HUGHENDEN IRRIGATION PROJECT CORPORATION PTY LTDhipco.com.au/wp-content/uploads/Hughenden...HUGHENDEN IRRIGATION PROJECT CORPORATION PTY LTD PRELIMINARY BUSINESS CASE M7220_003-REP-001

HUGHENDEN IRRIGATION

PROJECT CORPORATION PTY LTD Preliminary Business Case

Hughenden Irrigation Project

Volume One – Study Report

FEBRUARY 2020

HUGHENDEN IRRIGATION PROJECT CORPORATION PTY LTD

PRELIMINARY BUSINESS CASE

M7220_003-REP-001 Page ii Rev 0 : 14 February 2020

DISCLAIMER

This report has been prepared on behalf of and for the use of Hughenden Irrigation Project

Corporation Pty Ltd and the Australian Government and is subject to and issued in

accordance with Hughenden Irrigation Project Corporation Pty Ltd instruction to Engeny

Water Management (Engeny).

Engeny accepts no liability or responsibility for any use of or reliance upon this report by any

third party.

JOB NO. AND PROJECT NAME: M7220_003 HIP Preliminary Business Case

DOC PATH FILE: M:\Projects\M7000_Miscellaneous Clients\M7220_002 HIP Prelim Business Case\07 Deliv\Docs\Report\Revs\Master Report\M7220_003-REP-001-0 Prelim Business Case - Master Report.docx

REV DESCRIPTION AUTHOR REVIEWER PROJECT MANAGER

APPROVER / PROJECT DIRECTOR

DATE

Rev 0 Client Issue Jim Pruss Andrew Vitale Andrew Vitale Aaron Hallgath 14 February 2020

Signatures

Ellie Duck

Aaron Hallgath

Ellie Duck

Andrew Vitale

Ellie Duck

Andrew Vitale

Ellie Duck

Jim Pruss



M7220_003-REP-001 Page iii Rev 0 : 14 February 2020

CONTENTS

CONTENTS III

APPENDICES XI

LIST OF TABLES .............................................................................................................. XII

LIST OF FIGURES ............................................................................................................ XV

1. EXECUTIVE SUMMARY ......................................................................................... 1

1.1 Setting the Scene .................................................................................................... 1

1.2 The Importance of the Hughenden Irrigation Project ................................................ 1

1.3 Outline and Background .......................................................................................... 2

1.4 Service Need and Base Case .................................................................................. 3

1.5 Governance and Risk .............................................................................................. 4

1.6 Advantages and Opportunities ................................................................................. 5

1.7 Risks and Unknowns ............................................................................................... 6

1.8 Approach ................................................................................................................. 8

1.9 Reference Project .................................................................................................... 9

1.9.1 Key Metrics ..................................................................................... 10

1.9.2 Constructed Assets Required ......................................................... 11

1.10 Water and Environment ......................................................................................... 11

1.10.1 Water Sources and Allocation ......................................................... 11

1.10.2 Groundwater ................................................................................... 11

1.10.3 Access to Unallocated Water .......................................................... 12

1.10.4 Current Volumes Available for Allocation ........................................ 13

1.11 Environmental Flow Objectives (EFOs).................................................................. 13

1.12 Environmental, Planning, Social and Cultural ........................................................ 15

1.13 Capital Cost Summary ........................................................................................... 16

1.14 Revenue Summary ................................................................................................ 17

1.14.1 Crop Selection ................................................................................ 17

1.14.2 Gross Margin Analysis .................................................................... 19

1.15 Economic Analysis ................................................................................................. 20

1.15.1 CBA Results ................................................................................... 20

1.15.2 Economic Contribution Analysis Results ......................................... 20

1.16 Financial Assessment ............................................................................................ 21

1.17 Affordability ............................................................................................................ 22



M7220_003-REP-001 Page iv Rev 0 : 14 February 2020

1.18 Proposed Capital/Government Contribution ........................................................... 23

1.19 Conclusions ........................................................................................................... 25

1.20 Recommendations ................................................................................................. 26

2. GOVERNANCE ..................................................................................................... 28

2.1 Key Points ............................................................................................................. 28

2.2 Background and Purpose ...................................................................................... 28

2.3 Role of the Australian Government ........................................................................ 29

2.4 Role of the State Government ................................................................................ 29

2.5 Role of the Project Owner ...................................................................................... 30

3. METHODOLOGY .................................................................................................. 31

3.1 Key Points ............................................................................................................. 31

3.2 Background and Purpose ...................................................................................... 31

3.3 Approach ............................................................................................................... 31

3.4 Summary Risks ...................................................................................................... 32

3.5 Risk Assessment and Treatment ........................................................................... 33

4. STAKEHOLDER ENGAGEMENT .......................................................................... 35

4.1 Key Points ............................................................................................................. 35

4.2 Purpose and Objectives ......................................................................................... 35

4.3 Limitations and Risks ............................................................................................. 35

4.4 Stakeholder Analysis ............................................................................................. 36

5. PROPOSAL BACKGROUND ................................................................................. 38

5.1 Project Location ..................................................................................................... 38

5.2 Economic Overview - Key Points ........................................................................... 39

5.3 Industry .................................................................................................................. 39

5.3.1 Employment .................................................................................... 39

5.3.2 Agricultural Production .................................................................... 40

5.3.3 Mining ............................................................................................. 41

5.3.4 Business ......................................................................................... 41

5.3.5 Services to Transport ...................................................................... 42

5.4 Local and Visitor Services ...................................................................................... 42

5.4.1 Hughenden Aerodrome................................................................... 42

5.4.2 Schools ........................................................................................... 42

5.4.3 Health ............................................................................................. 43



M7220_003-REP-001 Page v Rev 0 : 14 February 2020

5.4.4 Diggers Entertainment Centre......................................................... 43

5.4.5 Flinders Discovery Centre ............................................................... 43

5.4.6 Visitor Accommodation ................................................................... 43

5.5 Current/Recent Developments ............................................................................... 43

5.5.1 Hughenden Recreational Lake ........................................................ 43

5.5.2 Kennedy Energy Park ..................................................................... 44

5.5.3 Overland Sun Farm ........................................................................ 44

6. SERVICE NEED .................................................................................................... 45

6.1 Key Points ............................................................................................................. 45

6.2 Why Service Need is an Important Concept? ......................................................... 45

6.3 Previous Assessment of the Service Need ............................................................ 46

6.4 Demand Assessment ............................................................................................. 46

6.5 Stakeholder Views ................................................................................................. 47

6.6 Criticality of Intended Outcomes and Possible Disbenefits ..................................... 48

7. BASE CASE .......................................................................................................... 49

7.1 Key Points ............................................................................................................. 49

7.2 Population Decline ................................................................................................. 49

7.3 Employment Decline .............................................................................................. 50

7.4 Socio-Economic Disadvantage .............................................................................. 50

7.5 Gross Regional Product ......................................................................................... 51

7.6 Relative Disadvantage ........................................................................................... 52

7.7 Future Trends ........................................................................................................ 52

7.8 Prospects of Further Decline .................................................................................. 54

7.9 Existing Water Resources ...................................................................................... 54

7.9.1 Current Water Infrastructure ........................................................... 54

7.9.2 Current Water Resources ............................................................... 55

7.9.3 Surface Water Entitlements ............................................................ 57

8. STRATEGIC CONSIDERATIONS ......................................................................... 60

8.1 Key Points ............................................................................................................. 60

8.1 Commonwealth Government ................................................................................. 60

8.1.1 White Paper on Developing Northern Australia ............................... 60

8.1.2 Northern Australia Audit – Infrastructure for a Developing North ..... 60

8.1.3 Australian Infrastructure Plan (AIP) ................................................. 61

8.1.4 National Water Initiative (NWI) ........................................................ 61

8.1.5 Reef 2050 Plan ............................................................................... 62



M7220_003-REP-001 Page vi Rev 0 : 14 February 2020

8.2 Queensland Government ....................................................................................... 62

8.2.1 Queensland Bulk Water Opportunity Statement .............................. 62

8.2.2 Queensland Agricultural Land Audit and Addendums ..................... 63

8.2.3 Advancing North Queensland Policy ............................................... 63

8.2.4 State Infrastructure Plan (SIP) ........................................................ 63

8.3 Local Government ................................................................................................. 64

8.4 Possible Proponent ................................................................................................ 64

9. OPTIONS CONSIDERED ...................................................................................... 65

9.1 Approach ............................................................................................................... 65

9.2 Review of Previous Studies ................................................................................... 66

9.2.1 Historical Dam Investigations .......................................................... 66

9.2.2 Flinders and Gilbert Agricultural Resource Assessment (FGARA) .. 66

9.2.3 Flinders River Water Resources and Irrigation Project .................... 68

9.2.4 HIPCo Initial Dam Investigations ..................................................... 69

9.2.5 15 Mile Irrigated Agricultural Development Project .......................... 70

9.3 Options Long List ................................................................................................... 71

9.3.1 Initial Options Screening ................................................................. 71

9.3.2 Alstonvale Dam Options ................................................................. 73

9.3.3 Stewart Creek Dam Options ........................................................... 76

9.3.4 Options Assessment ....................................................................... 80

9.4 Options Short List .................................................................................................. 95

10. REFERENCE PROJECT ....................................................................................... 97

10.1 Introduction ............................................................................................................ 97

10.2 Reference Project Summary .................................................................................. 97

10.3 Infrastructure Design Summary ............................................................................. 99

10.4 Infrastructure Costs ............................................................................................. 106

10.4.1 Capital Costs ................................................................................ 106

10.4.2 Operating and Maintenance Costs ................................................ 107

10.5 Yield Modelling .................................................................................................... 108

10.5.1 Overview ...................................................................................... 108

10.5.2 Assumptions and Methodology ..................................................... 108

10.5.3 Dam Yield Results ........................................................................ 110

10.5.4 Independent Yield Assessment Using Flinders Source Model ...... 116

10.5.5 Climate Change Impact Assessment ............................................ 118

10.5.6 Reservoir Siltation Assessment .................................................... 121

10.6 Licensing of Water Take ...................................................................................... 122

10.6.1 Water Plan and Resource Operations Plan Requirements ............ 122



M7220_003-REP-001 Page vii Rev 0 : 14 February 2020

10.6.2 Applicability to the Project ............................................................. 125

10.7 Assessment of Impacts to Downstream Stream Flows ......................................... 127

10.7.1 Overview ...................................................................................... 127

10.7.2 Modelling Approach ...................................................................... 127

10.7.3 Stream Flow Impacts – Annual Flow Volumes .............................. 129

10.7.4 Stream Flow Impacts – Daily Flow Volumes ................................. 129

10.7.5 Stream Flow Impacts – Environmental Flow Objectives (EFOs) ... 132

10.8 Assessment of Impacts to Existing Water Users .................................................. 134

11. LEGAL AND REGULATORY CONSIDERATIONS .............................................. 137

11.1 Key Points ........................................................................................................... 137

11.2 Purpose and Approach ........................................................................................ 137

11.3 Legal Considerations ........................................................................................... 137

11.4 Water Planning and Infrastructure........................................................................ 138

11.4.1 Water Act ...................................................................................... 138

11.4.2 Water Allocation and Flow Objectives (Water Act) ........................ 138

11.5 Saego Dam and Associated Infrastructure (Water Act, Water Supply Act) ........... 138

11.5.1 Water Act: ..................................................................................... 138

11.5.2 Water Supply (Safety and Reliability) Act: ..................................... 139

11.5.3 Other Infrastructure ....................................................................... 139

11.6 Planning, Environment, Native Title and Aboriginal Heritage ............................... 139

11.7 Land Acquisition and Access ............................................................................... 140

11.7.1 Acquisition .................................................................................... 140

11.7.2 Access .......................................................................................... 140

11.8 General Liabilities – Statutory Duty ...................................................................... 140

11.8.1 Health and Safety ......................................................................... 141

11.8.2 Legal Change ............................................................................... 141

12. MARKET CONSIDERATIONS ............................................................................. 142

12.1 Key Points ........................................................................................................... 142

12.2 Purpose ............................................................................................................... 142

12.3 Approach ............................................................................................................. 142

12.4 Summary ............................................................................................................. 143

13. PUBLIC INTEREST CONSIDERATIONS ............................................................ 145

13.1 Key Points ........................................................................................................... 145

13.2 Purpose ............................................................................................................... 145



M7220_003-REP-001 Page viii Rev 0 : 14 February 2020

13.3 Defining Public Interest ........................................................................................ 146

13.4 Stakeholders ........................................................................................................ 146

13.5 Impact on Stakeholders ....................................................................................... 146

13.5.1 Government .................................................................................. 146

13.5.2 Traditional Landowners................................................................. 146

13.5.3 Environmental Advocates ............................................................. 146

13.5.4 Property Owners Surrounding the Area ........................................ 147

13.5.5 Broader Community ...................................................................... 147

13.5.6 Media ............................................................................................ 147

13.6 Public Access and Equity ..................................................................................... 147

13.7 Safety and Security .............................................................................................. 147

13.8 Future Stakeholder Engagement ......................................................................... 147

14. ENVIRONMENTAL ASSESSMENT ..................................................................... 149

14.1 Approach ............................................................................................................. 149

14.2 Legislative Review ............................................................................................... 150

14.2.1 Commonwealth Legislation ........................................................... 150

Environment Protection and Biodiversity Conservation Act 1999 .............. 150

14.2.2 Queensland Legislation ................................................................ 151

State Development and Public Works Organisation Act 1971 .................. 151

Environmental Protection Act 1994 .......................................................... 151

Planning Act 2016 .................................................................................... 152

Environmental Offsets Act 2014 ............................................................... 152

Water Act 2000 ........................................................................................ 152

Biosecurity Act 2014 ................................................................................. 153

Aboriginal and Cultural Heritage Act 2003 ................................................ 153

Native Title (Queensland) Act 1993 .......................................................... 153

Queensland Heritage Act 1992 ................................................................ 153

Land Act 1994 .......................................................................................... 154

Nature Conservation Act 1992 ................................................................. 154

Vegetation Management Act 1999 ........................................................... 154

Fisheries Act 1994.................................................................................... 155

14.2.3 Local Planning Schemes .............................................................. 155

Flinders Shire Council Planning Scheme .................................................. 155

14.3 Existing Environment ........................................................................................... 156

14.3.1 Climate ......................................................................................... 156

14.3.2 Topography .................................................................................. 156

14.3.3 Geology and Soils ......................................................................... 157

Geology .................................................................................................... 157

Soils 157

14.3.4 Surface Water ............................................................................... 158

Waterholes ............................................................................................... 159



M7220_003-REP-001 Page ix Rev 0 : 14 February 2020

Stream Flow and Downstream Environments ........................................... 159

14.3.5 Groundwater ................................................................................. 160

14.3.6 Biodiversity ................................................................................... 161

Protected Areas ....................................................................................... 161

Wetlands .................................................................................................. 161

Ecological Communities ........................................................................... 161

Flora 162

Fauna 162

Fish Passage ........................................................................................... 163

14.3.7 Land Use and Tenure ................................................................... 164

14.3.8 Noise, Vibration, Light, Odour and Air Quality ............................... 165

14.3.9 Sensitive Receptors ...................................................................... 165

Traffic and Transport ................................................................................ 165

14.3.10 Cultural Heritage and Native Title.............................................. 166

Indigenous Heritage ................................................................................. 166

Non-Indigenous Heritage.......................................................................... 166

Native Title ............................................................................................... 166

14.4 Environmental and Planning Constraints Assessment ......................................... 166

14.5 Regulatory Processes and Approvals .................................................................. 175

15. SUSTAINABILITY ASSESSMENT ....................................................................... 182

15.1 Key Points ........................................................................................................... 182

15.2 Purpose ............................................................................................................... 182

15.3 Overview .............................................................................................................. 182

15.4 Approach ............................................................................................................. 182

15.5 Summary of Assessment ..................................................................................... 187

16. ECONOMIC ANALYSIS ....................................................................................... 188

16.1 Overview .............................................................................................................. 188

16.2 The Regional Economy ........................................................................................ 189

16.3 The Project .......................................................................................................... 191

16.4 The Economic Analysis ........................................................................................ 194

16.4.1 CBA Results ................................................................................. 194

16.4.2 Economic Contribution Analysis Results ....................................... 196

16.5 Future Refinement of Modelling Assumptions ...................................................... 197

17. FINANCIAL AND COMMERCIAL ANALYSIS ...................................................... 198

17.1 Findings and Conclusions .................................................................................... 198

17.2 Approach ............................................................................................................. 199

17.3 Project Description and Assumptions ................................................................... 199



M7220_003-REP-001 Page x Rev 0 : 14 February 2020

17.4 Headline Financial Modelling Results .................................................................. 202

17.5 Water Prices ........................................................................................................ 203

17.6 Future Refinement of Modelling Assumptions ...................................................... 204

18. AFFORDABILITY ANALYSIS .............................................................................. 206

18.1 Key Points ........................................................................................................... 206

18.2 Purpose ............................................................................................................... 206

18.3 Method ................................................................................................................ 206

18.4 Conclusion ........................................................................................................... 208

19. CONCLUSIONS .................................................................................................. 210

20. RECOMMENDATIONS ........................................................................................ 212

21. QUALIFICATIONS ............................................................................................... 214

22. REFERENCES .................................................................................................... 215



M7220_003-REP-001 Page xi Rev 0 : 14 February 2020

Appendices

APPENDIX A COMMUNICATIONS PLAN

APPENDIX B RISK REGISTERS

APPENDIX C ELECTRICITY STRATEGY REPORT

APPENDIX D DAM OPTIONS CONCEPT DESIGN REPORTS

APPENDIX E REFERENCE PROJECT CONCEPT DESIGN DRAWINGS

APPENDIX F DAM YIELD STUDY REPORT

APPENDIX G REFERENCE PROJECT FLOOD ASSESSMENT REPORT

APPENDIX H REFERENCE PROJECT INFRASTRUCTURE CONCEPT DESIGN

REPORT

APPENDIX I SAEGO DAM GEOTECHNICAL INVESTIGATION REPORT

APPENDIX J AGRONOMY REPORTS

APPENDIX K REFERENCE PROJECT ENVIRONMENTAL CONSTRAINTS

MAPPING

APPENDIX L ENVIRONMENTAL FLOW REVIEW REPORT

APPENDIX M ECONOMIC ANALYSIS REPORT

APPENDIX N FINANCIAL ASSESSMENT REPORT



M7220_003-REP-001 Page xii Rev 0 : 14 February 2020

List of Tables

Table 1.1 Currently Available Allocations (not including potential ‘buyback or trading

options’ ....................................................................................................... 13

Table 1.2 Capital Cost Summary –Scenario 1 Diversified Cropping ($2019) .................... 17

Table 1.3 Capital Cost Summary – Scenario 2 Grazier support ($2019) ........................... 17

Table 1.4 Total Developed Agricultural Production Scenario 1 Diversified Cropping ........ 19

Table 1.5 Total Developed Agricultural Production Scenario 2 Grazier Support ............... 19

Table 1.6 Gross Margin Analysis ...................................................................................... 20

Table 1.7 Economic Contribution Results ......................................................................... 21

Table 1.8 Required Payment from Farmers (if project was fully funded) ........................... 23

Table 1.9 Required Government Contribution ................................................................. 24

Table 3.1 Risk Assessment and Categorization................................................................ 34

Table 5.1 Share of Employment in Hughenden, by Industry. ............................................ 39

Table 7.1 Growth in Gross Regional Product, All regions, 2000-01 to 2010-11. ................ 51

Table 7.2 Queensland Local Government Areas - Top 10 ranked by population decline. . 52

Table 7.3 Occupations of Those Employed in the Flinders Shire. ..................................... 54

Table 7.4 Gauged Mean Annual Flow Volumes Along the Flinders River ......................... 57

Table 7.5 Current Volumes of Unsupplemented Water Entitlements in Flinders River

catchment ..................................................................................................... 57

Table 7.6 Current Status of Unallocated Water in Flinders River catchment ..................... 58

Table 7.7 Outcomes of 2015/16 Tender Process for Release of General Reserve in Flinders

catchment ..................................................................................................... 59

Table 9.1 Dam Options Identified by CSIRO FGARA study within Flinders Shire ............. 67

Table 9.2 Details of Dam Yield Modelling Simulations for the Options Assessment .......... 81

Table 9.3 Dam Yield Results for Alstonvale Dam Options ................................................ 84

Table 9.4 Dam Yield Results for Stewart Creek Dam Options .......................................... 86

Table 9.5 High-Level Capital Cost Estimates for Alstonvale Dam Options ........................ 88

Table 9.6 High-Level Capital Cost Estimates for Stewart Creek Dam Options .................. 88

Table 9.7 High-Level Capital Cost Estimates for Selected Alstonvale Dam Options ......... 91

Table 9.8 High-Level Capital Cost Estimates for Selected Stewart Creek Dam Options ... 91

Table 9.9 High-Level Total Project Cost Estimates for Selected Alstonvale Dam Options ....

....................................................................................................... 93

Table 9.10 High-Level Total Project Cost Estimates for selected Stewart Creek Dam Options

....................................................................................................... 93



M7220_003-REP-001 Page xiii Rev 0 : 14 February 2020

Table 9.11 Unit Cost Estimates for Selected Alstonvale Dam Options .............................. 95

Table 9.12 Unit Cost Estimates for Selected Stewart Creek Dam Options ........................ 95

Table 10.1 Reference Project Infrastructure Summary ................................................... 103

Table 10.2 Capital Cost Summary – Diversified Cropping Strategy ................................ 107

Table 10.3 Capital Cost Summary – Grazier Support Strategy ....................................... 107

Table 10.4 Operating and Maintenance Cost Summary ................................................. 108

Table 10.5 Predicted Dam Yields for Reference Project – GoldSim Model ..................... 111

Table 10.6 Comparison of Grazier Support Scenario Irrigation Supply Reliabilities ......... 118

Table 10.7 Climate Change Impact Assessment Parameters ......................................... 119

Table 10.8 Climate Change Impact Assessment Results – Diversified Cropping Scenario ...

..................................................................................................... 120

Table 10.9 Climate Change Impact Assessment Results – Grazier Support Scenario .... 121

Table 10.10 Estimated Average Annual Sediment Yields for the Saego Dam Catchment and

Flinders River Diversion Weir Catchments .................................................. 122

Table 10.11 Current Status of Unallocated Water in Flinders River Catchment .............. 125

Table 10.12 Predicted Annual Stream Flow Volume Changes for the Flinders River

Downstream of the HIP ............................................................................... 129

Table 10.13 EFO Performance Assessment for HIP ....................................................... 132

Table 10.14 EFO Performance Assessment for Alternative HIP Scenario with a 25%

Reduction in the Saego Dam Storage Capacity ........................................ 133

Table 10.15 Predicted Impacts of HIP on Existing Water Users ..................................... 136

Table 14.1 Geological Formations Identified Within the Project Area .............................. 157

Table 14.2 Soil Types Identified Within the Project Area ................................................ 157

Table 14.3 Proximity of Sensitive Receptors to the Project Area .................................... 165

Table 14.4 Environmental and Planning Constraints Assessment .................................. 167

Table 14.5 Approvals Register ....................................................................................... 176

Table 15.1 Options Assessed by Goal and Criteria ......................................................... 183

Table 15.2 Comparison of Scenarioa A and Scenario B ................................................. 184

Table 16.1 Share of Employment in Hughenden, by Industry. ........................................ 190

Table 16.2 Volume of Production by Scenario ................................................................ 192

Table 16.3 Water Requirements by Crop ....................................................................... 192

Table 16.4 Gross Margin Analysis .................................................................................. 193

Table 16.5 Capital Costs (discounted, undiscounted) – Scenario 1 and 2 ...................... 194



M7220_003-REP-001 Page xiv Rev 0 : 14 February 2020

Table 16.6 Disaggregated CBA Results, Undiscounted and 7% Discount Rate – Scenario 1

..................................................................................................... 195

Table 16.7 Disaggregated CBA Results, Undiscounted and 7% Discount Rate – Scenario 2

..................................................................................................... 195

Table 16.8 Economic Contribution Results ..................................................................... 196

Table 17.1 Summary of Approach .................................................................................. 199

Table 17.2 Key assumptions .......................................................................................... 199

Table 17.3 Key Assumptions .......................................................................................... 200

Table 17.4 Water Tariff Structure ................................................................................... 203

Table 18.1 Required Payment from Farmers .................................................................. 207

Table 18.2 Government Contribution .............................................................................. 208



M7220_003-REP-001 Page xv Rev 0 : 14 February 2020

List of Figures

Figure 1.1 FGARA Study Area and Reference Project Location ......................................... 3

Figure 1.2 General Arrangement Hughenden Irrigation Project – Reference Project ........ 10

Figure 1.3 Gulf Water Plan Area (Source: DNRME) ......................................................... 12

Figure 3.1 ISO 31000:2018 Risk Management Process Overview ................................... 32

Figure 4.1 Initial Stakeholder Identification and Mapping Process .................................... 36

Figure 5.1 Flinders Shire LGA .......................................................................................... 38

Figure 5.2 Mining Industry in Hughenden and Surrounds ................................................. 41

Figure 5.3 Total Businesses in the Agriculture, Forestry, and Fishing category, Flinders LGA,

2016-2018. ...................................................................................................... 42

Figure 7.1 Population in Flinders Shire (Source: Historical Data – ABS, 2019; Forecast

Population – QGSO, 2018) ............................................................................. 50

Figure 7.2 Employment and Labour Force Trends, Flinders Shire (Source: Australian Bureau

of Statistics, Census Data) .............................................................................. 53

Figure 7.3 Gulf Water Plan area (Source: Water Plan (Gulf) 2007)................................... 55

Figure 7.4 Flinders River Water Management Area (Source: Gulf Resource Operations Plan)

....................................................................................................... 56

Figure 9.1 Locations of New Dam Options Assessed in CSIRO FGARA study (Source:

Petheram et al., 2013) ..................................................................................... 67

Figure 9.2 Dam Sites Considered in Stage 1 Dam Investigation for HIPCo (Source: Grace

Detailed – GIS Services, 2018a) ................................................................... 70

Figure 9.3 Location of Proposed 15 Mile Irrigated Agricultural Development Project (Source:

GHD Pty Ltd, 2018) ....................................................................................... 71

Figure 9.4 Preferred Dam Sites for Options Long List (Image source: Queensland Globe) ..

....................................................................................................... 73

Figure 9.5 Concept Infrastructure Arrangement for Alstonvale Dam Irrigation Scheme .... 75

Figure 9.6 Storage Characteristics for Alstonvale Dam and Canterbury Creek Dam ........ 76

Figure 9.7 Saego Impoundment Area Locality Plan .......................................................... 77

Figure 9.8 Concept Infrastructure Arrangement for Stewart Creek Dam Options .............. 79

Figure 9.9 Storage Characteristics for the Stewart Creek Dam Options ........................... 80

Figure 10.1 General Infrastructure Arrangement for the HIP Reference Project ............. 100

Figure 10.2 General Infrastructure Arrangement for the Water Diversion and Storage

Infrastructure ............................................................................................... 101

Figure 10.3 General Infrastructure Arrangement for the Irrigation Delivery Infrastructure 102

Figure 10.4 Storage characteristics for Saego Dam ....................................................... 110



M7220_003-REP-001 Page xvi Rev 0 : 14 February 2020

Figure 10.5 Simulated Reservoir Performance for Saego Dam – Diversified Cropping

Scenario ................................................................................................... 111

Figure 10.6 Simulated Reservoir Performance for Saego Dam – Grazier Support Scenario

..................................................................................................... 112

Figure 10.7 Predicted Medium Priority Irrigation Supply Volumes – Diversified Cropping

Scenario ................................................................................................... 113

Figure 10.8 Predicted Low Priority Irrigation Supply Volumes – Diversified Cropping Scenario

..................................................................................................... 113

Figure 10.9 Predicted Irrigation Supply Volumes – Grazier Support Scenario ................ 114

Figure 10.10 Average Annual Inflows and Outflows – Diversified Cropping Scenario ..... 115

Figure 10.11 Average Annual Inflows and Outflows – Grazier Support Scenario ............ 115

Figure 10.12 Daily Flow Duration Curves for Flinders River at Richmond Gauging Station ..

..................................................................................................... 130

Figure 10.13 Daily Flow Duration Curves for Flinders River at Etta Plains Gauging Station .

..................................................................................................... 131

Figure 10.14 Daily Flow Duration Curves for Flinders River at Walkers Bend Gauging Station

..................................................................................................... 131

Figure 16.1 Population in Flinders Shire (Source: Australian Bureau of Statistics) ......... 189

Figure 17.1 Water Pricing Approach ............................................................................... 204



M7220_003-REP-001 Page 1 Rev 0 : 14 February 2020

1. EXECUTIVE SUMMARY

1.1 Setting the Scene

The proposed Hughenden Irrigation Project (referred to as the HIP or Reference Project in

this Preliminary Business Case) will be transformational for the Hughenden community and

the broader region. The HIP project may end up being one of several irrigation projects

carefully staged and delivered that will finally unlock the potential of the region. While there

are some legislative and approvals issues yet to be resolved, in context, the HIP requires a

relatively small amount of water from the Flinders River catchment to transform currently

underutilised grazing land into economically productive irrigated agricultural enterprises.

Some key statistics include:

▪ The catchment area of the Reference Project is 7,652km2 or approximately 7% of the

total Flinders River catchment at 109,000 km2

▪ The Flinders River is the longest river in Queensland at 1,004 kilometres in length and

contributes less than 15% to the freshwater flows into the Southern Gulf of Carpentaria

(GoC) and only 3% of the entire freshwater inflows into the Gulf. The Reference Project

requires only 4% of the mean annual flow of the Flinders River at Walkers Bend and is

700km upstream of the confluence with the Gulf of Carpentaria.

▪ The Reference Project’s average water take will be less than 0.15% of the mean annual

freshwater flows into the Gulf.

▪ This small amount of water (109GL/year), if harvested and used correctly, can produce

a Gross Regional Product of up to $72.8M and support up to 490 jobs.

▪ The project can also help alleviate the ‘boom and bust’ cycle and make the community

and supporting industries more independent and resilient in times of flood and drought.

1.2 The Importance of the Hughenden Irrigation Project

The Hughenden region has long been a vibrant and integral part of the north Queensland,

Queensland and Australian economies. It has been suffering long-term economic decline

for several decades.

The region has abundant irrigable cropping lands but lacks a large-scale reliable water

source. With the support of the Australian Government, and the vision and drive of local

farmers and irrigators, the Hughenden Irrigation Project (HIP) has been developed to a

stage where it demonstrates real potential to harvest environmentally-sustainable water

from the Flinders catchment and to store and deliver this water for new irrigation enterprises.

Whilst further refinements to this proposal and resolution of some key regulatory issues are

still required, including the appropriate allocation of water, no fatal flaws have been

identified that would prevent the project from progressing to the next stage of assessment.




This would normally be a Detailed Business Case (DBC) or similar. Furthermore, the project

has the potential to reinvigorate the regional and local economy and improve social

disadvantages. The economic and social improvements could be unparalleled in this part

of North Queensland. It may also provide an ‘exemplar’ or ‘archetype’ project and

governance procedures to implement a regional sustainability project in other areas thus

transforming regional communities for local, regional and national resilience and prosperity.

1.3 Outline and Background

There has long been an interest in utilising the resources available in the relatively sparsely

settled northern regions of Australia. As early as 1929 John Bradfield devised the Bradfield

Scheme to utilise and divert floodwaters in the north to other areas in Australia. Over the

years there have been various iterations of the Bradfield Scheme and it has once again

gained some prominence in the national discussion due to the prolonged and severe

drought. Both the Australian and State Government politicians are now referring to a

‘Revised Bradfield Scheme’ to help drought proof the grazing and irrigation lands.

While this PBC does not investigate the issues surrounding the various versions of the

Bradfield Scheme it does however seek to be consistent with its objectives and to be easily

integrated into any broader scheme should one come into existence in the future.

While the Bradfield Scheme commands public discussions, more contemporary and

focussed investigations such as the North Queensland Irrigated Agriculture Strategy

(NQIAS) have been undertaken to seek ways to productively and sustainably use water in

this part of Australia. CSIRO led one component of this study aimed specifically at the

Flinders and Gilbert Catchment areas. This study called the Flinders and Gilbert Agricultural

Resource Assessment, FGARA, (Petheram at al., 2013) aimed to identify and evaluate

water capture and storage options, identify and test the commercial viability of irrigated

agriculture opportunities and assess potential environmental issues and identify social and

economic impacts and risks. Among other things the FGARA studies concluded:

1. Thousands of hectares of soil are potentially suitable for irrigated agriculture across

northern Australia but access to enough water constrains development.

2. In the Flinders catchment, ‘farm dams’ could support 10,000 to 20,000 ha of irrigation

in 70%- 80% of years however irrigation may not be possible in very dry years.

3. ‘In-stream’ dams enable more reliable irrigated production than farm dams as they

can more easily carry water from one year to the next.

4. Significant water use would, in the downstream environment, amplify the social and

environmental challenges in dry years and impact commercial and recreational fishing

although these effects have not been quantified.

While there is national interest in this region, there is also very active local interest with

proponents seeking opportunities and solutions that enhance the region without harming

the downstream environment. The FGARA study area can be seen in Figure 1.1 with the




Hughenden Irrigation Project (HIP) or Reference Project shown in the insert box 45

kilometres downstream of Hughenden.

Figure 1.1 FGARA Study Area and Reference Project Location

1.4 Service Need and Base Case

The Hughenden Irrigation Project (HIP) is a scheme proposed by active local proponents

for the Flinders River near Hughenden that seeks to capture and utilise a reliable water

supply to realise the opportunities in this part of Australia.

The most recent 2016 Australian Census counted the population of the town of Hughenden

at around 1,100. The broader Flinders Shire had an estimated population of 1,500 in 2017.

The Shire’s population peaked at over 3,000 residents during the 1960s and has declined

significantly in the decades since.




Over the last two decades the Flinders Shire has experienced the fourth highest rate of

decline across Queensland with a total decline of almost 30% over the period. Further, over

the last five years, the Shire has exhibited an average rate of population decline of 3.0%

per year, compared to the State-wide average increase of 1.6% per year.

In the absence of regional economic growth initiatives, the decline will likely continue with

the Shire population projected to dip to around 1,260 by 2031, a further 17% decrease from

the most recent population estimate.

Subsequent to this decline in population, the total number of people employed has also

declined across all sections of the local economy as has the number of businesses,

including farming enterprises.

The Flinders Shire economy is mostly comprised of:

▪ Primary production, farming and to a much lesser extent mining, of which agriculture

and beef production is dominant.

▪ Transport-related services.

▪ Tourism-related services; and

▪ Support services to primary producers and mines and the broader community, including

local government administration, health, education, and hospitality.

Based on the Australian Bureau of Statistics Socio-Economic Indexes – which measures

socio-economic disadvantage – the Flinders Shire exhibits higher level of disadvantage

than more than half of the local government areas in Australia.

The Base Case examination reveals that without significant regional development it is highly

likely that Flinders Shire will experience further decline. This backdrop and clear Service

Need provides important context for a large-scale regional infrastructure project such as the

Hughenden Irrigation Project. Investment in irrigated agriculture is likely the most

appropriate investment vehicle to turn around the declining indicators as this sector

represents the core competency and skills of the region and will best meet the Service

Need.

1.5 Governance and Risk

To start the evaluation and assess opportunities, the active local proponents incorporated

the Hughenden Irrigation Corporation P/L (HIPCo). HIPCo’s prime objective was to oversee

the completion of a study to assess the viability of an irrigated agriculture project in the

upper sections of the Flinders River catchment. HIPCo engaged a Project Manager and

contractors to examine broad scale options. To further assess and develop these options

HIPCo engaged Engeny Water Management P/L (Engeny) to compile the requisite

information and produce a Preliminary Business Case (PBC) to outline a concept, including

net costs and benefits, of a sustainable scheme. The PBC was specified to comply with all




required regulatory assessment processes required for a large-scale regional infrastructure

project such as the HIP. The PBC was ultimately to make recommendations for progress if

a feasible project was identified for further investment.

To facilitate the completion of the PBC, Engeny developed a template using the Building

Queensland and Infrastructure Australia guidelines to ensure a wholistic approach was

taken. Further, it was acknowledged that one or both entities may at some point review the

proposal as per Commonwealth and State Government legislative requirements. Neither

template was used in exact format as other recent PBCs and DBCs were used as guides

and reference documents to inform the work program.

Risks were identified by a HIPCo Board workshop with input from consultants, stakeholders

and other relevant parties. Risks assessment and controls were recommended and adopted

by the Board with updates and mitigations tracked by the Project Manager. Risks were

reviewed regularly at Board meetings.

The HIPCo Board oversaw all the major components of the work, approved work programs,

stakeholder engagement processes, key messages and interactions. The Board also

approved budgets, payments, risk mitigations and probity controls. The financials have

been successfully audited and other governance processes are under active risk-based

refinement.

1.6 Advantages and Opportunities

To transparently assess potential water supply schemes, the standard process of

identification of risks, net costs and benefits was considered essential. However, the Board

required equal focus on the changing economic climate, regional security drivers and the

utilisation of the unique local and regional advantages. These advantages are well

understood by the local proponents but are sometimes difficult to monetise or categorise as

part of the net benefits or contextualise in compliance terms. The area has unique natural

advantages and benefits such as:

▪ Extensive underutilised areas of potentially highly productive blacksoil plains.

