Committees Act 1991, the Public Works Committee reports to parliament that it recommends the proposed public work.

Mr BRINDAL (Unley): It is with very heavy heart that I follow the member for Colton, whom I respect on many matters, but twice today the member for Schubert and I have been forced to disagree with him. This is not so much a disagreement with the member for Colton nor with members of the parliamentary committee that we all serve on but, rather, a fairly trenchant criticism of a government instrumen­tality that came and presented to us in this submission.

     I commend to all members the rather stunning dissenting member's report that is, I think, 13 pages long, so I will not have time to completely canvass it here. However, I will just point out the following. It is to substitute water from the Tod River for water from the River Murray, very much akin to saying that the Tod River is like a terminally ill patient who is going to die tomorrow so there is not much more blood we can get out of that patient, so we will transfer this to an equally terminal patient, but one who might have 20 or 30 years, so we will worry about it later.

     They do say, and I will not be unfair to them, that they are going to get that water by buying it commercially upstream, and I hope that there is more veracity in that statement than there was when I as minister and the then Leader of the Opposition as Deputy Premier committed to using the same methodology to buy water for the Clare Valley scheme, only to have this same department tell us afterwards—I am not sure for what reason: we did not put it in writing, or some­thing, or we did not tell them, we just told the public of South Australia, the result being that they just went and drew more water from the river by drawing down on the allocated portion of the country towns licence, something that I am ashamed of for myself because, if I had known that as minister, I would have issued an instruction. I am quite sure that the now Leader of the Opposition would have done the same. We committed a government to not drawing any more water from the River Murray and a department chose additional profits and did exactly that.

    Many of the arguments put forward by SA Water have no substance. The part that the EPA played worried me. SA Water decided to trial some things and, after spending a lot of money and time (and the men for Flinders will speak about this), almost two years, at the end of that process, whoopy-do, we cannot do it because of all the problems that the EPA saw.

     I invite members to read the dissenting report because I cannot see that they are problems. They claim this will increase the loads of heavy metals and pesticides in the discharge water, but surely the existence of a scheme on the Tod or anywhere else will not increase the load of pesticides or heavy medals. That is the load that is going in there and that is the between the agriculturalists, the system and the EPA. To simply come in and say that because SA Water is going to do something we can make it clean up a problem that already exists is a fallacious argument. By taking a salt load out of the Tod and desalinating it arguably gives the Tod system greater life. At present they take the best water from the Tod, allow the salty water to go down it and they are worried because the wetlands and the whole system is in precarious balance. It was proposed to take the salty water, desalinate it and presumably allow the freshest water to flow down the Tod, which would have given the Tod system greater life, but for some reason that was not considered a viable proposition.

     So, we go to the proposition of using waters from the Murray. What upset me and the member for Schubert more than anything else—and I hope the minister takes note of this—was their evidence on desalination. I asked the minister to read this and draw it to the attention of the executive government and, if there is a flaw in the logic of the dissent­ing report, I ask him to report it to the parliament. Having asked a series of questions, SA Water's replies were not adequate or complete and were in fact misleading. I take umbrage at that because as a committee of the parliament we are entitled to accurate and factual information. I take double umbrage because they were prepared to savagely criticise the member for Flinders who, as a private member, did the best she could with the material available to her. They then brought all the resources of the department to criticise what she had done, only for me to find by using the web that their answers were inadequate, misleading and not cost effective for the people of South Australia. A lot of it—

     The Hon. J.W. Weatherill interjecting:

     Mr BRINDAL: Pardon?

     The Hon. J.W. Weatherill interjecting:

     Mr BRINDAL: Steady? Well, you read it, because much of it involved processes of desalination. SA Water appears to be linked to a reverse osmosis technology cum rain or high water. When I asked SA Water about IDE technologies from Israel (part of which has been proposed for the mechanical vapour compression system and graphite technology, which the member for Flinders has proposed out of Ceduna), they said, `It's too expensive. It uses too much electricity.' They completely ignored the fact that the electricity generated for the member for Flinders' proposition would be solar gener­ated electricity and came at no cost, and that when the sun was not shining and the system was not needed the minimal amount of electric power needed to keep the compressors running (or some piece of equipment running) was totally negligible and could be obtained from storage batteries.

They used electricity cost as a reason for saying that it was not cost effective when, in fact, the whole purpose of the member for Flinders' proposal was to generate electricity. But even worse, they completely discounted or did not bother to mention multi-effect distillation techniques. It is clearly able to be established from the web that the multi-effect distillation technique is used elsewhere in the world in several plants, principally at Telde and Las Palmas, Spain, a plant at the Enron-Penuelas power station in Puerto Rico (which produces 7 600 cubic metres of water a day) and reliance petroleum at Jamnagar in India, which produces 48 000 cubic metres of water a day.

