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Utility dips a toe in private waters

THE Water Corporation is considering Western Australia's biggest public-private partnership to date, advising industry it is seeking privately financed proposals for its Mundaring Water Treatment Plant worth as much as $300 million.

While the end price tag could be about $50 million below that value, depending on what options are taken, the plant is still likely to be more than the CBD Courts Project undertaken by the recent Labor government, which was a $195 million PPP construction.

And the Mundaring project is just one of three potential PPP projects for which industry input has been sought by the Water Corporation.

The others are the East Rockingham Waste Water Plant, which is expected to ultimately be a bigger capital cost than Mundaring, and water supply prospects in the West Pilbara, which includes forecast increases in fresh water needs for towns and port dust suppression.

Water Corporation CEO Sue Murphy told WA Business News the utility had worked closely with the private sector via alliances that closely resembled PPPs, but the Mundaring project would take that a step further by potentially seeking outside funding.

Ms Murphy said $1 billion desalination plant was an alliance in which the Water Corp was the bank. To go to the next level and involve outside financial input a smaller development was required.

"We have been looking for the right sort of project to put a toe in the water to do a PPP," she said.

"This (Mundaring) is a brand new plant that we can ring fence.

"We are comfortable doing something that size; we don't want to be pushing the envelope."

The Mundaring plant will treat dam water to a higher degree than currently takes place, a process that is hoped will improve the quality of supplies that make the long and often hot journey via pipeline to the Wheatbelt and Kalgoorlie.

Ms Murphy said the East Rockingham plant was a different project, with the Water Corp simply aiming for cost per unit of wastewater supplied.

She believed there was potential for water treated at the plant to be on-sold to industrial users in the vicinity.

The Water Corporation's move comes amid a backdrop of tightening government finances along with the arrival of a conservative government, which has openly stated it is seeking private sector involvement in a range of state sectors.

Ms Murphy denied that the prospect of PPPs had resulted from the political change.

"We have been moving down this path for a long time," she said.

"We work in parallel and hand-in-hand with government but we are not directed by them.

"It is somewhat coincidental that the right project has come along at the right time when government is talking about it."

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