In the second part of his commentary on Paradise Dam, Ben Artup looks at issues behind the scenes regarding water infrastructure in the Wide Bay Burnett region.
Recent events and discussions have made it clear what the State Government’s main agenda is in regard to Paradise Dam, and it’s not safety.
What a lot of people have perhaps missed in the noise around Paradise Dam is that the Minister's own Department1 is simultaneously conducting another business case in the upper Burnett regarding water infrastructure related to Paradise Dam.
This other business case, titled Water Supply Requirements in the North and South Burnett was recently released by South Burnett Regional Council and is of great concern to the future of Bundaberg.
Engineering firm Jacobs are conducting this other study.
Unlike the business case being prepared by Building Queensland for the Bundaberg region, the North and South Burnett business case is rather unusually being prepared by the Minister's own Department.
Normally, the Minister's Department sticks to setting water policy and plays a reviewer role on business cases, not the proponent seeking to justify a major public investment.
The North and South Burnett business case is also being funded by the Australian Government, at a cost of $2 million, however seemingly lacks the usual independent rigour of a State Government business case.
This other business case is important because, as it currently stands, it lists 10 options that would see water transferred out of the Bundaberg water supply scheme and moved to water schemes outside of Bundaberg.
Council has written to the State Government and Sunwater asking that Bundaberg Regional Council, and our local agricultural groups, be consulted on the North and South Burnett study.
So far, the State Government and Sunwater have declined to permit our region to have any say in this study.
This approach by the Minister's Department of running two simultaneous, yet separate business cases, is a clear divide-and-conquer approach to our region’s economic development.
The North and South Burnett Jacobs-led study identifies a total of 23 options for water infrastructure investment in the Burnett.
Ten of these options require the transfer of water stored in Paradise Dam for the Bundaberg water scheme to other schemes, primarily located in the Burnett.
Chasing a Sunwater dividend
So what’s going on? What’s driving Sunwater and the State Government to consider moving water away from our region, particularly when it could cost the Bundaberg region over $2.4 billion in lost economic prosperity?
Well its rather obvious, it’s about maximising financial returns for the State Government.
As a government owned corporation, Sunwater who operate Paradise Dam are required to pay a dividend back to the State Government.
The more water Sunwater can sell to irrigators, the larger the potential dividend payable to the State Government.
The problem for the State Government is that unsold water in the Bundaberg water supply scheme cannot currently be moved out of the scheme and sold elsewhere.
While the Minister can make the decision to transfer water between water schemes at the stroke of a pen, publicly Anthony Lynham needs an independent business case showing that a transfer of water between water schemes is good for the state economy.
A push to transfer Bundaberg’s water to North and South Burnett
The Bundaberg Region is one of the largest agricultural food bowls in Australia, with readily available inputs such as water, quality soils and climate.
Sustained long-term investment in water infrastructure here will have a higher compounding effect than anywhere else in Australia.
Notwithstanding this, grower groups and Councils in the Burnett, along with Sunwater and the Minister would be acutely aware of the opportunity to sell unsold water held in Paradise Dam for the Bundaberg water scheme to irrigators in the South and North Burnett.
It’s understandable why the Mayor of North Burnett, Rachel Chambers, would parochially refer to water in Paradise Dam as “North Burnett’s water” given her area is at the top of the Paradise Dam catchment.
The reality is, most of the unsold water in Paradise Dam is reserved for the Bundaberg water supply scheme, not the upper Burnett scheme.
While as a member Council of WBBROC2 who strongly supports growth and prosperity of the North and South Burnett, it shouldn’t be done at the demise of any other region in the Wide Bay Burnett.
Any decision to transfer water out of the Bundaberg scheme shouldn’t be decided by whoever runs the best clandestine political campaign, supported by a secretive study commissioned off an engineering firm.
With roughly 100,000 megalitres of unsold water allocated in Paradise Dam for the Bundaberg scheme, if this water was to be reallocated and sold in any other water scheme3, then the State Government stands to make a significant financial windfall, payable via a dividend from Sunwater.
And this is exactly what the secretively conducted North and South Burnett study is examining.
It is explicitly building the case for the State Government and Sunwater to reallocate water held in the Bundaberg scheme for use in places like the Burnett, Coalstoun Lakes and Mundubbera.
Coalstoun Lakes, for example, is listed in six of the 23 options being examined in the $2 million North and South Burnett study.
Option two, titled, “liberalise water allocation trading between water supply schemes” means if this option goes ahead, then unsold water in the Bundaberg scheme could be sold to other regions.