These systems use errant heat which use virtually no electricity. The cost of producing water using these systems is less than the cost of pumping the water from Morgan to Whyalla. So, there is a technology which will produce water on site at a cheaper price, and it has been ignored.
Time expired.

Mrs PENFOLD (Flinders): This report was a disappointment on many levels. I was very pleased to see that a dissenting report raised concerns about some of the issues that worried me. Its major recommendation to extend the River Murray pipeline from Iron Knob to Kimba I consider to be short-sighted, environmentally irresponsible and ultimately inadequate. The report dismissed the possibility of using instead desalination in partnership with private enterprise. This decision, I believe, was based on a lack of understanding of the latest technologies available, despite desalination being used successfully around the world.

     I was surprised that this report has been made without the members of the committee at least investigating the other option that I put forward to put a desalination plant at Ceduna. It is my hope that they will ensure that the proposal that I put forward will be given proper consideration, as it needs to be put in place as soon as possible to provide for the mining, marina and housing developments expected in the Ceduna region within the next few years.

     There would be no-one here who does not know about the dire straits of the River Murray. Even the most conservative scientists believe that its extraction limits already exceed its long-term sustainability; and recent climate studies indicate that changing weather patterns could lead to lower flows through the entire system. The Murray Darling system is salinising at an alarming rate. This is now being slowed by a system of salt interception schemes but, as salt loads escalate, these schemes will not be able to keep up.

     Minister Wright has said that the water for Eyre Peninsula will be brought from South Australia and interstate irrigators who already hold water allocations. However, we are all being hit with the River Murray levy that was supposed to be used to buy these water allocations so that environmental flows in the Murray could be increased. Instead, that water will be pumped to Eyre Peninsula. There will also be an energy cost for pumping the water from the Murray and building and installing the pipeline and extra pumping systems.

  The pipeline will do little to alleviate the environmental problems we face in our own region. Currently, Eyre Peninsula's requirement of 10 gigalitres of water per year is taken predominantly from the underground basins south of Port Lincoln, which are critically overdrawn. Merely reducing that take by 1.4 gigalitres—the new pipeline—will not be enough to allow these basins to recharge, particularly if the predictions of low rainfall as a result of climate change become a reality. In addition, the new pipeline will not meet the needs of Eyre Peninsula households and industry in the future.

     The pipeline is due to be commissioned in 2007 when it will supply up to 1.4 gigalitres. This supply may be increased to the pipeline's full capacity of 2.3 gigalitres if BHP Billiton constructs a desalination plant at Port Augusta or Whyalla—or possibly even Port Pirie—primarily to service the proposed expansion of Roxby Downs, which is yet to be approved. Even if Eyre Peninsula gets 2.3 gigalitres, we will still be on water restrictions and there will be no water to spare for new industries, such as the potential lead and zinc mines being explored north of Kimba and the mineral sands north-west of Ceduna. In addition, the Eyre Peninsula Catchment Water Management Board anticipates that about 5 000 housing and commercial developments will be built in the region in the next three to five years, including more than 600 homes at the Ceduna Keys Marina.

     Contrast all these disadvantages with the benefits we could get from desalination plants built and funded by private enterprise and using the latest environmentally friendly technology. A consortium, which includes a company that operates more than 350 Mercury vapour compression (MVC) desalination plants around the world, has proposed building a plant at Ceduna that could produce 5 gigalitres of water a year if necessary. This would meet more than half the Eyre Peninsula's current water requirements, and all the govern­ment, through SA Water, has to do is give the private operators access to the pipes or pay the company a fair price for the water, which could then be sold to householders and businesses through SA Water at the usual price.

     Any subsidy that might be required for this price should cost less than even the interest on the $48.5 million that is going to be spent on the pipeline. The plant could be built and maintained at the cost of private enterprise. It would be modular, and its capacity could be increased as re­quired—unlike the new pipeline from Iron Knob to Kimba. If the Ceduna plant went ahead, there is a good possibility that another could be built at Port Lincoln and/or at Streaky Bay using wind energy.

     The proposal for the desalination plant at Ceduna is to use solar power stored in a graphite block to enable the plant to operate 24 hours a day on natural energy. It is proposed that the waste water will be returned to the existing salt pans and be used in the existing salt export business. The plant would produce few greenhouse emissions after the initial construc­tion. The desalinated water provided would be of good quality, whereas the water that has to be pumped thousands of kilometres from the River Murray would be highly chlorinated, as is the current supply that is pumped up from the overdrawn underground resource south of Port Lincoln.

     In a meeting of the Public Works Committee on 29 June, SA Water's General Manager of Infrastructure, John Williams, admitted that the organisation had `discounted' certain future developments on the Eyre Peninsula on the basis that the government would have to provide them with subsidised water and therefore they would not be `real developments', to use his words. Those developments included horticulture, viticulture and other activities, and information about them was provided to SA Water by councils on the Eyre Peninsula. On what basis were these developments discounted? Who did the calculations? Since when have SA Water bureaucrats been experts on the wine industry or indeed on any commercial development and its future potential?