▪ Opportunities exist for utilisation of the area’s industrial and agricultural characteristics

and remaining structural integrity.

▪ Substantial volumes of unallocated water in the Flinders River system; 166,000 ML if all

reserves are considered.

▪ Potential for a further 100,000 ML of water entitlement from trading or buy back of

existing allocations and utilising any ‘sleeper’ allocations.

▪ A small catchment area required for flow harvesting of approximately 8,000 km2 or 7%

of the entire Flinders River catchment.




▪ The Project requires only a small percentage of water from the Flinders River catchment

of approximately 4% of Mean Annual Flow measured at Walkers Bend.

▪ The region’s unique geospatial location to take advantage of early growing season and

market opportunities.

▪ Easy, fast and reliable access to domestic markets via road or rail.

▪ Secure access to export facilities via Townsville that has triple road train access and is

geographically close to World and Asian markets.

▪ Several potential dam sites close to the economic/service centre of Flinders Shire had

been identified in previous studies.

▪ Few immediate environmental issues from both a State and Federal perspective (apart

from the water allocation from the Gulf Water Plan and Environmental Flow Objective

(EFO) issues which were identified early as ‘high risk’ and have been under active

management as noted).

▪ Similar schemes have been established from relatively modest beginnings such as

Fairbairn Dam and irrigation scheme at Emerald that might be considered as a

comparator for successful implementation.

▪ Staging of infrastructure may be a successful approach to provide ‘proof of concept’

although this would be a fall-back position and not the primary approach.

▪ Potential for food, drought and flood resilience through the establishment of large local

industries in concert with relevant government policies.

▪ Engaged and dedicated local scheme proponents.

▪ Trials and agricultural studies have been undertaken and fodder production from

harvested surface water and local aquifers is well established in the region.

▪ Local community, Local Government and National support including through the

Honourable Mr. Bob Katter and the Honourable Mr. Robbie Katter from the Katter

Australia Party.

1.7 Risks and Unknowns

While these advantages and opportunities were immediately apparent the project also

presented some risks and unknowns. In order to address these risks and opportunities in a

systematic and efficient way, Engeny engaged NineSquared P/L for economic and financial

assessment and Peritus Agriculture P/L for crop, market and farm return analysis. Other

specialist consultants such as Epic Environmental, Hydrology and Risk Consulting (HARC),

Dr. Sandra Brizga (Brizga Environmental), Newman Engineering, ARQ Consulting

Engineers and W. Wightman Advisory were engaged to provide expert advice, opinion,




review and analysis. HIPCo also engaged resources directly such as GIS, topographic

survey, project management and web site design and establishment.

Some of the immediate high-level risks and unknowns identified were:

▪ Rainfall and runoff are variable and water harvesting is therefore only viable for a

relatively short period of time on an annual cycle.

▪ The Gulf Water Plan imposes some strict limits on the amount and extraction regimes

to protect downstream values and reduction of flows to the extent where water, at the

reliability or location required, may not be available in the system or allowed for by the

current Gulf Water Plan or Resource Operations Plan (ROP).

▪ The sub-catchments are relatively small this high in the Flinders catchment, therefore

potential volumetric capture is small.

▪ Although there are highly productive rural industries based on Mitchell grass blacksoil

plains there is no record or history of material irrigated agriculture being undertaken in

the immediate region.

▪ Several studies, including the Flinders Gilbert Agricultural Resource Assessment Study

(FGARA), have concluded that traditional infrastructure options are not likely to be

feasible for the upper parts of this catchment therefore the study needed to be wide

ranging and open to innovative options.

▪ There are existing users and multiple schemes proposed for the area bidding for the

same water and funding. All schemes are at different stages of maturity and are yet to

be considered by State and Federal governments.

▪ No immediate ‘foundation’ customer has been identified to pay for water.

▪ Limited geotechnical and soils information exists apart from at a generalised level.

▪ Limited environmental information for the potential dam site and downstream reaches

of the rivers exists.

▪ The cost of infrastructure to harness the variable, short-term high flows is likely to be

higher than the initially allocated $180M, therefore a proposal must demonstrate viability

through addressing the Service Need and be based on efficient costs and realistic

revenue projections.

▪ The Gulf prawn and aquaculture industry relies, to some unquantified degree, on flows

from the Flinders River.

▪ Stakeholder consultation is essential, particularly to address the complex government

approval processes at Federal, State and local government levels and this presents

some potentially competing objectives.




▪ A relatively short time frame and limited budget were available to complete the

assessment and address risks and opportunities.

1.8 Approach

Under the guidance of the proponent HIPCo, Engeny and associates considered these risks

and opportunities, among others, and developed an augmented desktop approach to most

efficiently utilise the allocated $2M in grant funding from the Commonwealth Community

Development fund in the short time allowed. That is, desktop analysis was only augmented

by field work or more detailed studies where risks and uncertainty remained, and budget

allowed. This approach allowed efficient allocation of funds and several rounds of

optioneering.

As very large concrete dam structures were unlikely to be viable, the adopted approach to

optioneering determined that more innovative solutions were evaluated to best utilise the

unique features of the landscape such as topography, geology, hydrology, ecology,

hydraulics and soil types. Further refinement of the methodology then included water

availability and use, constructability and cost of infrastructure, realistic farm returns, market

analysis, economic and financial analysis, affordability, environmental, cultural, social

equity and public interest issues.

While many of the risks have been examined and quantified during the development of the

PBC, others will likely require further work in the next phase. For example, market sounding

and analysis of potential growers (irrigators) and their willingness to pay for water remains

an unquantified risk although lower bound benchmarks have been adopted. Other risks

such as the water availability will require more detailed examination during the development

of the Detailed Business Case (DBC).

HIPCo, the proponent, also required that where possible, the approach should:

▪ Engage with all relevant stakeholders to ensure openness, transparency and address

critical success factors.

▪ Present a balanced view of the information and neither concentrate on the advantages

nor ignore the potential disadvantages.

▪ Integrate with other initiatives in the area including those outlined in the North

Queensland Market and Agricultural Supply Chain Study (2019) and the Flinders Shire

Council 15 Mile Project(s) Business Case and proposed Meatworks (Flinders Shire

Council web site http://www.flinders.qld.gov.au/beef-processing).

▪ Where possible align, or be able to align, with other irrigated agricultural projects in the

immediate vicinity of Hughenden including the Richmond agricultural scheme project

and any future Bradfield Scheme.

▪ Refer to existing Australian and State Government policy such as the Queensland Bulk

Water Opportunity Statement (DEWS, 2018) and the North West Queensland Economic

http://www.flinders.qld.gov.au/beef-processing




Diversification Strategy (NWQEDS) (DSDMIP, 2019) and the Commonwealth

Government Agricultural Competitiveness White Paper (Commonwealth of Australia,

2015). This paper is important in the context as it defines in broad terms exactly what

the HIP project sets out to do. That is to ‘identify water infrastructure projects of interest

to the Commonwealth in promoting agricultural development, including development in

the Flinders and Gilbert river catchments. The NWQEDS particularly identifies among

other things the need for ‘catalytic projects in high value dry-land and irrigated

agriculture and co-investing in common user facilities, renewable energy policies,

infrastructure funding opportunities and resilience projects‘.

▪ Assess the opportunity to produce power from hydro generation or pumped hydro.

▪ Have neutral or improved effect on local environment issues, downstream

environmental and economic values and existing water users.

▪ Identify a ‘go-no/go’ point with a viable project to proceed to DBC, or recommend further

risk reduction and quantification, or in a worst-case scenario recommend that no viable

project is available in this part of the catchment; and

▪ If a viable project is identified, then assist with accessing enough funds from the $180M

allocated to the project by the Australian Government to complete the detailed

assessment. This would include approvals pathways, commencement of land

acquisitions if required, establishment of governance structures, engaging the

engineering and construction market and identify water users and their willingness to

pay for water.

1.9 Reference Project

Based on the broad analysis of options using the stated approach, selection criteria,

background investigation, risk, governance process and stakeholder engagement

processes, the Reference Project as a concept is shown in General Arrangement in Figure

1.2.

The Reference Project defines a suite of bulk water infrastructure (dam, diversion channel

and in-stream diversion weir) and distribution infrastructure (pumps and channels) to

provide irrigation water to new farming enterprises. Two cropping scenarios are assessed

for the project and both are subject to economic and financial analysis:

▪ Scenario 1 Diversified Cropping: a mix of medium and low priority water for diversified

cropping comprising horticulture (avocados, mangoes, lemons and mandarins), grains

and hay (sorghum, wheat, corn and rhodes grass hay).

▪ Scenario 2 Grazier Support: low priority water for grains and hay production.

While improved economic results would be generated by assuming all the production is

high-value horticulture, it was deemed overly optimistic to transition to all high-value

horticulture in the short term and forego the drought resilience objectives. Therefore, for




Scenario 1 a mix of horticulture and broad-acre field crops is included. It is anticipated that

evolution of the product type would occur over time. Scenario 2 is only grains and hay

production and was used as a comparator given the different water uses, security and

economic and financial outcomes.

Figure 1.2 General Arrangement Hughenden Irrigation Project – Reference Project

N.B. More details are available in the main report and graphics and animations on the HIPCo website https://hipco.com.au

1.9.1 Key Metrics

▪ 190 GL impoundment (Saego Dam) on Stewart Creek and Back Valley Creek

▪ 109 GL/year average annual water take (Diversified Cropping scenario) inclusive of

irrigation supply and storage losses

▪ Gravity diversion channel from the Flinders River diversion weir to Saego Dam

(250 cumecs or 21,600 ML/day capacity)

▪ Open channel delivery system to provide water to approximately 10,000 ha of irrigated

agriculture to the south of the Flinders River.

https://hipco.com.au/




1.9.2 Constructed Assets Required

▪ In-stream diversion weir and diversion channel

▪ Water storage dam (Saego Dam)

▪ Irrigation offtake structure, pump station and under-river pipeline crossing

▪ Agricultural precinct – open channels, pipelines and pumping assets (two scenarios –

expandable and adaptable)

1.10 Water and Environment

1.10.1 Water Sources and Allocation

The Flinders River catchment is one of 29 Australian Water Resource Council (AWRC)

catchments in the Gulf of Carpentaria (GoC) Division. CSIRO (2009) shows that the Flinders

River only contributes less than 15% of the flow into the Southern GoC and 3% of the total

freshwater flows to the Gulf.

Water allocation, planning and governance in the Flinders catchment are detailed under the

Gulf Water Plan (Queensland Government, 2017). The eight (8) Gulf Water Plan

catchments that drain to the GoC are shown in Figure 1.3. The Flinders River is the largest

catchment in the Plan by area covering approximately 109 000 km2 (35% of the Gulf Water

Plan area), but is only the fourth largest contributor to the End of System (EOS) flows from

the Gulf Water Plan area.

Water allocation and planning in the Gulf is not static as the sharing and allocation plans

are implemented as part of the Resource Operations Plan (ROP). The requirement for a

ROP is defined in Section 179 of the Water Act 2000.

1.10.2 Groundwater

The Project area is located within the Water Plan (Great Artesian Basin and Other Regional

Aquifers) 2017 (GAB Water Plan) area. According to schedule 2 of the GAB Water Plan,

the Project area may interact with several Groundwater units. Initial investigations showed

unreliable and incomplete data and therefore water from groundwater sources has not been

included in the Reference Project. However assessment of potential ‘extraction from’ and

‘impact on’ groundwater will be required in the next phase of the project.




Figure 1.3 Gulf Water Plan Area (Source: DNRME)

1.10.3 Access to Unallocated Water

In 2014 the Queensland Government released a draft overview report (Department of

Natural Resources and Mines, 2014) that describes the unallocated water strategy for the

Flinders River catchment. The strategy was based around ‘farm scale’ water harvesting

proposals within the catchment considering the CSIRO’s FGARA and fisheries

assessments, community consultation and technical assessments undertaken on behalf of

the Department.




This Reference Project currently combines both in-stream water capture and water

harvesting. DNRME advice, from personal correspondence, states that while “the Gulf

Water Plan does not specifically prevent this option, impacts must be no greater than those

associated with the water harvesting option. This means the maximum diversion of water

from the catchment must not exceed the volumes obtained through either unallocated water

release processes or water trading.”

The water harvesting only approach as currently defined potentially unfairly limits larger

scale, more innovative and productive infrastructure options in the Flinders catchment. The

risks while important, appear largely precautionary and unquantified, therefore and an

openness to explore and test the current assumptions is logical. CSIRO do note however

‘critical emphasis should be placed on ‘first flush flows’ to renew and reconnect the aquatic

ecosystem’. Subsequently, the 2014 Gulf Water Plan amendment proposed that;

“any new entitlements granted from the general unallocated water reserve will

not be able to access water from 1 January each year until a specific volume of

…. 152 480ML in the Flinders River Catchment has reached an end of system

location at Walkers Bend gauge station. New entitlement holders can resume

accessing water once the cumulative volume is reached (37 days on average) or

in the event that the cumulative volume is not reached in low flow years over the

whole wet season (11per cent of years in the FGARA simulation).”

1.10.4 Current Volumes Available for Allocation

The current status of remaining unallocated water reserves in the Flinders River catchment

is summarised in Table 1.1. There is potential for a further 100,000 ML of water entitlements

to be accessed from trading or buy back of existing allocations.

Table 1.1 Current Status of Unallocated Water Reserves in the Flinders River Catchment

Reserve Amount (ML)

General Reserve 139,650

Indigenous Reserve 8,500

Strategic Reserve 17,850

Total 166,000

1.11 Environmental Flow Objectives (EFOs)

One of the more pressing risks with this scale of infrastructure are the EFOs. Engeny, in

association with HARC, undertook hydrological modelling for this project which included

yield analysis and flood frequency and flow reductions analysis to assess compliance with

the Gulf Water Plan Environmental Flow Objectives and related Environmental, Social and




Economic Values. The Flinders Source Model developed by CSIRO, now owned by

DNRME was used under licence by HARC from eWater. However, as the consequences of

the risks are largely unquantified, the modelling outputs were provided to Dr. Sandra Brizga

(Brizga Environmental) to provide:

▪ A description of the hydrological impacts of the Project (Reference Project) in relation

to the Flinders River flow regime, with reference to the flow indicators relevant to

environmental flows;

▪ A description of the environmental and other values (social, economic and cultural)

associated with environmental flow requirements for the Flinders River system

downstream of the Project (Reference Project), including values of the receiving waters

in SGoC that are associated with Flinders River flows;

▪ An assessment of the implications of the hydrological impacts of the Project (Reference

Project) for the environmental and other values identified; and

▪ An assessment of an alternate scheme with a 25% reduction in storage capacity.

Setting the context for Dr. Brizga’s study, the CSIRO FGARA Study found the risks of large-

scale irrigation projects to be:

▪ Reduction in river connectivity and flushing flows supporting waterhole ecology

▪ Reduced frequency of coastal floodplain inundation

▪ Potential impacts to fisheries production in the Gulf of Carpentaria

▪ Species distribution and lifecycle requirements including migration.

Dr. Brizga notes that while the ‘Reference Project’ will ‘lead to flow reductions downstream

of the project area …. the hydrological effects … will be mitigated by inflows from tributaries

downstream… particularly below the Stawell River confluence.’ Dr. Brizga further qualifies

this statement by noting that risks of affecting ecological processes will be higher in the

reaches immediately below the Reference Project Area, reducing in the further downstream

reaches as flows approach the Southern Gulf of Carpentaria. Dr. Brizga also notes that the

Reference Project will comply with 4 out of 7 of the Gulf Plan EFOs at Walkers Bend and

that HIPCo, through Engeny, are actively investigating why the 3 EFOs remain outside

compliance targets.

An examination of why the EFOs remain outside the current compliance targets is important

in understanding the assumptions made in the modelling and the development of the

compliance targets. Therefore, in making these statement Dr. Brizga notes key knowledge

gaps within the determination of allocations which include the following (these are not

hydrological or modelling gaps but the quantification and implications of the likelihood and

consequences of possible changes on the ecological processes):




▪ The implications of transmission losses for the effectiveness of passing flows

▪ List of flow-reliant species for each reach to enable more accurate definition of the

species that would potentially be affected by flow regime change

▪ The lack of detailed modelling of the Flinders River between Richmond and Etta Plains

to enable clearer definition of the sections of river subject to various degrees of risk

▪ Quantification of the effects of flow regime changes resulting from the Project on White

Banana Prawns and barramundi using existing quantitative models.

These qualifications are important in assessing an optimal scheme size in the upper

Flinders. It is possible, even likely, that the EFO targets and flow harvesting rules are too

conservative, but by how much is unclear. Therefore, any further investigation should test

these boundary conditions in defining a sustainable allocation in this area. Dr. Brizga notes

in her Report (Appendix L) that a nominal 25% reduction in planned water storage capacity

will comply with 6 of 7 EFOs and misses the 7th by 1% indicating an EFO compliant scheme

is feasible. HIPCo, while noting the knowledge gaps acknowledges the Reference Project

may be feasible with amendments to the Gulf Water Plan and therefore a more detailed

investigation should be undertaken as part of the DBC. This has been scoped accordingly

into the next round of investigations.

While making these observations to assess a sustainable scheme HIPCo reiterates its

objective to not inappropriately affect environmental issues, existing users or downstream

economics but to define and construct an optimal scheme while balancing the variables in

play.

1.12 Environmental, Planning, Social and Cultural

A preliminary assessment of the Environment, Planning, Social and Cultural risks have

been undertaken by Epic Environmental P/L in association with Engeny Water Management

engineers and scientists and with Dr. Brizga for specialised advice. The main review was a

desktop study to;

▪ Review relevant environmental and planning legislation

▪ Understand existing environment information including Cultural and Heritage issues.

The results of the environmental and planning constraints assessment for the Reference

Project have been categorised using a High, Medium and Low rating scale.

Two High risk items were initially identified in the report notably:

1. Stream Flow and Downstream Environments (consistent with CSIRO and Dr.

Brizga’s report)




2. Built Environment – proposed inundation area will impact on roads and access and

some sensitive receptors. This risk has been mitigated to Low with controls already

identified in the engineering reports, therefore only 1 High Risk item remains.

Six medium risks were identified however these will be further defined in an Environmental

Impact Statement (EIS) or an equivalent next stage notably:

1. Ecosystems – Wetlands, insufficient information requiring field surveys as local

landowners accounts do not always accord with the scientific record.

2. Flora – Mapped regulated vegetation needs clarification, some species with

conservation status known within 50 kilometres of the site. Field surveys will be

required.

3. Fauna - species with conservation status known within 50 kilometres of the site.

Field Surveys will be required.

4. Aquatic Ecology – Fish passages and waterway barriers works.

5. Land Use and Tenure – inundation and impact on lease hold and freehold land.

Quarrying and excavation are extractive industries, dam construction and operation

are considered as a Material Change of Use (MCU).

6. Cultural Heritage and Native Title – no known features of indigenous or non-

indigenous cultural heritage within the project area however an Indigenous Land

Use Agreement (ILUA) with the Yirendali People exists and a cultural heritage

assessment may be required with a possible Cultural Heritage Management Plan

(CHMP).

Two Low Risks items notably

1. Surface Water – Water extraction allowed, buy back of allocation likely required.

Requiring lodgement of an Initial Advice Statement (IAS) to the Coordinator General

(CG).

2. Groundwater – No extraction planned, some bores will be removed, application to

relevant department to seek clarification on requirements of this Controlled Action.

The assessment also outlined the regulatory processes and approvals pathways. While not

exhaustive, as other approvals may be required, the process is well defined with no high-

risk items or fatal flaws being identified. The Approvals Register is documented in the

Environmental Assessment section (Section 14).

1.13 Capital Cost Summary

Table 1.2 and Table 1.3 outline the capital cost summaries for both cropping scenarios. The

total project cost for both scenarios are approximately $500M as there are no differences in

the bulk water storage assets and some minor differences in the irrigation assets.

Operational and sustaining capital costs have also been estimated and were included in the

economic and financial assessments undertaken for the Project.




Table 1.2 Capital Cost Summary –Scenario 1 Diversified Cropping ($2019)

Description Contractor

Direct

Costs ($M)

Contractor

Indirect

Costs ($M)

Principals Cost

($M)

Contingency

($M)

Total ($M)

Saego Dam $160.90 $24.20 $63.60 $88.20 $336.90

Diversion Channel $32.50 $4.90 $5.70 $15.10 $58.20

Weir $14.40 $2.20 $2.50 $6.70 $25.80

Irrigation $36.50 $5.50 $15.30 $20.10 $77.40

Total $244.30 $36.80 $87.10 $130.10 $498.30

Table 1.3 Capital Cost Summary – Scenario 2 Grazier Support ($2019)


Direct Costs

($M)

Contractor

Indirect Costs

($M)

Principals Cost

($M)

Contingency ($M) Total ($M)

Saego Dam $160.90 $24.20 $64.30 $88.40 $337.80


Weir

$14.40 $2.20 $2.50 $6.70 $25.80

Irrigation $40.60 $6.10 $20.70 $23.60 $91.00

Total $248.40 $37.40 $93.20 $133.80 $512.80

1.14 Revenue Summary

1.14.1 Crop Selection

The agronomy and revenue studies were based on known and proven irrigation techniques.

More efficient protected agriculture, drip irrigation and technologically controlled system

efficiencies were not included in the current analysis as these are likely impractical at this

stage in the project. However, it is anticipated that both cropping, and irrigation practices

will evolve to include the use of technology to improve efficiency and farm returns as the




scheme develops. The study also acknowledges that crop types selected by growers, based

on conditions at the time of planting, may differ widely from those selected for analysis.

Given the lack of existing viable irrigated agriculture in the region, the HIPCo Board

considered viability and credibility of the Project as a high risk. Therefore, a specific and

detailed agronomic investigation and analysis with consideration of associated market

opportunities was undertaken. The multistep strategy was developed to address these risks

and to produce feasible, realistic and transparent farm revenue assessments.

The first step in defining revenue from crops required an assessment against the following

criteria which narrowed the ‘long list’ cropping options:

▪ Climatic conditions

▪ Soil types

▪ Gross margin analysis

▪ Proximity to markets

▪ General suitability to the region

The second stage further refined the crop options to include region-suitable crops using a

more refined set of criteria as follows:

▪ Fit to regional requirements (support for other industries)

▪ Production window and alignment with consumer demand

▪ Domestic and export demand and price return

▪ Logistics management

The crops selected for inclusion and indicative revenue analysis based on this two-step

process are as follows:

▪ Avocados ($4-$7/kg)

▪ Mangoes ($3-$4/kg)

▪ Citrus – lemons ($2-$4.5/kg)

▪ Citrus – mandarins ($2-$3/kg)

▪ Cereal grains – Sorghum, Wheat, Barley, Corn ($300-$500/t)

▪ Hay and fodder ($100-$411/t)




PeritusAg also undertook a sensitivity analysis on these crops and price estimates and the

results can be found in Appendix J.

It should also be noted that while other crops will grow successfully in the region the second

stage selection criteria prioritised locally consumed livestock feed grains to maximise

drought and food security and facilitate existing key competitive advantages, noting this in

the context that high value crops will produce the best net farm returns and scheme

economics.

The selected crops were matched against water availability and usage which enabled a

draft farm definition plan which incorporates the number, size and type of lots, and water

use. The outcomes are shown in Table 1.4 for Scenario 1 Diversified Cropping and Table

1.5 for Scenario 2 Grazier Support.

Table 1.4 Total Developed Agricultural Production Scenario 1 Diversified Cropping

Crop Lots Area (ha) Total Area (ha)

Avocadoes 1 900 900

Mangoes 1 600 600

Lemons 1 300 300

Mardarins 1 300 300

Grazier Support Lots 27 200 5,404

Total 31 7,505

Table 1.5 Total Developed Agricultural Production Scenario 2 Grazier Support

Crop Lots Area (ha) Total Area (ha)

Cereal Grains/Hay/Fodder 57 200 11,400

Total 57 11,400

1.14.2 Gross Margin Analysis

Table 1.6 shows the gross margin analysis of the chosen crops. This information was then

used in the Economic Analysis.




Table 1.6 Gross Margin Analysis

Crop Type Total Cost ($/ha) Total Revenue ($/ha) Total Gross Margin ($/ha)

Avocado $29,848.00 $44,899.92 $15,051.92

Mango $44,148.40 $50,194.20 $6,045.80

Lemon $66,600.00 $122,655.00 $56,055.00

Mandarin $51,000.00 $71,730.00 $20,730.00

Sorghum $897.00 $2,600.00 $1,703.00

Wheat $856.00 $2,275.00 $1,419.00

Corn $1,443.00 $4,200.00 $2,757.00

Rhodes Grass Hay $3,537.00 $5,920.00 $2,383.00

1.15 Economic Analysis

The project was assessed using two types of economic modelling:

▪ Cost-Benefit Analysis (CBA), which assesses community costs and benefits.

▪ Economic Contribution Analysis, which also assesses the wider impacts to the

community as a result of the project, but through an Input-Output model estimating the

impact of the project on Gross Regional Product and employment.

1.15.1 CBA Results

Scenario 1 (diversified cropping) generates higher economic benefits compared to scenario

2 (grains and hay), due to the higher returns from the horticultural production. Capital and

ongoing costs are marginally higher for Scenario 2 due to a larger cropping area able to be

irrigated. Headline CBA results are a Benefit Cost Ratio of 0.72 for Scenario 1, compared

to 0.47 for Scenario 2.

1.15.2 Economic Contribution Analysis Results

The impacts of the project on both employment and Gross Regional Product are

summarised in Table 1.7, as estimated on an annual basis over the 50-years of the

economic analysis.




Table 1.7 Economic Contribution Results

Employment

(FTEs)

Benefit to Gross Regional

Product

($M)

Scenario 1 – Diversified Cropping

Construction and Ongoing

Maintenance

61 $8.0M

Agriculture 429 $64.9M

Total 490 $72.8M

Scenario 2 – Grazier Support


Maintenance

66 $8.8M

Agriculture 211 $20.9M

Total 277 $29.7M

Note 1: Some jobs will be construction only and others operations only however the ongoing numbers are substantial and sustainable over the life of the project

The economic analysis builds on the Service Need conclusion for a significant regional

investment project and the suitability of the Hughenden Irrigation Project in this respect.

This project has the potential to dramatically reshape the Hughenden and wider Flinders

Shire communities. Population and employment have been declining in the region for an

extended period, with forecasts showing a continuation of the decline. This Project has the

potential to not only inject employment into the local community but to provide a significant

regional economic benefit well into the future.

The primary economic benefit associated with the Project is the increase in agricultural

production associated with improved availability of water supply. Development of

agriculture in the region has previously been constrained due to the variability of water

supply.

Total cost of the Project is estimated to be around $500 million escalated (for either option),

with construction costs mostly incurred between 2022 and 2024, with the Project’s first year

of operation assumed as 2025.

1.16 Financial Assessment

The financial analysis is complementary to the economic assessment. It considers the

Project as a stand-alone investment, rather than assessing broader costs and benefits that

might flow to the community. This analysis is also important to assess how affordable the




project might be to the potential funders of the project, notably the customers (irrigators)

and the Government. The financial analysis was undertaken through a conventional

Financial Net Present Value approach, where all capital and ongoing operational costs and

revenues are assessed over a 50-year period and then discounted back into present-day

dollar terms.

A key challenge for this Project, common to large regional bulk water infrastructure projects,

is the magnitude of the capital costs and the gap between likely revenues, based on the

capacity-to-pay of irrigation customers.

Costs Main Findings:

▪ The capital costs are high relative to the volume of water stored, irrespective of the

project scenario (e.g. medium and low priority water mix, or low priority water only).

▪ Most of the costs are those incurred during construction, which is assumed to be during

the period 2022 to 2024.

▪ The dam is the most expensive component of the project, accounting for around two-

thirds of the total capital costs.

▪ The contingencies attached to each of the sub-projects account for around one-quarter

of the overall capital cost estimate, which is not unreasonable at this stage of the

assessment process.

▪ The capital costs need to be considered after cost escalations are applied, as this is the

best representation of the cost required to deliver the Project.

Revenue Main Findings:

▪ There are three key revenue streams: government capital grant funding (timed to match

the construction costs incurred); the sale of water allocations, at the commencement of

water sales; and ongoing revenues from water sales to customers.

▪ It is highly improbable that customer (irrigator) willingness-to-pay for water allocations

would be enough to negate the need for significant government funding of the Project’s

capital costs.

▪ Revenues from customers – both upfront water allocation charges and ongoing charges

once water sales commence – also need to be escalated, as these revenue payments

in future years will be more than the current estimates.

An analysis of the impact of changes in cost and revenue assumptions to the financial

results concluded that it makes little difference to the headline conclusions in most cases

since the gap between capital costs and indicative water allocation charges remains

significant.

1.17 Affordability

The analysis reviewed the up-front allocation charge customers (irrigators) would need to

pay in order fully fund the capital costs and negate the need for government funding. To




undertake this analysis, the capital costs of the Project were compared to the water

allocation in each scenario. Where a higher cost per megalitre results, farmers would be

required to pay a higher initial allocation.

Results are presented both discounted and undiscounted and considered with and without

escalation. The discounted figures represent the cost of the Project with considerations for

the time value of money. Broadly, this captures peoples’ preference to spend money in the

future rather than today. Conversely, the undiscounted results may be looked at as a total

with no consideration for when expenditure is incurred. For the purposes of funding

allocations, the undiscounted escalated figure in Table 1.8 of $6,816 to $7,948/ML is the

most relevant as this an estimate of the cash cost of the Project at the time of construction

for water but does not include other farm set up costs.

Table 1.8 Required Payment from Farmers (if project was fully funded)

Discounted Undiscounted

Unescalated Escalated Unescalated Escalated


Capital Costs ($M) $375.1 $418.3 $498.3 $556.4

Yield (GL, or ‘000 ML) 70 70 70 70

Cost ($/ML) $5,358 $5,975 $7,119 $7,948


Capital Costs ($M) $386 $430.4 $513 $572.6

Yield (GL, or ‘000 ML) 84 84 84 84

Cost ($/ML) $4,595 $5,124 $6,105 $6,816

The assessment concludes, consistent with other contemporary regional bulk water

infrastructure assessments, that the Project is affordable if significant government capital

grant funding is committed. Other sources of non-customer funding sources, such as loan

funding, are not considered practical as repayment of capital contributions and interest is

required. Likewise, equity injections from government or private sector investors, also seem

impractical at this stage, as these would require water prices to cover a return to the

investors.

1.18 Proposed Capital/Government Contribution

As the prices listed in Table 1.8 are not realistically recoverable from the sale of water, a

government funding contribution will be required. Therefore, further analysis was




undertaken to quantify the level of funding required assuming customers (irrigators) will pay

$2,000/ML for medium priority water and $1,000/ML for low priority water. The results of

this analysis are detailed in Table 1.9.

Table 1.9 Required Government Contribution




Capital Costs ($M) $375.1 $418.3 $498.3 $556.4

Up-Front Payment ($M) $52.6 $65.7 $100 $121.9

Government Contribution

($M)

$322.5 $352.6 $398.3 $434.6


Capital Costs ($M) $386 $430.4 $512.8 $572.6

Up-Front Payment ($M) $44.2 $55.2 $84 $102.3

Government Contribution

($M)

$341.8 $375.3 $428.8 $470.2

Based on the assumptions outlined, specifically the amount of customer contributions

required towards the capital costs through the purchase of water allocations, the funding

gap for the project is approximately $400 million for Scenario 1 (Diversified Cropping),

expressed in 2019 dollars.

The difference in these estimates relates to which of the two modelled cropping scenarios

is adopted, as there are differing distribution infrastructure requirements between the two.

When account is taken of cost escalations from now in 2019 to the when the construction

window opens and costs are incurred, this rises to $435 million for Scenario 1. This is a

matter that will require further negotiations between the proponent and the Australian

Government as matters proceed.

The option of funding the Project via acquisition of subsidised loans from the Australian

Government merits further consideration as it has been the subject of discussions between

the proponent and the Government; however, this is closely linked to the customer

willingness and capacity to pay for water and is not the preferred option.




The capacity of customers to pay even the currently assumed upfront water allocation

charges and ongoing water charges are identified later in this report as areas needing

further refinement. This will have a large bearing on the capacity of the Project to support

loan fund repayments and is recommended to be further assessed after this additional

customer information is attained. Further, the impact on water pricing would also impact the

economic assessment of the Project’s viability as the gross margins would be impacted.

1.19 Conclusions

The investigation and analysis show a strategic water infrastructure project is required to

meet the identified service need to improve economic outcomes within the Finders Shire

region. The implementation of high value agriculture to the region is not only consistent with

the Service Need but also aligns to various government policy and strategic documents and

aligns to the region’s key capabilities. The Project also takes advantage of the natural

geography and regional advantages.

The PBC makes a strong case for further investment to refine and further de-risk the

Reference Project before a commitment to construction is made. This can be done either

through committing funding for a complete DBC or alternatively adopting a staged and gated

approach with commensurate funding.

The PBC shows that significant and sustainable local and regional economic growth is

almost certain, and the lack of a reliable water supply is the key limiting factor.

Importantly, no fatal flaws have been identified at the time of completion of the PBC noting

the importance of resolving the water licencing and willingness to pay risks.

In overall terms the Project requires only 4% of the Mean Annual Flow from the Flinders

River and utilises only 7% of the Flinders catchment area upstream of diversion and capture

points.

Unallocated water, buyback or trading of existing water licences are available in the Gulf

Water Plan although the product type, reliability and accessibility are to be addressed and

resolved with the DNRME.

The Project will manifestly improve regional and local economic conditions and substantially

alleviate the relative disadvantage evident in the Flinders Shire.

The Project has a headline BCR for Scenario 1 diversified cropping scenario of 0.72 and

will support up to 490 jobs and will have a positive impact on the GRP of up to $72.8M per

year.

The potential impact to downstream flow conditions is the most significant risk for the Project

and warrants further investigation in subsequent Project phases. Other environmental risks

have been assessed as medium to low and mitigations are under active consideration.




The Project requires substantial government support by way of upfront capital contribution

to the value of approximately $400M however this is relative and contextualised as the

Project addresses the Service Need.

The Project has local, regional and Federal support, strategic goals and initiatives to

productively use water in the northern parts of Australia and has a very good chance of

success as it utilises the current skills and depth in the region and sustainably utilises an

unrealised potential. It has limited downsides therefore warranting further refinement and

funding commitments.

1.20 Recommendations

As a result of the investigation and conclusion and the compelling evidence to enable a

viable agricultural water supply scheme near Hughenden it is recommended the HIPCo

Board:

1. Approach the Australian Government, potentially through the North Queensland

Water Infrastructure Authority (NQWIA), to progress to the next phase of the Project

to refine the Reference Project, analysis and design including probabilistic risk

adjusted cost assessments.

2. Consider a staged and gated approach to the DBC thereby de-risking funding

exposure.

3. Commence the preparation of the scope for the full DBC or gated components.

4. If the gated component approach is adopted, seek interim funding to address

remaining higher interest items while the PBC is undergoing review and critique.

5. Negotiate a new deed with the Australian Government for the development of the

DBC with appropriate legal and probity advice and suitable public interest tests.

6. Engage with the State Government (through DNRME) for review of the PBC and any

suggestions or advice for inclusion in the scope for DBC.

7. Engage with Infrastructure Australia to provide opinion and recommendations on the

scope of the next phase of work. This will likely entail a review of the PBC and

appendices and a ‘gap analysis’ with a focus on DBC specification.

8. Engage with SunWater to provide opinion and recommendations on the scope of work

for DBC and make comment and provide strategic advice.

9. Establish a governance and review structure to deliver the DBC (with appropriately

qualified individuals or expert advisors/panels) and engage the market as required for

prudent and efficient delivery of DBC or in defined stages as suitable.

10. Continue the stakeholder engagement process with DNRME for allocation of water

and include the required studies in the next phase of work to quantify risk of changes

to downstream flows and EFO compliance and amendments to the Gulf Water Plan.

11. Continue de-risking activities including geotechnical investigation for critical

infrastructure design work.

12. Engage the market as soon as funding allows to establish ‘willingness to pay’

parameters.

13. Develop ownership and operational models consistent within Government

requirements for public funding, allocation of risk, efficient and contemporary




operational use, realistic and economic returns and market opportunities, and

contemporary asset management approaches.

14. Continue with stakeholder engagement to ensure both public interest, sustainability,

and cultural and indigenous issues are managed and reflective of contemporary

expectations.

15. Explore efficiency options in the scope of works of the DBC to minimise evaporation

and other environmental losses, use of protected agriculture and technology to

maximise water use efficiency. 16. Commit further resources to investigate land suitability and land preparation to

enable the proposed cropping strategy, or include sensible modifications, to be successful.

17. Refine pricing, financial and economic models based on updated costs and projected revenues including willingness to pay surveys.




2. GOVERNANCE

2.1 Key Points

The Governance Chapter identifies:

▪ the governance arrangement for the project including key roles and responsibilities

▪ Interactions with various governments, auditing and milestone requirements

▪ The key requirements in probity, equity and stakeholder engagement.

