1. Desalination to fill state coffers, not dams
By Wendy Frew Environment Reporter
June 4, 2005Page Tools
A desalination plant would protect millions of dollars worth of annual dividends flowing from Sydney
Water to state government coffers but would not curb demand for water, according to critics of the
proposal.
Green groups and some water experts said that Sydney Water, the state's largest water authority, had
no incentive to encourage the city's residents to conserve water because it made money from water
consumption.
If the NSW Government built a large desalination plant, the ready supply of water would ease
pressure on the authority and the city's residents to save water, they said. It would also boost
government revenue from electricity suppliers because a desalination plant would be a large new
customer.
"Sydney Water is one of the big cash cows for Treasury," said Dr Charles Essery, a director of Urban
Water Management for NSW before he fell out with the Utilities Minister, Frank Sartor. "By getting a
desalination plant you are perpetuating demand instead of curbing demand. You are giving yourself a
lot of supply, which gives you an increased revenue stream," he said.
In the 20 months since water restrictions were introduced, the city had saved more than 121 billion
litres of water, the Government said. But the drought had reduced dam levels to 39.1 per cent of
capacity as of Thursday.
At $1.013 for each 1000 litres, the water saved has cost Sydney Water $122 million in foregone
revenue. A percentage of that sum would have gone to the Government as dividends and tax.
In the six years to the end of the 2003-04 financial year, Sydney Water returned to the State
Government $1.16 billion in dividends and tax.
Last year the seven state-owned energy suppliers returned to Treasury a total of $958.7 million in
dividends and tax.
There have been other threats to Sydney Water's revenue. Earlier this year the National Competition
Council ruled that the city's sewers should be opened to private companies that want to recycle
effluent now being pumped out to sea. The Australian Competition Tribunal is now considering the
issue.
A campaigner at the Total Environment Centre, Leigh Martin, said the Government had swallowed
Sydney Water's propaganda that the city's effluent could not be reused.
"What the Government is showing by pursuing desalination is a level of timidity and a lack of
forethought."
Sydney recycles only a small amount of the water that residents and industry use - about 3.2 per cent.
That is expected to rise to 4.6 per cent after a new water reclamation plant starts up in Wollongong in
October.
The Government is also considering major recycling systems for homes in new developments to the
city's south-west and north-west.
A water expert at the University of NSW, Associate Professor Greg Leslie, said it was prudent for the
Government to consider desalination as a contingency plan but it should first seek to maximise water
conservation and recycling.