$400m water project to boost South West

An ambitious water supply project in Western Australia's South West is set to proceed after gaining federal government backing, with Collie Water chairman Peter Fogarty saying he was well advanced in securing private investors to complete funding.

The project aims to rectify longstanding salinity issues in Wellington Dam and deliver improved water to farmers in the Collie River and Myalup areas through an upgraded irrigation network.

Mr Fogarty said it would deliver about 800 jobs, spread across construction and agriculture, and boost WA’s gross state product by $557 million per year.

The federal government support, announced today, will comprise a grant of $140 million and up to $50 million in loan funding.

The state government has already committed $37 million, while members of the Harvey Water cooperative have agreed to commit $30 million.

Mr Fogarty said the project had attracted a lot of interest from institutional investors, who were attracted by the 20-year offtake agreement with the Water Corporation.

“It's highly probably we will not need any debt funding,” Mr Fogarty told Business News.

Collie Water intends to start the ‘above the dam’ component of the project as soon as possible.

This involves construction of a 20-gigalitre desalination plant in Collie and piping to divert highly saline water from the Collie River east branch into disused coal mine pits.

This saline water currently feeds directly into Wellington Dam.

Of the treated water, 10GL is expected to be piped to Harris Dam to supply drinking water for Collie and other regional towns.

The project will lead to improved quality in the dam, which will be used to provide irrigation water to 730 farmers in the Collie River area represented by Harvey Water, as well as farmers in the Myalup area closer to the coast.

The project has also allowed more than 500 hectares of former pine forest in the Myalup area to be reallocated to horticultural use.

New plantations are being established in the south basin of the Collie River, with an initial 1.6 million pine trees planted in 2017 and a further 2.6 million to be planted this year.

Mr Fogarty said funding for the pine plantations, which will help address salinity issues, was separate from the water project.

He welcomed the confirmation of funding from the federal government, saying it was a key milestone for the project.

“We have been working on the region’s salinity issues for many years and now look forward to getting the project under way,” Mr Fogarty said.

He acknowledged the support of the state government and other stakeholders.

“Harvey Water has worked side by side with us and the state government to get this funding proposal through,” Mr Fogarty said.

“We have also had great support from the Water Corporation, Synergy, Griffin Coal, Premier Coal, the Collie Shire and the Forest Products Commission.

“Without their support we would not have advanced to this point.

Harvey Water general manager Bradd Hamersley said the collective membership had agreed to support the project with $30 million from its Member Asset Development Fund.

“Our members in the Collie River Irrigation District have been handing back their licences due to increasing salinity, which has impacted their farming operations,” he said.

“With improved water quality and a pressure-piped network, their future looks much brighter.”

Collie Water is the trading name of Myalup Wellington Water Corporation Pty Ltd, which is a special-purpose company formed to implement and operate the project.

Its founding shareholders were Mr Fogarty’s corporate advisory group, Pendulum Capital, and water solutions provider Aqua Ferre.

Nationals WA leader Mia Davies, who worked on the project while in government, said Wellington Dam was Western Australia’s second largest reservoir with a capacity of 185GL, but had long been plagued by rising salinity.

“Currently, just 6,557ha of the available 34,600ha of the Collie River, Harvey and Waroona districts are irrigated due to impediments to growth and limitations in infrastructure and the salinity of the water,” she said.