2.2 Background and Purpose

Several active local proponents had a vision and desire to oversee a contemporary study

of irrigated agricultural options in the upper catchments of the Flinders River. As described

in Section 9 there have been many previous studies undertaken to assess the viability of

larger irrigated agricultural schemes however none have progressed past concept and

feasibility.

For this project, HIPCo successfully applied for funds from the Federal Department of

Infrastructure, Regional Development and Cities established to support needed

infrastructure that promotes stable, secure and viable local and regional economies.

Funding from the Community Development Grants Programme of $2M (GST exclusive) was

subsequently allocated, under Deed, with payment in three components subject to meeting

various milestones and requirements. In simple terms the Deed requires several things

including registration with a Commonwealth, State or Territory Regulatory Body or provide

satisfactory evidence of correct statutory authority status. The recipient (proponent in this

case) must also have an ABN.

To satisfy these conditions the proponents established the Hughenden Irrigation Project

Corporation P/L with appropriate ABN. Five Board members were appointed to bring a

range of local representation and an in-depth knowledge of the local and regional

community. The Board has also appointed an independent project manager, probity and

governance consultant and a range of specialist companies to complete the activity in

accordance with the requirements of the Deed.

Engeny Water Management P/L (Engeny) was engaged as the main contractor although

HIPCo reserved the right to engage others as needed outside the agreement with Engeny.

To facilitate the completion of the project Engeny developed a template using the Building

Queensland and Infrastructure Australia guidelines to ensure a wholistic approach was

taken. Further, it was acknowledged that one or both entities may at some point review the

work as per Commonwealth and State Government legislative requirements if investment

is committed. Neither template was used in exact format as other recent PBCs and DBCs

were used as guides and reference documents to inform the work program.




The HIPCo Board oversaw all the major components of the work, approved work programs,

stakeholder messages and interactions and approved budgets, risk and probity control. The

financials have been successfully audited and other governance processes are active and

under refinement.

2.3 Role of the Australian Government

The main interaction with the Australian Government has been through the North

Queensland Water Infrastructure Authority (NQWIA). NQWIA was established to provide

strategic planning and coordination throughout the region and specifically for this project.

HIPCo have had ongoing open engagement with representatives from the NQWIA

throughout the PBC study. Other Federal stakeholders and departments have also been

involved although not in a governance role at this time. For example, representatives from

the National Water Infrastructure Development Fund (NWIDF) have been briefed on the

project and the possible funding requirements but no formal approaches for loan funding

have been made at this time.

Federal environmental involvement will also likely be required and has been flagged as part

of the environmental and compliance assessment. Formal engagement with the

Department of Environment and Energy as federal regulators will be required during the

development of the DBC.

Infrastructure Australia (IA) has been engaged in the early stages for advice and opinion as

the Australian Government is the main funding agent for the construction. It is possible that

IA may also do a review of the PBC although this would be informal as the IA charter does

not include a formal review capacity for PBC.

Other Federal Departments will also be engaged as required and as noted in the

stakeholder analysis and Communications Plan for the Project.

2.4 Role of the State Government

The main State entity in a governance role has been the Department of Natural Resources,

Mines and Energy (DNRME). Other departments have also been involved however, none

in a governance role at this time.

The main source of governance is the assessment and possible allocation of unallocated

water in the Gulf Water Plan.

SunWater Limited has also been engaged in an informal way to date given their role,

statutory status and possible future proponent and infrastructure owner. No formal

agreement is in place yet and the interactions have been informal and for information

purposes.

The HIPCo Board recognises and acknowledges the open and professional response from

all the entities mentioned above.




2.5 Role of the Project Owner

The Project owner for the delivery of the PBC is HIPCo, an incorporated entity registered in

Queensland and subject to legislative and fiduciary responsibilities specific by ASIC as well

as the responsibilities outlined in the Deed. At the PBC stage there is no difference between

Owner and Proponent although this may change for future stages.

The HIPCo Board, under the Chairman’s authority, makes all decisions for this Project

passed via resolution during Board meetings or as required outside meetings and

resolutions are recorded as required by the constitution.

The current project will reach a milestone with the completion of the PBC after approval by

the Board. Subsequent to the Board meeting an assessment of the best model for delivery

of the Detailed Business Case (DBC) will be required. Part of the considerations may require

a skills-based Board comprising a range of experts or subject matter advisors or review

panels. The Board will also need to consider appropriate management, delivery and project

structures and processes to ensure functional delivery and effective risk management.




3. METHODOLOGY

3.1 Key Points

▪ This chapter defines the methodology for identification of key risks, their assessment

and mitigation strategies relevant to the delivery of the PBC and potential for future

funding.

▪ The risk methodology, while rudimentary for the PBC, has followed the Building

Queensland Guidelines and used AS/NZS ISO 31000:2018 Risk Management –

Guidelines.

▪ The Board’s risk appetite is defined in the strategies adopted.

▪ All high risks were deemed to be unacceptable and detailed mitigation strategies were

actioned.

▪ The risk register is attached as Appendix B.

3.2 Background and Purpose

This chapter outlines the risk methodology adopted for the Project. The purpose is to

systematically identify and manage risk in accordance with the Boards appetite and ‘Project

context.

3.3 Approach

The risk approach, while cognisant of the respective frameworks including BQ and AS/NZS,

was relatively simple for the PBC. The owner specified risks of a certain level be actioned

in detail where others were controlled or monitored. This approach aligns with AS/NZS

31000:2018 as the first process requires ‘Establish the context’ as shown in Figure 3.1. The

context in this case was to examine the risks globally that might prevent successful

transition to a DBC or future funding or identify any fatal flaws.




Figure 3.1 ISO 31000:2018 Risk Management Process Overview

3.4 Summary Risks

Risks were identified in several ways through workshops and discussions with the

proponent. Apart from governance risks, which have been managed by the HIPCo Board,

project risks were identified with management controls and mitigations identified. The risks

have been monitored and actioned by the HIPCo Project Manager with regular updates

being provided to the Board.

1. Rainfall and runoff are variable and water harvesting is therefore only viable for a

relatively short period of time on an annual cycle. Management Control – include

storage and harvesting options not just harvesting options alone to mitigate for ‘dry

periods’.

2. The Gulf Water Plan imposes some strict limits on the use of the water to protect

downstream values and reduction of flows where water, at the reliability or location

required, may not be available in the system or allowed for in the current Gulf Water

Plan or ROP. Management Control – Stakeholder engagement with DNRME and DES,

independently assessed modelling, expert advice on EFOs, options iterations and

quantification.

3. The sub-catchments are relatively small in this part of the Flinders catchment.

Management Control – assess storage opportunities, pumped and gravity diversions

to utilise available flows.

4. Although there are highly productive rural industries based on Mitchell grass blacksoil

plains there is no record or history of large-scale irrigated agriculture being undertaken

in the immediate region. Management Control – Undertake detailed agronomical study,

for PBC to quantify and justify and remove potential negative perceptions.

5. A number of studies, including the Flinders Gilbert Agricultural Resource Assessment

Study (FGARA), have concluded that large dams or traditional infrastructure options

are not likely to be feasible for the upper parts of this catchment. Management Control




– assess options in stages, large, medium, small, combinations, both on-stream and

off-stream, explore innovative options.

6. There are existing users and multiple schemes proposed for the area bidding for the

same water and funding. Management Control – produce PBC with best combination

of headline metrics, realistic and clear CBA, implement stakeholder Communications

Plan.

7. No immediate ‘foundation’ customers identified and their willingness to pay for water.

Management Control – assume water prices based on benchmarks for PBC, undertake

‘willingness to pay’ as part of DBC or interim process as budget allows.

8. Limited geotechnical and soils information exist apart from at a general level of detail.

Management Control – undertake limited geotechnical investigation on high importance

areas including appropriate testing for local quarriable materials.

9. Limited environmental information for the potential construction and operations site and

downstream reaches. Management Control – Engage expert(s) to assess and advise.

10. The cost of infrastructure to harness the variable, short-term high flows is likely to be

higher than initially allocated ($180M). Management Control – Reference Project

addresses the Base Case and Service Need with realistic costs and revenue

projections. Consider staging or smaller infrastructure as a fall-back position.

11. The Gulf prawn and aquaculture industry relies, to some unquantified degree, on high

flows from river however the contribution from the upper catchment around Hughenden

is inconsequential at least when compared to annual mean flows. Management Control

– engage expert to advise of risk and recommended controls including reference to

Griffith University Australian Rivers Institute studies.

12. Stakeholder consultation and addressing the multitude of government and approval

processes at Federal, State and local government levels presents some potentially

competing objectives. Management Control – engage expert to develop stakeholder

management plan and implement.

13. A relatively short time frame was available to complete the PBC. Management Control

– augmented desktop analysis process. No time to conduct detailed mitigation

assessments or investigations. Only go past desktop when risk remains High.

14. Limited budget. Management Control – augmented desktop analysis process without

committing all funds up front. Retain contingencies to address risks as they become

apparent.

3.5 Risk Assessment and Treatment

Table 3.1 outlines how risks were assessed and categorised.




Table 3.1 Risk Assessment and Categorization

As the risk context was relatively simple at this early stage of the Project, the risks were

categorised and prioritised for action as per Table 3.1. All risks were under active

management throughout the Project unless noted as D grade. For A, B and C grade risks

mitigation objectives and strategies were identified and are outlined in Section 3.4. The

number, complexity and timing of the actions was reflective of the risk category.

Some risks will require further mitigation such as Risk 7 ‘willingness to pay’.

The currently active risk registers are included in Appendix B.




4. STAKEHOLDER ENGAGEMENT

4.1 Key Points

▪ A structured stakeholder engagement program was developed by Epic Environmental

P/L (Epic).

▪ The process outlined a Phased Communication Approach which will be ongoing as the

technical studies are completed.

▪ The process outlined a Key Audience Snapshot and prioritisation and type of

engagement required.

▪ The process provided a Roadmap for engagement post-completion and submission of

the PBC.

▪ Establishment of a HIPCo website for clarification of messages, project updates and key

materials repository.

▪ A great deal of informal local stakeholder engagement and formal Australian

Government engagement has been undertaken by HIPCo.

4.2 Purpose and Objectives

The purpose of this chapter is to outline the processes undertaken and describe the context.

The noted objectives were to:

▪ Identify key stakeholders, understand their drivers and ensure a no surprises approach;

▪ Ensure consistency of messaging across media and stakeholders in a way which

supports the future success of the Project;

▪ Ensure key messages are developed and refined over time to address current and

potential stakeholder issues; and

▪ Evolve the communications material to ensure the most up to date information is

available to any interested parties.

4.3 Limitations and Risks

▪ While the stakeholder engagement plan is a risk mitigation measure, presentation of

Project briefing information to potential competitors is a risk. Therefore, all stakeholder

engagement activities were either approved or monitored by the HIPCo Board and any

official meetings required Board consideration if a Board member was to be in

attendance. All briefing material for meetings was pre-approved by the Board.




▪ The Board Chairman is the nominated point for stakeholder engagement

▪ Media will not be proactively engaged until the PBC findings are reviewed and made

public. However, there will be times when opportunity presents that the Project would

benefit by engagement with the media.

4.4 Stakeholder Analysis

Stakeholder identification was undertaken in an initial workshop run by Epic with staff from

Engeny and NineSquared in May 2019.

The workshop identified a number of stakeholders, however it was recognised this list would

need to be cross checked with HIPCo and the list will likely evolve over time. The initial

stakeholder list was categorised and mapped against the desired engagement strategy and

objectives as shown in Figure 4.1

Figure 4.1 Initial Stakeholder Identification and Mapping Process

For simplicity the stakeholders identified in ‘Manage Closely’ were generally approached

personally and often repeatedly for comment, updates, recommendations and meetings

during the PBC. These engagements were mostly face to face, but some were over the

phone and others via email depending on the stakeholder’s needs. The ‘Keep Informed’

group were contacted as required throughout the development of the PBC as required

depending on process. Most of the other groups identified in ‘Keep Satisfied’ or ‘Monitor’

were not contacted directly however some interactions did occur. These priorities may

change for the DBC.




Key messages, Questions and Answers, presentations and project visualisations were

prepared and placed on the HIPCo Website. A stakeholder register and action plan was

developed and populated with interactions, recommendations and updates.

The website can be accessed at https://hipco.com.au/ and the Communications Plan is

included in Appendix A.

https://hipco.com.au/




5. PROPOSAL BACKGROUND

5.1 Project Location

The Project is in the Hughenden region, in the Flinders Shire, Queensland. The Flinders

Shire covers a total area of 41,632km2, with Hughenden being the main business centre,

situated on the banks of the Flinders River.

The town of Hughenden has a population of 1,136 as of the 2016 Australian Census. There

are two schools in the town – Hughenden State School, which caters for approximately 100

primary and secondary students, and St Francis Catholic primary school. Hughenden

Hospital provides inpatient, outpatient, 24-hour emergency, and general practice care for

the town. For more complex health conditions, the main referring hospital is Townsville

Hospital, almost 400km to the east.

While the Project is expected to have direct impacts primarily on the town of Hughenden

itself, indirect and flow-on impacts to the remainder of the Flinders Shire are to be expected.

As such, the Local Government Area (LGA) of Flinders is considered to be within the study

area. Figure 5.1 below shows the extent of Flinders Shire LGA.

Figure 5.1 Flinders Shire LGA




5.2 Economic Overview - Key Points

The economy of the area is driven by four major elements:

▪ Primary production and export, with mining an important secondary industry

▪ Services to and associated with transport, for example the Townsville – Mt Isa rail and

road transport such as the Flinders Highway

▪ Services to holiday and other visitors

▪ Supporting industries to primary producers and mines, as well as supporting services

for the wider shire (for example, Local Government administration, health, education,

and hospitality).

The area is geared to produce relatively large volumes of primary exports and has some

supplementary and outside income coming into it from rail and road servicing and offices

and visitors. It has a limited local servicing structure. But otherwise, it imports the bulk of

the goods and services it requires from outside its boundaries from the rest of Australia and

overseas.

5.3 Industry

5.3.1 Employment

Table 5.1 outlines industries of employment in 2011 and 2016 within Flinders Shire. Notably,

the total number of people employed across all industries decreased over the period by

more than 11%. The largest change in share of employment was seen in the transport

industry. This percentage share is likely to have declined further since 2016 due to Aurizon

cutting more than two thirds of its workforce in the Shire since this data was derived. The

table also shows that the agriculture, forestry and fishing industry is the largest employer in

Flinders Shire, with over one third of the population employed in this industry.

Table 5.1 Share of Employment in Hughenden, by Industry

Industry 2011 (% Share) 2016 (% Share)

Agriculture, Forestry and Fishing 35.3 35.2

Public administration and safety 11.4 12.7

Transport, Postal and Warehousing 11.9 8.2

Retail trade 8 7

Education and training 5.8 5.5





Accommodation and food services 5 4.9

Health care and social assistance 4.1 4.7

Construction 5.9 4.3

Administrative and support services 1.3 2

Electricity, Gas, Water & Waste Services 0.9 1.5

Manufacturing 2.7 1.4

Wholesale trade 0.8 1

Mining 1 0.9

Professional Scientific & Technical Services 0.7 0.9

Financial and insurance services 1 0.6

Rental, Hiring, & Real Estate Services 0.9 0.4

Arts and recreation services 0.3 0.4

Other services 2.1 2.5

Total persons employed (no.) 898 (total no.) 795 (total no.)

5.3.2 Agricultural Production

Beef cattle production is the major industry in Flinders Shire, with a gross value of

production of $73.5 million (Flinders Shire Council. 2018). Agriculture is the largest industry

within the Shire, making up around 35% of employment.

Historically, Flinders Shire also had a major sheep industry. Estimates in 1993 had 443,137

sheep in the Shire (Australian Bureau of Statistic. 1993), however, the sheep industry has

since mostly disappeared.

The sheep industry in Flinders Shire has largely been replaced by cattle. In 1993 the number

of cattle in the Shire was 227,071, which has now increased to 293,000. The cattle industry

is more land-intensive and is likely to have contributed to the decrease in agricultural

employment in Flinders Shire, alongside other factors such as the decline in the sheep

industry. Investing in alternative crops could yield more employment and increase

productivity.




5.3.3 Mining

Mining is not a major industry of direct employment in Flinders Shire, as only 0.9% of

residents were classified as employed by the mining industry in 2016. However, due to a

significant number of mines located in the area surrounding the Shire (see Figure 5.2)

mining drives employment in supporting industries within Flinders Shire such as transport.

Figure 5.2 Mining Industry in Hughenden and Surrounds

5.3.4 Business

1. As of June 2018, there were 186 registered businesses in the Flinders Local Government

Area. This is down from 199 businesses in June 2017, a reduction of approximately

6.5%.

2. Of these 186 businesses, approximately 41% were registered as businesses in the

Agriculture, Forestry, and Fishing Industry, equating to 76 businesses: the largest out of

all business categories.

3. Figure 5.3 displays how the number of businesses in this category changed over the

period 2016 to 2018. As seen in the figure, number of businesses in this sector increased

from 2016 to 2017, however fell again by approximately 16% in 2018. Most of these

businesses are small non-employing businesses with an annual turnover of less than

$200k.

4. The region has existing potential to sustain high-value agricultural production, with three

of the employing agricultural businesses in 2018 reporting annual turnover of between

$2 million and $5 million. Hence, it is clear that if investment in the region is able to

stimulate productivity and growth in the agricultural sector, allowing the currently non-

employing businesses to expand and hire new workers, then there is the potential for

businesses in the region to experience large increases in output and economic benefit.




Figure 5.3 Total Businesses in the Agriculture, Forestry, and Fishing category, Flinders LGA, 2016-2018.

5.3.5 Services to Transport

Hughenden’s location in northern Queensland has made it a large part of the regional freight

network. As of 2016, 8.2% of workers in Flinders Shire were part of the transport industry.

Hughenden services the Townsville to Mount Isa rail link, which includes the Inlander long

distance passenger service as well as freight. Hughenden’s location on the cross section of

the Flinders Highway and Kennedy Developmental Road places it as a major thoroughfare

for road freight, having linkages to Cairns, Townsville, Mt Isa and the Northern Territory.

However, since 2016 there has been a further reduction in transport employment in

Hughenden. Specifically, Aurizon shed 25 positions in Hughenden in 2017 which led to a

corresponding reduction in economic activity (Queensland Country Life. 2016).

5.4 Local and Visitor Services

5.4.1 Hughenden Aerodrome

Hughenden aerodrome allows residents to be connected to larger regional centres via air

travel. Regional Express (REX) airlines flies from Townsville to Mount Isa and return, with

a stopover in Hughenden, every Monday, Wednesday and Friday.

5.4.2 Schools

Flinders Shire is home to four different schools offering primary education, two of which are

in Hughenden. Secondary education is available at Hughenden State School, which also

offers traineeship opportunities, or by distance education. Hughenden is also home to a

kindergarten and early childhood centre.

81

90

76

2016 2017 2018




5.4.3 Health

The Hughenden Health Service provides inpatient, outpatient and 24 hour emergency care

services. Visiting services are also provided, giving residents access to dental, mental

health, women’s health and allied health care (Queensland Health, 2019).

5.4.4 Diggers Entertainment Centre

Diggers Entertainment Centre functions as a community hall, sporting facility and

conference centre in Hughenden. The hall has capacity to easily accommodate 650 guests.

5.4.5 Flinders Discovery Centre

Flinders Discovery Centre is the main visitor information centre located in Hughenden. This

facility also houses a dinosaur display and museum that is part of the region’s history.

5.4.6 Visitor Accommodation

Visitors to Hughenden have access to a variety of accommodation. Hughenden has one

hotel, one hotel/motel, two motels, and one caravan park.

5.5 Current/Recent Developments

There are several recent and current developments in Flinders Shire that demonstrate the

positive effect of investment on boosting opportunities in the region. These have been

outlined below.

It is important to note that the current declining population and employment statistics

capture the short term increases in employment in the construction sector that were

experienced as a result of these projects. However, once these projects were/will be

completed, it is expected that those contractors who relocated to Flinders Shire during the

construction of the project will leave the Shire to seek new opportunities, further decreasing

the population in the region. Additionally, some projects hired from within the region – for

example, Kennedy Energy Park, which provided 30 jobs for locals. Once construction was

completed, these locals were left jobless at least for a period. This highlights the importance

of investing in projects which provide long-term job opportunities that encourage people to

settle in Flinders Shire.

5.5.1 Hughenden Recreational Lake

More than $6 million has been dedicated towards the construction of Hughenden

Recreational Lake. The lake will be 900 metres in length, and up to 400 metres wide and

will provide opportunities to participate in aquatic activities, as well as a boat ramp, beach

and playground area. This project is scheduled for completion by the end of 2019 and will

include subcontracting local businesses where possible.




5.5.2 Kennedy Energy Park

Kennedy Energy Park is a utility-scale hybrid wind, solar and energy storage project, located

just outside of Hughenden. This was a $160 million investment, completed in late 2018, that

has the capacity to provide 60 MW of clean energy. An estimated 30 local residents were

employed as labourers for the construction phase. Additionally, several local businesses

were awarded subcontracts to assist in construction (Windlab. 2018).

5.5.3 Overland Sun Farm

Completed in 2017, the Overland Sun Farm has the capacity to provide 22.5 MW of clean

energy. During construction the project provided employment and subcontracting

opportunities.




6. SERVICE NEED

6.1 Key Points

▪ The identified Service Need addresses the Base Case issues raised in the PBC as an

opportunity to capitalise on the regional advantages to establish new agricultural

production in the region.

▪ The Service Need will be addressed by the Reference Project which constructs assets

to harvest and store currently unallocated water or buy back of existing allocations as

required and construction of irrigation infrastructure. Gulf Water Plan amendments will

likely be required for the Reference Project.

▪ Regional economic outcomes are strongly aligned with the increasing value of

agricultural products from the Reference Project.

▪ Benefits not only include an increase in the value of agricultural production and

subsequent improvements to Gross Regional Product (GRP) but also in construction of

new infrastructure and establishment of supporting industries for both construction and

ongoing operations.

▪ Benefits also include improvements to job opportunities, direct and indirect, permanent,

temporary and itinerant, in agricultural production and related service industries.

▪ Benefits will also flow to improvements in social disadvantage indices, heath and well-

being.

▪ The Reference Project also addresses the need for more resilient, self-sufficient and

self-reliant communities by providing sources of income and fodder when drought or

flood isolates these communities or makes products difficult to import.

▪ Initial discussions with Flinders Shire Council indicates there is no immediate need for

additional urban water supply. Further investigation to enhance water resilience

measures would be included in future studies including alignment with Regional Water

Supply Strategies. However, as the water sought from this Project is not in contest for

drinking water, a key point of tension does not exist.

▪ Available and suitable land far exceeds the water serviceability therefore evolution of

water efficient practices including evaporation control will allow expansion of the scheme

and evolution of crops and cropping practices.

6.2 Why Service Need is an Important Concept?

This PBC outlines the need for a large-scale water infrastructure project in the Hughenden

region. In business-case terminology there is a “Service Need” that needs to be addressed

in this region. That is, the agricultural sector has been in decline for some decades and this




has flowed through into those sectors that provide supporting services. This has led to a

decline in the population, employment prospects and social services that are available in

Hughenden and surrounds.

Significantly, the Hughenden region now has a strong dependence on the beef cattle

industry, especially since the decline of the wool industry.

These trends are likely to continue, with further declines in population, employment and

standards of living. There is a Service Need to redress this trend and create employment

opportunities for the longer-term economic and social survival of the region. Diversification

into other economic and value-adding activities is therefore an important need for this

region.

This Service Need is to be considered in the context of the “Base Case”; i.e. a description

of what the situation would be in the absence of the proposed Project.

The proposed Project is termed the “Reference Project” and needs to demonstrate that it

will meet this Service Need, which for this proposal is a large new irrigation scheme with

water stored in a new dam from the Flinders River and its’ tributaries. The Reference Project

– and indeed the two variations of this proposal – are described in detail later in this report.

This PBC demonstrates that this Reference Project would address the Service Needs as

articulated in this chapter.

This is done by demonstrating that the Reference Project leads to better outcomes than the

Base Case; i.e. what is projected to occur in the absence of this Project.

6.3 Previous Assessment of the Service Need

While the term ‘Service Need’ is a relatively recent addition to business case language

many previous studies have been undertaken in the region to assess the viability of irrigated

agriculture schemes and address the problem or ‘Base Case’. These have exclusively been

options studies to address the Service Need for dams to harvest the ‘unallocated’ water in

the Flinders River catchment. These studies are summarised in Section 9 Options

Considered.

6.4 Demand Assessment

Service Need or opportunity assessment usually includes town or urban supply needs with

subsequent examinations of the Water Security Plans or Demand forecasts as well as

agricultural demand and willingness to pay for combined schemes. In this case, no urban

need is required, or forecast to be required, and there are no service providers and service

areas apart from Flinders Shire Council to consider in this regard. Flinders Shire Council

advise their urban water supply is secure and serviced by bores with recent upgrades to

treatment facilities however the Richmond Shire may be a different matter.




Regarding agricultural demand and willingness to pay, these studies have not yet been

undertaken as a viable Reference Project and concept design was the first line of

investigation. Willingness to pay parameters for inclusion in the analysis were benchmarked

from previous studies and publicly available information on water sales and were used in

the modelling and analysis exercises. $2000/ML for medium security and $1000/ML for

lower security allocations were assumed in the models. The risk register contains an action

to undertake a more extensive study to assess willingness to pay, demand forecasts and

customer interest as part of the DBC. This study is scoped and ready to implement when

funds become available. At this stage demand is assumed as 100% of the allocation and

provided the price is reasonable this is considered reasonable. The financial models

assume ramp-up of crop production over a number of years (10 years for horticulture crops

and 4 years for grain and hay crops).

Therefore, the demand projection, and subsequent analysis, assumes a series of steps to

100% use and not an immediate change as this was not reasonable. Rigorous assessment

of demand projections and willingness to pay, linked to the construction timetable and sale

of water allocations will be required to further reduce the risk profile.

6.5 Stakeholder Views

Mutli-level stakeholder engagement assessments have been undertaken to establish the

Service Need and ability to address the Base Case. The Stakeholder Engagement chapter

(Section 4) outlines the process adopted. The indicative issues that have arisen are;

▪ There is competition for the unallocated water. This may lead to tensions however the

HIPCo Board has directed, as one of its objectives, to work with the other parties to

resolve these issues where possible. This includes Council, existing users, landowners,

regulators and other scheme proponents.

▪ Unanimous agreement that a feasible irrigated agriculture scheme is sensible, required

and possible and innovative means should be explored for sustainable harvesting.

▪ There is water available in the system and the dam options assessed in the past are not

feasible.

▪ The form and function and location are not agreed as similar schemes are proposed

further downstream and the Gulf Water Plan does not have enough unallocated water

for two large schemes in the immediate vicinity.

▪ The Gulf Water Plan is the first point of reference and downstream users and EFOs

need to be considered.

▪ The Flinders Shire Council 15 Mile Scheme Stages 1 and 2 are not in conflict with the

Reference Project and are considered complimentary and potentially different stages of

a series of reinvigoration projects across the region.




▪ A potential tension exists with other proponents with similar schemes however it is

understood that all schemes will be assessed on their individual merits by the DNRME

for water allocation and potential funding.

6.6 Criticality of Intended Outcomes and Possible Disbenefits

There are some identified potential ‘disbenefits’ identified in the Environment Assessment

section (Section 14) regarding potential effects on downstream environmental, social and

environmental indicators. However, these disbenefits are largely unquantified and are

precautionary in nature. The DBC scope for this project recommends a detailed

investigation to quantify the potential issues before a scheme is finalised.

The criticality of the project to the regional economy is another matter. The benefits have

been quantified and are substantial. Injection of resources into a suitable irrigated

agriculture project is considered essential to the functioning of the local and regional

economies.

The Base Case shows the current and likely future situation if the Project is not completed.

The likelihood is the region will suffer further declines in population and economic and social

conditions.

The Service Need is to arrest this decline and replace it with a project(s) to stimulate

economic and population growth and rising regional living standards.

The Base Case is not defined as an urban sector running out of water. It is defined as the

agricultural sector having never had enough water to realise its potential and without which

the current Base Case problem will persist and further decline.




7. BASE CASE

7.1 Key Points

▪ The Base Case represents the ‘business as usual’ situation, which is premised on

dominance of beef cattle production and support services underpinning the Hughenden

regional economy. It is likely to feature:

• Continuing decline in population, services, GRP, resilience, business opportunities,

employment opportunities

• Continuing decline in economic and social indicators

• Inability to attract new investment and hold continuing investors, families and

businesses

• Declines in serviceability and maintenance of key infrastructure

• Inability to contribute to Gross National Product (GNP) and national and state food

resilience measures

• Continued decline from the region’s most under-utilised resource, unharvested but

sustainable water supplies.

▪ The Service Need opportunity presented by the Reference Project has few disbenefits

and is an essential element of the economic and social recovery of the region.

7.2 Population Decline


at around 1,100. The Flinders Shire, in which it is located had an estimated population of

around 1,500 in 2017. The Shire’s population peaked at over 3,000 residents during the

1960s and has declined significantly in the decades since.

Over the last two decades the Flinders Shire has experienced the fourth highest rate of

population decline across Queensland with a total decline of almost 30% over the

period. Further, over the last five years, the Shire has exhibited an average rate of

population decline of 3.0% per year, compared to the State-wide average increase of 1.6%

per year.

Continuation of this decline, in the absence of regional economic growth initiatives, has the

Shire population projected to decline to around 1,260 by 2031, a further decrease of

approximately 17% from the most recent population estimate. Figure 7.1 illustrates the

historical decline in population along with the forecast continued decline.




Figure 7.1 Population in Flinders Shire (Source: Historical Data – ABS; Forecast Population – QGSO)

7.3 Employment Decline

Similarly, the total number of people employed in the Flinders Shire has declined and

across all sections of the local economy. The number of businesses, including farming

enterprises, has also declined.


▪ Primary production (farming and to a much lesser extent mining) of which agriculture

and beef production is dominant;

▪ Transport-related services;

▪ Tourism-related services; and



There has also been a shift of employment categories and their importance for the region

as described in Section 5.3.1.

7.4 Socio-Economic Disadvantage

Based on the Australian Bureau of Statistics Socio-Economic Indexes for Areas index –

which measures socio-economic disadvantage – the Flinders Shire exhibits higher level of

disadvantage than more than half of the local government areas in Australia.

0

500

1,000

1,500

2,000

2,500

2000 2005 2010 2015 2020 2025 2030

Po

pu

lati

on

Population(Historical)

Population(Forecast)




While the unemployment rate in the Shire is below the State average, this is driven by

population decline, rather than representative of a high level of employment opportunities

in the region. Accordingly, the number of people in employment declined by around 12%

between 2011 and 2016.

7.5 Gross Regional Product

While estimates of the Gross Regional Product (GRP) for Flinders Shire specifically are not

available, the Queensland Government Statistician’s Office (QGSO) published data over

the period from 2000-01 to 2010-11 which showed that the GRP for the North West region

of Queensland (which Flinders Shire is a part of) grew at 0.1 per year. This rate is

significantly below the whole-of-Queensland rate, and the slowest growth rate of all regions

(aside from the decline seen in the Central West) (see Table 7.1).

Table 7.1 Growth in Gross Regional Product, All Queensland regions, 2000-01 to 2010-11 (Source: Queensland Government Statistician’s Office)

Rank Region GRP Growth, 2000-01 to 2010-11

1 Sunshine Coast 5.1%

2 Gold Coast 4.8%

3 Brisbane 4.7%

4 Mackay 4.6%

5 Darling Downs 3.7%

6 Fitzroy 3.5%

7 Wide Bay-Burnett 3.0%

8 Northern 2.9%

9 West Moreton 2.6%

10 Far North 2.3%

11 South West 0.3%

12 North West 0.1%

13 Central West -1.9%

Queensland 4.1%




7.6 Relative Disadvantage

According to the Australian Bureau of Statistics Socio-Economic Indexes for Areas (SEIFA),

in terms of socio-economic disadvantage, the Flinders Shire is in the 43rd percentile of

advantage compared to other local government areas in Australia. In Queensland

specifically, it ranks marginally higher, being in the 61st percentile; this is due to a relatively

larger proportion of disadvantaged areas being in Queensland.

In other words, Flinders Shire exhibits less disadvantage than 61% of Local Government

areas in Queensland and 43% of Local Government Areas in Australia. However, this index

is a broad measurement of relative socio-economic advantage and disadvantage in terms

of “people's access to material and social resources, and their ability to participate in

society”. It does not provide a complete indication of a region’s economic prospects into the

future, which has a bearing on future social amenity.

7.7 Future Trends

As is the case in most rural areas, urban drift poses a significant threat to Flinders Shire.

Regional development can mitigate some of these effects. Table 7.2 shows the downward

population trend in Queensland local government areas with the Flinders Shire ranking

fourth highest.

Table 7.2 Queensland Local Government Areas - Top 10 Ranked by Population Decline (Source: Queensland Government Statistician’s Office)

Rank Local Government Area % Growth in population, 1998-2018

1 Barcoo -42.1%

2 Quilpie -34.2%

3 Bulloo -32.0%

4 Flinders -29.1%

5 Paroo -29.1%

6 Winton -28.4%

7 Richmond -27.3%

8 McKinlay -27.1%

9 Boulia -23.6%

10 Blackall-Tambo -23.0%




Another factor exacerbating the risk to the future of Flinders Shire is the ageing population.

In 2017 the median age of the Flinders population was 43.1 years, which is above the

Australian average of 37.5 years.

While the unemployment rate within Flinders Shire is relatively low, this is driven by

population decline, rather than representative of a high level of employment opportunities

in the region. The number of people in employment declined by 11.5% between 2011 and

2016 (equating to approximately 103 jobs), however over the same period the size of the

labour force also declined by 11.5%.

As the decline in the labour force seems primarily driven by the decline in population, this

may indicate that as people leave their employment in Flinders Shire (either voluntarily or

after redundancy), they migrate to an area with better employment prospects, removing

them from the Flinders Shire labour force (allowing the unemployment rate to remain

relatively low). There is a strong downward trend in the employment prospects in the town,

with a growth rate of approximately -2% per year (i.e. a decline).

Figure 7.2 Employment and Labour Force Trends, Flinders Shire (Source: Australian Bureau of Statistics)

Table 7.3 outlines employment categories in Flinders Shire as at the 2016 Census. It is

evident that most of the employment is within agriculture (predominantly business owners

who are classed as ‘managers’), labouring and machinery operators and drivers.

0

200

400

600

800

1000

1200

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

NU

MB

ER O

F P

EOP

LE

Employment Labour Force




Table 7.3 Occupations of Those Employed in the Flinders Shire (Source: Australian Bureau of Statistics)

Occupation Percentage

Managers 32.2%

Labourers 18.5%

Machinery operators and drivers 10.2%

Clerical and administrative workers 9.1%

Technicians and trade workers 8.8%

Community and personal service workers 6.9%

Professionals 6.8%

Sales workers 5.0%

Other 1.3%

7.8 Prospects of Further Decline

Without significant regional development it is likely that Flinders Shire will experience further

decline. Ongoing technological change and improvements in efficiency is likely to continue

to gradually reduce the demand for labour-based jobs. Furthermore, the future prosperity

of the region has a large dependence on local industry remaining in the area. For example,

when Aurizon cut 25 jobs in Hughenden due to the loss of a contract it had a huge impact

on the local economy. It caused the relocation of many families which is a significant ratio

in a small community.

Increasing regional investment and creating more jobs in the area will be the only way to

sustain Flinders Shire into the future.

7.9 Existing Water Resources

7.9.1 Current Water Infrastructure

There are currently no significant impoundment structures along the Flinders River. The

only significant in-stream water storages within the Flinders River catchment are:

▪ Chinaman Creek Dam – 2.75 GL capacity dam on Chinaman Creek (tributary of

Cloncurry River) used to supply water to the town of Cloncurry.

▪ Cloncurry Weir – low height weir on the Cloncurry River used to facilitate pumping of

water from the Cloncurry River into Chinaman Creek Dam.




▪ Lake Corella (Corella Dam) – 10 GL capacity dam on the Corella River that was

previously used to supply water to the Mary Kathleen Uranium Mine.

7.9.2 Current Water Resources

The Project study area is within the upper reaches of the Flinders River catchment which

falls within the Gulf Water Plan area (refer Figure 7.3). The Project location is within the

Flinders River Water Management Area Zone 7 (refer Figure 7.4).

Figure 7.3 Gulf Water Plan area (Source: Water Plan (Gulf) 2007)




Figure 7.4 Flinders River Water Management Area (Source: Gulf Resource Operations Plan)

The Flinders River is the longest river in Queensland. The Flinders River rises on the

western slopes of the Great Dividing Range to the north-east of Hughenden in North West

Queensland and flows generally north-west through the Gulf Country, across a large, flat

clay pan, before entering the Gulf of Carpentaria near the town of Karumba. The total

catchment area of the Flinders River is approximately 109,000 km2. Major tributary drainage

systems that flow into the Flinders River include:

▪ Galah/Porcupine Creek that enters the Flinders River near the town of Hughenden

▪ Dutton River and Stawell River which enter the Flinders River near the town of

Richmond

▪ Cloncurry River and Saxby River which enter the Flinders River in the lower reaches of

the catchment.

