18 October 2010

Australian desal at $24 billion

In Melbourne Australia...
Victorians would have to pay $15.8 billion to the Aquasure Consortium to operate the plant before a drop of water is bought. The figure was the equivalent of $4.6 billion in today's dollars. [With other expenses...] the maximum nominal cost* of the project and water would be almost $24 billion...

The report said the desalination plant along with spending on other water projects would result in the price that consumers would pay for water nearly doubling in the five years to 2012-13.

In Parliament Mr Brumby said he "made no apologies" for the project and the government's measures to tackle water security. He said the project price was determined after a "ferociously" competitive tender and was cheaper than if done by the public sector.
I have no doubt that the tender was competitive.

Given what I saw in Melbourne (consumption of under 200 lcd, or about 50 gcd), this may be the price they pay to live in a dry place.

OTOH, I am always skeptical of solutions that only address the supply side. Didn't they just build a mega-expensive pipeline that allows Melbourne to bring water from farmers to the North?

Bottom Line:The End of Abundance is expensive or uncomfortable. Take your pick.

* The cost is far less in current dollars, since the $24 billion is spread over 28 years.

HT to TS

3 comments:

  1. David,

    How does the cost of desal in Australia compare with the desal in Israel you recently described? Is the Israeli desal really a lot less expensive? If so, why? Thanks.

    Peter Mayer

    ReplyDelete
  2. @Peter -- land, labor and energy are cheaper in Israel. Environmental impacts (no solar power required in Israel) also matters. Then there's the experience of local contractors vs. the internationals who came to Oz. All of these add up...

    ReplyDelete
  3. ps/ I think the Aussies also built in a maximum hurry -- that also increases costs...

    ReplyDelete

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