     Time expired.     Debate adjourned.

 
DESALINATION PLANT, CEDUNA
Question on notice to Minister for Administrative Services  10 May 2005 - Responded 5 July 2005

Mrs PENFOLD: Will the privately funded desalination plant proposed at Ceduna be given the right to sell water to SA Water at commercial rates?

The Hon. M.J. WRIGHT: SA Water is able to purchase goods and services required for the provision of water and wastewater services within delegated financial limits. If SA Water needs to purchase water at Ceduna, it may do so within these delegations.

DESALINATION PLANT, CEDUNA
7 April 2005 

Mrs PENFOLD (Flinders): Will the Minister for Administrative Services advise the house whether a privately funded desalination plant at Ceduna would be given the opportunity to sell water to SA Water at commercial rates? Ceduna and surrounding districts currently receive very poor quality—and highly chlorinated—water from SA Water at an estimated cost of $3.60. On Tuesday I received an email from a person at Wirrulla who is about to install a $9 000 water softener for his farm. He listed major problems with the water on Eyre Peninsula, and the last sentence of his email states:

     In conclusion, the quality of the water supplied on the Eyre Peninsula is in need of urgent attention as the quality has deteriorated over the years and continues to do so and will be unusable.

The Hon. M.J. WRIGHT (Minister for Administrative Services): I thank the honourable member for her question, because she is acknowledging that the previous government did not concern itself with water issues on the Eyre Peninsula. As I have already said, we are taking seriously the interests of all South Australians. We will govern for regional South Australia even if the former government would never do so.
     Members interjecting:
     The SPEAKER: Order!
     Members interjecting:   

DESALINATION PLANT
9 March 2005

 Mrs PENFOLD (Flinders): My question is directed to the Minister for Administrative Services. Has the government reneged on the promise it made at the community cabinet meeting in Port Lincoln in 2002 for a public-private partner­ship to build a $32 million desalination plan to service Eyre peninsula? An Eyre peninsula desalination plant is not listed in the 2004 Major Developments in South Australia directory, which lists some $14 billion worth of projects—most of which are not yet approved or confirmed—but it was mentioned in the house by the Premier last week as part of a request for federal funding to put towards water projects.

The Hon. M.J. WRIGHT (Minister for Administrative Services): I thank the member for Flinders. As she knows full well, this government never reneges on a promise.     Members interjecting:
The DEPUTY SPEAKER: Order!

TOD RESERVOIR DESALINATION PLANT
8 December 2004

Mrs PENFOLD (Flinders): It seems that the desalination plant proposed for the Tod Reservoir near Port Lincoln on Eyre Peninsula has evaporated. The government's vision, as stated in the SA Water Charter, is to seek:
     . . . to ensure that South Australians have access to quality water services that promote the health of the public and are sensitive to the natural environment.

The original promise regarding the desalination plant was made at a community cabinet meeting in Port Lincoln in 2002 by the Minister for Government Enterprises, Patrick Conlon—

The ACTING SPEAKER: Order! The member will not name members of parliament but rather use their electorate title or ministerial title.

Mrs PENFOLD: —the Minister for Government Enterprises, and was for a $32 million public/private partnership. The former minister for administrative services, on ABC Radio on 4 June 2003, said that the desalination plant was `written in blood', yet it is not even listed in the state infrastructure projects for SA Water, despite trials costing $335 594 at the Tod Reservoir last year. Now there are rumours that it has been shelved altogether. If this is true, and I am assured that it is, it is a condemnation of the Labor government's lack of integrity and the lack of social concern for, and commitment to, a potable water supply for the people of Eyre Peninsula. The need for desalinated water to augment the current diminished underground supply is urgent as, in my view, connection to the River Murray is not an option.

     Despite the promises made by this Labor government, the desalination plant proposed for the Tod Reservoir is not listed in the 2004 Major Development SA Directory either, nor is it mentioned in the SA Water Annual General Report, tabled recently in parliament, which announced a profit to the government of $261.6 million for the year 2003‑04.

     I do not believe that a desalination plant on the Tod was ever going to be the full solution. We need more water than that option could provide to fulfil the existing and potential requirements for good water on Eyre Peninsula. Therefore, we should be planning a major seawater desalination plant at Port Lincoln, or one using the underground basin at Polda. I question whether water needs to be unpotable before the Rann Labor government decides to do something about addressing the water crisis on Eyre Peninsula.

