Politics drowns out effective water policy

ANALYSIS: Politics is getting in the way of timely and cost-efficient delivery of much-needed major projects.

As admirable as it may be, there’s nothing new in the $380 million plan to desalinate Wellington Dam and expand usable water supplies in the state’s South West. The project was first floated decades ago.

Why it took so long for the state government to recognise the benefits of turning a wasted resource of salty water into something of value is a good question, but the more interesting question is why so many recent government decisions have been so bad.

An appalling list of faults at newly built Perth hospitals is perhaps the best local example of government unable to manage big projects, or at least supervise the contractors doing the work.

But even quality control problems in new hospitals are just a symptom of something much bigger, and not confined to Western Australia, with the crisis in eastern states gas’ and electricity services a more far-reaching problem that could soon wash up in WA.

Before getting to the issue of power supplies, it is worth a closer look at what’s happening at Wellington Dam, the second biggest source of stored water in WA – topped only by the Ord River dam in the Kimberley.

Once a major source of water for the South West, Wellington Dam became a white elephant when farm clearing in its catchment area raised the watertable, bringing deep-seated salt to the surface, poisoning farmland and rendering the water in the dam unusable.

Proposals to desalinate the dam’s water were put forward by a number of people but were consistently delayed by the Water Corporation, which preferred much bigger coastal desalination projects based on treating seawater.

Eight years ago, Business News reported on one of those proposals, put forward by Victoria Park engineer Peter Coyne.

Mr Coyne said then that the cost of desalinating water from Wellington Dam would be much cheaper than desalinating seawater because the dam water contained far less salt (less than 2,000 parts per million) compared with seawater (35,000ppm).

A spokesman for the government interviewed by Business News for that 2009 story said funds had been set aside for research into solutions and all options would be considered.

Now, after those eight years of research and weeks before a state election, the Wellington Dam desalination proposal has popped up again in what a government media statement said would be an ‘industry-led’ solution to lower salinity levels.

Exactly what happened to the earlier dam desalination plan, or why it was sidelined, will probably never be known; but the significance of its return as an industry-led proposal raises the question of why government agencies couldn’t do the job on their own and why industry had to take the lead?

Grumbling aside, there is no doubt that moving ahead with the Wellington Dam desalination proposal is a good thing; but it is something that could have happened a long time ago and brought with it the benefits of increased food production from an expansion in available irrigation water being available now, rather than starting sometime in the next few years.

In economic terms the delay can be described as at least eight years of lost opportunity, which, if we were talking about a business, could be described as eight years of lost potential profits.

Inertia, or an inability to make quick and correct decisions, is common throughout government, perhaps because few people in government are prepared to risk something new for fear of failure. The net result is that not a lot actually gets done.

Worse than inertia is the political backflip, a situation that arises when a freshly elected government reverses the decisions of the outgoing government, no matter what the expense. Such occurrences can be enormously costly to taxpayers, and might happen if Labor wins the March state election and cancels construction on Roe 8.

Energy issues

The big issue in this list of mistakes made by governments across Australia is the botched national energy policy – though even that is an inaccurate description because Australia doesn’t actually have a national energy policy.

WA, thankfully, is not directly affected by what’s happening in the eastern and southern states, but there is the potential for collateral damage.

Electricity was the early flashpoint for the power crisis evolving in every state other than WA and the Northern Territory. Gas is the next flashpoint.

The well-documented electricity crisis is a result of governments opting for renewable sources of power over coal and other fossil fuels, such as gas and oil.

Unfortunately, the switch has not been smooth and might actually never work as planned because of problems associated with reliability and the inability of renewables as currently available to provide the high levels of uninterrupted, reasonably-priced power, required by industry.

South Australia’s blackouts last year were an example of what could become a routine occurrence as reliance on renewables rises. However, the more damaging result of erratic and expensive power supplies is the lack of investment in new industries.

People in WA might imagine that the mess in the east has nothing to do with them, but there is a connection and it can be found in the alumina refining business of Alcoa, which was developed here initially to supply aluminium smelters in Victoria (Geelong first and then Portland).

Generous power supply deals enticed the energy-intensive aluminium business to Victoria; and while it seems a last-minute deal could save the Portland project for now, its closure is a near-certainty in the future without continuing taxpayer subsidies, which a future government could cancel.

Losing Portland would not necessarily force an immediate change in Alcoa’s WA operations, but it would be another straw on the back of an ageing industry already targeting a future as an exporter of unprocessed bauxite, which will require far fewer workers.

Gas, of which Australia has vast resources, is the new government-created crisis, with finger pointing on an industrial scale just starting in Sydney, Melbourne and Canberra.

In a re-run of the electricity crisis, the gas crisis is a result of government decisions that discouraged the exploration and development of gas reserves to the point where supplies are being consumed faster than they’re being replaced.

Exports to Asia from Queensland’s new liquefied natural gas projects are the latest culprit for domestic gas prices rising sharply along the eastern seaboard; not that it should be a surprise, given predictions made for exactly that to happen several years ago.

Victoria is complaining loudest about higher gas prices, but it is also the state that has banned onshore gas exploration until 2020 and introduced a permanent ban on unconventional gas (which requires rock fracking).

The predictable electricity and gas crises developing in the east will lead to an equally predictable second stage of the mess – the wholesale loss of industry that needs reliable, low-cost power.

Government policy – nothing else – has delayed the development of a solution to the Wellington Dam salinity problem, caused South Australia’s electricity crisis, triggered a gas crisis in Victoria, and led to the closure of manufacturing industries.

If Labor wins WA’s upcoming election, the new government’s first big test will be the promised dumping of Roe 8. If it happens, it will confirm just how bad government has become in Australia, with political expediency ruling no matter what the cost to the taxpayer.