Historical stream flow gauging data for the Flinders River is summarised in Table 7.4.

https://en.wikipedia.org/wiki/Queensland

https://en.wikipedia.org/wiki/Great_Dividing_Range

https://en.wikipedia.org/wiki/North_West_Queensland

https://en.wikipedia.org/wiki/North_West_Queensland

https://en.wikipedia.org/wiki/Gulf_Country

https://en.wikipedia.org/wiki/Gulf_of_Carpentaria




Table 7.4 Gauged Mean Annual Flow Volumes Along the Flinders River

Gauging Station

Number

Gauging Station

Name

Catchment Area

(km2)

Period of Record Mean Annual Flow

(GL/year)

915003A Flinders River at

Glendower

1,958 1972 to 2012 135


Hughenden

2,519 1969 to 1988 127


Richmond

17,380 1971 to current 381

915012A Flinders River at Etta

Plains

46,130 1972 to current 919


Walkers Bend

106,300 1969 to current 3,186

7.9.3 Surface Water Entit lements

There are no supplemented surface water entitlements (water entitlements linked to water

storage infrastructure) within the Flinders River section of the Gulf Water Plan area. All

surface water entitlements are unsupplemented entitlements that are based on run-of-river

flows. The vast majority of the unsupplemented surface water entitlements within the

Flinders River catchment are for agricultural/rural use. A smaller volume of unsupplemented

surface water entitlements are held by Councils for urban and recreational use. The current

volumes of unsupplemented surface water entitlements in the Flinders River section of the

Gulf Water Plan area are summarised in Table 7.5. These volumes include water licences

that have been previously granted from the sale of the general reserve unallocated water.

Table 7.5 Current Volumes of Unsupplemented Water Entitlements in Flinders River catchment

Authorised Purpose Total Nominal Entitlement Volume (ML)

Any 10,798

Rural 209,014

Mining 200

Total 220,012

There is currently a small but increasing number of growers growing irrigated crops on a

commercial scale in the Flinders River catchment. Crops that have been successfully grown

in the region historically include sorghum, cotton, corn, chickpeas, mung beans and adzuki




beans. In addition to the current small-scale commercial irrigated cropping, there are other

producers who grow forage crops, both irrigated and dryland, for their own use. These crops

are grown for hay or silage.

Irrigation water is currently supplied from water harvesting licences which rely on run-of-

river flows and accordingly the supply volumes from these licences are highly variable and

susceptible to limited supplies during drought periods. Some irrigation water is also sourced

from groundwater aquifers including the Flinders River alluvium and the Great Artesian

Basin.

Flinders Shire Council source their urban water supplies from groundwater but hold

unsupplemented water entitlements for other purposes such as the supply of water from the

Flinders River to the recently constructed Hughenden Recreational Lake. Flinders Shire

Council also recently acquired a 5,000 ML water licence on the Flinders River downstream

of Hughenden for rural use from the recent sale of the general reserve unallocated water.

The current status of the unallocated water reserves in the Flinders River section of the Gulf

Water Plan area is summarised in Table 7.6. The total volume of unallocated water currently

remaining in the Flinders River catchment is 166,000 ML.

Table 7.6 Current Status of Unallocated Water in Flinders River Catchment

Unallocated Water Type Reserve Volume (ML) –

Water Plan (Gulf) 2007

Unallocated Water

Granted Since Water Plan

(ML)

Remaining Unallocated

Water Volume (ML)

Indigenous 8,500 0 8,500

Strategic (State Purpose) 17,850 0 17,850

General 239,650 100,000 139,650

Totals 266,000 100,000 166,000

The unallocated water reserves are unsupplemented water entitlements and the nominal

volume of these entitlements corresponds to an Annual Volumetric Limit (AVL) which

represents the maximum volume of water that can be taken in any year (water year basis).

Hydrologic modelling of the unallocated water reserves in the Flinders River catchment

undertaken by the Queensland Government for the Water Plan (Gulf) 2007 (i.e. Flinders

Source Model) indicates that the average volume of water that can be taken under the

unallocated water reserves (Mean Annual Diversion, MAD) varies between 55% and 70%

of the AVL, with an average value of approximately 60% of the AVL. This indicates that the

remaining unallocated water volume of 166,000 ML (AVL) in the Flinders River catchment

corresponds to a MAD of approximately 100,000 ML/year.

The Queensland Government has provided for the release of the general reserve

unallocated water in the Gulf Water Plan area through two separate tender processes:




▪ Public tender in late 2015/early 2016 for the sale of the general reserves in the Flinders,

Norman, Nicholson, Gregory and Leichhardt catchments.

▪ Public tender commencing in mid-2017 (tender process is still open) for the sale of the

general reserve in the Gilbert catchment and remaining general reserve (not sold in first

tender) in the Cloncurry River section of the Flinders catchment.

In the Flinders catchment, the general reserve was offered for sale as two different

unsupplemented water entitlements (Product 1 and Product 2) each with different AVLs,

daily extraction limits and flow thresholds/conditions. Product 2 had higher flow thresholds

than Product 1 and accordingly has a lower reliability of supply compared to Product 1.

Limits were applied on the volumes of Products 1 and 2 offered for sale in different parts of

the catchment. The outcome of the 2015/16 tender process for the Flinders River catchment

are summarised in Table 7.7. The remaining Product 1 volume of 7,500 ML in Reach 3

(Cloncurry River catchment) was subsequently offer for sale in the tender process for the

Gilbert and Cloncurry catchments that commenced in mid-2017. The entire remaining

Product 1 volume for the Cloncurry River catchment (7,500 ML) has been sold as part of

this tender process.

Table 7.7 Outcomes of 2015/16 Tender Process for Release of General Reserve in Flinders catchment

Part of Catchment Product 1

Volume

Available for

Sale (ML)

Product 1

Volume Sold

(ML)

Product 2

Volume

Available for

Sale (ML)

Product 2

Volume Sold

(ML)

Reach 1 – Flinders River and

tributaries upstream of Richmond

Gauging Station

25,000 18,000 0 -


tributaries between Richmond

Gauging Station and Cloncurry River

confluence

10,000 4,500 70,00 0

Reach 3 – Cloncurry River catchment 7,5001 0 50,000 50,000


tributaries downstream of Cloncurry

River confluence

12,500 12,500 184,650 7,500

Total for Flinders River Catchment 55,000 35,000 184,650 57,500

1 This Product 1 volume was subsequently sold in the 2017 unallocated water tender for the Gilbert and Cloncurry catchments.




8. STRATEGIC CONSIDERATIONS

8.1 Key Points

▪ The Base Case, Service Need and Reference Project align

▪ There is also strong alignment between the Strategy and Policy objectives outlined in

the various levels of documentation from the Australian Government, State Government

and Local Governments.

▪ The selected Reference Project will address the issues within the broader and local

context.

▪ Several conditions of the various government strategies and policies will need to be

addressed in the next phase of the project.

▪ During the DBC a scheme proponent will be engaged via alignment with corporate

strategies, policies and government mandates and charters.

8.1 Commonwealth Government

8.1.1 White Paper on Developing Northern Australia

The Our North, Our Future: White Paper on Developing Northern Australia (2015) outlines

the Commonwealth Government’s vision for the future of Northern Australia and profiles the

region, outlines the available resources, the challenges, the infrastructure required and the

workforce issues. The White Paper also talks about reducing barriers to better use of the

land and water. Although the White Paper does not specifically identify the HIP project, the

PBC and Reference Project are in close alignment with the White Paper.

A strategic goal in the White Paper is to provide greater access to water across northern

Australia. The Reference Project identified in this PBC is consistent with this objective as it:

▪ Provides increased water supply security and reliability to underpin sustainable

economic growth

▪ Increases water supply for irrigated agriculture on suitable soils with few environmental

issues (noting some compliance aspects of the Gulf Water Plan that require further

consideration)

8.1.2 Northern Australia Audit – Infrastructure for a Developing North

The Northern Australia Audit: Infrastructure for a Developing North was published in 2015

and assessed critical economic infrastructure gaps and requirements to meet projected

Northern Australia population and economic growth through to 2031.




The Northern Australia Audit, like the White paper, found that water availability varies

dramatically in Northern Australia and highlighted continuing challenges including limited

existing infrastructure. This study concluded that prospective agricultural developments

may utilise a range of potential water supply options analysed on a case-by-case basis.

Water is noted as coming from trading, expansion of existing agricultural water supply

schemes and planning and construction of new infrastructure.

This PBC once again aligns with the findings of this audit by considering infrastructure and

non-infrastructure solutions (such as sensible amendments to the Gulf Water Plan and

Resource Operations Plan) to access water supplies to address the Base Case and meet

the Service Need.

8.1.3 Australian Infrastructure Plan (AIP)

The AIP (2016) sets out the infrastructure challenges and opportunities and solutions for

Australia over the next 15 years. The infrastructure is required to drive productivity and

growth, and not only maintain but enhance the nation’s standard of living, ensuring the

current world-class standards are maintained. The Plan highlights the need for

infrastructure investment in Northern Australia to enhance regional productive capacity and

take advantage of growing demand for produce in South-East Asia and China; at the same

time, noting that regulatory frameworks and operational arrangements should align with any

new infrastructure investments to maximise potential productive capacity. This has a slightly

different emphasis in this report as it implies both regulatory frameworks and infrastructure

proposals need to align, not one being necessarily subservient to the other.

The Reference Project proposed in this PBC is very well aligned with the AIP as it increases

water security for agricultural production, responds to the increasingly variable climate and

capitalises on the strategic objective of the Australian Infrastructure Plan to develop

Northern Australia through the development of water infrastructure for irrigated agriculture.

8.1.4 National Water Initiative (NWI)

The Commonwealth Government and State and Territory governments are parties to the

Intergovernmental Agreement on a National Water Initiative (NWI). The NWI, established

in 2004, is a blueprint for national water reform and a shared commitment by governments

to increase the efficiency of Australia's water use, provide greater certainty for investment

and productivity, and to ensure improved environmental outcomes. Developments have

included changes to:

▪ Water access entitlements

▪ Water markets

▪ Water pricing

▪ Water use efficiency




▪ The integrated management of water resources.

This PBC sets out affordability positions that acknowledges a Commonwealth or State

grant. However, as reflective of the Full Cost Pricing (FCP) principles set out in the NWI,

the DBC should further examine the willingness to pay and likely capital contributions once

again acknowledging that ‘commercial’ viability is unlikely. Economic viability and ability to

address the Service Need is clearly achievable.

8.1.5 Reef 2050 Plan

The Reef 2050 Plan was released by the Commonwealth and Queensland Governments in

March 2015. The Plan is the overarching framework for the protection and management of

the Great Barrier Reef (GBR) until 2050. Among other priorities and initiatives, the Plan

outlines management measures to ensure the universal value of the GBR is preserved.

Water quality is a key focus of the Reef 2050 Plan, particularly in relation to the potential

impact of infrastructure projects on the quality of water that is discharged into the GBR. The

potential for agricultural practices to impact on the nutrient, sediment and pesticide loads in

the GBR is identified in the Plan, as is the need to have consideration for the quality of

agricultural run-off.

The Reference Project has been assessed against the objectives of the Reef 2050 Plan.

The environmental impacts from a proposed HIP Reference Project on the Great Barrier

Reef are expected to be inconsequential as the Flinders River and its tributaries flow into

the Southern Gulf of Carpentaria (SGoC) which is not part of the Great Barrier Reef or

included in the Reef 2050 plan. Therefore, not only does the Reference Project not impact

on the Great Barrier Reef, it potentially removes some need for agricultural production in

the areas covered by the Reef 2050 Plan.

8.2 Queensland Government

8.2.1 Queensland Bulk Water Opportunity Statement

The Queensland Bulk Water Opportunity Statement (QBWOS), originally released in July

2017 and updated in December 2018, provides a framework through which the Queensland

Government can support and contribute to sustainable regional economic development

through better use of existing bulk water infrastructure and investment in new infrastructure.

The QBWOS is discussed in various sections of this PBC however a summary of its intent

is provided here to contextualise the Reference Project in the QBWOS policy hierarchy.

The QBWOS is the Queensland Government’s outline for investment and competition in

bulk water supply opportunities where public funds are required. The QBWOS objectives

are stated as:

▪ Safety and reliability of dams and urban water supplies

▪ Use existing water resources more efficiently




▪ Support infrastructure developments that provide a commercial return

▪ Consider projects that will provide regional economic benefits.

The QBWOS identifies opportunities for both regional communities and the State to use

bulk water for economic growth. The primary focus is on maximising the use of, and benefits

from, existing investments and carefully considering the benefits and costs of new

infrastructure. One of the main enablers inherent in the QWBOS is on reducing the barriers

to using water within existing bulk water supply infrastructure and considering new projects

that demonstrate economic benefits within the context of competing budget and

environmental constraints.

8.2.2 Queensland Agricultural Land Audit and Addendums

Where QBWOS deals with water opportunities, the Queensland Agricultural Land Audit

released in May 2013, with addendums released in 2014, 2015, 2016 and 2017, outlines

the land opportunities. The Audit identifies land classes, current and potential agricultural

production land, crop studies, climate risk and the constraints on development to meet the

2040 Agricultural Vision of ‘efficient, innovative, resilient, profitable and by 2040 to ‘double

Queensland’s Agricultural Production’.

Chapter 5 of the Queensland Agricultural Land Audit covers the Gulf and North West

Queensland which encompasses the Reference Project. Chapter 5 identified large areas of

land, approximately 2,000,000 hectares, that is suitable for perennial or annual irrigated

agriculture that is currently used for grazing. The Reference Project aligns with the findings

of the Queensland Agricultural Land Audit, having identified areas suitable for future

agricultural development.

8.2.3 Advancing North Queensland Policy

The Advancing North Queensland Policy was released in June 2016 and highlights several

priorities that support the regional economic development potential with a focus on the

competitive natural advantages of the region.

Water security is one of the priorities under this policy, with the Advancing North

Queensland Policy acknowledging that water security and water infrastructure are critical

to sustain agricultural industries and boost regional development throughout the region.

The Reference Project is once again in alignment with this policy of contributing further

economic growth of the Gulf and North West Queensland regions and the state of

Queensland.

8.2.4 State Infrastructure Plan (SIP)

The SIP (DILGP, 2016) outlines the strategic direction for planning, investment and delivery

of infrastructure in Queensland. The SIP identifies the government’s infrastructure

objectives and sets out how the objectives are to be achieved. Among other objectives the




SIP requires ‘water supply infrastructure is in place or in train where there is a sound

business case and water resources are available’. This PBC and documented Reference

Project meets this objective. The standard measures of a ‘sound business case’ are clearly

described as is the availability and accessibility of water.

8.3 Local Government

There are no overlaps or conflicts with town water supply for Hughenden or Richmond

currently. However, there are currently no published Regional Water Security Plans for the

region to assess the potential benefits either. Personal conversations with officers from

Flinders Shire Council advise that the town has secure access to bores for drinking water.

The Flinders Shire Council is the Proponent of a water development in the vicinity of the

reference project. This project is called the 15 Mile Irrigated Agriculture Development

Project and is an approved project by the Co-ordinator General. The project is located 12 km

north-west of Hughenden and is immediately east of the HIP Reference Project. The project

plans to use bore water to irrigate a relatively small citrus and table grape farm.

Discussions with the Flinders Shire Council has revealed no conflict for water and many

synergies. The 15 Mile Project may even be considered as an early phase of a series of

complementary irrigation projects in the region. This project also provides possible

interconnectivity with Hughenden town water supply if required in the future.

Richmond Shire Council also has a proposal for an Irrigated Agricultural Scheme as detailed

in a report prepared by the Mount Isa to Townsville Economic Zone (MITEZ, 2018). This

project has been under consideration for some time and in concept is similar to the HIP

Reference Project. While they may be ultimately incompatible or in competition for the same

water and funding, these potential issues should be explored in more detail as part of the

DBC. No comparison is made of the schemes, as this will be the role of the various

governments. However, the fundamental arguments for irrigated agriculture schemes in the

region are similar.

8.4 Possible Proponent

The Project Proponent for the PBC is HIPCo. No decision has yet been made on the most

suitable proponent for the completion of the DBC and possible construction phases. There

are numerous possibilities and a proponent will be appointed through the DBC process and

will lead the establishment of governance and risk processes and define ownership and

operational models and structures.

The scope for DBC contains a requirement to establish suitable governance and review

structures to ensure the DBC is delivered on time and on budget and at the highest quality.




9. OPTIONS CONSIDERED

9.1 Approach

Options were identified to address the Service Need of supplying water to the Flinders Shire

for agricultural use. For the purpose of the options identification, it was assumed that a

water yield of 50 to 100 GL/year would be required to have a significant beneficial impact

on the economic activity and associated socio-economic wellbeing within the Flinders Shire.

There are sufficient volumes of water within the remaining unallocated water reserves in the

Flinders River catchment to support the required water yield.

The Queensland Government’s State Infrastructure Plan (SIP) hierarchy and its supporting

water policy document, the Queensland Bulk Water Opportunities Statement (QBWOS),

provide the following hierarchy for considering water supply options and solutions:

a. Reform – reform of existing institutions and laws

b. Better use – better use of existing resources

c. Improve existing – investing relatively low capital expenditure to augment existing

infrastructure

d. Build new – investing relatively high capital expenditure to construct new infrastructure.

Since there is currently no regional scale water supply infrastructure in the Flinders Shire

LGA, the only water supply options considered feasible to address the Service Need involve

the construction of new dams. Groundwater resources were not considered feasible to

support an irrigation supply of the scale of 50 to 100 GL/year.

There have historically been numerous investigations into the feasibility of new water supply

dams within the Flinders River catchment. The approach for the options identification

involved a review of these previous investigations to make best use of the information and

findings from these studies.

The general approach used for the identification of options involved the following steps:

▪ Review of previous dam feasibility investigations in the wider Flinders River catchment

and more locally within the Flinders Shire.

▪ Identification of new dam options within the Flinders Shire considered worthy of further

assessment (options long list).

▪ Assessment of potential water supply yields for the dam options.

▪ High level assessment of infrastructure requirements and costs for the dam options.

▪ Identification of value-adding opportunities.

▪ Short-listing of options and identification of the Reference Project.




9.2 Review of Previous Studies

9.2.1 Historical Dam Investigations

There have been a number of historical investigations of potential dam sites and irrigation

areas in the vicinity of Hughenden. These include:

▪ Upper Flinders River Irrigation Scheme - Flinders River Damsite 828.5km Investigations

(QWRC, 1985):

• Investigation of dam site on Flinders River at Glendower (north-east of Hughenden)

by the Queensland Government

• Dam storage capacity: 200 GL

• Estimated water supply yield: 25 GL/year at 100% reliability (historical no failure

yield) to 30 GL/year at 75% annual reliability

• Dam capital cost: $85 to $100 million

▪ Irrigation Project – Alstonvale (SMEC, 2003):

• Investigation of dam sites at Alstonvale on Betts Gorge Creek (north-west of

Hughenden) and Mt Beckford on the Flinders River (east of Hughenden)

commissioned by Flinders Shire Council.

• A number of different irrigation scheme options were assessed for each dam option.

• Alstonvale Dam scheme not considered viable due to high cost of external catchment

diversion works required to augment the scheme yield.

• Mt Beckford Dam scheme involved:

o Dam storage capacity: 250 GL

o Estimated water supply yield: 60 to 70 GL/year at 92 to 96.5% monthly reliability

o Irrigation area: 15,000 to 17,000 ha

o Scheme capital cost: $90 to $100 million (including irrigation delivery system)

9.2.2 Flinders and Gilbert Agricultural Resource Assessment (FGARA)

The feasibility of in-stream dams within the Flinders River catchment was assessed as part

of the CSIRO Flinders and Gilbert Agricultural Resource Assessment (FGARA) (Petheram

et al., 2013). Fifteen potential dam locations in the Flinders River catchment were identified

and assessed (dam locations shown in Figure 9.1). These dam locations were all in the

upper reaches of the Flinders and Cloncurry River catchments. The topography in the

middle and lower reaches of the Flinders River catchment is not suitable (too flat) for large

dams.

Seven of the fifteen dam options identified are within the Flinders Shire part of the Flinders

River catchment (i.e. most upstream part of catchment). These dam options are

summarised in Table 9.1. The dam option with the highest water supply yield was

Glendower Dam with an estimated yield (85% annual reliability) of 57 GL/year.




Figure 9.1 Locations of New Dam Options Assessed in CSIRO FGARA study (Source: Petheram et al., 2013)

Table 9.1 Dam Options Identified by CSIRO FGARA study within Flinders Shire

Dam

ID

Dam Name Watercourse Catchment

Area (km2)

Storage

Capacity

(GL)

85% Annual

Reliability

Dam Yield

(GL/year)

Dam Capital

Cost as at

2013

1 Alston Vale Betts Gorge Ck 1,132 241 12 $275M

8 Flinders 856 km Flinders River 1,694 89 39 $275M




Dam

ID

Dam Name Watercourse Catchment

Area (km2)

Storage

Capacity

(GL)

85% Annual

Reliability

Dam Yield

(GL/year)

Dam Capital

Cost as at

2013

9 Glendower Flinders River 1,912 309 57 $375M

10 Mt Beckford Flinders River 2,065 245 45 $450M

11 Mt Oxley Flinders River 690 62 22 $225M

13 Porcupine Creek Porcupine Creek 1,051 31 11 $179M

15 White Mountains Flinders River 1,085 111 34 $225M

Three of the fifteen potential dam sites in the Flinders catchment were short-listed and

assessed in more detail because each was initially deemed to be one of the more promising

sites in each of three distinct geographical areas (Hughenden, Richmond and Cloncurry).

The selection of these three sites was based on consideration of topography of the dam

axis, geological conditions, proximity to suitable soils and water yield. The short-listed sites

were:

▪ Cave Hill Dam on the Cloncurry River upstream of Cloncurry – 248 GL storage capacity

dam (capital cost $249M) with 40 GL/year yield

▪ O’Connell Creek Offstream Storage – 127 GL storage capacity dam (capital cost

$229M) with 34 GL/year yield

▪ Porcupine Creek Dam – details provided in Table 9.1.

9.2.3 Flinders River Water Resources and Irr igation Project

SMEC (2014) developed a concept design of a water supply scheme on the Flinders River

downstream of Hughenden on behalf of Flinders Shire Council. Details of the proposed

scheme are as follows:

▪ 200 GL storage capacity weir on the Flinders River downstream of the confluence with

Galah/Porcupine Creek

▪ Gravity canal system supplying irrigation water from the Flinders River dam to irrigation

areas (up to 18,000 ha) on the southern side of the Flinders River extending for a

distance of approximately 80 km to the west of Hughenden

▪ Separate water storages on Walker Creek, Sloans Creek and Cannum Creek connected

to the irrigation areas and Flinders River dam by gravity canals




▪ Estimated water supply yield: 60 GL/year

▪ Estimated capital cost: $357 million.

9.2.4 HIPCo Initial Dam Investigations

In 2018 Grace Detailed – GIS Services investigated dam options in the Flinders Shire on

behalf of HIPCo. These investigations were undertaken in two stages:

▪ Stage 1 (Grace Detailed – GIS Services, 2018a): Preliminary assessment of dam site

suitability (including catchment areas, dam storage characteristics, catchment inflows

and feasibility of external catchment diversions) for the following dam sites (refer Figure

9.2):

• Mt Beckford dam site on the Flinders River – not considered feasible due to

interactions with road and rail infrastructure

• Alstonvale dam site on Betts Gorge Creek – considered feasible

• Porcupine Creek diversion into Alstonvale Dam – not considered feasible due to the

expected high cost of the required diversion works

• Dam site on Stewart Creek upstream of confluence with Jones Valley Creek – not

considered feasible due to smaller catchment area and catchment inflows.

• Dam site at The Gap on Stewart Creek downstream of confluence with Jones Valley

Creek – considered feasible

• Dutton River diversion into The Gap dam site – considered possibly feasible.

▪ Stage 2 (Grace Detailed – GIS Services, 2018b): Further feasibility assessment of

Alstonvale and The Gap dam sites including dam yield assessment and consideration

of construction costs:

• The Gap dam site (with or without the Dutton River diversion) was not considered

feasible based on unfavourable storage characteristics (high storage losses) limiting

the dam yield.

• Alstonvale Dam configuration assessed:

o 224 GL storage capacity dam

o 24 GL/year water supply yield at 89% annual reliability

o Irrigation area supported: 2,500 ha

o Capital cost: $112 million




Figure 9.2 Dam Sites Considered in Stage 1 Dam Investigation for HIPCo (Source: Grace Detailed – GIS Services, 2018a)

9.2.5 15 Mile Irrigated Agricultural Development Project

Flinders Shire Council is currently progressing the development of the 15 Mile Irrigated

Agricultural Development Project (GHD Pty Ltd, 2018) approximately 15 km to the north-

west of Hughenden.

The site for the 15 Mile Project (Lot 168 SP262319) is located on the southern bank of the

Flinders River immediately downstream of the confluence with Galah/Porcupine Creek

(refer Figure 9.3). Council purchased the site from the Queensland Government in 2016

and has since been undertaking necessary works to facilitate the Project.

Initial crops planned for the Project will comprise intensive horticulture and tree crops

consisting of 60 ha of table grapes and 60 ha of citrus. These will fulfil current market

opportunities within Council’s initial third-party investor’s supply chains for major

supermarkets within Australia and internationally. These crops are planned to be grown on

alluvial soils which are considered suitable for irrigated agriculture, having excellent

drainage, good root depth and texture, and few chemical limitations.

The estimated water use for the third-party investor development crops is 2,160 ML/year

which is planned to be supplied from groundwater aquifers (Flinders River Alluvium and

Great Artesian Basin).




Figure 9.3 Location of Proposed 15 Mile Irrigated Agricultural Development Project (Source: GHD Pty Ltd, 2018)

Council also holds a surface water licence (Licence No. 618019) for extraction of up to

5,000 ML/year from the Flinders River under certain flow conditions; however, Council do

not intend on relying on this licence for the Project.

The Project was recently awarded Coordinated Project status by the Queensland

Government.

9.3 Options Long List

9.3.1 Initial Options Screening

Based on the outcomes of the previous dam feasibility studies in the Flinders River

catchment, a list of dam options were identified for further assessment. The dam options

were selected to meet the following key requirements linked to the identified Service Need

and other regulatory and stakeholder constraints:




▪ Proximity to the town of Hughenden

▪ Proximity to large areas of land extending to the west of Hughenden and on the southern

side of the Flinders River that are suitable for irrigated agriculture due to soils

characteristics and topography, are outside of floodplain areas and are mostly already

cleared due to the current grazing land use of these areas

▪ Dam locations which are suitable to achieving a water supply yield of 50 to 100 GL/year

either via direct catchment inflows or through external catchment diversions into the

dams

▪ Suitable topography at dam sites for economic dam construction and efficient storage

characteristics

▪ Suitable geotechnical conditions for dam construction

▪ Minimal impacts to third party infrastructure

▪ Dam locations will not inundate high value environmental or cultural/social features

▪ Potential for future expansion of water storage infrastructure (i.e. dam raising).

All of the previously identified dam sites on the Flinders River do not comply with a number

of the criteria listed above and were excluded from the assessment. The topography in the

lower reaches of Galah/Porcupine Creek is also not considered suitable for a large dam.

The following dam sites were selected for further assessment based on their conformance

with the key project criteria listed above:

▪ Alstonvale Dam site on Betts Gorge Creek located on the northern side of the Flinders

River approximately 25 km to the north-west of Hughenden– excellent dam site but will

require external catchment diversions from Galah/Porcupine Creek and/or the Flinders

River to provide sufficient water supply yield.

▪ Dam site/s near the outlet of the Stewart Creek catchment located on the northern side

of the Flinders River approximately 45 km to the north-west of Hughenden – dam sites

are not as suitable as Alstonvale Dam but are located further downstream and in closer

proximity to the Flinders River which makes them potentially suitable to achieve the

required water supply yield at a lower infrastructure cost.

These dam options are generally consistent with the outcomes of the preliminary HIPCo

dam investigation studies (Grace Detailed – GIS Services, 2018a,b) which recommended

the Alstonvale and The Gap dam sites as suitable for further assessment.

The options long list was developed as a combination of a number of different infrastructure

configurations for these two main dam site options.




Figure 9.4 Preferred Dam Sites for Options Long List (Image source: Queensland Globe)

9.3.2 Alstonvale Dam Options

The Alstonvale Dam site is an excellent dam site from a topographic perspective because

the Betts Gorge Creek valley is closely surrounded by steep basalt plateaus on both sides

of the valley. These topographical features will provide an economical dam construction

(short dam wall length) and efficient storage characteristics (low ratio of ponded area to

storage capacity) to minimise storage losses (evaporation and seepage).

The catchment area of Betts Gorge Creek is only 1,127 km2 at the proposed dam site and

previous investigations have identified that only a small water supply yield (approximately

20 GL/year) is possible based on the direct catchment area of the dam.

The Flinders River and Galah/Porcupine Creek (lower reaches referred to as Galah Creek)

catchments are larger adjacent catchments to the south of Betts Gorge Creek and options

for diversion of stream flows from these catchments into Alstonvale Dam to increase the

yield of the scheme were assessed. This identified that gravity diversions from the Flinders

River and Galah Creek into Canterbury Creek (small creek between Galah Creek and Betts

Gorge Creek) were feasible; however, the presence of the 70 m high plateau between

Canterbury Creek and Betts Gorge Creek is a significant constraint to the gravity flow of

water into Alstonvale Dam.

Stewart Creek dam sites

Alstonvale Dam site

Potential irrigation area




Options considered for the gravity flow of water between Canterbury Creek and Betts Gorge

Creek (minimum diversion distance of 4 km) included either an excavated channel or a

tunnel through the plateau (plateau is formed from basalt flows overlying mudstone). Both

gravity diversion options were not considered to be feasible due to high capital costs,

concerns over the long-term stability of either an excavated channel or tunnel constructed

through low strength mudstone, and the absence of an elevation difference between

Canterbury Creek and Betts Gorge Creek which will prevent gravity flows from occurring

when there is a significant volume of water stored in Alstonvale Dam.

The preclusion of gravity transfers meant that a pumped diversion system between

Canterbury Creek and Alstonvale Dam would be required. This system requires another

water storage to be constructed on Canterbury Creek to provide temporary storage to buffer

the imbalance between the gravity diversion inflows from Galah Creek/Flinders River (high

flows but of relatively short duration corresponding to periods of high stream flow in the

waterways) and the pumped outflows to Alstonvale Dam (smaller flow capacity but of

significantly longer duration than the gravity inflows).

Review of topographic data identified the following preferred scheme to facilitate flow

diversions from the Flinders River and Galah/Porcupine Creek into Alstonvale Dam (refer

Figure 9.5):

▪ Gravity diversion between the Flinders River and Galah Creek:

• Diversion weir on the Flinders River near Glendower, approximately 35 km to the

north-east of Hughenden

• Excavated diversion channel between the Flinders River and Orange Tree Creek

(Orange Tree Creek flows into Boundary Creek which then flows into Galah Creek)

▪ Gravity diversion between Galah Creek and Canterbury Creek:

• Diversion weir on Galah Creek, approximately 23 km to the north-east of Hughenden

• Excavated diversion channel between Galah Creek and Coolibah Creek (Coolibah

Creek flows into Canterbury Creek)

• Levee across Crescent Creek where the diversion channel crosses Crescent Creek

▪ Dam on Canterbury Creek approximately 14 km to the north-east of Hughenden

▪ Pump station at Canterbury Creek Dam with rising main pipeline over the basalt plateau

between Canterbury Creek Dam and Alstonvale Dam.

▪ Alstonvale Dam on Betts Gorge Creek.

▪ Potential for pumped hydropower generation utilising the pumping system between the

Canterbury Creek Dam and Alstonvale Dam reservoirs.

Storage characteristics at the Alstonvale and Canterbury Creek dam sites were assessed

using LiDAR ground survey of these areas acquired by HIPCo in May 2019. The storage

characteristics are shown in Figure 9.6.




Figure 9.5 Concept Infrastructure Arrangement for Alstonvale Dam Irrigation Scheme




Figure 9.6 Storage Characteristics for Alstonvale Dam and Canterbury Creek Dam

A number of different sub-options were assessed for the Alstonvale Dam scheme which

represent different combinations of the following infrastructure configurations:

▪ Alstonvale Dam storage capacity

▪ Canterbury Creek Dam storage capacity

▪ Flow capacity of pumping system between Canterbury Creek Dam and Alstonvale Dam.

The total catchment area reporting to the Alstonvale Dam scheme is 5,071 km2, comprising:

▪ 1,127 km2 catchment area for Betts Gorge Creek upstream of Alstonvale Dam

▪ 1,935 km2 catchment area upstream of the diversion weir on the Flinders River

▪ 1,912 km2 catchment area upstream of the diversion weir on Galah Creek

▪ 97 km2 catchment area for Canterbury Creek upstream of Canterbury Creek Dam.

9.3.3 Stewart Creek Dam Options

The Stewart Creek dam options are based on a primary impoundment area on the Saego

Plains property (Lot 2 DU15) near the mouth of Stewart Creek, approximately 47 km to the

north-west of Hughenden. This dam site is located in a low energy area on the northern

0

1,000

2,000

3,000

4,000

5,000

6,000

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000

Are

a (h

a)

Volume (ML)

Alstonvale Dam

Canterbury Creek Dam




floodplain of the Flinders River. The impoundment area is surrounded by steep basalt

plateaus to the west and north, and by a low height mudstone ridge to the east which divides

the lower reaches of Stewart Creek from the adjacent Back Valley Creek (refer Figure 9.7).

The Saego impoundment area has relatively poor storage characteristics (high ratio of

ponded area to storage capacity) at low storage volumes, but once the floor of the valley is

fully submerged (i.e. water ponded against the surrounding plateau walls) the storage

capacity increases with only minor increase in ponded area.

The Saego impoundment area is connected to a much larger natural basin upstream of a

narrow opening between the basalt plateaus known as The Gap. This basin is formed at

the confluence of Stewart Creek and Jones Valley Creek and is referred to as Expressman

Downs. The storage characteristics of the Expressman Downs basin area are even poorer

than the Saego impoundment area and a dividing wall will be required in The Gap to prevent

the Saego impoundment area from expanding out into the Expressman Downs basin

upstream of The Gap, resulting in high storage losses.

Figure 9.7 Saego Impoundment Area Locality Plan

The following water diversion and storage infrastructure was identified for the Stewart Creek

dam options (refer Figure 9.8):

▪ Diversion weir on the Flinders River downstream of the confluence with Betts Gorge

Creek

Expressman Downs

basin area

Saego basin area

The Gap

Betts Gorge Creek

Stewart Creek

Flinders River




▪ Excavated diversion channel to facilitate gravity diversions of water out of the Flinders

River into the Catch Dam on Back Valley Creek

▪ Catch Dam on Back Valley Creek to provide buffer storage between the gravity

diversions out of the Flinders River and pumped transfers into Saego Dam

▪ Saego Dam on Stewart Creek approximately 800 m upstream of the confluence with

the Flinders River (Saego Dam shares a common embankment with the Catch Dam)

▪ Pumping system to allow transfers of water from the Catch Dam into Saego Dam

(gravity transfers are possible through a sluice gate arrangement when storage levels

are low in Saego Dam)

▪ Dam wall across The Gap to confine the impoundment area of Saego Dam to minimise

storage losses (the elevation of The Gap dam wall is nominally equal to the Saego Dam

wall elevation)

▪ Pumping system to transfer water impounded behind the Gap dam wall (from Stewart

Creek and Jones Valley Creek inflows) into Saego Dam.

Storage characteristics for the Saego Dam, The Gap Dam and Catch Dam sites were

assessed using LiDAR ground survey of these areas acquired by HIPCo in May 2019. The

storage characteristics are shown in Figure 9.9.

A number of different sub-options were assessed for the Stewart Creek dam options which

represent different combinations of the following infrastructure configurations:

▪ Saego Dam storage capacity

▪ Flow capacity of pumping system between Catch Dam and Saego Dam.

The total catchment area reporting to the Stewart Creek dam options is 7,652 km2,

comprising:


▪ 957 km2 catchment area for Stewart Creek and Jones Valley Creek upstream of the

Gap Dam

▪ 64 km2 catchment area between Gap Dam and Saego Dam

▪ 63 km2 catchment area for Back Valley Creek upstream of the Catch Dam.




Figure 9.8 Concept Infrastructure Arrangement for Stewart Creek Dam Options




Figure 9.9 Storage Characteristics for the Stewart Creek Dam Options

9.3.4 Options Assessment

Overview

The long listed dam options were assessed in terms of the water supply yield and the

infrastructure costs. Water supply yields were identified for a 90% monthly supply reliability

(i.e. the yield able to be supplied in 90% of months). Infrastructure costs were estimated as

the present value (PV) cost corresponding to the capital cost and annual operating costs

over a 50 year operating period. The options were compared using the PV cost of the

infrastructure per unit volume of annual yield that can be supplied by the options (i.e. $/ML

supplied).