     I have been advised that overdrawing the last major underground basin, south of Port Lincoln, would bring in saltwater from the sea, and this must be avoided at all costs. If our remaining water supply becomes contaminated by seawater to a point from which it cannot be reversed, the vast majority of Eyre Peninsula will be without a suitable supply of reticulated potable water. Water will all have to be supplied from desalination. Both quantity and quality are important. We must have sufficient water but it must also be useable water. Salinity and chlorine levels are unacceptable over much of Eyre Peninsula during the summer, and I have already been told of one butcher shop in a country town that could not get accreditation because of the poor quality of the reticulated water there.

     To enable them to keep their butcher shop, the local council had to assist with a filtration plant to comply with safety requirements. I am now bypassing the government and SA Water in an attempt to secure an improved water supply for Eyre Peninsula. I have put in a freedom of information request to the department to obtain details of the service currently being provided by SA Water in the region.

     Perth is planning a $350 million‑plus desalination plant that will supply about 20 per cent of its water requirements, and I was interested to note that a private company is proposing a water desalination plant for Whyalla, Port Augusta and Port Pirie which the Premier today indicated would cost multi-millions of dollars, include water for Roxby Downs and release 12 gigalitres of water for the environment­al flows in the River Murray.

     A similar desalination plant is needed for Eyre Peninsula. It is ridiculous for the government to call for reduced water usage, thereby reducing use of the existing infrastructure and their profits. Despite the Premier saying that he wants to treble South Australia's exports by 2010, limiting the water supply can only reduce the potential for development of business and industry and the associated jobs that go with expansion.

     I have been exploring with private industry the provision of a large-scale plant to desalinate water for most of Eyre Peninsula. Small units, such as that at Nundroo vineyard, would be suitable for small communities such as Port Kenny and Venus Bay, which are not connected to the existing pipeline. Unfortunately, the short-sightedness of the govern­ment and SA Water has not encouraged participation by anyone who has shown interest.

     Time expired.

DESALINATE SEAWATER
2 June 2004

Mrs PENFOLD (Flinders): A letter from the Department of Water, Land and Biodiversity Conservation, dated 30 April 2004, and obtained by the member for Stuart, states:
     The government has decided to widen the long‑term conservation measures to apply to all of the state's water resources. A regulation will be drafted under the Water Resources Act 1997 to bring into effect conservation measures that will apply to watercourses, lakes, surface water, underground water and effluent as defined in the Water Resources Act 1997. This includes domestic and industrial waste water, rainwater tanks, bores, reclaimed water and direct extraction from rivers such as the Torrens and the Murray.

The regulation is to apply from 1 July this year with penalties applying.

     Presumably all these new measures will require compli­ance officers coming on to our properties and into our homes to check that we are conserving our tank, bore and even our domestic waste water, including effluent. One of my colleagues suggested that the government could call these officers the poo police or the dunny detectives. The mind boggles at the possibilities and it helps to illustrate the sheer stupidity of this new invasion of our personal privacy and waste of money by this Labor government.

     This regulation could be disallowed if commonsense prevails but, should it get through, it will be particularly hard to enforce, and a law that is not going to be enforced is worthless, in my view. However, I was amazed when I heard the minister on the ABC today. When asked, `How do you police bore and rainwater usage when there is no meter?' the minister said, `Well, you don't need to.'

     Why should there be such an acceptance by this Labor government of limited water, anyway. Our oceans cover nearly 71 per cent of the surface of the earth and contain 97 per cent of the world's water. Most of our population and industry are sited close to seawater, yet we are told that we have a critical shortage. For those on the Murray, I quote Professor Cullen, our Thinker in Residence, who said that the Murray‑Darling could double production and halve the water use.

     It is amazing to me that the substance most plentiful on the surface of the earth is treated as being in critically short supply when the only limiting factor is salt. Salt can be removed for less than $2 per kilolitre, with the lowest price I have heard recently being $1.36 per kilolitre. Therefore the only thing lacking is the willingness to invest in the desalina­tion process. The more water that is desalinated, the cheaper the cost will be. The cost increase created by desalinated water being shandied into the existing supply will be small and will stretch the existing supplies. The benefit of locating desalination plants close to users will cut pumping and other costs such as pressure blow‑outs.

     Instead of desalinating so that we have plentiful water, the Labor government is using taxpayers' money on more expensive filtration systems, pipes and pumping systems and is adding chemicals to ensure that the limited Murray River water is fit to drink, at a cost estimated at $5 per kilolitre in Whyalla. They are using taxpayers' money to install tanks in government buildings, such as schools, and forcing the people who can least afford it to put in tanks, with all the associated pumps, piping, filters, plumbing and maintenance costs at great personal expense.

     The Labor government is also charging a save the River Murray levy, despite the fact that SA Water is making about $250 million in profits, some of which could be used to provide alternatives to the river water, help solve the problem and increase their revenue. But the Labor government is restricting the use of the existing system and finding alternatives, thus making SA Water less viable. I understand that restrictions on water use cost about $11 million in profits this year. The restrictions also took away a great deal of pleasure from many people and caused a great deal of anguish, particularly amongst the elderly, who cherish their little bit of garden. They have to decide whether they should have a garden, or get up very early, or stay up very late, to ensure that it is watered.

