As a business manager, Victoria doesn't hold water

Rain is falling in Victoria and water restrictions are being relaxed.

How well has the Government performed as a business manager in drought-proofing Melbourne and other Victorian cities?

The Thomson Dam -- Victoria's most recent major catchment development -- supplies on average 150 gigalitres a year, a third of Melbourne's needs.  It was commissioned in 1983;  since then Melbourne's population has increased by 30 per cent.

Soon after being voted in, the Bracks/Brumby administration abandoned previous Melbourne Water plans for ensuring supply keeps up with demand.  Melbourne Water planned a sequential development of catchments in the east of the state to service the growing needs of urban centres.

Daunted by the prospect of adverse publicity from demonstrators in koala suits at a dam site, Labor pretended that climate change would mean water shortages.  And it argued that Victoria couldn't afford the $1 billion cost of a new dam.

So the Government introduced usage restrictions, and built a pipe from the northern irrigation area and a desalination plant.

The pipeline from the north can deliver about half as much water as a new dam in the eastern ranges.  Including spending on irrigation channels, it has cost $1.1 billion.  On top of this are expenses of pumping the water over the Great Divide.

The desalination plant's costs are $5.7 billion for about 150 gigalitres a year -- about the same as would be provided by duplicating the Thomson Dam either in the Thomson catchment itself or on the Mitchell.

The bottom line is that to avoid spending $1 billion ($1.35 billion in today's money), the Government embarked on programs costing $7 billion.

Moreover, pumping water through the northern pipeline and from the desalination plant, unlike water flowing naturally from the mountains, entails increased emissions of greenhouse gases which the government says it abhors.  (Only an idiot could believe the claim that pumping the water entails ''100 per cent offset of electricity by renewable energy'').

In addition, the Government has forced Melburnians to save water.  This has meant dry sports grounds and gardens, and expensive water conserving devices.

Many areas around the world have desalination plants and water recovery measures.  But they, unlike Victoria, are running against capacity limits to new dam-fed supplies.  Victoria has enough rainfall in its catchment areas to avoid forever the need to artificially create drinking water or to acquire it from irrigators.

In deliberately shunning the use of our abundant natural water resources, the Government is therefore sacrificing community wealth.

Even without accounting for the expenses and inconveniences of water restrictions, the Government's solutions to ensuring an adequate water supply comes at a cost premium of $6 billion.  This means the Government has wasted $1000 for every person in Victoria.

Few people evaluate the Victorian Government's performance as a business manager now that most of the former state-run businesses have been privatised.

But the present Government has allowed political considerations to override commercial realities on water -- one of the few businesses it actually owns.

With this experience, imagine what excess costs would be loaded on to the community if the State Government still owned electricity, gas, forest plantations and the TAB.

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