Red Rag

During last night’s debate, Colin Barnett announced the Coalition’s unconditional support for a 3700km covered canal to deliver water from the Fitzroy River to Perth.

I don’t know whether I support or oppose such a canal, because the appropriate feasibility studies — economic, environmental and social — have not yet been conducted. Unfortunately, that’s exactly why Barnett wants to go ahead with it.

Look at his campaign slogan: “Decisions, not delays.” It is intended to draw a contrast between a Government that conducts endless reviews and an Opposition that wants to get on with the job. Pretty standard stuff.

This announcement, though, doesn’t work. In one corner, Geoff Gallop demands proper planning be conducted before it will splash out taxpayers’ dollars on massive capital works projects. In the other, Colin Barnett is a reckless hot-head who makes huge decisions on the run and isn’t interested in whether they will actually work.

We know this was a hastily- (and sloppily-)constructed policy. Last December, when Gallop announced the idea would be analysed by a panel of experts, the Liberal Member for Kalgoorlie, Barry Haase — through whose electorate most of the pipeline would run — made his opinion fairly clear:

Mr Haase said the proposed project, to transport water from the Fitzroy River to Perth via a covered canal, was ridiculous.

“There is no reason for the Federal Government to get involved,” Mr Haase said.

“The project is not a viable proposition-a previous survey proved it would be an $11 billion investment.”

His state equivalent, the Liberal candidate for Kimberley, was similarly shocked by the announcement:

I was gob-smacked with the announcement actually — I wasn’t pre-warned or anything like that about it.

The most disturbing evidence, though, is that the Shadow Minister for Water, Murray Criddle, appeared to have no idea what was going on when he was interviewed by Liam Bartlett. You can (and should) listen to the interview, but I’ve transcribed some of it for you:

LB: What happens if the EPA says no?

MC: Well I, I think, ah. The indications we’ve got, ah, Liam, are that, ah, the, ah, project is a, a feasible one, but I think we can get a thousand reasons for not doing these issues and, and, ah, certainly, Doctor Gallop instituted an inquiry into this area, and he is obviously, he was going to get on with it otherwise he wouldn’t have put in place that inquiry. I think it’s a clear indication.

[...]

LB: What’s the taxpayer take on that?

MC: Aw, I’m not particularly wise to that amount of money, but obviously the amount of money going into the desalination plant is about $350 million…

LB: That’s why I ask you the question, because Colin Barnett claimed last night that it would cost less than the cost of the desalination plant.

MC: Well…

LB: How does he know that?

MC: Well, Colin is the Leader of the Party and would’ve done those figures and, ah, we would stand by them

LB: But you’re the Opposition Spokesperson for Water Resources; shouldn’t you know them?

MC: Well, as I say, we’ve got to go through a process and if that’s the indication we’ve got then I, we stand by them.

LB: But, but, but how much is it, Murray?

MC: Sorry?

LB: How much is it? It’s $300-odd million for the desal plant…

MC: $350 million for the desalination plant.

LB: …plus annual costs, so… Colin Barnett said last night, on TV statewide, that it would cost less than the desalination plant, so how much is it?

MC: Well, ah, I don’t know the exact figure, but if he says it’s less than the desalination figure, we stand by that; that’s the figure we stand by.

The biggest water initiative in WA since the Kalgoorlie Pipeline, and the Shadow Minister doesn’t have a clue what’s going on.

To be fair, nobody else seemed to know what was going on, either. Colin Barnett said it would cost less than $350 million, then the Liberal Party’s media release said, “It was estimated the government contribution required for the project would be about $400 million.” Then Colin Barnett was asked about it by Paul Murray:

PM: I point out to you again there is no costing in this policy you have put out today, what is the notional costing we put down against this, is it $400 million?

CB: No it is not Paul.

Riiight.

Barry Haase raised an important point when he bagged Labor just for thinking about the plan:

Why does the premier want to waste WA taxpayer’s money propping up multi-million dollar company Tenix?

The Coalition keeps mentioning the fact that it would be put out to tender, but every time they say, “the indication we’ve been given” or “our information is,” they have mentioned figures that are outlined in the two-page Tenix proposal (pdf). 3700km. 2% of the Fitzroy’s flow. No dam. 200 gigalitres. $2 billion. The tender process is a foregone conclusion.

Why would that be? Well, Paul Murray reminds us that “Tenix, the proponents are not without links to the Federal Government – their lobbyist is Peter Reith the former Minister.” No wonder Barnett’s convinced.

Tenix proposes to run the canal on the Build, Own, Operate, Transfer (BOOT) model, and also lock the Government into “take or pay” contracts. John Quiggin has written extensively on the pitfalls of PPPs, and his article in Dissent 8 includes an interesting comment:

Despite, or perhaps because of, their superficial appeal, BOOT schemes have not been viewed favourably by Australian economists. The EPAC Infrastructure Taskforce and the Industry Commission have condemned them, as have numerous public inquiries.

I’d be interested to hear what John had to say about the Tenix proposal.

The “take or pay” arrangement is a big money funnel from the State Government into Tenix’s coffers. It’s like signing up for a $100/month phone contract, and locking yourself in for ten years. If you suddenly find a cheaper way to make calls — say, by using Skype — then stiff shit. You’ve still got to pay the $100/month for the life of the contract. If rainfall rises, catchment rates improve, or some new innovation provides a cheap and sustainable source of water, we won’t have the flexibility to cut down on water coming from the Fitzroy, and will have to keep paying Tenix regardless.

Finally, I’d like to point out the big contradiction in Colin Barnett’s announcement. He says we have to act now to protect our water supply, so he’s going to cancel the desalination plant and build the canal instead. The trouble is, the desalination plant will be online in a matter of months, while Barnett can’t guarantee that the canal will be approved — let alone pumping water — for the next three years. It’s a long-term plan, but it’s got a long-term start date.

That means total sprinkler bans next summer.

Geoff Gallop is putting the desalination plant online to deal with our short-term water needs, and investigating various options for bringing water from the north to make sure the public gets the best deal.

Decisions, not delays.