     I ask the Premier: who is covering the insurance risk associated with people drinking tap water that SA Water and United Water have not ensured is safe to drink? Will the poo police also check that we are not using the tank water for drinking, as well as ensuring that it is properly connected and maintained? I understand that the problems associated with maintenance caused the government to get rid of tanks on Housing Trust homes some years ago.

     The real cost of our water must be worked out in dollars, social benefit, environmental cost and amenity. By planning for long‑term restrictions, in my view the government is doing everything wrong from a community obligation, commonsense and economic point of view. Water has to be recognised as just another commodity. Restrictions on consumption are only justified until additional water can be sourced. If there is no critical shortage, there is no justifica­tion for having restrictions, leading to a police state, with neighbours reporting on neighbours and, potentially, water police presumably checking our use of the water from our tanks and even our effluent.

     However, controls on bores and dams need to be policed, at least in areas such as the Adelaide Hills, to ensure recharge and an equitable allocation of ground and surface water. In a recent Flinders Journal, Dr Simmons from Flinders University stated:

     While people and politicians can see the plight of the River Murray with their own eyes, the fate of our underground water resources goes largely ignored.

He goes on to state that groundwater `comprises about 97 per cent of the fresh water available on the earth'. What a dilemma it is that we ignore the source of most of our fresh water and therefore risk using it beyond its recharge and/or contaminating it. Both these scenarios are occurring in our supply on Eyre Peninsula, where we do not have access to the River Murray and currently have no other source of fresh water.

     Except for a community service obligation to supply the basic needs of households, the government's aim should be to supply as much water to the community to use in any way it likes at the cost of supply. To contemplate long‑term restrictions on development of businesses and housing, and therefore jobs for our children and the survival of our small communities, cannot be justified under any circumstances. There is ample water, and many firms are willing to desali­nate it. They can sell it to SA Water for distribution if SA Water cannot compete. We rely on private enterprise for food, energy and accommodation, so why not for the supply of water?

     Restricting public use of water for amenities such as ovals, parks and gardens should also not be contemplated. We live in a modern community and should not look back to the self‑sufficiency of the past. I well remember the dusty country towns before we had water for trees, lawns and flowers. Communities, such as the small town of Cummins, have made their environments more attractive to people and should continue to be encouraged to do so. We live in a competitive world, and people will go to the places they most enjoy. Turning the communities into dry, dusty areas will kill them, and that will occur if individuals and communities are constrained by any method from having gardens.

     The supply of all water needed at minimum cost should be the function of the government, yet the opposite appears to be the situation. Currently, the SA Water monopoly is a hidden cash cow producing $250 million profit for the government from metered taxpayers. In my view, this should be investigated under competition policy requirements. Water is too important to the future of our state to be artificially expensive and in short supply. Water has been treated appropriately in the past as a commodity that is readily available and cheap. Nothing has changed, except that currently the cheapest source of water is fully committed.

     On Eyre Peninsula, the Uley Basin water, if used within sustainable quantities, does not have a purchase or environ­mental dollar cost, but does have a distribution and quality maintenance cost. If, as has already been proposed, the green power is used from the Hydro Tasmania wind turbines (located close to the Uley underground water pumping station), the cost could be dropped even lower than $1.36 per kilolitre and be even more environmentally friendly. The desalinated water could then be shandied with the low salt Todd Reservoir water. This would stretch the potable quality water further, provide better water for the whole of Eyre Peninsula and enable greater recharge of our underground resource.

     Let us stop the nonsense in the proposed regulation and start being sensible by addressing water issues for the long term. We could lead the world if we would only start being innovative—and the opportunity to do so is on Eyre Penin­sula. Our mediterranean climate and our beautiful terra rosa soils, combined with water, could turn the region into an oasis, help to triple our state's exports and increase our jobs, as our Premier is asking us to do, but we need large scale desalination now.

WATER SUPPLY, EYRE PENINSULA
2 June 2003

Mrs PENFOLD (Flinders): Will the Minister for Environment and Conservation advise the house what action the government intends to take to address the significant water problems on the Eyre Peninsula, particularly in light of the fact that the people on Eyre Peninsula are paying a levy for the Catchment Water Management Board and are now expected to pay another levy for water to which they have no access?

The Hon. J.W. WEATHERILL (Minister for Adminis­trative Services): I answer this question as the minister with responsibility for SA Water. The honourable member should be aware (and these matters have been communicated to her) that there is a long‑term strategy to deal with the water needs of Eyre Peninsula. Indeed, the current demands from the Eyre Peninsula's potable water supply are unsustainable, as total demand from the system is exceeding SA Water's licensed extractions from Uley South, Lincoln and Uley-Wanilla basins. SA Water initiated a master plan study to determine the optimum unsustainable solution, and the Department of Water, Land and Biodiversity Conservation and the Eyre Peninsula Catchment Water Management Board were represented on the technical steering committee.