That is, it won’t be there in the future to accommodate the economic growth of the Bundaberg region.
Keeping the region divided
I have heard members of our local agricultural bodies take comfort in assurances by the Minister that water in the Bundaberg scheme will not be transferred to other schemes.
I know these same stakeholders were as surprised as Council was when they first learnt about the North and South Burnett study being conducted by Jacobs.
The Jacobs study mentions again and again that water from Paradise Dam may need to be moved between water schemes to implement various options being considered by the State Government.
Unlike some of our agricultural bodies who have been placated by the Minister's comments, Council is not as confident in the Minister's assurances.
This view isn’t a political one, it’s based on an understanding of the potential drivers for such a decision by the State Government and Sunwater.
Essentially, if the State Government can demonstrate there’s weak growth in future water demand in the Bundaberg scheme, and simultaneously demonstrate strong demand in other water scheme areas, this builds the case the State Government needs to argue (on economic grounds) that transferring water out of the Bundaberg scheme is a sensible, even responsible proposition.
And by keeping the Wide Bay Burnett region divided through separate studies, the State Government will be better able to argue a decision to transfer water allocations to the Burnett would create significant economic benefits, albeit benefits that would come at an exclusive cost to Bundaberg.
The 2018 water auction
The potential gain from transferred water sales in the upper Burnett would have became more apparent to the State Government and Sunwater following the most recent 2018 water auction where 100,000 megalitres of water allocated to the Bundaberg scheme, was left unsold.
After this auction many growers have commented if they had known future water availability was going to be threatened, they would have purchased larger water allocations.
The 2018 auction result actually helps build the argument Sunwater and the State Government need to transfer water out of the scheme for sale elsewhere. They can now support the notion that “Bundaberg doesn’t need the water”.
Of course, the circumstances under which Sunwater conducted the 2018 auction, including whether they appropriately disclosed information about the integrity of the dam is now a matter for a class action against Sunwater led by Bundaberg Region water rights holders.
Irrespective of the outcome of the class action, we should remember that once the water in the Bundaberg scheme is transferred, it will be near impossible to get back, particularly if sold to irrigators in the North and South Burnett.
A red herring
As for the timing of the Minister's renewed efforts to transfer water out of the Bundaberg scheme, the impending repair bill to fix the dam — upwards of $800 million — provides a timely imperative to find income to justify a large expense for an asset the State Government views as under performing.
The State Government appears to have used the issue of dam safety as a conveniently timed red herring to push forward with two business cases that prioritise financial, not safety objectives.
For example, neither of the business cases seem overly focussed on efforts to estimate the value of “community safety” that would be restored if the dam is repaired.
However they do go to lengthy efforts to estimate the value of water demand between competing water schemes.
That’s because safety isn’t the main concern of the State Government.
The dam safety smokescreen that resulted in the dam wall being reduced without full exploration or understanding of available engineering options has effectively been used by the State Government to fast track the studies required to transfer water away from the Bundaberg water scheme.
The recent independent Commission of Inquiry into Paradise Dam clearly stated that in the event of a 2013 flood event, the dam is stable.
Further, the national dam safety guidelines that evolved after the dam’s construction should be used to guide safety and maintenance upgrades to modern standards.
In addition to the recognised construction deficiencies, if these new guidelines now require upgrades costing $50 million, or even $800 million, that’s what they cost.
The transfer of water out of the Bundaberg scheme shouldn’t be used as a method to finance the repair of construction deficiencies or maintenance and safety upgrades that are the due responsibility of the State Government.
As introduced in my previous article, to ensure the right decision is now made by the State Government and Sunwater on Paradise Dam, we need data from our local agricultural sector regarding their future water needs to be included in the water demand assessment that NC Economics is completing.
Again Council urges all landholders in, or within proximity to the Bundaberg water supply scheme area, to think about their future water needs and reveal this in the NC Economic survey.
You can register here now to complete the survey when it opens on 19 September.
- Part one: Our economic security is under threat
Ben Artup is Executive Director Strategic Projects and Economic Development at Bundaberg Regional Council.
References
- 1 The Department of Natural Resources, Mines and Energy.
- 2 Wide Bay Burnett Regional Organisations of Councils.
- 3 The other water supply schemes that Paradise Dam serves in addition to Bundaberg include; the Boyne River & Tarong scheme, the Barker Barambah scheme, and the Upper Burnett scheme.