Dam Yield Assessment

Water supply yields for the Alstonvale and Stewart Creek dam options were assessed using

a continuous historical reservoir simulation model. The reservoir simulation model was

developed using the GoldSim Montecarlo simulation software. GoldSim is a general

purpose simulation software for dynamically modelling complex systems in business,

engineering and science. GoldSim supports decision and risk analysis by simulating future

performance while quantitatively representing the uncertainty and risks inherent in all

complex systems. GoldSim is used extensively for modelling of water resource applications

and was selected for its’ ability to undertake complex simulations efficiently with short

simulation timeframes. Given the large number of options to be assessed for the HIP,

0

1,000

2,000

3,000

4,000

5,000

6,000

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000

Are

a (h

a)

Volume (ML)

Saego Dam

The Gap Dam

Catch Dam




GoldSim was considered a more efficient simulation platform than the Flinders Source

Model used by the Department of Environment and Science (DES) for the Gulf Water Plan.

The GoldSim reservoir simulations were undertaken for the same historical period as the

Flinders Source Model (122 water years spanning the period July 1889 to June 2011) since

some of the stream flow sequences from the Flinders Source Model were used as inputs

for the GoldSim model. The reservoir simulations were undertaken using a daily time step.

For the options assessment, the water supply yields were identified for a 90% monthly

supply reliability which is defined as the yield able to be supplied in 90% of months in the

historical simulation period.

Full details of the dam yield modelling are provided in the HIP Dam Yield Study technical

report which is provided in Appendix F. Key aspects of the dam yield modelling simulations

are detailed in Table 9.2.

Table 9.2 Details of Dam Yield Modelling Simulations for the Options Assessment

Model Aspect Description

Simulation period July 1889 to June 2011 (122 water years)

Simulation time step 1 day

Stream flow sequences for

Alstonvale Dam options

Betts Gorge Creek dam site: Historical daily stream flow sequence derived using

AWBM daily rainfall runoff model calibrated to stream gauging data for Station

No. 915007A (Betts Gorge Creek at Alstonvale)

Canterbury Creek dam site: Historical daily stream flow sequence derived using

AWBM daily rainfall runoff model with same parameters as Betts Gorge Creek

Galah Creek diversion structure: Stream flows from Flinders Source Model

scaled to diversion structure location

Flinders River diversion structure: Stream flows from Flinders Source Model at

Node 001-GS915013A (Glendower gauging station)

(Note that there are no surface water licences upstream of the Alstonvale Dam

scheme)

Stream flow sequences for

Stewart Creek dam options

Gap Dam, Saego Dam and Catch Dam sites (Stewart Creek and Back Valley

Creek): Historical daily stream flow sequences derived using AWBM daily rainfall

runoff model with same parameters as Betts Gorge Creek

Flinders River diversion weir: Stream flows from Flinders Source Model at

confluence of Flinders River and Betts Gorge Creek (Node 009-confluence).

Stream flows were applied for a minimum development scenario (i.e. no

upstream water use) assuming that upstream water licences would be

relinquished in lieu of the HIP





Historical daily rainfall data (for

stream flow calculations and

direct rainfall inflows to dam

reservoirs)

SILO Data Drill gridded daily rainfall data

For stream flow calculations, averaging of the gridded data within the catchment

areas was undertaken.

Historical daily evapotranspiration

data (for stream flow calculations)

SILO Data Drill gridded Morton’s potential evapotranspiration data

For stream flow calculations, averaging of the gridded data within the catchment

areas was undertaken.

Historical daily evaporation data

(for evaporation losses from dam

reservoirs)

SILO Data Drill gridded Morton’s lake evaporation data at dam site locations

Dam reservoir seepage losses Constant seepage loss rate of 0.82 mm/day (300 mm/year) from the ponded

surface areas of the dams

Dam storage capacities Alstonvale Dam options:

• Alstonvale Dam: Different storage capacities investigated in range 150

to 700 GL

• Canterbury Creek Dam: Different storage capacities investigated in

range 100 to 500 GL

Stewart Creek dam options:

• Saego Dam: Different storage capacities investigated in range 300 to

500 GL

• Gap Dam: Storage capacity varies in response to Saego Dam storage

capacity (Gap Dam has same full supply level as Saego Dam)

• Catch Dam: 35 GL (maximum storage capacity to allow gravity

diversions out of Flinders River into Catch Dam)

Dam dead storage capacities No dead storage volumes assumed for all dams (i.e. assumes all water in the

dams is accessible for irrigation supply)

Diversion/transfer capacities Alstonvale Dam options:

• Flinders River diversion structure (diversion to Galah Creek): 250 m3/s

(21.6 GL/d) diversion capacity

• Galah Creek diversion structure (diversion to Canterbury Creek Dam):

500 m3/s (43.2 GL/d) diversion capacity (diversion of stream flows from

both Flinders River and Galah Creek)





• Canterbury Creek Dam pumping system (pumped transfers to

Alstonvale Dam: Different pumping capacities investigated in range 5

to 20 m3/s (432 to 1,728 ML/d)


• Flinders River diversion structure (diversion to Catch Dam): 250 m3/s

(21.6 GL/d) diversion capacity

• Catch Dam pumping system (pumped transfers to Saego Dam:

Different pumping capacities investigated in range 10 to 600 m3/s

(864 ML/d to 51.8 GL/d)

• Transfers between Saego Dam and Gap Dam: Assumed that Saego

Dam overflows into Gap Dam once the storage capacity in Saego Dam

is reached

• Transfers between Gap Dam and Saego Dam: 23 m3/s (2,000 ML/d)

• Transfers between Saego Dam and Gap Dam occur to maximise the

volume of water stored in Saego Dam to minimise storage losses

Environmental release/pass flow

requirements

Alstonvale Dam options:

• Flinders River diversion structure: 4 m3/s (346 ML/d) pass flow (i.e. all

upstream stream flows up to pass flow threshold allowed to pass the

diversion structure)

• Galah Creek diversion structure: 4 m3/s (346 ML/d) pass flow (i.e. all



• Alstonvale Dam: 1 m3/s (86.4 ML/d) capacity environmental release

(environmental releases occur when there are catchment inflows to the

dam)

• Canterbury Creek Dam: No environmental release


• Flinders River diversion structure: 8 m3/s (691 ML/d) pass flow (i.e. all



• Saego Dam: No environmental release (dam location is near

downstream limit of Stewart Creek)

• Catch Dam: No environmental release (dam location is near

downstream limit of Back Valley Creek)

Note: Environmental release/pass flow requirements were assigned to achieve a

compromise between the dam yield and downstream environmental flow





requirements. Increased environmental release/pass flow thresholds were

shown to cause a significant reduction in dam yield.

Irrigation demand An annual water supply demand was applied for 6 months of the year from May

to October. Annual supply demand rates were adjusted for each dam option to

achieve a 90% monthly supply reliability (i.e. supply reliability calculated only for

months in which there is an irrigation demand)

A summary of the dam yield results for the Alstonvale Dam options is provided in Table 9.3

and includes variations of the following infrastructure configurations:

▪ Alstonvale Dam only (no external catchment diversions or Canterbury Creek Dam)

▪ Canterbury Creek Dam only (with Flinders River and Galah Creek catchment diversions

but no Alstonvale Dam)

▪ Full scheme with Alstonvale Dam, Canterbury Creek Dam and Flinders River and Galah

Creek catchment diversions.

Table 9.3 Dam Yield Results for Alstonvale Dam Options

Alstonvale Dam Storage

Capacity (GL)


Storage Capacity (GL)

Canterbury Creek Dam to

Alstonvale Dam Transfer

Capacity (m3/s)

90% Monthly Reliability

Yield (GL/year)

150 No dam - 14

500 200 7.5 86

500 300 7.5 90

500 100 7.5 74

700 100 7.5 76

300 100 7.5 69

300 100 5 67

300 100 10 71

300 100 20 72

500 100 5 72




Alstonvale Dam Storage

Capacity (GL)


Storage Capacity (GL)

Canterbury Creek Dam to

Alstonvale Dam Transfer

Capacity (m3/s)

90% Monthly Reliability

Yield (GL/year)

500 200 5 82

500 200 10 87

No dam 300 - 46

No dam 400 - 50

No dam 500 - 54

The dam yield modelling for the Alstonvale Dam options indicated the following findings:

▪ The 90% monthly reliability yield for the option involving Alstonvale Dam only (no

external catchment diversions) is only 14 GL/year. The yield is limited by the stream

flows in Betts Gorge Creek rather than the storage capacity of Alstonvale Dam.

▪ The 90% monthly reliability yield for the options involving Canterbury Creek Dam only

(no Alstonvale Dam) varies from 46 to 54 GL/year for dam storage capacities of 300 to

500 GL.

▪ The 90% monthly reliability yield for the options involving both Alstonvale Dam and

Canterbury Creek Dam varies from 67 to 90 GL/year for the options investigated.

▪ The maximum possible yield for the full scheme with no restrictions on dam storage

capacities or transfer capacity between the two reservoirs was determined as

130 GL/year (result not shown in Table 9.3).

▪ Storage losses are significant and typically equal to 50 to 100% of the system yield

depending on the infrastructure configuration.

A summary of the dam yield results for the Stewart Creek dam options is provided in Table

9.4.




Table 9.4 Dam Yield Results for Stewart Creek Dam Options

90% Monthly Reliability Yield (GL/year)

Catch Dam to Saego

Dam Transfer Capacity

(m3/s)

300 GL Saego Dam

Storage Capacity

400 GL Saego Dam

Storage Capacity

500 GL Saego Dam

Storage Capacity

10 62 65 65

25 75 80 84

50 87 95 98

100 96 110 116

200 103 121 133

300 105 126 141

400 106 127 145

500 106 129 148

600 107 129 149

The dam yield modelling for the Stewart Creek dam options indicated the following findings:

▪ The 90% monthly reliability yield varies from 62 to 149 GL/year for the options

investigated.

▪ A large pumping capacity (in excess of 50 m3/s) is required between the Catch Dam and

Saego Dam to achieve a yield of 100 GL/year.

▪ The maximum possible yield with no restrictions on dam storage capacities or transfer

capacities was determined as 210 GL/year (result not shown in Table 9.4).

▪ Storage losses are significant and typically equal to 50 to 100% of the system yield

depending on the infrastructure configuration.

Dam Cost Estimates

High-level concept designs and capital cost estimates were developed for the dams

associated with the Alstonvale Dam and Stewart Creek dam options by ARQ Australia Pty

Ltd (2019a and 2019b) in collaboration with Newman Engineering Pty Ltd.

Concept designs and capital cost estimates were developed for the following dam

configurations:




▪ Alstonvale Dam options:

• Alstonvale Dam: 300, 500 and 700 GL storage capacity

• Canterbury Creek Dam: 100, 200 and 300 GL storage capacity.

▪ Stewart Creek dam options:

• Catch Dam: 35 GL storage capacity

• Saego Dam: 300, 400 and 500 GL storage capacity

• Gap Dam: 325, 550 and 850 GL storage capacity (corresponding to full supply levels

nominally 300 mm higher than each of the Saego Dam configurations).

No detailed geotechnical investigations were undertaken to support the concept dam

designs (a site visit and minor test pitting was undertaken for the Alstonvale Dam site).

Conservative assumptions were made in relation to foundation and cut-off depths for the

Saego Dam and Catch Dam which would be expected to be founded on alluvial soils given

the locations of the dams within the floodplain area of the Flinders River.

The following types of dam construction were considered suitable for the dams based on

the dam configurations and expected foundation conditions:


• Alstonvale Dam: Roller compacted concrete gravity dam

• Canterbury Creek Dam: Clay core rockfill embankment with concrete gravity spillway.


• Catch Dam: Clay core rockfill embankment with concrete gravity spillway

• Saego Dam: Clay core rockfill embankment with concrete gravity spillway

• Gap Dam: Roller compacted concrete gravity dam.

The capital cost estimates for the dams included the following allowances for direct and

indirect costs:

▪ Lump sum allowances for construction accommodation camp, temporary construction

facilities, permanent infrastructure and land acquisition costs

▪ 10% measurement growth allowance (applied to direct costs)

▪ 40% allowance for contractor preliminaries and general costs (applied to direct costs)

▪ 10% allowance for planning and design costs (applied to direct costs and preliminaries)

▪ 10% contingency allowance (applied to direct costs and preliminaries).

Design details and assumptions, concept design plans and cost estimates for the dams are

detailed in the design basis reports prepared by ARQ Australia Pty Ltd (2019a and 2019b)




which are included in Appendix D. A summary of the dam design configurations and cost

estimates is provided in Table 9.5 for the Alstonvale Dam options and Table 9.6 for the

Stewart Creek dam options.

Table 9.5 High-Level Capital Cost Estimates for Alstonvale Dam Options

Dam Storage

Capacity (GL)

Full Supply

Level (m AHD)

Dam Crest

Level (m AHD)

Dam Capital

Cost ($million)

Unit Cost ($ per

ML of storage

capacity)

Alstonvale Dam 300 314 318 $283M $944

Alstonvale Dam 400 320 324 $326M $652

Alstonvale Dam 500 325 329 $361M $566

Canterbury

Creek Dam

100 308 311.5 $184M $1,843

Canterbury

Creek Dam

200 311.5 315 $239M $1,194

Canterbury

Creek Dam

300 314 317.5 $278M $928

Table 9.6 High-Level Capital Cost Estimates for Stewart Creek Dam Options

Dam Storage

Capacity

(GL)

Full Supply

Level (m AHD)

Dam Crest Level

(m AHD)

Dam Capital

Cost ($million)

Unit Cost ($ per

ML of storage

capacity)

Catch Dam 35 269 274 $581M1 $16,6061

Saego Dam 300 278.5 282.5 $869M $2,898

Saego Dam 400 283.5 287.5 $1,229M $3,072

Saego Dam 500 288.5 292.5 $1,313M $2,626

Gap Dam 325 278.82 282.8 $202M $622

Gap Dam 550 283.82 287.8 $263M $478

Gap Dam 850 288.82 292.8 $333M $392

1 Catch Dam cost includes diversion weir on Flinders River and diversion channel into Catch Dam.

2 Gap Dam full supply levels are nominally 300 mm higher than corresponding Saego Dam full supply levels.




The estimated cost of Saego Dam is significantly higher than the other dams, primarily as

a result of the long embankment length and the deeper foundation and cut-off requirements.

To facilitate assessment of the options, a smaller list of options was selected to determine

overall capital and operating costs. These options were assessed as the options considered

likely to be the most cost effective (cost per unit yield) options for each of the Alstonvale

Dam and Stewart Creek dam schemes. The options selected for costing are as follows:


• 500 GL capacity Alstonvale Dam, 300 GL capacity Canterbury Creek Dam and

7.5 m3/s transfer capacity between the dams

• 300 GL capacity Canterbury Creek Dam only (no Alstonvale Dam).


• Three options corresponding to Saego Dam storage capacities of 300, 400 and

500 GL with a transfer capacity between the Catch Dam and Saego Dam of 100 m3/s

• Three options corresponding to Saego Dam storage capacities of 300, 400 and

500 GL with a transfer capacity between the Catch Dam and Saego Dam of 200 m3/s.

High-level capital cost estimates were developed for the following infrastructure elements:


• Alstonvale Dam and/or Canterbury Creek Dam (as detailed above)

• Flinders River diversion (i.e. diversion weir and channel)

• Galah Creek diversion (i.e. diversion weir and channel)

• Canterbury Creek Dam to Alstonvale Dam pump transfer system (electric powered)

• Irrigation delivery system assumed to consist of a regulating weir on the Flinders

River downstream of the confluence with Betts Gorge Creek (dams to release water

to the regulating weir) and a pumping system (electric powered) between the

regulating weir and the irrigation area on the southern side of the Flinders River (no

further allowance for distribution of water within the irrigation area)

• Electricity supply upgrade to the new pump station sites (concept details identified in

the HIPCo Electricity Strategy – Phase 1 Report by W. Wightman Advisory, 2019).


• Catch Dam (includes diversion weir and channel on Flinders River), Saego Dam and

Gap Dam (as detailed above)

• Catch Dam to Saego Dam pump transfer system (diesel powered)

• Irrigation delivery system comprising a pumping system (electric powered) between

Saego Dam and the irrigation area on the southern side of the Flinders River (no

further allowance for distribution of water within the irrigation area)

• Electricity supply upgrade to the Saego Dam irrigation delivery pump station (concept

details identified in the HIPCo Electricity Strategy – Phase 1 Report by W. Wightman

Advisory, 2019).




A summary of the infrastructure capital cost estimates for the selected options is presented

in Table 9.7 (Alstonvale Dam options) and Table 9.8 (Stewart Creek dam options).

Annual operating and maintenance costs and periodic sustaining capital costs were

estimated as follows:

▪ Infrastructure annual operating and maintenance costs (excluding power costs):

• Dams: 0.15% of capital cost

• Weirs and diversions: 1% of capital cost

• Pipelines: 0.25% of capital cost

• Electric pumps: 2% of capital cost

• Diesel pumps: 4% of capital cost.

▪ Power costs for pumping:

• Electricity: 17.3c/kWh as identified in the HIPCo Electricity Strategy – Phase 1 Report

(W. Wightman Advisory, 2019)

• Diesel (Catch Dam to Saego Dam pumping system): $17/ML (assuming average

10 m pumping head and $1/L diesel cost after the diesel rebate).

▪ Sustaining capital:

• Replacement of mechanical and electrical components of pump stations after 25

years.

Equivalent PV total project lifecycle costs for the capital, annual operating and maintenance

and sustaining capital costs for the selected options were estimated over a project life of 50

years and assuming a discount rate of 7%. The total project lifecycle costs are summarised

in Table 9.9 (Alstonvale Dam options) and Table 9.10 (Stewart Creek dam options).

To facilitate comparison of the cost effectiveness of the different options, the total project

lifecycle costs were expressed as a unit cost per megalitre of yield. The unit costs of the

selected options are listed in Table 9.11 (Alstonvale Dam options) and Table 9.12 (Stewart

Creek dam options).

The unit costs for the Stewart Creek dam options are approximately 60% higher than the

Alstonvale Dam options.

None of the long list options are considered economically viable, with a cost per megalitre

significantly higher than what irrigators would be willing to pay for water allocations (around

$2,000/ML).




Table 9.7 High-Level Capital Cost Estimates for Selected Alstonvale Dam Options

Option Configuration Capital Costs ($million)

Alstonvale Dam

Storage

Capacity (GL)

Canterbury

Creek Dam

Storage

Capacity (GL)

Canterbury

Creek Dam to

Alstonvale Dam

Transfer

Capacity (m3/s)

Total Dams

Cost

Total

Diversions

Cost

Canterbury

Creek Dam to

Alstonvale Dam

Transfer Cost

Irrigation

Delivery

System Cost

Electricity

Supply

Upgrade Cost

Total Capital

Cost

500 300 7.5 $605M $180M $62M $100M $20M $967M

No dam 300 - $278M $180M - $68M $15M $541M

Table 9.8 High-Level Capital Cost Estimates for Selected Stewart Creek Dam Options


Saego Dam

Storage Capacity

(GL)

Gap Dam Storage

Capacity (GL)

Catch Dam to

Saego Dam

Transfer Capacity

(m3/s)

Total Dams Cost Catch Dam to

Saego Dam

Transfer Cost

Irrigation Delivery

System Cost

Electricity Supply

Upgrade Cost

Total Capital Cost

300 325 100 $1,653M $100M $67M $20M $1,840M





Saego Dam

Storage Capacity

(GL)

Gap Dam Storage

Capacity (GL)

Catch Dam to

Saego Dam

Transfer Capacity

(m3/s)

Total Dams Cost Catch Dam to

Saego Dam

Transfer Cost

Irrigation Delivery

System Cost

Electricity Supply

Upgrade Cost

Total Capital Cost

400 550 100 $2,073M $100M $77M $20M $2,270M

500 850 100 $2,227M $100M $81M $20M $2,429M

300 325 200 $1,653M $200M $72M $20M $1,945M

400 550 200 $2,073M $200M $85M $20M $2,378M

500 850 200 $2,227M $200M $93M $20M $2,541M




Table 9.9 High-Level Total Project Cost Estimates for Selected Alstonvale Dam Options

Option Configuration Costs ($million)

Alstonvale Dam

Storage Capacity

(GL)

Canterbury Creek

Dam Storage

Capacity (GL)

Canterbury Creek

Dam to Alstonvale

Dam Transfer

Capacity (m3/s)

Total Capital Cost Total Sustaining

Capital Cost (cost

every 25 years)

Total Annual

Operating and

Maintenance Cost

(cost every year)

Present Value of

Total Project

Lifecycle Cost (50

year project life)

500 300 7.5 $967M $20M $11.6M $1,131M

No dam 300 - $541M $2M $4.2M $600M

Table 9.10 High-Level Total Project Cost Estimates for selected Stewart Creek Dam Options


Saego Dam Storage

Capacity (GL)

Gap Dam Storage

Capacity (GL)

Catch Dam to Saego

Dam Transfer

Capacity (m3/s)


Capital Cost (cost

every 25 years)

Total Annual

Operating and

Maintenance Cost

(cost every year)

Present Value of

Total Project

Lifecycle Cost (50

year project life)

300 325 100 $1,840M $42M $12.5M $2,020M

400 550 100 $2,270M $44M $13.8M $2,468M

500 850 100 $2,429M $45M $14.2M $2,634M

300 325 200 $1,945M $68M $14.3M $2,155M





Saego Dam Storage

Capacity (GL)

Gap Dam Storage

Capacity (GL)

Catch Dam to Saego

Dam Transfer

Capacity (m3/s)


Capital Cost (cost

every 25 years)

Total Annual

Operating and

Maintenance Cost

(cost every year)

Present Value of

Total Project

Lifecycle Cost (50

year project life)

400 550 200 $2,378M $71M $15.8M $2,609M

500 850 200 $2,541M $73M $16.6M $2,784M




Table 9.11 Unit Cost Estimates for Selected Alstonvale Dam Options

Option Configuration

Alstonvale Dam

Storage

Capacity (GL)

Canterbury

Creek Dam

Storage

Capacity (GL)

Canterbury

Creek Dam to

Alstonvale Dam

Transfer

Capacity (m3/s)

Present Value

of Total Project

Lifecycle Cost

($million)

90% Monthly

Reliability Yield

(GL/year)

Unit Cost

($million per

ML of Yield)

500 300 7.5 $1,131M 90 $12,566

No dam 300 - $600M 46 $13,041

Table 9.12 Unit Cost Estimates for Selected Stewart Creek Dam Options

Option Configuration

Saego Dam

Storage

Capacity (GL)

Gap Dam

Storage

Capacity (GL)

Catch Dam to

Saego Dam

Transfer

Capacity (m3/s)

Present Value

of Total Project

Lifecycle Cost

($million)

90% Monthly

Reliability Yield

(GL/year)

Unit Cost

($million per

ML of Yield)

300 325 100 $2,020M 96 $21,043

400 550 100 $2,468M 110 $22,436

500 850 100 $2,634M 116 $22,704

300 325 200 $2,155M 103 $20,921

400 550 200 $2,609M 121 $21,562

500 850 200 $2,784M 133 $20,930

9.4 Options Short List

Since none of the long list options were considered to be economically viable, a revised and

flexible approach was adopted for the progression of the PBC study to consider smaller

dams with less pumping/energy requirements. It was decided to proceed with further

investigation of an alternative Stewart Creek dam option for the following reasons:

▪ A smaller Saego Dam can be filled with gravity diversions out of the Flinders River

without the need for the separate Catch Dam reservoir or any pumping into Saego Dam.




▪ HIPCo advised that geological conditions along the majority of the Saego Dam and

Catch Dam alignments are expected to comprise relatively shallow mudstone.

Accordingly, dam foundation excavation and cut-off depths are likely to be significantly

less than that assumed in the Stewart Creek dam option cost estimates prepared by

ARQ Australia Pty Ltd.

▪ For a smaller Saego Dam, the Gap Dam may not be required since the incremental

increase in yield that results from the Gap Dam (due to reduced storage losses) may be

relatively minor.

▪ It may be possible to achieve gravity transfers of water from Saego Dam to the lower

parts of the irrigation area.

▪ Operating the storages to provide a combination of higher and lower reliability water

allocations to customers could allow higher value horticulture crops to be grown which

will significantly improve the economic outcomes of the Project.

Further consideration of these factors and investigation of costs and yields for smaller

Stewart Creek dam configurations led to the preferred project option described in Section

10 which involves gravity diversions out of the Flinders River directly into a smaller Saego

Dam on Stewart Creek, without the need for the Catch Dam, Gap Dam or any pumping into

Saego Dam. This preferred option is different to any of the water supply options previously

investigated for the Hughenden area.




10. REFERENCE PROJECT

10.1 Introduction

Based on the findings of the options assessment process (refer Section 9), a Reference

Project was identified to achieve improved economic outcomes in terms of reduced capital

and operating costs and optimised use of water to maximise agricultural production

opportunities from the Project.

The Reference Project is located along the section of the Flinders River between Betts

Gorge Creek and Stewart Creek and is based on a primary water storage dam (Saego Dam)

that is configured to facilitate gravity diversion of stream flows out of the Flinders River into

the dam. Geotechnical investigations were undertaken to inform the design of the water

storages.

This section of the PBC report describes the following aspects of the proposed Reference

Project:

▪ Bulk water diversion and storage infrastructure and irrigation delivery infrastructure

proposed for the Reference Project.

▪ Capital, operating and sustaining capital costs for the proposed infrastructure.

▪ Estimated water yields from the Reference Project for two alternative cropping

scenarios:

• Diversified cropping scenario consisting of horticulture crops supplied with higher

reliability irrigation water and grazier support crops supplied with lower reliability

irrigation water; and

• Grazier support crops supplied with medium reliability irrigation water.

▪ Licensing requirements for the proposed water take from the Reference Project.

▪ Potential impacts of the Reference Project on the stream flow characteristics in the

downstream reaches of the Flinders River.

▪ Compliance of the Reference Project with the Environmental Flow Objectives specified

for the Flinders River catchment in the Gulf Water Plan.

▪ Potential impacts of the Reference Project on existing water users.

10.2 Reference Project Summary

The Reference Project for the Hughenden Irrigation Project comprises a 190 GL storage

capacity dam (Saego Dam) on Stewart Creek and Back Valley Creek approximately 45 km

to the north-west of the township of Hughenden, with associated gravity diversion




infrastructure on the Flinders River and a delivery system to irrigation areas located to the

south of the Flinders River.

The total catchment area reporting to the Reference Project is 7,652 km2, comprising:


▪ 1,084 km2 direct catchment area of Saego Dam comprising the Stewart Creek, Jones

Valley Creek and Back Valley Creek catchments.

The Reference Project is predicted to be able to supply up to 84 GL/year of irrigation water

at an 80% monthly reliability to support a maximum irrigation area of approximately

11,400 ha of crops comprising cereal grains, hay and fodder to support the local cattle

industry (grazier support strategy). As an alternative cropping scenario (diversified cropping

strategy), the Reference Project could supply up to 30 GL/year of irrigation water at a higher

reliability (94% monthly reliability) to support a maximum irrigation area of approximately

2,100 ha of higher value horticulture crops (avocados, mangoes, lemons and mandarins)

and an additional 40 GL/year of irrigation water at a lower reliability (70% monthly reliability)

to support a maximum irrigation area of approximately 5,400 ha of cereal grains, hay and

fodder crops to support the local cattle industry.

Key infrastructure elements for the Reference Project include:

▪ In-stream diversion weir on the Flinders River downstream of the confluence with Betts

Gorge Creek

▪ Excavated diversion channel to facilitate gravity diversions of water out of the Flinders

River (upstream of the diversion weir) into the Saego Dam

▪ 190 GL storage capacity Saego Dam on the lower reaches of Stewart Creek and Back

Valley Creek

▪ Irrigation delivery system to supply water from Saego Dam to the irrigation areas on the

southern side of the Flinders River, comprising:

• Irrigation delivery offtake structure at Seago Dam

• Inverted siphon (gravity pipeline) under the Flinders River channel and floodplain

• Gravity open channel distribution system to supply water to farms within the lower

parts of the irrigation area

• Pumping system (pump station and rising main) to lift water into the channel

distribution system supplying water to higher parts of the irrigation area

• Gravity open channel distribution system to supply water to farms within the higher

parts of the irrigation area.

Concept design drawings for the Reference Project infrastructure are included in Appendix

E. The general infrastructure arrangement for the Reference Project is shown in Figure

10.1. Zoomed in views of the general infrastructure arrangements for the water diversion




and storage infrastructure and irrigation delivery infrastructure are provided in Figure 10.2

and Figure 10.3 respectively.

10.3 Infrastructure Design Summary

Concept design of the Reference Project infrastructure was undertaken to demonstrate

proof of concept and to allow construction costs of the infrastructure to be estimated. The

concept design utilised the findings of flood and hydrology assessments, preliminary

geotechnical investigations of the Saego Dam and Flinders River diversion weir sites and

visual inspections of the infrastructure sites. A technical report that details the basis of the

infrastructure concept design is provided in Appendix H. Key design aspects of the

proposed Reference Project infrastructure are summarised in Table 10.1.




Figure 10.1 General Infrastructure Arrangement for the HIP Reference Project




Figure 10.2 General Infrastructure Arrangement for the Water Diversion and Storage Infrastructure




Figure 10.3 General Infrastructure Arrangement for the Irrigation Delivery Infrastructure




Table 10.1 Reference Project Infrastructure Summary

Design Criteria Description

Saego Dam Embankment

Failure impact rating Category 1 (referable dam)

Population at risk 20 (1:10,000 AEP flood failure)

Watercourses impounded Stewart Creek and Jones Valley Creek

Embankment type Clayfill core and rockfill shoulders with transition zones

Crest length 9,500 m

Direct catchment area 1,084 km2 (excluding Flinders River diversion)

Impoundment area at FSL 44 km2

Dam crest elevation RL 270.5 m AHD

Full supply level (FSL) RL 266.0 m AHD

Storage volume at FSL 190 GL (including volume impounded behind the Flinders River diversion weir)

Maximum embankment height 21 m (above natural surface level)

Crest width 8.0 m

Upstream batter slope 1V:1.75H

Downstream batter slope 1V:1.75H

Downstream batter toe flood

scour protection (berm)

2 m above 1:10,000 AEP Flinders River flood level

Outlet structure Reinforced concrete inlet tower with 2 No. DN2100 RCP pipes through the

embankment

Fish passage provisions Fish passage between Stewart Creek/Back Valley Creek and the Flinders River

provided via the diversion channel and fish ladder on the Flinders River diversion

weir

Saego Dam Spillway

Spillway type Ogee crest spillway





Construction Roller-compacted concrete with structural concrete facing

Length 300 m

Discharge Stilling basin discharging into Back Valley Creek

Design discharge capacity 2,853 m3/s (1:10,000 AEP design storm event)

Discharge coefficient 2.1

Spillway freeboard 4.5 m

1:10,000 AEP storm event (2.73 m) + 1:10 AEP wind event (1.75 m)

Diversion Channel

Invert level RL 260.0 m AHD

Length 6,600 m

Invert grade 0%

Base width 50 m (increasing to 100 m from CH 5,500 to 6,600)

Side slope 1V:4H

Maximum excavation depth 13 m

Design channel flow rate 250 m3/s (prior to overtopping of Flinders River diversion weir)

Flinders River Diversion Weir

Weir crest elevation RL 266.0 m AHD

Weir crest length 125 m

Maximum weir height 7 m (above natural surface level)

Weir construction Roller-compacted concrete

Embankment crest levels Northern embankment: RL 272.0 m AHD

Southern embankment: RL 268.0 m AHD

Embankment construction Northern embankment: Earth embankment comprising a clayfill core and rockfill

shoulders





Southern embankment: Homogenous clay embankment with rock protection

Fish passage provisions Vertical slot fish ladder

Irrigation Delivery System

Irrigation supply volume Diversified cropping strategy: 30 GL/year higher reliability water (94% monthly

reliability) for horticulture crops and 40 GL/year lower reliability water (70%

monthly reliability) for grazier support crops

Grazier support strategy: 84 GL/year water at 80% monthly reliability

Irrigation area supplied Diversified cropping strategy: 7,505 ha comprising 2,100 ha of horticulture crops

and 5,405 ha of grazier support crops

Grazier support strategy: 11,351 ha of grazier support crops

Flinders River pipeline crossing

(inverted siphon)

2 no. DN2100 reinforced concrete pipes (RCP) – buried installation (with cement

stabilised sand backfill through the Flinders River channel)

Open channel delivery system Channel depth: 3 m (2m design flow depth and 1 m freeboard)

Channel longitudinal gradient: 1V:15,000H

Channel base width: 3 m

Channel side slope: 1V:3H

Channel construction type: Excavated channel

Channel lengths:

• Lower (gravity) channel: 16,850 m (both cropping strategies)

• Higher (pumped) channel:

o Diversified cropping strategy: 15,920 m

o Grazier support strategy: 29,420 m

Design flow rates:

• Lower (gravity) channel:

o Diversified cropping strategy: 5.4 m3/s (467 ML/d)

o Grazier support strategy: 5.3 m3/s (458 ML/d)

• Higher (pumped) channel:

o Diversified cropping strategy: 3.7 m3/s (320 ML/d)

o Grazier support strategy: 4.0 m3/s (346 ML/d)





Pump station for higher delivery

channel

Design flow rate:

• Diversified cropping strategy: 3.7 m3/s (320 ML/d)

• Grazier support strategy: 4.0 m3/s (346 ML/d)

Power requirement (diesel powered pumps):

• Diversified cropping strategy: 1.9 MW

• Grazier support strategy: 2.1 MW

Rising main: 2,800 m of DN1500 steel pipe (buried installation)

10.4 Infrastructure Costs

Initial capital expenditure (CapEx) and operating expenditure (OpEx) costs have been

estimated for the Reference Project infrastructure based on the concept designs. The cost

estimates are priced in 2019 dollars and are exclusive of GST. Details of the basis and

assumptions for the infrastructure cost estimates are described in the Reference Project

Infrastructure Concept Design technical report which is provided in Appendix H.

10.4.1 Capital Costs

A summary breakdown of the capital costs for each crop strategy is provided in Table 10.2

and Table 10.3. The following indirect and contingency cost allowances were adopted for

the capital cost estimates.

▪ Contractor indirect costs: 15% of contractor direct costs

▪ Principal’s costs: 15% of total direct costs (contractor direct and indirect costs) in

addition to costs for acquisition of land and water entitlements

▪ Contingency: A deterministic contingency allowance of 35% (applied to total contractor

direct and indirect costs and Principal’s costs) in lieu of a formal probabilistic risk

assessment/adjustment for capital costs which has not been undertaken in the PBC

study.

The equivalent capital costs per unit volume of annual water supply yields are:

▪ Diversified cropping strategy: $7,119 per megalitre of annual yield (70 GL/year total

yield)

▪ Grazier support strategy: $6,105 per megalitre of annual yield (84 GL/year total yield).




Table 10.2 Capital Cost Summary – Diversified Cropping Strategy


Direct Costs

($M)

Contractor

Indirect

Costs ($M)

Principal's

Cost ($M)

Contingency

($M)

Total ($M)

Saego Dam $160.90 $24.20 $63.60 $88.20 $336.90


Weir $14.40 $2.20 $2.50 $6.70 $25.80

Irrigation Delivery $36.50 $5.50 $15.30 $20.10 $77.40

Total $244.30 $36.80 $87.10 $130.10 $498.30

Table 10.3 Capital Cost Summary – Grazier Support Strategy


Direct Costs

($M)

Contractor

Indirect

Costs ($M)

Principal’s

Cost ($M)

Contingency

($M)

Total ($M)

Saego Dam $160.90 $24.20 $64.30 $88.40 $337.80


Weir $14.40 $2.20 $2.50 $6.70 $25.80

Irrigation Delivery $40.60 $6.10 $20.70 $23.60 $91.00

Total $248.40 $37.40 $93.20 $133.80 $512.80

10.4.2 Operating and Maintenance Costs

Annual operating and maintenance costs were estimated as a percentage of the capital

costs with additional allowance for power costs to run the irrigation delivery pump stations.

The OpEx cost factors (% of capital costs excluding the contingency allowance) adopted

are as follows:

▪ Saego Dam: 0.25%

▪ Flinders River diversion weir: 3%

▪ Diversion channel: 2%

▪ Irrigation delivery channels: 1%




▪ Pipelines: 0.25%

▪ Pumps: 4%

The estimated annual operating and maintenance costs are summarised in Table 10.4.

Table 10.4 Operating and Maintenance Cost Summary

Description Diversified Cropping Strategy

Total Annual OpEx ($/year)

Grazier Support Strategy Total

Annual OpEx ($/year)

Saego Dam $528,000 $528,000

Diversion channel $862,000 $862,000

Flinders River diversion weir $573,000 $573,000

Irrigation delivery $1,947,000 $2,941,000

Total $3,910,000 $4,904,000

10.5 Yield Modelling

10.5.1 Overview

The GoldSim reservoir operation simulation model described in Section 9.3.4 was used to

identify the water supply yields available for the Reference Project. The scheme yield was

also independently assessed using the Flinders Source Model developed by the

Queensland Government for the Gulf Water Plan. An assessment of the potential impacts

of future climate change on the dam yield estimates has also been undertaken. The dam

yield modelling performed for the Reference Project is described in detail in the HIP Dam

Yield Study technical report which is included in Appendix F. The following sections provide

a summary of the dam yield modelling outcomes.