Members should also be aware (and I know that the honourable member has had this communicated to her) that, on 23 September last year, cabinet approved a preferred solution to the water supply problems on Eyre Peninsula, based on the findings of that master plan. It was a three‑part plan that involved the construction of plant to desalinate water from the Tod River, as well as the reuse of treated effluent and a water efficiency program to achieve a mini­mum 5 per cent reduction in water usage.

Between February and July this year, a pilot plant study is being conducted at the Tod Reservoir to determine pre‑treatment requirements for a full‑scale plant, which is 2.3 gigalitres per year. The plant is expected to be delivered, as are a number of these plants, by SA Water via a public‑private partnership. I understand that those arrangements have also been made clear to the member for Flinders.

So, quite the contrary, the government is taking a number of steps that are directed at securing the long‑term water needs for the Eyre Peninsula.

IMPORTANCE OF WATER BOARD AND MASTERPLAN
28 May 2003

Mrs PENFOLD (Flinders): I support the bill with some reservations. Most South Australians have always been aware of the necessity to care for our water supplies, but none more so than those in the country, especially in my electorate of Flinders, which covers Eyre Peninsula. My electorate has been under very strict water restrictions over the last summer under the existing powers of the minister.

     I am particularly proud of the work that schools, councils and the community are doing in the conservation of water, work that began well before the water restrictions were put in place. The emphasis of their work is on the reuse of effluent water and the efficient use of stormwater.

     I was privileged to open the Cummins Area School's project that will save the region's water supply about 10 million litres a year. A dam, which was constructed in two weeks using mostly volunteer labour, machinery and fuel, collects stormwater that would otherwise go to waste. The water is then used to irrigate the school's agricultural block and the school oval. Principal Chris Deslandes said that the Cummins recreation centre and bowls club dams served as a model for the school, and he hoped that the school's system would be seen as a model of good environmental practice for other places.

     Elliston and Streaky Bay Area Schools are undertaking exciting projects in the reuse of stormwater. Elliston Area School obtained an ecologically sustainable development grant to rejuvenate Samphire Swamp, which is located near the township. The stormwater is cleaned and reused by the school. Elliston District Council contributed significantly to the success of this project. Streaky Bay Area School also obtained an ecologically sustainable development grant towards the cost of setting up a wetland and stormwater project to alleviate water shortages in their local community. Generous support came from the Streaky Bay District Council and the community for this project. School projects are linked to the curriculum to add to student learning outcomes and action.

     About five years ago, a committee was established to begin planning a comprehensive strategy for the preservation, management and distribution of water resources on Eyre Peninsula. The committee's responsibilities included the preparation of water allocation plans for the groundwater resources in the southern basins and Musgrave prescribed wells areas. It is a tribute to the capability of the committee members that these plans were adopted on 31 December 2000 and 2 January 2001 respectively. A major reason for the committee's success was its method of working with the community to ensure that the water resources were managed sustainably and equitably. The committee linked the community, government agencies, industries, organisations and other water resource groups.

     The committee looked at setting up a water master plan to ensure that the use and management of the Eyre Penin­sula's water resources sustained the physical, economic and social wellbeing of the people while protecting water dependent ecosystems and the needs of future generations. I commend Newton Luscombe for his leadership of the committee, and members Fred Gerschwitz, Helen Mahar, Bill Nosworthy, Robin Dixon-Thompson, Ross Pope and Scott Evans from the Department of Water Resources for their work.

     This committee was automatically disbanded with the establishment of the Eyre Peninsula Catchment Water Management Board. The Presiding Member of the board, Wayne Cornish, board members and the then general manager, Geoff Rayson, worked tirelessly with the commun­ity to ensure that all aspects of water management on Eyre Peninsula were addressed.

     A holistic approach to water supply is essential for continued good management to meet current and future challenges. With this in mind, the Eyre Peninsula Water Management Supply Master Plan was put in place to identify both immediate and future water needs for the region. The master plan was prepared by United Utilities and SA Water. It considered options such as desalination plants, develop­ment of new bore fields, effluent reuse, recharging of aquifers and extension of the existing water supply network.

     We live in exciting times, when we consider all the possibilities and options that can be developed to produce a reliable water supply. We are on the threshold of the birth of wind power as a local industry. This has the potential to tie in with cheaper desalination in off peak power periods.

     I was alarmed when SA Water indicated that there would be no more new commercial, industrial or housing water allocations on Eyre Peninsula without increased allocations from the underground basins. The Catchment Water Management Board expressed concern that, unless there was a much higher than average ground water recharge, there was a likelihood that SA Water would not have enough water to meet consumer demands for public water supply throughout Eyre Peninsula. In Port Lincoln alone, four major develop­ments were put in jeopardy, along with some 1 000 subdivisions, and horticulture and marine developments on the rest of Eyre Peninsula which are potentially worth millions of dollars. A number of localities in the electorate are already constrained in development because of insufficient water supply.

