Coalition to change plans

Private sector bids for key power and water projects in Western Australia face an uncertain future if the Coalition wins government at this month’s election, but they are not without hope.

The coalition has pledged to scrap two of the Gallop Government’s biggest infrastructure projects – the $350 million desalination plant and the private development of the State’s next base load power station.

Opposition leader Colin Barnett believes his proposed $2 billion Kimberley water canal, which he wants to be funded jointly by government and the private sector, is a better option than the desalination plant.

And he has stated that a Coalition government would boost the State’s base load power capacity by building a second 300 megawatt unit at Collie power station (coal) and proceeding with stage two of the Cockburn power station (gas).

However, in both areas, there remains potential for future private sector involvement.

In relation to power, the Coalition says it wants two thirds of future installed generation capacity in the South West to be sourced from independent power producers.

In relation to water, Mr Barnett said this week the 3,700 kilometre-long Kimberley canal would be a staged project and it would most likely be 10 years before it started supplying Perth.

He said he believed interim measures, such as thinning scrub in water catchments and increased water recycling, would tide WA over until the canal was completed.

This view has been disputed by the Government, which believes another major supply source will be needed soon.

The debate over the Kimberley canal has been the top issue in the election campaign ever since Mr Barnett announced his commitment to the project, despite the uncertainty over its cost.

Chamber of Commerce and Industry chief executive John Langoulant weighed into the debate, saying it was premature to commit to such a project before the practical issues and the financial feasibility have been properly assessed.

The debate comes just a week before two competing consortia are due to lodge final bids with the Water Corporation for construction of a desalination plant.

Perth Desalination Company, comprising French water company Veolia and local partners United KG, Leighton Contractors and Sinclair Knight Merz, is bidding for the project against the Australian Desalination Company, comprising French water company Degremont and its partner Multiplex.

The Gallop Government’s target is to have the desalination plant completed by the end of 2006 so that it can supplement water supplies during that summer.

In relation to power supplies, coal producers Wesfarmers and Griffin Group are among the three consortia bidding to build the next base load power station under the Gallop Government’s long-running procurement process.

Western Power is due to receive final bids by June, with a view to the power plant being completed by 2008.

Apart from changing power procurement, the Coalition’s energy policy proposes the partial split of Western Power by creating a new power line authority.

Up to $50 million would be taken each year from Western Power’s annual dividend for upgrading transmission lines and the distribution network.

Western Power would retain its generation and retail business units, in contrast to the government plan to split them into separate businesses.

In other election news this week, Mr Barnett outlined plans to slash government spending to support a raft of tax reductions while also maintaining the budget surplus.

His proposals include a commission of audit to identify $80 million a year in savings and plans to save $180 million, or 3 per cent, by decentralising government procurement.

The Government questioned whether he would be able to achieve these targets without cutting services.