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Australia : Labor legacy leaves $3.8 billion dollar debt.

Queensland s Auditor-General has issued a scathing report of the former Labor Government s decision to build the Gold Coast Desalination Plant and the Western Corridor Recycle Water Scheme in a report tabled in Parliament today.

Minister for Energy and Water Supply Mark McArdle said the Auditor-General s report, Maintenance of water infrastructure assets Report to Parliament 14: 2012 13, highlights the former Governments knee jerk approach to dealing with issues by throwing money at a problem with no sound business case.

The Gold Coast Desalination Plant cost $1.2 billion to build and the Western Corridor Recycled Water Scheme cost $2.6 billion.

The Auditor-General says the cost-efficiency of these assets cannot be demonstrated and no robust business case was developed for the Gold Coast Desalination Plant and the benefits were overstated for the Western Corridor Recycle Water Scheme, Mr McArdle said

The Auditor-General benchmarks the performance of both plants and found that both cost four times per megalitre than other Australian desalination plants.

Based on a 2011 Productivity inquiry the Gold Coast Desalination Plant operating and maintenance costs in 2011-12 were $4,403 per megalitre and the Western Corridor Recycle Water Scheme the actual costs in 2011 12 were $4,419 per megalitre.

Mr McArdle said the Auditor-General report validates the Government s drastic measures to minimise the impact of these past decisions on water prices.

This Government s recent decision to moth ball the Western Corridor Plant has significantly reduced operating costs of this scheme by around $16 million, he said.

The recommendation of Seqwater is to continue to operate the Gold Coast Desalination Plant in hot standby mode with its use strictly limited to the mitigation of critical supply emergencies. This will result in annual savings of $9 million.

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Publication:Mena Report
Date:Jun 4, 2013
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