10.5.2 Assumptions and Methodology

The GoldSim reservoir simulation model utilised for the assessment of the Stewart Creek

dam options described in Section 9.3.4 was used for the dam yield assessment for the

Reference Project with the following changes to reflect the revised infrastructure and

operating details:

▪ The Catch Dam, Saego Dam and Gap Dam storages were combined into a single

storage for Saego Dam with a maximum storage capacity of 190 GL (including the

storage capacity upstream of the Flinders River diversion weir) and a direct catchment

area of 1,084 km2. The storage characteristics for Saego Dam are shown in Figure 10.4




and have been derived using LiDAR ground survey of the Saego Dam impoundment

area acquired by HIPCo in May 2019.

▪ The irrigation demand pattern was changed to a constant demand pattern with water

supplied over all 12 months of the year.

▪ Two different water allocation products were simulated for the diversified cropping

strategy:

• Higher reliability (Medium Priority) water allocations for irrigation of horticultural

crops: 94% monthly reliability

• Lower reliability (Low Priority) water allocations for irrigation of grazier support crops:

70% monthly reliability.

▪ A single water allocation product was simulated for the grazier support strategy

representing a monthly reliability of 80%.

▪ The water sharing rules assumed for the diversified cropping strategy (i.e. two water

allocation products) were as follows:

• Saego Dam volume greater than 47.5 GL (i.e. greater than 25% full): 100% of

allocations available for both Medium Priority and Low Priority allocations.

• Saego Dam volume less than 47.5 GL (i.e. less than 25% full): 100% of allocations

available for Medium Priority allocations and 0% of allocations available for Low

Priority allocations (i.e. supply to Low Priority allocations ceases).

The same diversion configuration assumed for the options assessment phase was adopted

for the Reference Project, comprising:

▪ A low flow (pass flow) threshold of 8 m3/s (691 ML/d) at the Flinders River diversion weir

(i.e. all inflows to the diversion weir up to 8 m3/s are passed through the weir prior to

diversion of stream flow into Saego Dam).

▪ A diversion flow capacity of 250 m3/s (i.e. maximum rate of water diversion out of the

Flinders River into Saego Dam).




Figure 10.4 Storage characteristics for Saego Dam

10.5.3 Dam Yield Results

A summary of the dam yield results for the different cropping strategies is provided in Table

10.5.

For the diversified cropping strategy, the proposed scheme is capable of supplying:

▪ 30 GL/year of higher reliability water (Medium Priority allocations) at 94% monthly

reliability (86% annual reliability) and 40 GL/year of lower reliability water (Low Priority

allocations) at 70% monthly reliability (48% annual reliability).

▪ An equivalent average annual irrigation supply of 57 GL/year.

For the grazier support strategy, the proposed scheme is capable of supplying:

▪ 84 GL/year water at 80% monthly reliability (61% annual reliability).

▪ An equivalent average annual irrigation supply of 70 GL/year.

The simulated reservoir performance of Saego Dam over the historical period (1889 to

20011) for the two different operating/demand scenarios is shown in Figure 10.5 (diversified

cropping scenario) and Figure 10.6 (grazier support scenario).

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000

246

248

250

252

254

256

258

260

262

264

266

268

Reservoir Surface Area (hectares)

Reservoir Storage (ML)

Res

ervo

ir L

evel

(m

AH

D)

Reservoir Storage

Reservoir Surface Area

Full supply level




Table 10.5 Predicted Dam Yields for Reference Project – GoldSim Model

Crop

Strategy

Medium Priority Allocations (horticulture

crops)

Low Priority Allocations (grazier support

crops)

Target

Yield

(GL/year)

Monthly

Reliability

Annual

Reliability

Average

Annual

Yield

(GL/year)

Target

Yield

(GL/year)

Monthly

Reliability

Annual

Reliability

Average

Annual

Yield

(GL/year)

Diversified

cropping

30 94% 86% 28 40 70% 48% 29

Grazier

support

- - - - 84 80% 61% 70

Figure 10.5 Simulated Reservoir Performance for Saego Dam – Diversified Cropping Scenario




Figure 10.6 Simulated Reservoir Performance for Saego Dam – Grazier Support Scenario

The predicted reservoir time histories for the historical simulation period demonstrate:

▪ Greater number of water supply failures (reservoir empty) for the grazier support

scenario as a result of the increased irrigation water use.

▪ Water supply failures can occur over extended periods (multiple years) as a result of

prolonged drought. The worst drought sequence in the historical simulation period is a

period of 6 years in the first decade of the 1900s.

The predicted annual irrigation supply volumes for the historical simulation period for the

two different diversified cropping scenario water products are shown in Figure 10.7 (Medium

Priority allocations) and Figure 10.8 (Low Priority allocations).

There are only two years predicted in the 122 year simulation period where there is less

than 10 GL/year of Medium Priority irrigation water available for horticulture crops. It is

expected that there would some replacement/replanting of older fruit trees in years with low

volumes of Medium Priority water available.

There are several occurrences predicted of multiple consecutive years of no Low Priority

irrigation water available for grazier support crops under the diversified cropping scenario.

Farmers could decide not to plant grain/fodder/hay crops for irrigated production when

Saego Dam is at low levels; however, dry-land farming could still occur on the properties.




Figure 10.7 Predicted Medium Priority Irrigation Supply Volumes – Diversified Cropping Scenario

Figure 10.8 Predicted Low Priority Irrigation Supply Volumes – Diversified Cropping Scenario




The predicted annual irrigation supply volumes for the historical simulation period for the

grazier support scenario is shown in Figure 10.9. The annual volume of water available for

irrigation will be less than 40 GL/year (approximately 50% of the total allocation volume) in

only 15% of the years in the historical simulation period for the grazier support scenario.

Figure 10.9 Predicted Irrigation Supply Volumes – Grazier Support Scenario

Average annual inflows and outflows for the Reference Project water supply scheme are

displayed in Figure 10.10 (diversified cropping scenario) and Figure 10.11 (grazier support

scenario). The diversion inflows from the Flinders River are significantly greater (almost four

times larger) than the direct inflows from the Saego Dam catchment area.

The average storages losses from Saego Dam (evaporation and seepage) represent a

significant loss from the system, at 63% of the average irrigation supply for the grazier

support scenario and 90% of the average irrigation supply for the diversified cropping

scenario. Opportunities to reduce storage losses will be investigated during subsequent

phases of the Project.

The average annual flow diversion out of the river system (irrigation supply and storage

losses) for the proposed HIP scheme will be 109 GL/year for the diversified cropping

scenario and 114 GL/year for the grazier support scenario. These diversions out of the river

system represent approximately 38% of the mean annual flow in the Flinders River system

at the scheme location (i.e. confluence of the Flinders River and Stewart Creek), but only

4% of the mean annual flow at the mouth of the Flinders River.




Figure 10.10 Average Annual Inflows and Outflows – Diversified Cropping Scenario

Figure 10.11 Average Annual Inflows and Outflows – Grazier Support Scenario




10.5.4 Independent Yield Assessment Using Flinders Source Model

The scheme yield estimated for the HIP Reference Project was independently assessed for

the grazier support scenario only (84 GL/year irrigation demand) using the Source model of

the Flinders River catchment that was developed to inform the water resource planning

aspects of the Water Plan (Gulf) 2017. The Source software was developed by eWater

(https://ewater.org.au/products/ewater-source/) and is designed to simulate all aspects of

water resource systems to support integrated planning, operations and governance from

urban, catchment to river basin scales including human and ecological influences. Source

accommodates diverse climatic, geographic, water policy and governance settings for both

Australian and international climatic conditions.

The independent yield assessment was undertaken by Hydrology and Risk Consulting

(HARC) under the instruction and direction of Engeny. The WRP/ROP Amendment version

of the Flinders Source Model developed by the Department of Environment and Science

(DES) was used for the assessment. This version of the model assumes full utilisation of all

surface water entitlements (including unallocated reserves) and represents a ‘maximum

water use’ scenario as allowed under the Gulf Water Plan. The same configuration and

operating conditions (i.e. dam size, diversion configuration, seepage rate, irrigation

demand, etc.) assumed for the Reference Project in the GoldSim reservoir simulation model

were applied in the Source model. Full details of the independent yield assessment are

provided in the HIP Dam Yield Study technical report which is included in Appendix F. Key

aspects of the assessment are as follows:

▪ The historical simulation period in the Flinders Source Model is identical to that adopted

for the GoldSim model (i.e. July 1889 to June 2011).

▪ The stream flow sequence for Saego Dam (Stewart Creek and Back Valley Creek

catchments) needed to be added to the Flinders Source Model since these catchments

were not explicitly represented in this model (only included in larger residual catchment

inflows between the Betts Gorge Creek confluence with the Flinders River and the

Dutton River confluence with the Flinders River).

• The stream flow sequence provided in the Flinders Source Model for inflow Node

008 – GS915007A Alstonvale (i.e. Betts Gorge Creek at Alstonvale gauging station)

was adopted for the catchment inflow sequence for Saego Dam. The Betts Gorge

Creek catchment is immediately adjacent to the Stewart Creek and Back Valley

Creek catchments and the catchment areas of these catchments are almost identical

(1,077 km2 for Betts Gorge Creek at Alstonvale gauging station compared to

1,084 km2 for the Saego Dam catchment).

• The residual catchment inflows in the Flinders Source Model between the Betts

Gorge Creek confluence with the Flinders River and the Dutton River confluence with

the Flinders River (inflow nodes 009 – Residual Inflow and 904 – Residual Inflow)

were reduced by corresponding volumes to the added Saego Dam catchment inflows

to prevent double counting of inflows.

https://ewater.org.au/products/ewater-source/




▪ The Flinders Source Model was modified to represent the following assumed changes

to the water licensing upstream of the proposed scheme that has the potential to impact

the dam yield (further discussion on water licensing is included in Section 10.6):

• Previous sale of 12,000 ML of the general reserve unallocated water (Product 1)

within Reach 1 (Flinders River upstream of Richmond gauging station) and the

subsequent re-location of these new licences (licence numbers 618703 and 618704)

to the lower reaches of the Stawell River (i.e. downstream of HIP scheme). Since the

supply node associated with the Reach 1 general reserve in the Flinders Source

Model (node GR1_SP) is upstream of the HIP scheme location (in vicinity of

Hughenden), this change resulted in a reduction to the water use upstream of the

HIP scheme (i.e. GR1_SP demand reduced by 12,000 ML/year).

• An additional 6,000 ML of the general reserve unallocated water (Product 1) within

Reach 1 was purchased by the owner of the Saego Plains property who subsequently

sold 5,000 ML of this entitlement to Flinders Shire Council (licence number 618019),

which is assigned to the property associated with the 15 Mile Irrigated Agricultural

Development Project. Flinders Shire Council do not plan to utilise this licence for the

15 Mile Irrigated Agricultural Development Project (water planned to be supplied from

groundwater extraction licences) and accordingly it was assumed that licence

number 618019 will be relinquished (i.e. bought back and cancelled) as part of the

HIP Project (i.e. (i.e. GR1_SP demand reduced by 5,000 ML/year).

• The remaining 1,000 ML of the 6,000 ML general reserve unallocated water (Product

1) purchase by the owner of the Saego Plains property was retained as a water

harvesting licence attached to the Saego Plain property (licence number 616951).

This licence was also assumed to be relinquished as part of the HIP scheme (i.e.

GR1_SP demand reduced by 1,000 ML/year).

• The remaining 7,000 ML of the general reserve unallocated water (Product 1) within

Reach 1 was assumed to be allocated to the HIP scheme (i.e. GR1_SP demand

reduced by 7,000 ML/year).

• The strategic State reserve unallocated water included in the Flinders Source Model

at Hughenden (supply node SR1_SP with a demand of 3,000 ML/year) was assumed

to be allocated to the HIP scheme (i.e. SR1_SP demand reduced to zero).

• Existing surface water licences associated with the Riverside property (licence

numbers 43752J, 43864J and 100474 with a combined annual volumetric limit

entitlement of 2,120 ML/year) were assumed to be allocated to the HIP scheme (i.e.

demand for supply nodes 205, 207 and 211 reduced to zero).

The simulated monthly and annual reliabilities of the annual irrigation supply for the grazier

support scenario (84 GL/year demand) in the Flinders Source Model are compared to the

GoldSim reservoir simulation model reliabilities in Table 10.6. The two different yield models

produce very similar yield estimates, with the Flinders Source Model producing a slightly

smaller monthly supply reliability and a corresponding 2 GL/year reduction (i.e. 3%

reduction) in the average annual irrigation supply volume. The small differences in the dam

yield estimates are attributed to:

▪ Relatively minor differences in the upstream water use assumptions between the two

models – the GoldSim model assumed no upstream water use while the Flinders Source




Model included a relatively small volume of extraction (approximately 1,000 ML/year)

out of the Flinders River upstream of the Scheme.

▪ Differences in the direct catchment inflow sequences for Saego Dam between the two

models which relate back to the different runoff model calibration for the Betts Gorge

Creek catchment adopted by Engeny for the GoldSim model compared to that adopted

by DES in the Flinders Source Model.

Further refinement of the dam yield modelling in subsequent stages of the Project will utilise

the Flinders Source Model.

Table 10.6 Comparison of Grazier Support Scenario Irrigation Supply Reliabilities – Flinders Source Model compared to GoldSim model

Yield Model Target Yield

(GL/year)

Monthly Reliability Annual Reliability Average Annual

Yield (GL/year)

Flinders Source

Model

84 78% 61% 68

GoldSim model 84 80% 61% 70

10.5.5 Climate Change Impact Assessment

An assessment of the potential impacts of future climate change on the dam yield estimates

has also been undertaken for the Reference Project. This assessment was performed using

the GoldSim reservoir simulation model.

The model climate data inputs were adjusted using the methodologies outlined in “Climate

Change in Australia Technical Report” (CSIRO, 2015) to undertake the climate change

impact assessment. The CSIRO report provides projections of future climate variables as a

result of climate response to a number of greenhouses gas and aerosol emission scenarios

(Representative Concentration Pathways).

Climate projections for Hughenden (Monsoonal North region) were obtained using the

Projections Builder application provided on the Climate Change Australia website

(https://www.climatechangeinaustralia.gov.au/en/climate-projections/climate-futures-

tool/projections-builder/). Projections were obtained for the “Best” and “Worst” case

scenarios which are based on the following:

▪ Best Case – higher rainfall and lower evaporation, improving dam yield; and

▪ Worst Case – lower rainfall and higher evaporation, reducing dam yield.

Projections are also provided for the “Maximum Consensus” which is the climate future

projected by at least 33% of the climate models and which comprises at least 10% more

https://www.climatechangeinaustralia.gov.au/en/climate-projections/climate-futures-tool/projections-builder/

https://www.climatechangeinaustralia.gov.au/en/climate-projections/climate-futures-tool/projections-builder/




models than any other. The “Maximum Consensus” is considered the most representative

forecast of all the climate models.

Projected changes to average annual rainfall and evaporation/evapotranspiration were

obtained for the following climate change scenario:

▪ 2070 projection year – suitable for a 50-year design life of the HIP

▪ Representative Concentration Pathway 4.5 (RCP4.5) – represents some

intervention to reducing greenhouse gas and aerosol emissions, however not the

most optimistic outlook.

The climate change sensitivity parameters are provided in Table 10.7.

Table 10.7 Climate Change Impact Assessment Parameters

Scenario Change in Average

Annual Rainfall

Change in Average Annual

Evaporation /

Evapotranspiration

Model and Consensus

Best Case 7.5% 3.3% Model – NorESM1-M

Consensus – Low

Worst Case -13.6% 4.3% Model – HadGEM2-CC

Consensus – Low

Maximum Consensus -0.4% 7.1% Model – CanESM2

Consensus – Medium

The GoldSim reservoir simulation model daily climate data inputs were adjusted using the

values in Table 10.7 to assess the impacts of the “best” case, “worst” case and “maximum

consensus” climate change scenarios. The climate change impact assessment results for

the diversified cropping scenario (target 30 GL/year of Medium Priority water and

40 GL/year of Low Priority water) are shown in Table 10.8.

The simulated monthly reliability of the Medium Priority water allocations (94% for the base

case scenario with no climate change) is predicted to vary between 83% (“worst” case

climate projection) and 96% (“best” case climate projection) with a “maximum consensus”

projection of 91% (i.e. 3% reduction in reliability).

Similarly, the simulated monthly reliability of the Low Priority water allocations (70% for the

base case scenario with no climate change) is predicted to vary between 47% (“worst” case

climate projection) and 78% (“best” case climate projection) with a “maximum consensus”

projection of 65% (i.e. 5% reduction in reliability).




The average annual irrigation supply volume (total of both water products) is predicted to

vary from 46 GL/year (“worst” case climate projection) to 61 GL/year (“best” case climate

projection) with a “maximum consensus” projection of 55 GL/year, which represents only a

3.5% reduction compared to the base case scenario with no climate change.

Table 10.8 Climate Change Impact Assessment Results – Diversified Cropping Scenario

Climate Change

Projection

Monthly Supply Reliability

(%)

Annual Supply Reliability (%) Average Annual Irrigation

Supply (GL/year)

Medium

Priority

Allocations

Low Priority

Allocations

Medium

Priority

Allocations

Low Priority

Allocations

Medium

Priority

Allocations

Low Priority

Allocations

Base Case (no

climate change)

94% 70% 86% 48% 28 29

“Best” case

climate

projection

96% 78% 91% 57% 29 32

“Worst” case

climate

projection

83% 47% 67% 25% 26 20

“Maximum

Consensus”

climate

projection

91% 65% 83% 42% 28 27

The climate change impact assessment results for the grazier support scenario (target

84 GL/year of irrigation water supply) are shown in Table 10.8. The simulated monthly

reliability of the scheme (80% for the base case scenario with no climate change) is

predicted to vary between 61% (“worst” case climate projection) and 86% (“best” case

climate projection) with a “maximum consensus” projection of 77% (i.e. 3% reduction in

reliability).

The average annual irrigation supply volume for the grazier support scenario is predicted to

vary from 56 GL/year (“worst” case climate projection) to 74 GL/year (“best” case climate

projection) with a “maximum consensus” projection of 68 GL/year, which represents only a

3% reduction compared to the base case scenario with no climate change.




Table 10.9 Climate Change Impact Assessment Results – Grazier Support Scenario

Climate Change

Projection

Monthly Supply

Reliability (%)

Annual Supply Reliability

(%)

Average Annual Irrigation

Supply (GL/year)

Base Case (no climate

change)

80% 62% 70

“Best” case climate

projection

86% 71% 74

“Worst” case climate

projection

61% 40% 56

“Maximum Consensus”

climate projection

77% 57% 68

The climate change impact assessment indicates that the potential impacts to the dam

yields over a project life of 50 years are likely to be relatively minor (3% reduction to the

average annual yield) under a “maximum consensus” climate projection. The predicted yield

reductions are approximately 20% under a “worst” case climate projection.

It is noted that the climate change impact assessment has only considered projected

changes to average climate conditions. Climate change research currently provides only

limited information on changes to climate variability. It is envisaged that a more detailed

climate change impact assessment will be undertaken in subsequent stages of the Project,

including identification of the need to factor future climate change into the infrastructure

design (e.g. spillway capacity).

10.5.6 Reservoir Siltation Assessment

A study on sediment infilling rates for dams in Northern Australia (Tomkins, 2013) was

undertaken as part of the CSIRO Flinders and Gilbert Agricultural Resource Assessment

(FGARA). This study provided estimates of average annual sediment yields for the Betts

Gorge Creek and Flinders River catchments in the vicinity of the HIP of approximately

100 t/km2/year or 70 m3/km2/year with an assumed sediment bulk density of 1.4 t/m3.

The estimated average annual sediment yields for the Saego Dam direct catchment and

Flinders River catchment at the diversion weir location is shown in Table 10.10.

Assuming 50% of the sediment yield from the Flinders River catchment is deposited in

Saego Dam via the diversion inflows, the average annual sedimentation rate for Saego Dam

is estimated at 0.3 GL/year or 0.15% of the storage capacity of the dam per year. This

sedimentation rate is very low.

The deposition of sediment from the Flinders River catchment into the diversion weir is a

greater concern for the Project. The storage capacity behind the diversion weir is




approximately 10 GL and so the average annual sediment yield from the Flinders River

catchment represents approximately 5% of the storage capacity of the weir per year.

Periodic de-silting of the weir impoundment area will be required to ensure the effective

operation of the weir low flow outlet, fish ladder and diversion channel. The diversion

channel design includes provision for control gates on the Riverside Poseidon Road

crossing of the diversion channel which will allow the weir impoundment area to be isolated

from Saego Dam to allow de-silting works to occur even when there are high water levels

in Saego Dam.

Table 10.10 Estimated Average Annual Sediment Yields for the Saego Dam Catchment and Flinders River Diversion Weir Catchments

Catchment Catchment Area (km2) Average Annual

Sediment Yield

(m3/km2/year)

Average Annual

Sediment Yield (ML/year)

Saego Dam 1,084 70 76

Flinders River Diversion

Weir

6,568 70 460

10.6 Licensing of Water Take

10.6.1 Water Plan and Resource Operations Plan Requirements

Surface water entitlements in the Flinders River catchment were described in Section 7.9.3.

There are no supplemented surface water entitlements (water entitlements linked to water

storage infrastructure) currently within the Flinders River section of the Gulf Water Plan

area. All existing surface water extraction entitlements are unsupplemented water

harvesting entitlements that are based on run-of-river flows and are typically defined by:

▪ A daily volumetric limit (DVL) representing the maximum daily extraction volume

▪ An annual volumetric limit (AVL) representing the maximum annual extraction volume

▪ Flow conditions under which extraction can occur (typically a flow threshold which must

be exceeded before extraction can commence).

The development scenario assumed for the 2015 amendment of the Water Plan (Gulf) 2007

considered all unallocated water reserves in the Flinders River catchment as

unsupplemented water harvesting entitlements. This assumption was based on the findings

of the CSIRO FGARA study which identified unallocated water associated with water

harvesting into on-farm storages as the most viable water development option to take

advantage of the potential for agricultural development in the Flinders River catchment.




The water resource modelling of the development scenarios undertaken as part of the Gulf

Water Plan amendment identified flow conditions that were applied to the water harvesting

licences representing the unallocated water reserves to minimise the risks to Gulf of

Carpentaria fisheries, environmental assets and ecological processes and existing water

users.

The Overview Report for the Water Plan amendment (Department of Natural Resources

and Mines, 2014) stated that the amendment does not prevent the future development of

instream storages; however, any proposed developments will need to ensure that resulting

impacts on downstream flow outcomes are no greater than those associated with the

proposed water harvesting development scenario.

The process for making available and dealing with unallocated water is specified in Chapter

2 of the Gulf ROP and Chapter 5, Part 1, Division 2 of the Gulf Water Plan. Key conditions

relating to the release of unallocated water include:

▪ The process for granting unallocated water is a process stated in the Water Regulation

2016, Part 2, Division 2, Subdivision 2. This allows the release of unallocated water by

either public auction, tender, fixed price sale or grant for a particular purpose.

▪ In preparing and implementing the process for granting unallocated water, the chief

executive must consider the following:

• The purpose for which the water is required;

• The efficiency of existing and proposed water use practices;

• The extent to which water in the plan area is being taken under authorisations;

• The availability of an alternative water supply for the purpose for which the water is

required;

• The impact the proposed taking of, or interfering with, the water may have on existing

water users in the plan area;

• Whether the proposed taking or interfering is likely to have a direct adverse effect on

groundwater flows;

• The stream flows required to maintain the following:

o The longitudinal connectivity of low flow habitats throughout river systems in the

plan area;

o The wetted habitats at riffles and other streambed features;

o The natural seasonality of flows and zero flows;

o The replenishment of refuge pools that enable movement of instream biota;

o Groundwater flows;

o The contributions from aquifers to the flow of water in watercourses;

o The lateral connectivity between rivers in the plan area and their adjacent riverine

environments, including floodplains.

• The impact the taking of, or proposed taking of, or interfering with, water may have

on the following:

o Water quality;

o The natural movement of sediment;




o The bed and banks of a watercourse or lake;

o The inundation of habitats;

o The movement of fish and other aquatic animals;

o The recreation and aesthetic values of the plan area;

o Cultural values including, for example, cultural values of local aboriginal or Torres

Strait Islander communities.

▪ Unallocated water volumes granted must be within the annual volumetric limits for the

indigenous, strategic and general reserves specified in Schedules 6A, 7 and 8

respectively of the Gulf Water Plan.

▪ Unallocated water held as an indigenous reserve (indigenous unallocated water) may

be granted only for helping indigenous communities in the Cape York Peninsula Region

area, Flinders River catchment area, Gilbert River catchment area, Morning Inlet

catchment area, Settlement Creek catchment area, Staaten River catchment area or

the Gregory River subcatchment area to achieve their economic and social aspirations.

▪ Unallocated water held as a strategic reserve (strategic unallocated water) may be

granted only if it is to be taken for a State purpose, which is:

• A coordinated project; and/or

• A project of regional significance.

▪ Water entitlements granted from the general reserve in the Flinders River and Gilbert

River catchment areas must include:

• At least 1 pass flow condition; and

• A condition stating the transfer of water under the entitlement must be done in

accordance with the group B water transfer rules.

To date, the Queensland Government has provided for the release of the general reserve

unallocated water in the Gulf Water Plan area through public tender processes. In the

Flinders catchment, the general reserve was offered for sale as two different

unsupplemented water entitlements (Product 1 and Product 2) each with different DVLs,

AVLs and flow thresholds/conditions. A maximum release of 25,000 ML of general reserve

unallocated water was made available in the Flinders River catchment upstream of

Richmond (Reach 1). A total of 18,000 ML of this release was sold and converted to water

licences.

The current status of the unallocated water reserves in the Flinders River section of the Gulf

Water Plan area is summarised in Table 10.11. The total volume (AVL) of unallocated water

currently remaining in the Flinders River catchment is 166,000 ML.




Table 10.11 Current Status of Unallocated Water in Flinders River Catchment

Unallocated Water Type Reserve Volume (ML) –

Water Plan (Gulf) 2007

Unallocated Water

Granted Since Water Plan

(ML)

Remaining Unallocated

Water Volume (ML)

Indigenous 8,500 0 8,500

Strategic (State Purpose) 17,850 0 17,850

General 239,650 100,000 139,650

Totals 266,000 100,000 166,000

10.6.2 Applicability to the Project

The proposed HIP scheme will involve instream dams and accordingly will be a

supplemented water supply scheme. Given that the Gulf Water Plan and ROP have only

envisaged unsupplemented water entitlements in the Flinders catchment, the process for

the authorisation of the proposed water take associated with the HIP scheme is not well

understood at this early stage in the Project. The Department of Natural Resources, Mines

and Energy have provided the following general advice regarding the licensing of the

proposed HIP water take as part of stakeholder engagement during the PBC study:

▪ The Gulf Water Plan does not specifically prevent the authorisation of the proposed HIP

scheme; however, impacts on the Water Plan outcomes must be no greater than those

associated with the water harvesting development scenario assessed in the 2015 Water

Plan amendment.

▪ The maximum diversion of water from the catchment must not exceed the volumes

(AVLs) obtained through either unallocated water release processes or water trading.

Any requirement to authorise the HIP scheme water take based on an annual volumetric

limit (and also potentially a daily volumetric limit) will severely limit the ability of the scheme

to provide a sufficient volume of higher reliability water allocations to support the

development of large-scale irrigated agriculture. The primary objective of a supplemented

water supply scheme is to capture sufficient stream flow volumes in storage during higher

flow years to provide a reliable water supply during periods of low flows which in most

locations in Queensland can persist for multiple wet seasons. This typically requires the

capture and storage of at least two years of water required to meet water demands and

storage losses to achieve a high yield reliability.

The average annual flow diversion out of the river system (irrigation supply and storage

losses) for the proposed HIP scheme will be 109 GL/year for the diversified cropping

scenario and 114 GL/year for the grazier support scenario. Limiting the maximum annual

water take from the scheme to say 166 GL/year (i.e. total remaining unallocated water

reserve volume in the Flinders River catchment) will only support a significantly smaller




supplemented water supply scheme than that proposed. The modelled maximum water take

into the HIP scheme in the historical simulation period (1889 to 2011) is 330 GL/year which

is double the unallocated water reserve in the Flinders catchment.

A more practical licensing approach for the proposed HIP scheme water take is to access

a sufficient volume of unsupplemented water entitlements (unallocated water reserves and

buy-backs of existing unsupplemented water licences) with an equivalent Mean Annual

Diversion (MAD) volume to offset the average annual water take from the HIP scheme (i.e.

no net increase in mean annual diversions out of the river system). It will also be necessary

to demonstrate that the proposed water take will comply with the primary objectives of the

Gulf Water Plan in terms of protection of environmental, social and cultural values of water

in the Flinders catchment.

Hydrologic modelling of the unallocated water reserves in the Flinders River catchment

undertaken by the Queensland Government for the Water Plan (Gulf) 2007 (i.e. Flinders

Source Model) indicates that the average volume of water (MAD) that can be taken under

the water harvesting entitlements representing the unallocated water reserves varies

between 55% and 70% of the AVL, with an average value of approximately 60% of the AVL.

This indicates that the remaining unallocated water volume of 166,000 ML (AVL) in the

Flinders River catchment corresponds to a MAD of approximately 100,000 ML/year.

Additional buy-back of existing water entitlements would be required in addition to the

granting of unallocated water reserves to offset the average annual water take from the HIP

scheme (approximately 110 GL/year) under this potential licensing approach.

The Project location is within Zone 7 (Flinders River upstream of Richmond gauging station)

of the Flinders River Water Management Area defined under the Gulf ROP. The ROP

currently limits transfers of existing water harvesting licences from a different Water

Management Area zone into Zone 7 to a maximum combined AVL of licences within the

Zone of 10,000 ML; however, there are provisions under the ROP for the chief executive to

grant a transfer beyond this limit if the transfer will not adversely impact the objectives of

the Water Plan.

The potential impacts of the proposed HIP scheme water take on downstream flow regimes

and environmental, social and cultural values of water are discussed in Section 10.7 and

Section 14. Potential impacts on downstream water users are identified in Section 10.8.

The authorisation of a supplemented water supply scheme will require an amendment to

both the Gulf Water Plan and ROP to define the Water Allocation Security Objectives

(WASOs), water sharing rules and infrastructure details for the scheme. Under recent

changes to Queensland's water resource management framework the Gulf ROP will

ultimately be replaced by Resource Operations Licences and Operations Manuals for the

individual water supply schemes within the Gulf Water Plan area. The only supplemented

water supply schemes currently within the Gulf Water Plan area are the Julius Dam and

Lake Moondarra Water Supply Schemes.

Further engagement with the Department of Natural Resources, Mines and Energy will be

required in subsequent phases of the Project to develop a clear path forward for the




licensing aspects of the Project and to understand the nature of any required amendments

to the Gulf Water Plan and ROP to authorise a new supplemented water supply scheme

within the Flinders River catchment.

10.7 Assessment of Impacts to Downstream Stream Flows

10.7.1 Overview

The potential impact of the proposed HIP scheme on the downstream flow regime of the

Flinders River was assessed using the Flinders Source Model. The following stream flow

impacts were quantified:

▪ Changes to median and mean annual flow volumes at different locations downstream

of the scheme.

▪ Changes to the frequency of daily flows (i.e. flow duration curves) at different locations

downstream of the scheme.

▪ Compliance with the Environmental Flow Objectives (EFOs) specified in the Gulf Water

Plan.

A preliminary assessment of the potential implications of the changes to the downstream

flow regimes on the environmental, social and cultural values of water in the Flinders River

catchment is addressed in the Environmental Assessment section (Section 14).

10.7.2 Modelling Approach

The potential impact of the proposed HIP scheme on the downstream flow regime of the

Flinders River was assessed using the modified version of the Flinders Source Model

(WRP/ROP amendment version) that was used to independently assess the HIP scheme

yield (refer Section 10.5.4). The Source modelling for this impact assessment was

undertaken by Hydrology and Risk Consulting (HARC) under the instruction and direction

of Engeny. The impact assessment was performed for the grazier support scenario only

which is the higher scheme water use scenario and will result in slightly greater downstream

flow impacts compared to the diversified cropping scenario.

Modifications made to the Flinders Source Model to reflect the HIP scheme water take and

water licensing changes upstream of the HIP scheme were summarised in Section 10.5.4.

The following modifications were made to the Flinders Source Model downstream of the

HIP scheme to reflect unallocated water sales since the Gulf Water Plan amendment and

assumptions about water licensing aspects of the proposed water supply scheme (i.e.

access to unallocated water reserves):

▪ The remaining 4,500 ML of the Product 1 general reserve unallocated water within

Reach 2 (Flinders River between Richmond and Cloncurry River confluence) was




assumed to be allocated to the HIP scheme (i.e. GR2_SP demand reduced by

4,500 ML/year).

▪ The remaining 127,150 ML of the Product 2 general reserve unallocated water within

Reach 4 (Flinders River downstream of Cloncurry River confluence) was assumed to

be allocated to the HIP scheme (i.e. NWU10_SP demand reduced by 127,150 ML/year).

▪ The strategic State reserve unallocated water included in the Flinders Source Model at

Richmond (supply node SR3_SP with a demand of 3,000 ML/year) was assumed to be

allocated to the HIP scheme (i.e. SR3_SP demand reduced to zero).

▪ No access to the indigenous reserve unallocated water was assumed.

▪ Relocation of the 50,000 ML of the Product 2 general reserve unallocated water that

was sold within Reach 3 (Cloncurry River catchment) to a new water licence (licence

number 616858) located on the Corella River (tributary of the Cloncurry River). The total

Product 2 general reserve unallocated water for the entire Flinders River catchment

(184,650 ML) was previously modelled as a water harvesting licence at the downstream

end of the Flinders River catchment (immediately upstream of Walkers Bend gauging

station) in the WRP/ROP version of the Source Model.

The total volume (AVL) of unallocated water reserve assumed to be allocated to the HIP

scheme was 145,650 ML, comprising 6,000 ML of the strategic reserve and 139,650 ML of

the general reserve. The total volume (AVL) of existing water licences assumed to be

allocated to the HIP scheme under a buy-back arrangement was 8,120 ML (i.e. Flinders

Shire Council 5,000 ML water licence and existing licences attached to the Riverside and

Saego Plains properties).

The predicted stream flow impacts resulting from the proposed HIP scheme (grazier support

scenario) were identified at the following locations along the Flinders River system

downstream of the HIP scheme:

▪ Richmond gauging station 915008A (total catchment area 17,380 km2)

▪ Etta Plains gauging station 915012A (total catchment area 46,130 km2)

▪ Walkers Bend gauging station 915003A (total catchment area 106,300 km2).

The predicted downstream flows for the HIP scheme were compared against stream flows

for the following development scenarios:

▪ Pre-development scenario representing no water use in the Flinders River catchment

▪ WRP/ROP amendment scenario representing the maximum development scenario (i.e.

full use of water entitlements) assumed for the 2015 Water Plan amendment (i.e. all

unsupplemented water harvesting entitlements).




10.7.3 Stream Flow Impacts – Annual Flow Volumes

The predicted changes to the median and mean annual stream flows (annual flows are on

a water year basis) at the downstream locations are shown in Table 10.12.

Table 10.12 Predicted Annual Stream Flow Volume Changes for the Flinders River Downstream of the HIP

Location Median Annual Flow (GL/year) Mean Annual Flow (GL/year)

Pre-Dev WRP /

ROP

HIP HIP %

Reduction

from

WRP/ROP

Pre-Dev WRP /

ROP

HIP HIP %

Reduction

from

WRP/ROP

Richmond GS 168 133 43 68.0% 422 399 329 17.7%

Etta Plains GS 599 535 490 8.5% 1,260 1,195 1,123 6.0%

Walkers Bend GS 1,431 1,163 1,167 -0.3% 2,770 2,551 2,565 -0.6%

The HIP will result in significant changes to annual flow volumes at Richmond gauging

station (compared to the approved WRP/ROP development scenario), but these impacts

will be considerably reduced at Etta Plains and negligible at Walkers Bend. However, the

downstream industries appear to be very sensitive to small changes in high and flood flows.

The relocation of large volumes of unallocated reserves previously modelled on the Flinders

River to both the smaller Stawell River and Corella River systems (in accordance with the

new water licence conditions) is likely to be having a beneficial impact on stream flows as

a result of reduced water use from these entitlements at their new locations.

The HIP scheme location (confluence of Stewart Creek and the Flinders River) does not

exist in the WRP/ROP version of the Flinders Source Model due to the resolution of the

model and residual catchment inflows. The changes to the Source model to specifically

include catchment inflows for the Stewart Creek and Back Valley Creek catchments were

only made for the version of the Source Model used to represent the proposed HIP scheme.

Accordingly, stream flow changes immediately downstream of the HIP scheme are not

available from the Source Model at this time. The GoldSim modelling performed for the HIP

yield assessment (refer Section 10.5.3) indicated that the HIP water take will result in a 38%

reduction in mean annual flow immediately downstream of the scheme.