     Linking Eyre Peninsula to the River Murray has been mentioned on a number of occasions. However, I seriously doubt that this would be accepted, given the well publicised problems facing the Murray. Private enterprise investors are interested in providing needed desalination plants, and the government must facilitate their involvement as quickly as possible, or undertake to provide this infrastructure via SA Water.

     At a cabinet meeting in Port Lincoln in September last year, a public-private partnership (PPP) was announced by the Minister for Government Enterprises to provide a $32 million desalination plant for Eyre Peninsula. However, with the pressure from the unions against PPPs, I am concerned that this promise may not fulfilled.

     The solution is simple: the government simply has to put out a tender for private enterprise to provide the water requirements of Eyre Peninsula at a reasonable price. Let private enterprise take the risks and decide where this desalination plant, or plants, is to be located—one may be near Port Lincoln, one near Ceduna, and perhaps one may be at Streaky Bay, or even Elliston.

     With the first wind farm near Sleaford, it may be that this is the place for desalination of sea water using off peak power from the grid. The existing pipes and pumping stations are nearby, and an underground aquifer could be used for storage until the water is needed, if there is an excess that pipes and pumping systems cannot cope with.

     A paper on the economics of desalination by Winter, Pannell and McCann from the University of Western Australia in January 2002 stated that the current reported costs of desalinated water fall within the range of 80¢ per kilolitre to $2.10 per kilolitre. Many of the sources used by the authors were dated in the 1980s, and the industry has moved on considerably since then. The authors identified energy as one of the principal determinants (if not the principal determinant) of final cost. With desalination plants sited adjacent to wind farms, or included in the original design and establishment, power costs would be minimised.

     Desalination of sea water is being used extensively in many countries across the world, such as Israel and Cyprus, and the state of California. In Israel, which relies heavily on desalinated water, the price of desalinated water has fallen by more than 100 per cent over a decade. Plants being used `would involve extremely advanced reverse osmosis tech­nology which would use pure sea water as well as brackish water'.

     It is claimed that desalination will count for half of Israel's urban water by 2008. Cyprus desalinates sea water using a reverse osmosis process. The first plant started in 1997 (six years ago), and the island now has three operational plants.

     This government must address the critical state of water supplies for all South Australians, and there is a community service obligation to supply water at the same price as the rest of South Australia for those people living on Eyre Peninsula to help unlock the fabulous potential of this wonderful region of our state.

EYRE PENINSULA WATER RESTRICTIONS
4 December 2002

The Hon. P.F. CONLON (Minister for Government Enterprises): I seek leave to make a ministerial statement.
     Leave granted.

     The Hon. P.F. CONLON: I wish to advise the house of the imposition of water restrictions on the Eyre Peninsula, effective from midnight tomorrow night. As the house will remember, the government announced a three pronged approach to the water issue on the Eyre Peninsula, involving a commitment to build a desalination plant to treat water from the Tod Reservoir, increasing reliance on re-use water and the development of a water conservation program.

     Water conservation has been a high profile issue on Eyre Peninsula for many years. Unfortunately, despite some very successful and notable efforts, water consumption on Eyre Peninsula for the period from July to October, at 2 675 mega­litres, was the highest on record and, whereas consumption slowed slightly in November, it continues to be well above target. I am advised that the increase in water use appears to be in the rural sector and that PIRSA, SA Water, and the Department of Water, Land and Biodiversity Conservation are working to determine the reasons for this increase.

     In the meantime, in order to avoid over-extraction of the groundwater basins, it has become necessary to introduce restrictions. These restrictions are designed to ensure that non-essential water use is kept to a minimum. For domestic users, the restrictions affect the watering of lawns and gardens, filling of pools, spas and ponds, and the washing of vehicles, windows and paved areas. Other restrictions apply to rural use, including irrigation, commercial use, and the watering of public parks and sports grounds.

    The restrictions will remain in force until consumption returns to target levels. The government is committed to the management of Eyre Peninsula's water resources, and this is seen as a necessary step to ensure the long-term sustainability of the ground water basins. For people seeking additional information on the restrictions, SA Water has set up a hotline number 1800 130 952. In addition, the restrictions will be widely advertised through the media, including the placement of advertisements on radio and in the Port Lincoln Times, the West Coast Sentinel and the Eyre Peninsula Tribune.

