A highlight of this financial year’s capital works was the $3m Leongatha Wastewater Treatment Plant improvements, including adding this ‘digester’ to the treatment process at the Begg Street plant. Next year’s capital works are set to be dominated by the Poowong, Loch Nyora Sewerage Scheme. m242414
IT SEEMS like an impossible scenario but South Gippsland Water is going ahead with an ambitious program of capital works next financial year, highlighted by the $20 million Poowong, Loch, Nyora Sewerage Scheme.
But they’ll do it while reducing total tariffs by between $50 and $100 per customer.
On an annual water and wastewater bill of typically $950, it’s a pretty good outcome.
Of course something’s got to give.
Debt levels will be going up from $43 million at the end of this financial year, to peak at $55 million when the Poowong, Loch, Nyora scheme is complete late in 2015 at which time debt will begin to come down again.
“Thanks to the pressure sewerage system we’ve opted for, in partnership with South East Water, we’ve been able to cut the overall cost of the project and will be able to have it completed in much less time,” Philippe du Plessis said, the corporation’s managing director.
“Water infrastructure has a long life so it’s appropriate to spread the impact out over a longer period. Of course, you’d like to have no debt but we’ve also got to be providing for future growth as well.”
He’s comfortable with the authority’s level of debt and its ability to repay it, even with reduced tariffs.
“In line the government’s Fairer Water Bills initiative announced in Melbourne last month, there will also be an efficiency dividend for country water users as well.
“We looked at putting the value our efficiency gains into wiping off the debt but the Water Minister was keen to see urban customers in the country get a reduction as well, over the next four years.
“We may not be able to achieve the $100 reduction they’ll get in Melbourne but it will be between $50 and $100 off total tariffs here as well.”
Mr du Plessis said the authority was awaiting a final announcement from the Department of Treasury and Finance to go ahead with the Poowong, Loch, Nyora Scheme; having previously received approval from the Essential Services Commission to raise up to $23.1 million, much of it from property owners covered by the scheme.
“We’ll be well within that now, and likely to be under $20 million in total.
“We’re expecting an announcement soon and will be able to start in July.”
More good news for the people of that district.
But, not everything has gone South Gippsland Water’s way.
They didn’t get the $21 million they were hoping to see in the May State Budget towards the $28 million cost of connecting the Poowong, Loch Nyora and Korumburra water supplies to the Lance Creek Reservoir.
“Because it wasn’t funded in the Budget, we recently met with Peter Ryan and the Water Minister Peter Walsh and while they were non-committal, they generally support the project, especially given the need to provide water security to Burra Foods and Murray Goulburn.
“We would still be hopeful of an announcement in the next six months.”
But South Gippsland Water has a ‘Plan B’ for the Korumburra township, and Burra Foods in particular which it is already moving on.
“One of the things we are looking at doing is networking Korumburra into Leongatha. Murray Goulburn has been able to reduce its water usage by 400mg/L but, due to its expansion, Burra Foods has increased its usage and we now have capacity at Leongatha.
“You want to be an enabler of economic development but at the same time you don’t want to saddling people with the cost of providing excess capacity either.”
Connecting the authority’s ‘northern’ systems (Korumburra, Loch, Poowong, Nyora) to its ‘southern’ systems (Inverloch, Wonthaggi, Cape Paterson) with Lance Creek as the primary water supply, backed up by Melbourne Water remains the authority’s number one priority.
And according to Mr du Plessis, the desalination plant doesn’t have to be operating for it to benefit from the security of the Melbourne system.
The 82km pipeline, between Wonthaggi’s desalination plant and the Cardinia Reservoir on the Melbourne Water system is a two-way pipe which can provide water either from the desal plant or the Melbourne reservoirs.
The authority has previously purchased a 1 gig/L water right for the bargain basement price of $350,000 but has never had to use it.
For administrative purposes only the bulk entitlement was recently transferred to the Greater Yarra System – Thompson River Pool, which is a section of the Melbourne supply.
With the end of the financial looming, South Gippsland Water has achieved much of its $10 million plan of capital works including: $2m Alberton Small Town Sewerage Scheme, $3m Leongatha Wastewater Treatment Plant improvements, $1m Lohr Avenue sewerage pump capacity improvement, $1m waste water pipe replacement and $1m water pipe replacement.
South Gippsland Water has recently submitted its updated Corporate Plan to the government for approval, outlying works, improvements and tariffs for the coming year. An announcement is expected soon.