10.7.4 Stream Flow Impacts – Daily Flow Volumes

The frequency of exceedance of daily flows (flow duration curves) for the HIP scheme are

compared to the pre-development and WRP/ROP development scenarios in Figure 10.12

(Richmond GS), Figure 10.13 (Etta Plains GS) and Figure 10.14 Walkers Bend GS).




The HIP is predicted to cause a material reduction in high flows and increase in low flows

at Richmond gauging station compared to the WRP/ROP scenario. The increase in low

flows is a result of the changes to the unallocated water reserves and buy-backs of existing

water licences that were assumed to occur in lieu of the HIP scheme.

The changes to the flow duration characteristics are considerably reduced at Etta Plains

and Walkers Bend gauging stations.

Figure 10.12 Daily Flow Duration Curves for Flinders River at Richmond Gauging Station

0.1

1

10

100

1000

10000

100000

1000000

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Da

ily F

low

(M

L/d

) -

Fli

nd

ers

Riv

er

at

Ric

hm

on

d (

GS

91

50

08

A)

% of Time Exceeded

Pre-development

WRP-ROP

HIP




Figure 10.13 Daily Flow Duration Curves for Flinders River at Etta Plains Gauging Station

Figure 10.14 Daily Flow Duration Curves for Flinders River at Walkers Bend Gauging Station

0.1

1

10

100

1000

10000

100000

1000000

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Da

ily F

low

(M

L/d

) -

Fli

nd

ers

Riv

er

at

Ett

a P

lain

s (

GS

91

50

12

A)

% of Time Exceeded

Pre-development

WRP-ROP

HIP

0.1

1

10

100

1000

10000

100000

1000000

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Da

ily F

low

(M

L/d

) -

Fli

nd

ers

Riv

er

at

Wa

lke

rs B

en

d (

GS

91

50

03

A)

% of Time Exceeded

Pre-development

WRP-ROP

HIP




10.7.5 Stream Flow Impacts – Environmental Flow Objectives (EFOs)

Environmental Flow Objectives (EFOs) for the Flinders catchment are detailed in Schedule

5 of the Gulf Water Plan and represent key performance objectives that must be achieved

to meet the Water Plan outcomes for the sustainable management of surface water.

The EFOs for the Flinders catchment are specified at the Walkers Bend gauging station

915003A location and are summarised as follows:

▪ The proportion of no flow days in the simulation period should be no more than 70%

▪ The mean annual flow as a percentage of pre- development flow should be at least 90%

▪ The median annual flow as a percentage of pre-development flow should be at least

78%

▪ The median wet season (January to March) flow as a percentage of pre-development

flow should be at least 75%

▪ The 1.5 year daily flow volume as a percentage of pre-development flow volume should

be at least 90%

▪ The 5 year daily flow volume as a percentage of pre-development flow volume should

be at least 96.5%

▪ The 20 year daily flow volume as a percentage of pre-development flow volume should

be at least 98%.

The Flinders Source Model was used to assess the performance of the proposed HIP

scheme (grazier support scenario only) in achieving the EFOs specified for the Flinders

River catchment. The EFO performance assessment results for the HIP are summarised in

Table 10.13.

Table 10.13 EFO Performance Assessment for HIP

EFO EFO Performance

Requirement

EFO Performance

WRP/ROP HIP Scenario

Proportion of no flow days <70% 68.3% 68.5%

Mean annual flow percentage >90% 92.1% 92.6%

Median annual flow percentage >78% 81.3% 81.5%

Median wet season flow percentage >75% 81.2% 83.7%




EFO EFO Performance

Requirement

EFO Performance

WRP/ROP HIP Scenario

1.5 year daily flow volume percentage >90% 91.9% 87.4%

5 year daily flow volume percentage >96.5% 98.3% 95.2%

20 year daily flow volume percentage >98% 99.0% 97.8%

Note: EFO performance values in red text do not achieve EFO performance requirement.

The Source modelling of the HIP scheme (grazier support scenario) indicates that the

Project will comply with the low flow and medium flow EFOs but not the three high flow

EFOs. The performance results for the three high flow EFOs are considered to be relatively

minor non-compliances, particularly for the 5 and 20 year daily flow volumes. The EFO

compliance performance for the diversified cropping scenario is expected to be generally

similar (potentially minor improvement in performance) to the grazier support scenario.

The Source model was used to assess potential mitigation strategies for the HIP scheme

to improve the EFO performance outcomes. Mitigation strategies considered included:

▪ Reducing the flow capacity of the diversion from the Flinders River into Saego Dam

▪ Releasing water from Saego Dam as the Flinders River flood peak passes the HIP

location

▪ Reducing the storage capacity of Saego Dam.

Reducing the storage capacity of Saego Dam had the most impact on the high flow EFO

performance. A 25% reduction in the storage capacity of Saego Dam was sufficient to

achieve compliance with the two largest high flow EFOs (5 year and 20 year daily flow

volumes), while the smallest high flow EFO (1.5 year daily flow volume) improved to within

1% of the EFO performance target. The EFO performance for the 25% smaller Saego Dam

scenario is summarised in Table 10.14.

Table 10.14 EFO Performance Assessment for Alternative HIP Scenario with a 25% Reduction in the Saego Dam Storage Capacity

EFO EFO Performance

Requirement

EFO Performance

WRP/ROP HIP Scenario – 25%

Smaller Saego Dam

Proportion of no flow days <70% 68.3% 68.5%

Mean annual flow percentage >90% 92.1% 93.1%




EFO EFO Performance

Requirement

EFO Performance

WRP/ROP HIP Scenario – 25%

Smaller Saego Dam

Median annual flow percentage >78% 81.3% 83.2%

Median wet season flow percentage >75% 81.2% 83.8%

1.5 year daily flow volume percentage >90% 91.9% 89.0%

5 year daily flow volume percentage >96.5% 98.3% 97.4%

20 year daily flow volume percentage >98% 99.0% 98.7%

Note: EFO performance values in red text do not achieve EFO performance requirement.

Further reductions to the storage capacity of Saego Dam (beyond the 25% reduction) had

no further impact on the 1.5 year daily flow volume EFO (even with the HIP infrastructure

and water take completely removed from the Source model). This indicates that it is other

changes made to the Source model that don’t relate directly to the HIP water take (e.g.

addition of Stewart Creek/Back Valley Creek catchment inflows, relocation of water licences

from recent sales of the general reserve unallocated water, etc.) that are causing this minor

EFO non-compliance. Further investigation and modelling in subsequent phases of the

project will be required to resolve this issue.

A 25% reduction to the Saego Dam storage capacity only results in a 6% reduction to the

average annual supply volume from the HIP scheme (i.e. average annual irrigation supply

volume reduces from 68 GL/year to 64 GL/year as simulated using the Flinders Source

Model). This indicates that a relatively minor adjustment of the proposed HIP Reference

Project could be implemented that would achieve practical compliance with the Gulf Water

Plan EFOs (assuming resolution of minor modelling discrepancies) and that would not

materially detract from the economic outcomes presented for the Reference Project in the

PBC study (i.e. small reduction in scheme yield and likely commensurate reduction in

scheme cost).

Further engagement with the Department of Natural Resources, Mines and Energy and the

Department of Environment and Science will be required in subsequent phases of the

Project to investigate the need for minor amendments of the Reference Project to comply

with the EFOs specified in the Gulf Water Plan.

10.8 Assessment of Impacts to Existing Water Users

One of the economic outcomes for the sustainable management of water in the Gulf Water

Plan area is the provision for the continued use of all water entitlements and other

authorisations to take or interfere with water (Section 13(a) of the Water Plan).




The Flinders Source Model was used to assess the potential impacts of the proposed HIP

scheme (grazier support scenario only) on existing water users. This assessment identified

the change in the Mean Annual Diversion (MAD) of existing water harvesting entitlements

along the Flinders River compared to the approved WRP/ROP development scenario.

The predicted impacts to the MADs of existing water entitlements are summarised in Table

10.15. The assessment indicates that:

▪ There will be a beneficial impact to the water licences upstream of the HIP as a result

of the removal of the unallocated water supply nodes assigned upstream of the HIP in

the WRP/ROP version of the Source model.

▪ The MAD for the Richmond Shire Council water licence that supplies water to the

Richmond Recreational Lake (supply node 110) will reduce by 13%; however, the

volume reduction is very small (only 2 ML/year reduction in MAD).

▪ The MAD for the water licence that supplies water to the Silver Hills property

downstream of Richmond (supply node 245) will reduce by 7% (608 ML/year reduction

in MAD).

▪ Relatively small percentage reductions in MAD (4% or less) are predicted for an

additional four water licences downstream of Richmond.

The existing water licences that will be adversely impacted by the Project are too far

downstream of the Project to economically provide a compensatory water supply from the

scheme. Compensation arrangements would need to be made with affected water users as

part of the HIP development and could comprise monetary compensation payments, buy-

back of existing entitlements or transfer of additional water entitlements to the affected

parties.

Engagement with impacted landholders/water users will occur as part of stakeholder

engagement activities planned for future stages of the Project.




Table 10.15 Predicted Impacts of HIP on Existing Water Users

Newalloc_51432J 360 77 360 78 0%

101- Flinders Shire TWS- 778km 182 109 182 182 67%

SR1_SP (UAW Strategic Reserves) 3,000 1,799 - - -

GR1_SP (UAW- General Reserve Product 1) 30,000 20,435 - - -

Newalloc_93216J 12 4.0 12 4.9 21%

215- Unreg Irr AMTD 772km 34 3.2 34 4.5 40%

Newalloc_93798J 20 3.2 20 4.1 30%

Newalloc_175287 400 93 400 100 8%

216 Stock Water AMTD 760km 2 0.6 2 0.7 11%

211- BS Irr AMTD 730km 399 384 - - -

205- WH Irr 720MLa AMTD 730km 720 454 - - - 207- WH Irr 1000 Mla ATMD 730km 1,000 706 - - -

236- Modelled demand 720 ML/a 734 684 - - -

113- Recreation Richmond 624 km 38 37 38 37 1%

SR3_SP (UAW Strategic Reserves) 3,000 1,620 - - -

110- WH-Recreation AMTD 624 km 199 18 199 16 -13%

GR2_SP (UAW- General Reserve Product 1) 10,000 6,829 4,500 3,083 -

245 - Irr Demand 14,000 Mla 14,321 8,708 14,321 8,100 -7%

025 - WH AMTD 575km 3200 Mla 3,200 2,648 3,200 2,581 -3%

119 - WH AMTD 540 km 1600 Mla 1,600 908 1,600 905 0%

132 - WH Newalloc_608017 AMTD 360 km 32,000 21,166 32,000 20,233 -4%

NWU10_P1 (UAW- General Reserve Product 1) 12,500 8,602 12,500 8,488 -1%

NWU_10 (UAW- General Reserve Product 2) 185,000 103,049 7,500 4,463 -

159- Unreg Irr AMTD 109.4 km 972 571 972 570 0%

Newalloc_608014 28,800 17,721 28,800 16,970 -4%

Notes:

Yellow shaded cells indicate reduced AVLs to offset the HIP water take

Green shaded cells indicate an increase in MAD caused by the HIP

Orange shaded cells indicate a decrease in MAD caused by the HIP

Water Entitlement

Water users upstream of HIP

Water users downstream of Etta Plains (GS915012A)

Water users between Richmond (GS915008A) and Etta Plains (GS915012A)

Water users between HIP and Richmond (GS915008A)

WRP/ROP HIP

AVL (ML/year) MAD (ML/year) AVL (ML/year) MAD (ML/year)

MAD % Change

(HIP to

WRP/ROP)




11. LEGAL AND REGULATORY CONSIDERATIONS

11.1 Key Points

▪ The proposed Reference Project will require amendment to the Gulf Water Plan to

authorise a new supplemented water supply scheme within the Flinders River

catchment, with the potential need for changes to the Environmental Flow Objectives

depending on the final configuration of the scheme.

▪ The proposed Reference Project will trigger requirements under the Water Supply Act

including referable dam conditions, a Resource Operations Licence and Operations

Manual.

▪ The proposed Project will require planning and environmental, native title and aboriginal

heritage approvals in the next phase.

▪ The proposed Project will require the acquisition of land and may require land access

or compensation agreements for construction and temporary use.

▪ Work Health and Safety and General Liabilities will be relevant to the Project proponent.

All legal risks and regulatory considerations will require further investigation and refinement

in the next phase of the Project.

11.2 Purpose and Approach

A high-level legal review has been conducted as part of the PBC development. This chapter

addresses the primary matters identified as legal and regulatory interactions for the Project,

including:

▪ Legislative considerations pertaining to water planning, planning and environmental,

native title and aboriginal heritage;

▪ Dam safety;

▪ Land access and acquisition; and

▪ General liability and health and safety.

11.3 Legal Considerations

This section provides a description of relevant legal considerations that may be triggered

by the Project. It is noted that this is not considered a complete certified legal review and

may require further refinement or definition in the next phase of the Project.




11.4 Water Planning and Infrastructure

11.4.1 Water Act

In Queensland, water resource management is primarily regulated by the Water Act 2000

(Water Act) and Water Regulation 2016 (Qld) (Water Regulation). The Water Act

establishes a hierarchy of water instruments. Relevant to the Project, these include:

▪ Water Plan (Gulf) 2007 (Gulf Water Plan) (Queensland Government, 2017)

▪ Gulf Resource Operations Plan (Department of Natural Resources and Mines, 2015).

11.4.2 Water Allocation and Flow Objectives (Water Act)

The current Gulf Water Plan does not provide for the Reference Project as currently defined

in the PBC. It should be noted, however, the Gulf Water Plan does not preclude the

development of large-scale water supply schemes such as proposed in the Reference

Project. Accordingly, engagement with Government Agencies, particularly DNRME, has

been conducted during completion of the PBC on the potential for amendments to the Plan.

It is noted and acknowledged that amendments of some form would be required to the Gulf

Water Plan should the project proceed to construction. The nature of these amendments

will be outlined and defined in more detail during the DBC to ensure the recommended

changes are scientifically justified, remain in the public interest and make consideration of

downstream social, environmental or economic outcomes.

The potential for the Project to impact availability of water to existing entitlements shall also

be further quantified during the next phase, including the Environment Impact Assessment

process, for the Project. During preliminary work, modelling of the Reference Project has

been undertaken to quantify impact to flow downstream of the proposed scheme against

the objectives of the current Plan. Modelling has also been undertaken of the modified

version of the Reference Project indicating a scheme is viable with mitigated impacts on

downstream flows against the objectives of the current Plan.

11.5 Saego Dam and Associated Infrastructure (Water Act , Water Supply Act)

With the proposed development of the Project, the introduction of the scheme may require

the following legislative approvals. This does not include the planning and environment

related approvals which are further discussed in Section 14.2.

11.5.1 Water Act:

▪ As above, amendment of the Gulf Water Plan to contemplate the proposed Saego Dam

within the Water Plan area. Public consultation will be necessary for these proposed

amendments.




▪ An application for a new Resource Operations License (ROL) for operation of the

scheme. The application will need to include evidence of the expected impact of the

Project on Flinders River flows, and operating arrangements for the dam, diversion and

irrigation infrastructure.

▪ An application for a new Operations Manual for the scheme.

11.5.2 Water Supply (Safety and Reliability) Act:

▪ The proposed Saego Dam will trigger the dam safety regulations as a referrable dam

under the Water Supply (Safety and Reliability) Act 2008 (Qld) (Water Supply Act).

▪ The proponent must acquire a service provider registration under the Water Supply Act.

▪ The proponent must acquire a certified failure impact assessment after construction and

given to the Chief Executive.

11.5.3 Other Infrastructure

Development of the Project will involve interaction with existing public utilities and third-

party infrastructure. The Reference Project option will require consideration of the impact to

such infrastructure and the extent of any removal or relocation of infrastructure if required

to implement the detailed design in the next phase.

As highlighted in the Environmental Assessment section (Section 14) negotiations may be

required with stakeholders for:

▪ Electricity supply over privately owned land to homesteads;

▪ Relocation of any existing infrastructure within the Project Area, including homestead

dwellings and homestead access roads; and

▪ Temporary access to areas, for example, for borrow pits for the dam embankment

construction.

Legal and regulatory compliance shall be managed by the environmental and planning

approvals processes, early engagement and consultation with the relevant Government

Agencies, local councils and public utility providers, as well as controls in the next phase of

the Project.

11.6 Planning, Environment, Native Title and Aboriginal Herit age

A desktop environmental assessment and legislative review has been completed covering

all Planning, Environmental, Native Title and Aboriginal Heritage approvals and legal risks

associated with the proposed Project. The Environmental Assessment section (Section 14)

includes an approvals register addressing all State and Federal Planning and




Environmental approvals requirements likely to be triggered by the proposed Project. A

summary of all relevant legislation is also included in the Section 14.

11.7 Land Acquisition and Access

11.7.1 Acquisition

Land will need to be acquired for the construction and operation of the Project, either by

purchasing the land, resumption or compensation. Ideally the Project proponent will acquire

and own all land subject to the Project area. For further information on Land Tenure, refer

to the Environmental Assessment section (Section 14).

The Acquisition of Land Act 1967 (Qld) (ALA Act) authorises constructing authorities to take

land for public purposes, either by agreement or by compulsory acquisition.

Under this Act, the Chief Executive of DNRME has power to acquire land by resumption for

purposes relating to water, including for dams and dam-associated development. The

Coordinator-General also has power to acquire land under the State Development and

Public Works Organisation Act 1971 (Qld). The power to acquire land includes the power

to acquire property for the facilitation of the Project.

Taking land under the ALA Act creates rights to compensation for people or entities with an

estate or interest in the land at the time of taking. The issue of compensation can be dealt

with after the relevant land is taken. Development of an acquisition strategy during the next

phase of the Project will assist in managing risk of negotiations with impacted landholders.

11.7.2 Access

During the next phase of the Project access agreements with landowners may be required,

in the absence of land acquisition, to enable construction activities within the Project area

and/or to temporarily occupy and use the land.

11.8 General Liabilities – Statutory Duty

For the proposed Project, the proponent will face potential claims from persons who suffer

any loss or damage (e.g. to themselves personally or their property) in connection with the

Project (Injured Persons). The ability of Injured Persons to recover against the proponent

will depend on whether those persons have a right of action against the operating entity,

and the likelihood they can establish legal liability under that right of action.

These risks have been considered in a generic manner, given each claim if brought by an

Injured Person, would be determined on its particular facts and circumstance. In a Project

of this scope and scale, it is not possible to classify every potential claim that could be

brought by an Injured Person during the construction and operational management of the

Project.




Based on the current Project scope numerous risk areas exist, many of which may be the

subject of loss or damage to an Injured Person. This would need to be further defined the

next phase of the Project. These may include:

▪ General liability including:

• Flood caused by, or impacts caused by, the Project during construction and/or

operation; and

• Physical injury or death of persons (workers and non-workers).

11.8.1 Health and Safety

Work Health and Safety legislative and regulatory requirements will apply to the Project

during execution and operation and the proponent shall have duties to discharge under

WHS legislation, which includes:

▪ Work Health and Safety Act 2011 (Qld)

▪ Work Health and Safety Regulation 2011 (Qld)

▪ WHS Codes of Practice and Guidelines.

The relevant activities subject to these requirements shall be further defined in the next

phase of the Project. The extent to which activities are in part delegated to others (e.g.

construction contractors) under WHS legislation will also continue to be a relevant

consideration should the Project proceed. During the next phase of the Project policies and

procedures shall be developed to implement the appropriate risk mitigation.

11.8.2 Legal Change

In consideration of the timeframe associated with the progression of the Project through its

phases, it is reasonable to assume legislative and related policy changes will occur and

may impact the Project in some way. The potential for any introduced or legislative

amendments to negatively impact the success of the Project is considered low risk. To

manage this risk, dedicated National and State Government engagement will continue

through into the next phase of the Project. Additionally, the legislative interactions shall be

further defined in the next phase of the Project to identify any legal changes.




12. MARKET CONSIDERATIONS

12.1 Key Points

▪ The market was investigated through benchmarking and preliminary discussions with

potential growers and agronomy experts.

▪ The market analysis, undertaken as part of the agronomy studies, identified market

opportunities for products, pricing, seasonality and market segmentation.

▪ The market analysis for water pricing was completed as part of the financial and

economic analysis to assess an assumed bulk water price. The assumed price was

benchmarked from comparable schemes.

▪ Limited engagement has been undertaken so far about willingness to pay and is

therefore scoped and included in the next phase.

▪ Feedback from the market indicates reliability and affordability of water is key to success

of the Project.

▪ Benchmarking of previous Business Case studies shows water allocation purchase

prices from $500 to $6000 per ML.

▪ A conservative willingness to pay for water pricing of $1000/ML for low security water

and $2,000/ML for medium security water has been assumed for analysis with

recommendations to thoroughly assess these as part of the next phase.

▪ There is high demand for new water allocations at the correct price. It has been assumed

that all allocations will be purchased at the right price and level of security.

12.2 Purpose

The purpose of this chapter is to summarise the market assessment undertaken to date to

quantify the Service Need and scenario assessments. A separate market sounding activity

is yet to be undertaken although the assumptions and approach are outlined.

12.3 Approach

The grower issues and financial impacts have been explored in detail in Chapters 17 and

18. The most important variables for prospective irrigators are demand for water, price and

reliability, farm returns and market size, availability and on-going costs.

▪ Demand for water was assumed at 100% purchase of the upfront allocations from

stakeholder feedback

▪ Reliability was assessed via hydrological modelling (Section 10.5)




▪ Bulk water charges were assessed from benchmarking

▪ Farm returns, access and size were assessed in the agronomical investigation

(Appendix J)

▪ Capital and on-going costs were assessed as part of the concept engineering design

(Appendix H)

The only remaining variable not described in previous sections is the benchmarking

exercise for bulk water prices. The list below primarily references the Nullingah Dam studies

as the most relevant and contemporary, as an independent process was used to assess

willingness to pay. However, these were used as ‘ballpark’ upper bound costs for the current

estimation.

1. Nullingah Dam undertaken by MJA and referenced from the Nullingah Dam PBC

(Building Queensland, 2017a). Costs are per ML of allocation:

i. $2,700/ML for permanent transfers

ii. $1,500/ML for lower security allocations for sugar cane, etc.

iii. $2000 to $3000/ML for medium security allocations for sugar cane

iv. High value crop growers may be willing to pay $2,500 to $2,700/ML

v. High value crop growers may be willing to pay $3000 to $4000/ML for highly

productive soils/areas

vi. System loss conversion for water security up to $3,500/ML

2. Granite Belt Irrigation Project DBC (Jacobs Australia, 2019):

i. Extensive consultation revealed a willingness to pay of $6,000/ML for water

allocations and $400/ML usage (part B)

3. Lower Fitzroy River Infrastructure Project DBC (Building Queensland, 2017b) –

quoted figures in adjacent schemes:

i. $60 to $2000/ML for medium priority allocations

ii. $1800 to $3000/ML for high priority allocations.

12.4 Summary

The initial market sounding has indicated a demand for water. The willingness to pay has

not been thoroughly tested and where other studies have been used as benchmarks there

are differences that may mean these numbers are unrealistically high. Therefore, a more

conservative set of numbers were assumed for analysis with the recommendation that a




thorough market sounding and willingness to pay exercise is undertaken as a priority

component of the DBC or early works phase if a staged delivery mechanism is adopted.




13. PUBLIC INTEREST CONSIDERATIONS

13.1 Key Points

▪ Initial public interest criteria are met by conforming to the documents, policies and

strategic objectives outlined in Section 8 Strategic Considerations.

▪ The Reference Project will have limited negative impacts on the local community and

many positive impacts.

▪ Local stakeholders have been updated through Council and open community sessions

however extensive stakeholder engagement has not yet occurred apart from with

governments and regulatory bodies.

▪ There is almost universal social licence in the community for a project like the Reference

Project to go ahead. This assertion is yet untested in downstream communities although

the Proponent has been actively engaged in promoting the scheme.

▪ Inundation of local landholding will occur however there is no apparent opposition to the

proposal.

▪ The planned irrigation areas will overtake current grazier blocks but once again there is

a single owner/grazier who has been kept informed through the stakeholder

engagement process.

▪ An Indigenous Land Use Agreement (ILUA) has been identified with the local

Indigenous group (Yirendali People) but the environmental mapping has found no high-

risk cultural sites.

▪ Equity issues will be mapped as part of the DBC stakeholder engagement process to

ensure contemporary processes are followed for all sectors of the community including

for those who are potentially disadvantaged and unable to provide feedback by

conventional mechanisms.

13.2 Purpose

The purpose of this chapter is to assess the extent to which the Hughenden Irrigation Project

is in the public interest. As discussed earlier in this report, the project involves building a

rockfill embankment with clay core to create a water storage facility adjacent to the Flinders

River with 190GL storage capacity and other associated bulk and distribution infrastructure.

Upon completion of, or during construction, water allocations would be sold to customers,

who would subsequently be provided with bulk and distribution water services under some

form of ownership model yet to be decided.

Accordingly, the scope of potential public interest issues is enough to warrant consideration

in this PBC.




13.3 Defining Public Interest

The Queensland Office of the Information Commissioner defines Public Interest

considerations as those affecting the good order and functioning of the community and

government affairs, for the well-being of citizens.

Public interest considerations are generally common to all members of, or a substantial

segment of, the community, as distinct from matters that concern private or personal

interests. However, some public interest considerations can apply for the benefit of an

individual.

This chapter describes the main public interest considerations, along with opportunities for

any potential negative impacts of the project to be managed and, where possible, mitigated

or adjusted to realise opportunities and benefits. However, for the great majority this project

provides many positives and aligns with government interests to provide water security for

irrigated agriculture that will boost the economy and provide sustainable jobs, all of which

will promote “the good order and functioning of the community and government affairs, for

the well-being of the citizens’’.

13.4 Stakeholders

Engeny and HIPCo have engaged with a range of stakeholders and community members

during the preparation of the PBC as noted in Section 4. Epic Environmental provided the

overarching stakeholder engagement framework which is outlined in the Communications

Plan (Appendix A).

13.5 Impact on Stakeholders

The impact of the project on the stakeholders outlined in Section 4 are described below.

13.5.1 Government

The public perception of the project is in the interest of all three levels of government, in

terms of the effectiveness of the strategy implemented and use of potentially large amounts

of taxpayers’ money.

13.5.2 Traditional Landowners

The traditional owners of the land may feel a sense of loss if there was to be development

of man-made infrastructure and an ILUA is currently in place.

13.5.3 Environmental Advocates

Impacts to the environment and surrounds of the area is in the interest of environmentalists.

Possible endangering and/or extinction of several species of flora and fauna is a risk to the

state of the natural ecosystem.




13.5.4 Property Owners Surrounding the Area

Property owners residing within the vicinity of the desired construction area may lose and/or

have their property damaged, which would result in a form of compensation for the

landowner. Subsequently, property owners may also incur a temporary and/or permanent

reduction in access to public services and facilities.

13.5.5 Broader Community

The project will likely create employment opportunities in the region. With increased workers

assigned to the project, this is anticipated to result in an indirect injection into the local

economy, boosting local businesses.

13.5.6 Media

Increased media attention might occur depending on the course of action implemented and

the level of controversy associated with these decisions.

13.6 Public Access and Equity

Public access is related primarily to agricultural users, irrigators and property owners in the

region. In order to construct and facilitate the infrastructure, dam impoundment area and

irrigated cropping areas, acquisition of private property is required. This must be done in

such a manner that current landholders are adequately, but not excessively, compensated.

There are also potential issues with regards to the water allocation process. Ideally, water

allocations would be allocated to prospective customers via a transparent and equitable

public process – namely a request-for-offer process. This ensures fairness in the allocation

of the water.

13.7 Safety and Security

Safety and security considerations include corruption, crime, public health risk, quality and

security of supply. Dam safety represents a potentially major concern with regards to the

Project. As there are population at risk downstream of the dam then dam failure assessment

is required. This has been undertaken with the results included in the Flood Assessment

Report provided in Appendix G. All relevant dam safety regulatory requirements will be met,

both during the design and construction of the infrastructure and once the assets are

operational. This will be in accordance with the statutory framework Water Supply (Safety

and Reliability) Act 2008.

13.8 Future Stakeholder Engagement

Should the project progress beyond the PBC, the following recommendations aim to

manage the expectations of key stakeholders, impacted landowners and the broader

community:




▪ Update key stakeholders and the community on whether the project will proceed, the

outcome of the DBC and the subsequent decision-making process.

▪ Provide regular updates to impacted landowners on how the project is progressing and

corresponding course of action (especially with regards to land acquisition timeframes).

▪ Engage with downstream landowners to communicate impacts and mitigation

strategies.




14. ENVIRONMENTAL ASSESSMENT

14.1 Approach

A desktop environmental assessment has been undertaken to identify environmental and

planning constraints relevant to the Project. The desktop environmental assessment

comprised was of:

▪ A review of environmental and planning legislation that may be triggered by the Project

(Section 14.2);

▪ A desktop information gathering exercise to understand the existing environment

(Section 14.3). Desktop information sources included:

• Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act)

Protected Matters Search Tool (PMST);

• WildNet (Wildlife Online) database maintained by the Department of Environment

and Science (DES);

• Aerial imagery;

• Queensland Globe;

• Regional Ecosystem (RE) mapping;

• Regional Ecosystem Description Database (REDD);

• Essential Habitat mapping;

• Biomaps;

• Atlas of Australian Soils (Northcote et al, 1960-68);

• Queensland Government’s registered groundwater bore database;

• Directory of Important Wetlands;

• Queensland Aboriginal and Torres Strait Islander Cultural Heritage Database and

Register maintained by the Department of Aboriginal and Torres Strait Islander

Partnerships (DATSIP);

• National Native Title Register maintained by the National Native Title Tribunal

(NNTT);

• Register of Indigenous Land Use Agreements maintained by the NNTT;

• Queensland Heritage Register maintained by the DES; and

▪ A review of environmental and planning constraints applicable to the Project

(Section 14.4);

▪ An approvals strategy for the Project (Section 14.5).




14.2 Legislative Review

This section provides a brief description of environmental and planning legislation that may

be triggered by the Project.

14.2.1 Commonwealth Legislation

Environment Protection and Biodiversity Conservation Act 1999

The Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) is

administered by the Commonwealth Department of the Environment and Energy (DEE). It

provides a legal framework for protecting and managing nationally and internationally

important aspects of the Australian environment including biodiversity and heritage places.

The EPBC Act has been established to:

▪ Provide for the protection of the environment, especially Matters of National

Environmental Significance (MNES);

▪ Promote ecologically sustainable development through the conservation and

ecologically sustainable use of natural resources;

▪ Promote the conservation of biodiversity;

▪ Provide for the protection and conservation of heritage;

▪ Promote a cooperative approach to the protection and management of the environment

involving governments, the community, landholders and Indigenous peoples;

▪ Assist in the cooperative implementation of Australia's international environmental

responsibilities;

▪ Recognise the role of Indigenous people in the conservation and ecologically

sustainable use of Australia’s biodiversity; and

▪ Promote the use of Indigenous peoples' knowledge of biodiversity with the involvement

of, and in cooperation with, the owners of the knowledge.

A Project can be classed as an action that has, will have or is likely to have a significant

impact on an MNES. In such cases a referral to the DEE is required. Upon receipt of the

referral DEE is responsible for making a ‘Controlled Action or assessment approach’

decision within 20 business days. If the Project is determined to be a Controlled Action by

DEE an approval process will be prescribed under the EPBC Act.




14.2.2 Queensland Legislation

State Development and Public Works Organisat ion Act 1971

The State Development and Public Works Organisation Act 1971 (SDPWO Act) is

administered by the Queensland Department of State Development, Manufacturing,

Infrastructure and Planning (DSDMIP). The SDPWO Act facilitates timely, coordinated and

environmentally responsible infrastructure planning and development to support

Queensland's economic and social progress. The SDPWO Act gives the Queensland

Coordinator-General (CG) the following significant powers to (among other things) manage

major infrastructure projects:

▪ Declare a project to be a 'coordinated project' and coordinate the environmental impact

assessment of the project;

▪ Coordinate and regulate programs of works;

▪ Enter and authorise entry onto land to undertake works;

▪ Compulsorily acquire land; and

▪ Implement and manage state development areas.

To enact the powers under the SDPWO Act a proponent must lodge an Initial Advice

Statement (IAS) with the CG. The IAS helps the CG to determine whether the project in

question should be declared a coordinated project and the level of assessment required

(i.e. Environmental Impact Statement (EIS) or Impact Assessment Report).

Environmental Protection Act 1994

The Environmental Protection Act 1994 (EP Act) is administered by DES. The EP Act

provides the key legislative framework for environmental management and protection in

Queensland. The objective of the EP Act is to: “Protect Queensland’s environment while

allowing for development that improves the total quality of life, both now and in the future,

in a way that maintains ecological processes on which life depends” (section 3 of the

EP Act). Under the EP Act, all organisations must comply with the general environmental

duty not to undertake an: “Activity that causes, or is likely to cause, environmental harm

unless all reasonable and practicable measures to prevent or minimise the harm are taken”

(section 319 of the EP Act).

Activities which cause or are likely to cause environmental harm are offences under the EP

Act unless authorised through an Environmental Authority (EA). An EA is an approval to

undertake an Environmentally Relevant Activity (ERA) in accordance with the imposed

conditions. These environmental requirements generally address planning, financial

assurance, construction, operation and rehabilitation aspects of the activity, to ensure the

impacts and risk to the environment are avoided, minimised or managed at a level permitted

in the approval.




Planning Act 2016

The Planning Act 2016 (Planning Act) is administered by the DSDMIP. The purpose of the

Planning Act is to establish an efficient, transparent and accountable system of land-use

planning and development assessment that will lead to ecological sustainability. The

Planning Act comprises three main elements; plan making, development assessment and

dispute resolution.

Under the Planning Act, development may be categorised as accepted development,

assessable development (code and impact) and prohibited development. Development

approval may be required for matters identified in the relevant planning scheme as well as

matters of state significance.

Environmental Offsets Act 2014

The Environmental Offsets Act 2014 (EO Act) provides the flexibility to approve

development in one place on the basis that an equivalent environmental gain will be made

in another place where there is not the same value to industry. An environmental offset may

be required as a condition of approval where a project is likely to result in a significant

residual impact on prescribed environmental matters as identified through the following

guidelines:

▪ The State guideline that provides guidance on what constitutes a significant residual

impact for Matters of State Environmental Significance (MSES);

▪ The Commonwealth Significant Impact Guidelines for what constitutes a significant

residual impact on Matters of National Environmental Significance (MNES); and

▪ Any relevant local government significant impact guideline for Matters of Local

Environmental Significance (MLES).

Offsets may be delivered through a variety of manners, including financial settlement

offsets, proponent driven offsets and a combination of these approaches. To avoid

duplication of offset conditions between jurisdictions, State and local governments can only

impose an offset condition in relation to a prescribed activity, if the same, or substantially

the same impact and the same, or substantially the same matter has not been subject to

assessment under the EPBC Act.

Water Act 2000

The Water Act 2000 (Water Act) is administered by the Queensland Department of Natural

Resources, Mines and Energy (DNRME). The Water Act provides a structured and

sustainable system for the planning, protection, allocation and use of Queensland’s surface

water and groundwater. The Water Act regulates:

▪ The taking of and interference with water, excavation or placing of fill in a watercourse,

and removal of vegetation in a watercourse for waters recognised as watercourses

under the Water Act; and




▪ The sustainable allocation of water for environmental purposes (i.e. environmental flows

to protect ecological functions in rivers).

Interfering with water, excavating or placing fill within a watercourse, removing vegetation

from a watercourse, and water allocations are assessed under the Water Act.

Biosecurity Act 2014

The Queensland Department of Agriculture and Fisheries (DAF) is responsible for

administering the Biosecurity Act 2014 (Biosecurity Act). The purpose of the Biosecurity Act

is to provide a framework for minimising and managing biosecurity risks in Queensland,

ensuring the safety of agricultural inputs, and aligning responses to biosecurity events to

national and international obligations.

The Biosecurity Act establishes a General Biosecurity Obligation (GBO) that requires all

persons in Queensland to be responsible for managing biosecurity risks that are under their

control and that they know about or should reasonably be expected to know about. The

Biosecurity Act also establishes prohibited and restricted biosecurity matter and places.

Aboriginal and Cultural Heritage Act 2003

The Aboriginal and Cultural Heritage Act 2003 (ACH Act) is administered by the Department

of Aboriginal and Torres Strait Islander Partnerships (DATSIP). The ACH Act binds all

persons to provide recognition, protection and conservation of Aboriginal cultural heritage.

The Cultural Heritage Duty of Care (section 23 of the ACH Act) states that: “a person who

carries out an activity must take all reasonable and practical measures to ensure the activity

does not harm Aboriginal cultural heritage”.

The ACH Act requires that a Cultural Heritage Management Plan (CHMP) or Native Title

Agreement be developed in accordance with Part 7 of the ACH Act when an EIS is required.

Native Title (Queensland) Act 1993

The provisions of the Native Title (Queensland) Act 1993 (NT Act) are administered by the

National Native Title Tribunal (NNTT). The NT Act recognises the land rights and interests

of Indigenous peoples where they have historically resided and regulates the conduct of

“future acts”, including development. The legislation provides for the determination of native

title claims, the treatment of “future acts” that may impact on native title rights and requires

consultation and/or notification to relevant claimants.

