THE Wonthaggi Desalination Plant faces losing millions of dollars after it failed to deliver the 50 gigalitre water order.
The plant had 12 months to deliver the water, but after electrical issues, Victorians had to wait until March before water began flowing into the Cardinia Reservoir.
AquaSure had until June 30 to deliver its first water order but would fall short by almost four gigalitres, Water Minister Lisa Neville said last week.
Speaking to 3AW’s Neil Mitchell on Thursday, Ms Neville said it was estimated AquaSure would only deliver 46.1 gigalitres of the 50 gigalitre water order.
“We only pay for the water we get, so we don’t pay for the four gigs we don’t get,” she said.
Minister Neville said the government will not pay the full $27 million for the water order and they will seek to reduce their security payment the government pays AquaSure each year, around $604 million annually.
Minister Neville wouldn’t confirm the exact amount the State Government would try and retrieve, but confirmed it would be a multi-million dollar penalty.
She also raised fears AquaSure could fight the State Government on how much money they’re planning to retrieve.
“That money will go in initially into a trust in case AquaSure attempt to dispute the adjustment we make under the contract.”
She said the money might be used to flatten bills over time for Melbourne Water customers.
“It’s absolutely clear here that this is to do with this piece of equipment, it’s not to do with government and we will be absolutely seeking every adjustment we can under that contract to go back to Melbourne Water customers.”
Better use for money
Mark Robertson, president of Watershed Victoria, a group formed following the announcement of the desalination plant, says it’s not good enough the plant couldn’t deliver.
“They’ve not been able to fulfil their contract and they’ve had five years to get ready for it,” he said.
“I think the first thing they should be doing is putting $30 million into the Wonthaggi Secondary College building fund.
“That would give them a few brownie points I think and make a lot of local people very happy.”
Mr Robertson said the company’s being paid to have the plant sit there and it should be ready to go at any time.
He also holds concerns over environmental impacts, especially when the plant’s running over plated capacity.
In a statement following Minister Neville’s comments on 3AW, AquaSure CEO Matt Brassington said the plant has performed “above expectations”, producing 0.467 of a gigalitre per day.
“This performance is testament to the quality of both the design and construction of the plant, and the expertise of our operations team.
“We are obviously disappointed that issues with the electricity supply meant that the plant was not able to start water production at an earlier date.”
He said AquaSure “notes” the Minister’s comments on the four gigalitre shortfall and said it equates to around eight days of production.
The plant will continue operating into winter to produce the 15 gigalitre water order for 2017-18, he said.
“Delivery is expected to be completed by the end of September 2017. It will then be returned to preservation mode.
“Most importantly though we’re satisfied that the issues with the power supply are extremely unlikely to recur, and we remain committed to working within the contractual framework through the remainder of the concession.”