State government finds Hells Gates Dam has ‘considerable risk’
The state’s water department says developing the Hells Gates Dam has considerable risk and uncertainty. Read why the state isn’t backing the project.
Townsville
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The state government department responsible for managing Queensland’s water resources has questioned the benefits of building a new dam west of Townsville, saying a planned “supply driven” approach to its development presents “considerable risk”.
It also says building the dam on the upper Burdekin River requires “significant trade-offs” at the expense of existing water entitlement holders and that the scheme has “untested environmental credentials, cultural heritage considerations and complex land matters to resolve”.
“The (Hells Gates Dam) detailed business case does not provide the information necessary to inform a final investment decision,” the Department of Regional Development, Manufacturing and Water says.
The comments are contained in an addendum inserted into the business case study ahead of its assessment by the new federal Labor government and add weight to claims the state government cruelled the chances of the $7.1bn project.
The federal Labor government revealed last week it would not proceed with Hells Gates after the previous Coalition government had committed to provide the $7.1bn in funding.
The outcome has disappointed the region’s economic development body, Townsville Enterprise, which managed the business case alongside consulting firm SMEC, and which says that development of the dam is a “no-brainer”.
Meanwhile, the region’s most senior government minister, Labor Member for Townsville Scott Stewart, says Hells Gates has to “stack up”.
“I have always said we support projects that stack up. Hells Gates is a major piece of infrastructure and it needs to be value for money and have a proven benefit for our regional communities,” Mr Stewart said.
It means almost $29m has been spent on studies by both the former Labor federal government in 2014 and the Coalition government since 2016 which have so far come to nought.
The latest study, which draws on the expertise of more than 60 organisations, is an exhaustive 666-page document.
It finds the detailed business case supports the development of the dam but proposes a structured approach to resolve the “most significant project challenges”. Development was proposed over seven years from 2027.
But the State Department of Regional Development, Manufacturing and Water says a supply driven approach with only early indications of water demand through expressions of interest from potential water customers has “considerable risk and uncertainty”.
“ … while the proponent has received responses to an expression of interest process, there are no secured commitments from identified water customers supporting the water demand assumptions in the detailed business case,” the department says.
It says development of water infrastructure should be guided by strong evidence-based assessments, attributable customers, robust assessment of available markets, proven environmental credentials and identifiable financial commitments from investors and/or customers.
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Originally published as State government finds Hells Gates Dam has ‘considerable risk’
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