Cash down the drain

ONCE again Melbourne households have to pay for the utter folly of the Victorian Government’s white elephant desalination plant.

Inside Victoria's desalination plant. Picture: Jake Nowakowski

ONCE again Melbourne households have to pay for the utter folly of the Victorian Government’s white elephant desalination plant.

Even though winter rain has delivered steady and unsurprising increases in dam levels across the state, residents will still have to pay for the water — water that we don’t actually need.

The Daniel Andrews Labor Government ordered 50 gigalitres of water from the Wonthaggi plant and even though water reserves are now much higher, the $27 million payment still has to be made.

Making the announcement in March, Premier Andrews declared that turning on the plant was “the right thing to do”.

But now it seems like the decision is, in the words of state Nationals leader Peter Walsh, “reckless’’.

The current water order with plant operator Aquasure was placed for the current financial year after the government claimed that dry conditions — especially in Geelong and Ballarat — had triggered the “insurance policy” of the desalination plant for the first time.

The latest recorded levels around the state seem to suggest otherwise.

Geelong storages are approaching last year’s volumes while Colac’s reserves are nearly full at 99.8 per cent.

And for Ballarat, the Central Highland Water reserves are above 67 per cent.

With a wet spring forecast, the state seems a long way from drought territory.

The so-called desalination insurance policy appears to be an arrangement with no reasonable get-out clause because of changed circumstances. And the advice from water authorities is that the government should also order 50 gigalitres for 2017-18 and for 2018-19.

Once more, it will be the long-suffering metropolitan households who have to foot the bill, in the form of a $12 annual charge on their water invoice.

Ever since 2007, when the John Brumby Labor government signed the first contracts on the controversial $4 billion project, the plant has come at a steep cost.

The desalination operation was first switched on in December 2012.

Taxpayers still fork out a staggering $1.8 million every single day for the plant — even when the operation sits idle and does not provide water. It’s patently clear the contract between the government and operator Aquasure needs to be reassessed and renegotiated or public money will continue to drain away.

It is hard not to conclude that ordering this water was all about justifying that ill-considered Labor decision to build the plant in the first place.

Indeed, it’s a shocking reality that past and present state Labor governments have saddled the very people who elected them with cost blowouts on a series of major projects through poor contract negotiations or sheer hubris.

Those governments now leave all Victorians a depressingly profligate legacy.

The myki public transport ticketing system was flawed and expensive from the start. It was clear to commuters and visitors who have grappled with its operation for nearly seven years.

The cost of the myki mess reached an eye-watering $1.5 billion — all for a smartcard system that is inflexible and bewilders tourists.

Regardless, the state government last month awarded the same company NTT Data (formerly Kamco) with a new $700 million contract to continue to run the system for another seven years.

And the decision by Mr Andrews, after Labor’s ascension to state office in 2014, to scrap Melbourne’s much-needed East West road tunnel project has cost more than $1.1 billion, according to the state Auditor-General.

The billions of dollars squandered on these three projects — myki, East West Link and the desalination plant — could have been spent on schools, hospitals, roads and all manner of services to generally improve the quality of Victorians’ daily lives.

Instead the state is hamstrung with deals — such as the desalination plant contract — which appear to defy fiscal logic.

We pay for water when none is provided. We pay more when water is provided even though it’s not needed.

And what’s worse, this imprudent deal will continue to be a financial yoke on the taxpayers of Victoria for decades to come.