WATER, DESALINATION
21 August 2002

Mrs PENFOLD (Flinders): Will the Minister for Government Enterprises advise the house of the action being taken by the government to ensure that a desalinisation plant is put in place on Eyre Peninsula as soon as possible? As you know, Mr Speaker (but many may not), Eyre Peninsula is not connected to the Murray River. Most of the water is drawn from underground basins that are being overdrawn. This year is expected to be another year with low recharge to these basins, bringing about the risk that seawater will be drawn into the basins and contaminate them. This would leave most of Eyre Peninsula, a region from where $1 billion of state income is generated, without a potable water supply, with drastic repercussions now and into the future, not only for the region but also for the state.

The Hon. P.F. CONLON (Minister for Government Enterprises): I thank the honourable member for her question. I acknowledge that the member for Flinders is a more than keen supporter on this subject, but I have not built a desalinisation plant since she last asked me the question a month ago—it takes a little longer than that. As the member for Flinders would know, one of the initiatives taken was the Eyre Peninsula master plan, and in recent weeks—and I treat the issue seriously—the master plan in a condensed form has been the subject of consultation in the community. I indicate to the member for Flinders that, water being such a keen issue on the Eyre Peninsula, I understand there has been a signifi­cant level of response and communication with us as a result of that consultation. There are a series of options in the master plan, including desalination.

     I further indicate, as I have said many times, that water has been an issue on the Eyre Peninsula since Flinders ran into Baudin, so it is not a new issue and not easy to solve. We are addressing the issue, will look at the consultation and we will certainly be looking at what is available in our capital programs and at what ways the public-private partnerships might accelerate the provision of productive infrastructure. It is an issue on which I have pleaded with the opposition to show support. I assure the member for Flinders that as soon as there is progress to report she shall be among the very first to know.

WATER, EYRE PENINSULA
11 July 2002

Mrs PENFOLD (Flinders): Will the Minister for Government Enterprises advise the house whether the master plan for water on Eyre Peninsula will be tabled for public comment prior to its finalisation? Mr Speaker, as you are aware, the water supply on Eyre Peninsula is in a critical state. The Eyre Peninsula water supply master plan is currently being developed and is due to be released in August. However, constituents are concerned that there be an opportunity for community comment before the plan is finalised and it becomes the plan for future water supplies on Eyre Peninsula. 

The Hon. P.F. CONLON (Minister for Government Enterprises): I understand that the question is: will the plan be available for public comment before it is finalised? I will take that question back to SA Water. I do know that there has been a degree of consultation with the water catchment authority. Frankly, I will have to find out what stage that is at, but I would like to take this opportunity to talk about water, particularly on the Eyre Peninsula. At the invitation of the honourable member, I travelled to the Eyre Peninsula and met with the water catchment authority. I must say that I was disappointed with the comments made to the media by one of the representatives of the water catchment authority following the meeting as, in my view, they were entirely consistent with the tenor of the debate that we had and the willingness on my part to look for solutions to the problems that exist on Eyre Peninsula. Let us be plain: I said there and I say here that water on Eyre Peninsula unlocks wealth, and it always has. Secondly, from the time that Matthew Flinders turned up there have been problems with water on the Eyre Peninsula. If they were easy to fix, someone would have fixed them by now. I have a great regard for my own abilities, but I am sure that if these problems were easy to fix someone would have done it before now. Taking all that into account, we are genuinely addressing what we can do there.

The master plan is a first step. I recognise the program of the former minister and the former government, and point out that work on the pipeline to Streaky Bay is continuing, which will give the people concerned security regarding their water supply in the future. We must recognise that in the world we have inherited it is a much smaller government than before, with a capital program that is capable of doing only so much at once. I advise the member for Flinders that one of the difficulties is, of course, simply the replacement value of water infrastructure on Eyre Peninsula. Off the top of my head, I think it will involve about $550 million. So the issues are not easy to address.

One of the things I encourage the opposition to do—and we have said that we want to do this—is to make better use of public/private partnerships in the productive infrastructure. So far, the opposition has chosen only to make a political issue out of that. I urge the honourable member's colleagues to take a more balanced approach, because infrastructure is the key to addressing those water problems. It is expensive infrastructure. If we can innovatively involve the private sector in assisting us to provide infrastructure, we will do that, and it will be easier if it is not made a political football by the honourable member's colleagues. I am a great fan of the Eyre Peninsula, as the member for Flinders well knows. I have visited it on many occasions. I think it is one of the most beautiful places—

     An honourable member interjecting:

The Hon. P.F. CONLON: I've done a little fishing. I've done a lot more work than I've done fishing, I can tell you. However, it is one of the most beautiful places on earth. There is a lot of wealth to be unlocked there, if we could provide the infrastructure to supply water. However, none of it is easy. What we need and what we tried to foster over there—and what was so disappointing about the comments I read in the paper—is a bipartisan approach that supports what we tried to do so that, to the extent possible, we can bring ahead the infrastructure we need. I genuinely want to do it. There are limitations in our state budget, so I ask for your support in the approach that we take with public/private partnerships.