Tuesday, April 3, 2012


If you paid $654 for something, you'd be expecting something pretty nifty in return.

An iPad 3, for example. Or maybe a weekend away somewhere sunny, with dinner at a nice restaurant and a few drinks.

Conversely, if you paid $654 for something and got... nothing for it, not a sausage, you'd be pretty fucking ropable. That iPod spaced hole on your coffee table would remain just a hole and you'd be ready to break something.

But then, let's imagine, having endured this dud transaction, you were then told that this wasn't a one off, but that you'd actually signed up for an annual payment of $654. A once yearly sting for which you would receive... nothing. Not a bean. Not a skerrig. Not even a free magnet calendar for your fridge. Well, if this happened, then 'ropable' and 'break something' probably wouldn't cut it. If you had a temperament like mine, you'd probably just burst into flames on the spot.

And so here's the bad news.

If you live in Victoria, then this is precisely the deal that your last two Governments have stuck you with.

Only it's not $654 that we'll be paying each year for... nothing. It's $654 million. For this is the amount that the 'AquaSure' consortium, builders of Victoria's new desalination plant, will receive from us taxpayers in the 2012-13 financial year, in return for which they will need to deliver us with... nothing.

And by nothing, I mean NOTHING. Nothing as in the way Seinfeld was about nothing:

GEORGE: I think I can sum up the payments for you with one word; Nothing.


GEORGE: (Smiling) Nothing.

RUSSELL: (Unimpressed) What does that mean?

GEORGE: The payments are for nothing.

RUSSELL: All right, tell me, tell me about the water. How much water?

GEORGE: Oh, no. No water.

RUSSELL: No water? Well, what are we paying for?

Good question Russell, what indeed?

The $654 million is not for the plant, which we have already paid $5.7 billion dollars for and which may even be finished at some point in the future (as of this writing it is more than a year overdue and no revised date of completion has been announced). And it's not for any actual water. As reported by 'The Age' earlier this week, the state Government has placed an order for 'Zero litres' of recalibrated drinking water for the next financial year. Meaning that our very high tech, $5.7 billion water plant is going to be sitting unused for the next twelve months, the only noise coming from it the sounds of some high priced tradesmen trying to finish building it.

So if it's not for the plant and it's not for any actual water, what exactly have we bought with our $654 mill?

In reality, there can be no better answer given than this $654 million annual payment is stipulated in the contract signed by the Government and AquaSure. The consortium demanded it as part of their terms for building the facility and the Government signed off on it. The spectacularly dreary project summary on the Government's Public-Private partnership website - for the good of your health I don't recommend clicking that link and reading it - simply states that the Government will pay for any water used and;

...a security element that is paid to the extent the Project delivers water that is ordered, or is capable of delivering 150 GL per annum of desalinated water at the required quality.'

In other words, it's just a fat wad of our cash that goes straight into the consortium's pocket. And all they have to do to earn this, based on the above, is have the plant ready to produce water, whether we actually end up buying any or not.

So, a better question than what are we getting for our $654 million is probably, how on earth did we get stuck with such a crapulent contract? In these difficult financial times, when Government's from both sides tell us repeatedly and very loudly that they have no money for anything, how is it that we're lumbered with paying $654 million dollars annually, for twenty years, for nothing.

It seems almost too incredible to be true.

The Labor Government that produced this outcome for the state is, of course, little more than a fast fading memory. Although a few of the players behind the deal are still on the scene. Former Water Minister Tim Holding, who signed the Aquasure contract on behalf of the Government, was asked about it this week and he said that he thought Melbournians would be 'thankful' for the desalination plant in future years, despite the costs.

You can now see why he's an ex Minister.

But this is not to say that the current, Liberal, Government is free from blame for this debacle. After all, it was their scare campaign over water in 2006, with Big Ted Baillieu himself first proposing a desalination plant, that triggered this mess in the first place. Labor were initially firmly opposed to the idea - quite apart from the cost, desalination is environmentally unfriendly in a number of ways - but they waivered in the face of a concerted media campaign. A nationwide drought had a grip on the public imagination, water catchment levels were hovering around 25% and as Opposition Leader, Big Ted was happy to tell the press that Victoria would soon look the surface of the moon.

Labor's panicked response to the Liberal's effective campaign directly lead to them rushing into the poorly thought out Aquasure deal. They were keen to get in bed with someone, anyone, who could deliver a desalination plant as quickly as possible, and they were willing to spend large amounts of our money to do it.

Now, of course, the drought has broken, catchment levels are in the sixties and panic about water security seems like a mass delusion brought on by too much exposure to the Herald Sun and Neil Mitchell (sadly, a common occurrence in this state) For his part, Premier Ted is happy to shrug his shoulders and say, in his bored, listless fashion, that Labor fucked things up, just like they always do. And just be thankful that he was able to step in and... (yawns)... something something.

A more energetic Premier might think about doing something to fix a massive problem, and drain on the state's resources, that they were partly responsible for creating. But this is unlikely. Energetic is not Big Ted's style. And, in any case, the Liberal Party will be quite happy to pay $654 million a year to have such a big stick to whack the Labor Party with. For political party's at least, opportunities like this are truly priceless.

But there are options if anyone wants to follow them up. With all the problems that Aquasure have had building the blasted thing, the consortium has already lost a billion dollars over the construction of the plant, you'd think they could be tempted out of their contract, for the right offer. The state could buy them out, pack them off and then sit on what has already been built, in the off chance that we may get some use out of it in the future.

A one off chunk to save $654 million dollars a year? It's worth considering. And would probably be a vote winner. It's something for the ALP, held out of Government by only one seat and facing a Premier who has a hard time staying awake, to seriously think about.

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