Water Corporation PPP a state first

Water Minister Graham Jacobs and Treasurer Troy Buswell have today announced the first public private partnership for the state's water industry with the Water Corporation calling for expressions of interest to work on upgrades at Mundaring Weir.

Water Corporation chief executive Sue Murphy had told WA Business News last year the corporation was evaluating a PPP for its Mundaring water treatment plant, worth up to $300 million.

The Mundaring Weir water supply improvement project involved the construction of a water treatment plant, pump station, pipelines, upgrades to pump stations and the weir itself, as well as improvements to the tourism precinct.

"The Water Corporation will now release an Expression of Interest (EOI) for the new water treatment plant, pump station and various pipelines, which will be delivered by private industry," Dr Jacobs said.

"A full industry briefing will be held shortly in Perth to outline the procurement process.

"Other parts of the project, including upgrades to the weir, existing pump stations and the precinct will be carried out by the corporation through traditional construction contracts."

Dr Jacobs said the provision of a new treatment plant would be the key component of the project.

"The treatment plant is required to keep pace with improving water quality standards," he said.

"While there have been a number of upgrades to the weir and its associated infrastructure during the years, parts of the facility are more than 100 years old and need upgrading to meet increasing water demands.

"This project will greatly improve the quality of water supplies for about 100,000 people living in the Hills area of Perth, and the Goldfields and agricultural regions."

Treasurer Troy Buswell confirmed the Mundaring PPP would be a first for the Western Australian water industry.

"A public private partnership is the best model to deliver this vital infrastructure to the community," Mr Buswell said.

"It will drive value for money for water consumers by creating greater incentives for innovation and by cost effective risk transfer to the private sector during the project life."

The Treasurer said the treatment plant, pump station and pipeline would be handed back to the corporation in full operating condition, within 35 years.

The project methodology was consistent with Infrastructure Australia PPP Guidelines and Western Australian Government jurisdictional requirements as developed via the Council of Australian Governments.

The Mundaring PPP followed the State Government's announcement in January of several PPPs for the WA prison system.

Mr Buswell said the Mundaring project was more evidence of the Government's commitment to offer a suite of PPP opportunities throughout 2010.

"We are actively pursuing public private partnerships where they offer value for money and are in the public interest," he said.

While the PPP was new ground for the Water Corporation, it had already significantly increased the role of the private sector in service delivery in recent years.

More than 95 per cent of our $3.5billion four-year capital program is already delivered through the private sector.

In addition, both the Perth Seawater Desalination Plant and, when completed, the Southern Seawater Desalination Plant, will be operated and maintained for 25 years by the private sector.

The new water treatment plant and pump station were scheduled to be operational in 2013.