The Tribunal is established to work with people to understand Native Title and reach

outcomes that recognise everyone’s rights and interests in land and waters.

Queensland Heritage Act 1992

DES is responsible for administering the Queensland Heritage Act 1992 (QH Act). The

QH Act outlines the framework for the conservation of Queensland’s non-indigenous

heritage. To achieve this the QH Act provides for the establishment and maintenance of the




Queensland Heritage Register (the register). The QH Act regulates development of

registered places within the register.

Land Act 1994

The Land Act 1994 (Land Act) is administered by DNRME. The purpose of the Land Act is

to administer and manage non-freehold land and deeds of grant in trust and the creation of

freehold land, and for related purposes. Applications that may be required under the Land

Act include application for a temporary road, permit to occupy State Land, or stock route

closures.

Nature Conservat ion Act 1992

The Nature Conservation Act 1992 (NC Act) is administered by DES. In broad terms, the

objective of the NC Act is the conservation of nature (plants and animals) within

Queensland. Specifically, the NC Act seeks to gather relevant information, identify critical

habitat areas, manage protected areas, protect wildlife and promote ecologically

sustainable development. The NC Act has ten subordinate regulatory instruments in the

form of regulations, conservation plans and notices. This includes the Nature Conservation

(Wildlife) Regulation 2006 which lists the protected flora and fauna species (extinct in the

wild, endangered, vulnerable, near threatened) and also international wildlife and prohibited

wildlife.

Under the NC Act it is an offence to “take” protected wildlife without a license, permit or

other authority (section 320 of the NC Act). It is also an offence for a person, without a

reasonable excuse, to tamper with an animal breeding place that is being used by a

protected animal to incubate or rear the animal’s offspring (section 332 of the Nature

Conservation (Wildlife Management) Regulation 2006).

Under the NC Act, permits for the movement of protected animals and the clearing of

protected plants are required and a Species Management Program (SMP) must be

approved when interfering with protected native fauna habitat and breeding places. The Act

also provides legislative guidance in relation to offsetting significant residual impacts to flora

and fauna deemed to be of State significance.

Vegetation Management Act 1999

The DNRME is responsible for administering the Vegetation Management Act 1999

(VM Act). Overall, the VM Act regulates the clearing of remnant vegetation in Queensland.

The VM Act incorporates the regional ecosystem (RE) classification scheme. REs are

remnant vegetation communities in a bioregion that are consistently associated with a

particular combination of geology, landform and soil. RE maps describe the extent and

conservation status of remnant vegetation as REs.

The VM Act allows many routine clearing activities to be undertaken as exempt clearing

work, under an accepted development clearing code or using an area management plan.

Non-routine clearing activities to which the VM Act applies must be ‘assessable




development’ under the Planning Act. These activities will require a development approval

in accordance with that Act.

Fisheries Act 1994

The Fisheries Act 1994 (Fisheries Act) is administered by the Department of Agriculture

and Fisheries (DAF). The purpose of the Fisheries Act is to provide for the management

and protection of fisheries resources, including regulating development that might impact

declared fish habitat areas and fish passage. It regulates the taking and possession of

specific fish, removal of marine vegetation, the control of development in areas of fish

habitat and listed noxious fish species.

The Fisheries Act establishes a risk hierarchy for waterway barrier works across

Queensland and guides the design and assessment process for the implementation of new

waterway crossings. Development potentially impacting fish passage within a waterway can

be classified as accepted development or assessable development.

Accepted development works must be undertaken in accordance with a published accepted

development code. Culverts, bridges, dams and other temporary or permanent waterway

barrier works that cannot comply with accepted development requirements will result in

waterway barrier works designs requiring approval from the DAF under the provisions of

the Planning Act.

14.2.3 Local Planning Schemes

Flinders Shire Council Planning Scheme

The Flinders Shire Council Planning Scheme is administered by the Flinders Shire Council

and is implemented in conjunction with the Planning Act. The Planning Scheme sets out

what development can occur in the Shire and applications that can be made against the

Scheme. The Planning Scheme’s purpose is to facilitate the Shire’s vision with an emphasis

on providing an environment to promote economic development while also preserving the

Shire’s liveability and sense of place.

The Flinders Shire Council Vision includes:

▪ “To grow, sustainably, and not become too big – to retain the close-knit community that

exists currently, while also becoming a vibrant and diverse town with a sustainable local

economy and plenty of employment opportunities.

▪ To continue to improve the liveability of the Shire and establish a healthy community.

▪ To provide more opportunities for young people to work and recreate within the Shire

and encourage them to stay.

▪ For all residents to think We are better off here”.




In accordance with the Planning Act, three categories of development are defined under the

Finders Shire Council Planning Scheme: accepted development; assessable development

and prohibited development. A development approval is required for assessable

development.

14.3 Existing Environment

This section is based on a desktop environmental assessment of available Local, State and

Commonwealth databases and mapping to define known environmental features in the

vicinity of the Reference Project. Environmental constraints mapping of these features has

been prepared and is provided in Appendix K. Field investigations will be required in later

stages of the project to ground truth the findings of the desktop assessment.

The Project area for the purpose of the desktop environmental assessment is mapped in

Appendix K – Overview Map. The Project area includes the Saego Dam embankment,

diversion channel, diversion weir, the full supply volume inundation area of Saego Dam and

the Flinders River diversion weir, the irrigation areas and associated irrigation channels,

and potential rockfill borrow areas. It should be noted that some irrigation areas are only

potential expansion areas and the Appendix K mapping represents a conservative Project

area. Environmental features and constraints downstream of the Project area have been

considered where relevant.

14.3.1 Climate

The Project area is located approximately 45 km west of Hughenden, in central

Queensland. The Hughenden region has a hot, semi-arid climate. Mean temperatures

range from 22⁰C (minimum) to 37⁰C (maximum) in summer and 9⁰C (minimum) to 27⁰C

(maximum) in winter. The mean annual rainfall is 492 mm with most of the annual rainfall

typically occurring between December and March (Bureau of Meteorology, 2019).

14.3.2 Topography

The topography of the Project area is undulating. A variety of geomorphic features exist

within the Project area, including Betts Gorge, Stewart Creek, Back Valley Creek and Jones

Valley Creek. Several basalt plateaus surround the proposed Saego Dam.

The elevation of the Project area ranges from 250 m AHD at the confluence of Stewart

Creek and the Flinders River to 260 m AHD at the proposed weir on the Flinders River (refer

to Appendix K – Topography Map). The Full Supply Level of the Saego Dam is 266 m AHD.

This is less than the elevation of the surrounding basalt plateaus, which range from 320 m

AHD to 360 m AHD.




14.3.3 Geology and Soils

Geology

Through the Queensland Government’s geological map, accessed through Queensland

Globe, the geological formations in Table 14.1 and Appendix K – Geology and Water Bores

Map have been identified within the Project area.

Table 14.1 Geological Formations Identified Within the Project Area

Project Area Type Formation Lithology

Saego Dam

Inundation Areas,

Embankment,

Diversion Channel

and Weir

Dominant Formation Quaternary alluvium and

lacustrine deposits

Sand, silt, mud and gravel

Sub-Dominant Wallumbilla Mudstone and siltstone with

calcareous concretions

Sub-Dominant Tertiary-Quaternary

Basalts, N Queensland

Mostly olivine basalt flows and some

plugs; some nephelinite

Potential Rockfill

Borrow Pits

Dominant Formation Tertiary-Quaternary

Basalts, N Queensland

Mostly olivine basalt flows and some

plugs; some nephelinite

Irrigation Area and

Associated Irrigation

Channels

Dominant Formation Wallumbilla Mudstone and siltstone with

calcareous concretions

Sub-Dominant Allaru Mudstone Mudstone, calcareous siltstone

Sub-Dominant Toolebuc Formation Calcareous bituminous shale,

limestone

Soils

Through the Atlas of Australian Soils (Northcote et al, 1960-68), the soil types described in

Table 14.2 and mapped in Appendix K - Soils Map have been identified within the Project

area.

Table 14.2 Soil Types Identified Within the Project Area

Project Area Soil

Code

Soil Type Description

Diversion Channel MM5 Uniform fine cracking, smooth faced

peds, brown clay horizon underlain by

carbonate pan before 1.5m

Gently undulating clay plains with a

slight gilgai microrelief




Project Area Soil

Code

Soil Type Description

Si9 Duplex yellow-grey, hard setting A

horizon, A2 horizon sporad bleached,

alk pedal whole col B horizon

Alluvial plains with slightly elevated old

levees & shallow prior stream channels

Kb23 Very stony-surfaced (boulders up to 2

or 3 ft) dark clays

Very gently undulating extensive basalt

tablelands

Flinders River

Diversion Weir






Potential Rockfill

Borrow Pits

Kb23 Very stony-surfaced (boulders up to 2

or 3 ft) dark clays

Very gently undulating extensive basalt

tablelands

Saego Dam

Embankment and

Inundation Area

MM5 Uniform fine cracking, smooth faced





Irrigation Area and

Associated Irrigation

Channels












peds, brown clay horizon redder than

1.5m deep

Level alluvial plains with many braided

distributary channels

14.3.4 Surface Water

The Project is situated in the upper fresh waters of the Flinders River catchment, within the

Gulf Water Plan area. A number of named ephemeral tributaries of the Flinders River are

located within the Project area, including:

▪ Stewart Creek;

▪ Jones Valley Creek (tributary of Stewart Creek);

▪ Betts Gorge Creek;

▪ Back Valley Creek; and




▪ L-Tree Creek.

Waterways within the Project area that have been determined as watercourses or drainage

features under the Water Act have been mapped in Appendix K – Watercourse Identification

Map. The Flinders River and the downstream reach of L-Tree Creek are determined

watercourses, while the upstream reaches of L-Tree Creek are determined drainage

features. There are several areas within L-Tree Creek’s drainage features that are classified

as Lakes under the Water Act. No other waterways within the Project area have had a

watercourse determination performed under the Water Act. Several water bodies in the

vicinity of the irrigation area have been defined as lakes under the Water Act.

Waterholes

The closest known waterhole to the Project has been described in a 2013 study (Waltham

et al., 2013) as a permanent waterhole and is located on Betts Gorge Creek, within the

potential dam inundation area, just upstream of the confluence with the Flinders River. It

should be noted however, local landholders have advised that they have not observed a

permanent waterhole at this location. Further investigation and ground truthing will be

required in the next stage of the Project to identify the existence of waterholes downstream

of the Project area.

Waterholes have high ecological importance in the Flinders River because they can provide

critical dry season refugia for many species, including fisheries species. More information

on the studies conducted on waterholes within the Project area can be found in the

Environmental Flow Review Report prepared for the Project (Appendix L).

Stream Flow and Downstream Environments

Waterways in the vicinity of the Project area are highly ephemeral. Environmental features

and characteristics downstream of the Project area are summarised in the Environmental

Flow Review Report prepared for the Project (Appendix L). Downstream of the Project area,

the Flinders River is subject to prolonged dry periods – there is no flow for more than half

of the year at the Richmond gauging station (approximately 110 km downstream of the

Project area). The ephemeral flow regime plays a key role in defining and supporting riverine

habitats along the Flinders River, including wetlands, waterholes and fisheries.

Downstream of the Project area, the Flinders River is bordered by floodplains, with

anabranching channels extending across the floodplain. The Flinders River floodplain is

subject to regular inundation in the wet season. As a result, numerous riverine and

palustrine floodplain wetlands occur on the Flinders River floodplain, transitioning to

extensive estuarine wetlands near the Gulf of Carpentaria. The floodplains and wetlands

provide habitat for many flora and fauna species.

Studies of the persistence or permanency of waterholes downstream of the Project have

produced varying results. The closest identified waterhole with greater than 50%

persistence may be located just downstream of the proposed diversion weir, but its exact

location is not documented, and further investigations would be required to confirm its




existence. The numerous studies tend to align in that there are no further permanent or

persistent waterholes along the Flinders River until the confluence of the Stawell and

Flinders Rivers downstream of Richmond which is approximately 130 km downstream of

the Project.

Commercial, recreational and indigenous fishing occurs within the Flinders River

catchment, downstream of the Project Area. Commercial fisheries occur in the estuarine

reaches of the Flinders River and Gulf of Carpentaria. Target species include Barramundi,

Threadfin, Mackerel, Emperor, Mangrove Jack, Snapper, tropical sharks, mud crabs and

prawns. Inflows from the Flinders River system support the recruitment of juvenile prawn in

the estuaries. High flows cause the migration of prawns from the estuaries into the Gulf of

Carpentaria where they become available to commercial fisheries.

Recreational and indigenous fishing occurs in the fresh water and estuarine reaches of the

Flinders River. Indigenous fishing practices are reported to involve line fishing, crabbing,

hunting dugong and collecting molluscs and crustaceans.

14.3.5 Groundwater

The Project area is located within the Water Plan (Great Artesian Basin and Other Regional

Aquifers) 2017 (GAB Water Plan) area. According to schedule 2 of the GAB Water Plan,

the Project area may interact with following groundwater units:

▪ Betts Creek beds North;

▪ Galilee Clematis;

▪ Eromanga North Hooray;

▪ Eromanga Hutton;

▪ Eromanga Precipice;

▪ Eromanga Wallumbilla Rolling Downs;

▪ Adori Injune Creek Springbok Walloon; and

▪ Winton Mackunda.

There is also a relatively shallow groundwater system associated with the Flinders River

alluvium within the Project area. The Queensland Government’s registered groundwater

bore database (accessed through Queensland Globe) was used to identify registered

groundwater bores within or adjacent to the Project area (refer to Appendix K – Geology

and Water Bores Map). The database indicates that there are 4 registered groundwater

bores within the impoundment area of Saego Dam and several additional registered bores

in close proximity to the perimeter of the Saego Dam reservoir area.




14.3.6 Biodiversity

Protected Areas

No protected areas that are Matters of State Environmental Significance (MSES) are

mapped as occurring within or adjacent to the Project area (refer to Appendix K – MSES

Map). The nearest protected area is Porcupine Gorge National Park, which is located

approximately 65 km north-east and upstream of the Project area.

The EPBC Act PMST Report (included in Appendix K) shows that there are no protected

areas that are Matters of National Environmental Significance (MNES) (i.e. World Heritage

Properties, National Heritage Places, Wetlands of International Importance, Marine Parks

or Marine Areas) within or adjacent to the Project area. The nearest MNES protected area

is also Porcupine Gorge National Park, approximately 65 km north-east and upstream of

the Project area.

Downstream of the Project area, the nearest protected area does not occur until the Gulf of

Carpentaria some 700 km from the Project area.

Wetlands

As shown in Appendix K – MSES Map, the Project area contains High Ecological

Significance (HES) wetlands which are associated with Jones Valley Creek and the upper

reaches of Stewart Creek. These HES wetlands are within the Full Supply Level inundation

area for Saego Dam. It should be noted however, local landholders have advised that they

have not observed wetlands within the proposed Project area. Further investigation and

ground truthing will be required in the next stage of the Project to confirm the existence of

and ecological value of wetlands in the Project area.

There is also MSES Regulated Vegetation (100m from wetland) within the proposed

irrigation area extent which may correlate with non-MSES Riverine, Palustrine and

Lacustrine wetlands.

Downstream of the Project area, there are no HES wetlands or wetlands of High Ecological

Value (HEV) within 300 km of the Project area.

The nearest MNES Wetland of International Importance downstream of the Project area on

the Flinders River is the Southern Gulf Aggregation, located in the Gulf of Carpentaria. The

Southern Gulf Aggregation is a large wetland subject to regular inundation by marine and

estuarine tidal waters, and wet season flooding from rivers and streams from the inland

catchment.

Ecological Communities

According to the PMST Report (2019) (included in Appendix K) there are no listed

Threatened Ecological Communities (TECs) within or adjacent to the Project area. The

Endangered TEC ‘native species dependent on natural discharge of groundwater from the




Great Artesian Basin’ is the closest downstream TEC but not mapped within 50 km of the

Project Area.

Much of the Project area overlaps with areas of mapped known or potential Groundwater

Dependent Ecosystems (GDEs) (refer to Appendix K – GDE Map).

Flora

Regulated Vegetation (Category B and Category X), Regulated Vegetation Intersecting a

Watercourse and 100 m from Wetland Areas, and Least Concern Regional Ecosystems are

mapped as occurring within the Project area (refer to Appendix K – MSES Map, Regional

Ecosystems Map and Regulated Vegetation Map). Downstream of the Project area, the

Flinders River and its riparian zone has been identified as a ‘riparian corridor’ of ‘State

significance’. Flow-dependent ‘of concern’ Regional Ecosystems (REs) (classified under the

Vegetation Management Act) occur within the Flinders River riparian corridor.

No areas of Essential Habitat have been identified within or immediately downstream of the

Project area. Similarly, Protected Plants Flora Survey Trigger map does not apply to the

Project area or areas immediately downstream.

The PMST (included in Appendix K) identified the following Listed Threatened Species as

potentially occurring, or potentially having habitat occurring, within 50 km of the Project

area:

▪ Pink Gidgee (Vulnerable)

▪ Bluegrass (Vulnerable)

▪ King Blue-grass (Endangered)

The Wildlife Online Report (2019) (included in Appendix K) provides the complete list of

flora species that have been recorded within 50 km of the Project area. The list includes the

Pink Gidgee (Acacia crombiei), which is listed as Vulnerable under the NC Act.

The PMST (included in Appendix K) also lists the following invasive plant species, and/or

habitat for these species, as likely to occur within 50 km of the Project area: Prickly Acacia,

Rubber Vine, Prickly Pears, Cotton-leaved Physic-Nut, African Boxthorn, Parkinsonia,

Parthenium Weed, Athel Pine and Mesquite.

Fauna

There are no areas of Wildlife Habitat (for threatened and/or special least concern animals)

mapped as occurring within or immediately downstream of the Project area. However the

PMST (included in Appendix K) identified the following Listed Threatened Species of fauna

as potentially occurring, or potentially having habit occurring, within 50 km of the Project

area:

▪ Birds:




• Critically Endangered – Curlew Sandpiper

• Endangered – Star Finch (eastern), Star Finch (southern), Southern Black-throated

Finch, Gouldian Finch and Australian Painted Snipe

• Vulnerable - Red Goshawk, Squatter Pigeon (southern), Painted Honeyeater and

Masked Owl (northern)

▪ Mammals:

• Endangered - Northern Quoll

• Vulnerable - Ghost Bat, Greater Bilby and Koala, Large-eared Horseshoe Bat and

Julia Creek Dunnart

▪ Reptiles:

• Vulnerable – Plains Death Adder and Yakka Skink

The Wildlife Online Report (included in Appendix K) shows that the following Special Least

Concern and Vulnerable species have been recorded within 50 km of the Project area: Fork-

tailed Swift (Special Least Concern), Oriental Plover (Special Least Concern), Oriental

Pratincole (Special Least Concern), Common Sandpiper (Special Least Concern), Short-

beaked Echidna (Special Least Concern), Squatter Pigeon (southern subspecies)

(Vulnerable) and the Painted Honeyeater (Vulnerable). The full list of fauna species

recorded within 50 km of the Project Area can be found in Appendix K.

The PMST (included in Appendix K) lists ten Listed Migratory Species and 17 Listed Marine

Species (including the critically endangered Curlew Sandpiper) as ‘likely to’ or ‘may’ occur

within the Project area.

The PMST identified the following invasive animal species as potentially occurring, or

potentially having habit occurring, within 50 km of the Project area: Domestic Pigeon, House

Sparrow, Domestic Dog, Domestic Cat, Domestic Cattle, House Mouse, Rabbit, Pig, Red

Fox and the Asian House Gecko. The Cane Toad species or species habitat is known to

occur within the area.

Fish Passage

Waterway barrier works have the potential to impede fish passage along Queensland’s

network of rivers and streams. Barrier works include constructing, raising, replacement and

some maintenance works on structures such as culvert crossings, bed level and low level

crossings, weirs and dams, both permanent and temporary.

The Queensland waterways for waterway barrier works mapping layer colour-codes

waterways along their length to show the risk of adverse impact from instream barriers on

fish movements. The colours indicate whether waterway barrier works can potentially

proceed under the relevant Fisheries Queensland self-assessable code or whether the

works will require a development approval.




Within the Project area, the Flinders River, and L-Tree Creek and its upstream drainage

have been defined as major (purple) risk Queensland waterways for waterway barrier

works. All other waterways within the Project area have been defined as low (green),

moderate (amber) or high (red) risk waterways (refer to Appendix K – Queensland

Waterway Zoning Map).

Downstream of the Project area, the Flinders River retains a high degree of natural

connectivity which facilitates fish passage. There are no major dams or weirs to significantly

impede sediment transport or fish habitat. Riffle or glide habitat within the Flinders River

plays an important part in maintaining connectivity along the Flinders River for fish passage

when flows occur.

14.3.7 Land Use and Tenure

Under the FSC Planning Scheme, the Project area is zoned as Rural Land except for the

Flinders River corridor itself which is zoned as Recreation and Open Space. The purpose

of the Rural Land zone is to:

▪ Provide for rural uses and activities;

▪ Provide for other uses and activities that are compatible with:

• Existing and future rural uses and activities;

• The character and environmental features of the zone.

▪ Maintain the capacity of land for rural uses and activities by protecting and managing

significant natural resources and processes.

This Planning Scheme zoning is consistent with the Good Quality Agricultural Land (GQAL)

mapping which has the Project area mapped as GQAL land (refer to Appendix K – GQAL

Map). Specifically:

▪ The Saego Dam inundation area, embankment, diversion channel and diversion weir

will be located predominantly within Class C2 (Pasture Land – Native Pastures) with a

portion of Class B (Limited Cropping Land).

▪ Potential rockfill borrow areas will be in Class B areas.

• Note that quarrying activities will be required within the rockfill borrow areas to obtain

rock material for embankment construction. These borrow source locations are

indicative based on the underlying geology. Quarrying activities are an

Environmentally Relevant Activity (Extractive and Screening Activities) under the

EP Act.

▪ The diversion channels for irrigation and the irrigation areas themselves will be located

across mostly Class C1 (Pasture Land – Sown pastures, and native pastures on high

fertility soils) with minor areas of Class C2.




Most of the Saego Dam embankment, its inundation area and diversion channel will be

located on leased land (refer to Appendix K – Land Tenure Map). Freehold land impacted

by the Project includes the irrigation areas and associated irrigation channels, a section of

the diversion channel and embankment and the eastern extent of the Saego Dam

impoundment area. A Major Infrastructure Stock Route also passes through the proposed

irrigation areas.

14.3.8 Noise, Vibration, Light, Odour and Air Quality

The main sources of existing noise, vibration, light, odour and particulate emissions in the

vicinity of the Project area include farming activities on rural properties and local traffic

travelling on local roads.

14.3.9 Sensitive Receptors

Hughenden is the closest major community to the Project area (approximately 45 km east

of the Project area). Homesteads that currently overlay with the Project area were identified

using aerial imagery. This information is summarised in Table 14.3. It should be noted that

all stakeholders related to homesteads located within the Project area are already aware of

the Project and are being consulted as part of the Preliminary Business Case assessments.

Any displacement and/or road access impacts from the Project on these homesteads,

where relevant, do not present a risk to Project development.

Table 14.3 Proximity of Sensitive Receptors to the Project Area

Distance to Hughenden Nearest Identified Homesteads

~ 45 km • 4 homesteads located within the Project area

• 2 homesteads located within 1 km of the Project area

• ~6 homesteads located within 10 km of the Project area

Traffic and Transport

In terms of transport infrastructure, only local roads have the potential to be impacted by

the Project:

▪ Dalkeith Road intersects the diversion weir;

▪ Expressman Downs Road intersects the diversion channel and dam inundation area;

▪ Saego Plains Road intersects the dam inundation area; and

▪ Riverside Road intersects the diversion channel, dam inundation area and

embankment.

Any impacts to local roads will be addressed as part of the Project design and as a result,

do not present a risk to Project development.




14.3.10 Cultural Heritage and Native Title

Indigenous Heritage

A search of the DATSIP Aboriginal and Torres Strait Islander Cultural Heritage Database

and Register and associated Queensland Government mapping indicates there are no

known features of Indigenous cultural heritage within the Project area (refer to

Appendix K – Cultural Heritage Map).

Non-Indigenous Heritage

A search of the DES Queensland Heritage Register indicates that there are no known

features of non-Indigenous State or Local heritage within the Project area.

Native Title

The National Native Title Tribunal register provides the following information regarding

Native Title and an Indigenous Land Use Agreement (applicable to the entire the Project

area):

▪ Tribunal File no. QCD2017/002:

• Name: Yirendali People Core Country Claim

• Determination date: 20 March 2017

• Determination outcome: Native Title does not exist

▪ Tribunal File no. QI2016/039:

• Name: Yirendali People Claim Resolution ILUA

• ILUA type: Area Agreement

• Determination date: 2 December 2016

• Subject matter: Access (Government)

14.4 Environmental and Planning Constraints Assessmen t

An environmental and planning constraints assessment has been undertaken for the Project

(refer to Table 14.4). A rating has been applied to potential environmental and planning

constraints:

▪ Low - Unlikely that the constraint will trigger any legislative approvals, or the works are

classified as exempt or accepted development.

▪ Medium – The constraint will trigger a legislative approval, however the constraint is

unlikely to alter the design or operation of the Project.

▪ High – The constraint will trigger a legislative approval and will alter the design or

operation of the Project.




Table 14.4 Environmental and Planning Constraints Assessment

Aspect of the

Existing

Environment

Potential Impacts Environmental and Planning

Constraints

Mitigation and Management Measures Constraint

Rating

Surface Water • The Flinders River and part of L-Tree

Creek are defined watercourses under

the Water Act.

• The upstream reaches of L-Tree Creek

are defined drainage features under the

Water Act.

• There are several areas classified as

lakes under the Water Act.

• The impacted sections of Stewart Creek,

Betts Gorge Creek, Back Valley Creek

and Jones Valley Creek are not yet

assessed/determined under the Water

Act.

• Water extraction from the Project will

impact stream flows along downstream

reaches of the Flinders River (see

below). The Saego Dam embankment is

located close to the confluence of

Stewart Creek and the Flinders River to

minimise stream flow impacts to Stewart

Creek.

• Triggers an application for operational

work that involves taking or interfering

with water.

• Any excavation or filling within a

mapped watercourse will require

assessment against riverine protection

permit (RPP). requirements.

• Buy back of existing surface water

licences that will be affected by the

Project is likely to be required.

• Lodge an IAS with the CG to have the

project declared a coordinated project.

To allow assessment of impacts on

watercourse to be included as part of a

coordinated project.

Low




Aspect of the

Existing

Environment


Constraints


Rating

Stream Flow &

Downstream

Environments

• Hydrological modelling suggests that the

Project would reduce medium and high

flows downstream of the Project

(Appendix L). The impact on high flows

would persist until Richmond

(approximately 150 km downstream of

the Project). Further downstream, near

the Gulf of Carpentaria, the impact on

high flows would be offset by inflows from

other parts of the catchment. The Project

would have a lesser impact on low flows

downstream of the Project.

• The reduction in medium and high flows

may impact on channel maintenance

processes, riparian zone communities

and connectivity with anabranch and

floodplain habitat.

• Downstream of Richmond, the Project

may reduce the ability of passing flows to

maintain instream, riparian and floodplain

habitat, waterholes, riffles/glides and

longitudinal connectivity.

• Modelling suggests that the Project

would not meet 3 of the 7

Environmental Flow Objectives (EFOs)

for the Flinders River, as set out in the

current Gulf Water Plan.

• An alternative scheme with a 25%

reduction in the storage capacity of

Saego Dam (nominal number) was

modelled to test sensitivity and

compliance with the EFOs. This

scenario is fully compliant with 6 of the

7 EFOs and is marginally non-

compliant with the 7th EFO. The

alternative scheme suggests that it

would be feasible to refine the design of

Saego Dam to achieve compliance with

all 7 EFOs.

• Amendments to the Gulf Water Plan

and Resource Operations Plan may be

required to license the proposed water

take if compliance with all 7 EFOs

cannot be achieved. Amendments may

also be required to convert unallocated

water reserves to water allocations.



Potential impacts on streamflow and

downstream environments would be

investigated in more detail as part of

the coordinated project assessment

process.

• Design refinements and environmental

flow modelling to be undertaken to

inform compliance with the Gulf Water

Plan EFOs, environmental

management riles, water storage

design and mitigation measures.

High




Aspect of the

Existing

Environment


Constraints


Rating

Groundwater • The Project area will remove the function

of a small number of water bores.

• The Project inundation area and

infrastructure may impact on GDEs.

• The irrigation area may reduce the depth

to groundwater in this area.

• Any agreement with landholders will

require a ‘make good’ agreement for

impacted water bores.

• A referral to DEE will be required.

• Field survey will be required to

determine if GDEs exist within the

Project area.

• Prepare a referral to the DEE to decide

if a Controlled Action.

• Secure make good agreements with

impacted landholders.

Low

Ecosystems • No mapped MSES protected areas within

or adjacent to the Project area.

• No mapped MNES protected areas

identified within 50 km of the Project

area.

• No mapped MNES Listed Threatened

Ecological Communities identified within

50 km of the Project.

• HES wetlands associated with Jones

Valley Creek and the upper reaches of

Stewart Creek which are within the

inundation area.


• Field surveys will be required to

undertake a significant impact

assessment.

• An aquatic ecological survey will be

required to support the development.

• It is possible State environmental offset

will be required for impacts to the HES

wetlands and regulated vegetation.


if a Controlled Action. Medium




Aspect of the

Existing

Environment


Constraints


Rating

Flora • Mapped regulated vegetation (Category

B and Category X), MSES Regulated

Vegetation Intersecting a Watercourse

and 100m from Wetland Areas and Least

Concern Regional Ecosystems (classified

under the Vegetation Management Act)

are located across the Project Area.

• No areas of Regulated Vegetation

Essential Habitat or Protected Plants

Flora Survey Trigger areas are located

within or directly downstream of the

Project area.

• Species with conservation status have

been identified within 50 km of the site.

• The Project area may impact MNES

Listed Threatened Species of plants as

their species or species habitat are

known to occur or likely to occur within 50

km of the Project area.

• The Project area is likely to contain

invasive plant species.

• Clearing of regulated vegetation can

only be for a relevant purpose, be

exempt clearing or accepted

development code.

• Field surveys will be required to

undertake a significant impact

assessment.

• A referral to DEE may be required.

• It is possible State environmental offset

will be required for impacts to the

regulated vegetation.

• Development application for native

vegetation clearing (VM Act 1999).




regulated vegetation and essential

habitat to be included as part of a

coordinated project.



• Potential for an invasive species

assessment and consequence

management plan.

Medium




Aspect of the

Existing

Environment


Constraints


Rating

Fauna • Species with conservation status have

been identified within 50 km of the site.

• EPBC Listed Threatened and Migratory

species are identified with 50 km of the

Project area.

• The Project area is likely to contain

invasive animal species.

• An ecological field survey will be

required to identify the species and

species habitat that occur within Project

area and the significance of impact.

• An application for a damage mitigation

permit may be required under the NC

Act.

• A species management program will be

required under the NC Act.




• Prepare a species management

program.

Medium

Aquatic

Ecology

• The Project Area will impact on natural

fish passage of Betts Gorge, Stewart,

Jones Valley, L-Tree and Back Valley

Creek as well as the Flinders River.

• Betts Gorge, Stewart and Jones Valley

Creeks are mapped as high-risk

waterways for waterway barrier works.

• The Flinders River, L-Tree Creek and its

upstream drainage features are mapped

as major-risk waterways for waterway

barrier works.

• Back Valley Creek is mapped as a low-

impact waterway.

• An aquatic ecological survey will be

required to support the development.

• A development application for

assessable development that is

operational work that is constructing or

raising waterway barrier (Planning Act

and Fisheries Act) will be required.




waterways to be included as part of a

coordinated project application.

• Prepare application for waterway

barrier works.

• Design of diversion channel allows for

fish passage between Saego Dam and

Flinders River.

• Design for Flinders River weir allows

for fish passage across weir.

Medium




Aspect of the

Existing

Environment


Constraints


Rating

Land Use and

Tenure

• Saego Dam will inundate free hold and

lease hold land.

• The dam embankment and diversion

channel will be constructed across lease

land and one free hold tenure.

• The irrigation area and associated

irrigation infrastructure will be constructed

on mostly free hold land and constructed

across a Major Stock Route.

• Operation of the dam is a material

change of use.

• Construction of the dam embankment,

weir and diversion channel is operational

works.

• Quarrying and extractive activity for the

rockfill borrow pits.

• Class B, C1 & C2 GQAL land will be

impacted by the Project area.

• Native title does not exist within the

Project area.

• Landholder compensation for loss of

useable land.

• Change the purpose of existing tenure.

• Planning application to the Local

Government.

• Development applications would require

a land suitability assessment.

• Permit to close and realign a Major

Stock Route.

• Environmental Relevant Activity

(Extractive and Screening Activities)

triggered for quarrying activity where

more than 5000 tonnes is extracted or

screened in one year.



Allowing powers related to compulsory

land acquisition and planning

applications to be assessed as part of

a coordinated project (superseding

local planning applications).

• Permit to close and realign a Major

Stock Route.

• Potential for Environmental Authority

application for Environmental Relevant

Activity (Extractive and Screening

Activities) for quarrying activity.

Medium




Aspect of the

Existing

Environment


Constraints


Rating

Built

Environment

• The inundation area will impact on local

roads.

• Access to the site will be via both local

and state-controlled roads.

• Some homesteads will be displaced or

otherwise impacted by construction and

operation of the Project however all

stakeholders related to homesteads

located within the Project area are

already aware of and being consulted as

part of the preliminary business case

assessments. Any displacement and/or

road access impacts from the project on

these homesteads does not present a

risk to the project development.

• Approval required from Council to

realign the local roads.

• A traffic and transport assessment will

be required for the construction phase.

• Impacts on sensitive receptors to be

considered as part the lead approval

(IAR or EIS).

• Landholder compensation for direct

impacts to sensitive receptors.

• Field survey will be required to clarify

infrastructure impacts to any existing

infrastructure in the area.



To ensure assessment of impacts on

sensitive receptors and roads included

as part of the approval process.

Low




Aspect of the

Existing

Environment


Constraints


Rating

Cultural

Heritage and

Native Title

• There no known features of indigenous

or non-indigenous cultural heritage within

the Project area.

• A current ILUA for the Yirendali People

exists which encompasses the entire

Project area.

• Development works have a duty of care

to ensure the Project does not impact

on matters of cultural heritage

significance.

• Duty of care to not harm cultural

heritage sites or items of significance.

• Field survey will be required to

determine if any indigenous or non-

indigenous heritage occurs within the

Project area.

• Development will require assessment

against the Aboriginal Cultural Heritage

Act Duty of Care Guidelines.

• Undertake a cultural heritage risk

assessment.

• Prepare a Cultural Heritage

Management Plan if required.

Medium




14.5 Regulatory Processes and Approvals

Table 14.5 is a summary of legislative approvals that may be triggered by the design or

operation of the Project. This is based on information gathered as part of the desktop

assessment, therefore Table 14.5 should not be construed as an exhaustive list of

approvals. Additional approvals may be identified during future phases of the Project.




Table 14.5 Approvals Register

Item Applies To Approval Legislation Trigger Assessment

Agency Earliest State Time

Preparation

Time

Assessment

Time

1. Commonwealth Approvals

1.1 Entire Project EPBC Act

Referral

Environment Protection

and Biodiversity

Conservation Act 1999

(EPBC Act)

A Project that has, will

have or is likely to have a

significant impact on an

MNES.

Department of

Environment &

Energy (DEE)

As soon as

possible. 2-6 months

20 business

days for

determination1

1.2 Entire Project EPBC Act Formal

Assessment

EPBC Act

Where the Minister

decides that the Project

is a Controlled Action

and is subject to

assessment and

approval under the

EPBC Act.

DEE Following item 1.1. 6-12 months 9-12 months2

1.3 Entire Project Offset Strategy EPBC Act

Where significant

residual impacts to

MNES are identified.

DEE Concurrent with

item 1.2. - -






Preparation

Time

Assessment

Time

2. State Approvals

2.1 Entire Project Initial Advice

Statement

State Development and

Public Works

Organisation Act 1971

(SDPWO Act)

Where the proponent is

seeking a coordinated

project determination and

seeking the Coordinator-

General to facilitate the

planning and delivery of

the infrastructure.

Department of

State

Development,

Manufacturing,

Infrastructure

and Planning

(DSDMIP).

As soon as possible

following completion

of Preliminary

Business Case and

decision to proceed

to the Detailed

Business Case.

1-3 months 1.5 Months2

2.2 Entire Project

Environmental

Impact Statement

(EIS) or Impact

Assessment

Report (IAR)

SDPWO Act

Where the Project is

declared a Coordinated

Project by the

Coordinator-General and

the EIS or IAR

assessment process is

determined.

DSDMIP and

multiple referral

agencies3

Following 2.1 (allow

for an additional 2

months for draft

Terms of

Reference).

6-9 months 6–12 months2

2.3 Entire Project Riverine

Protection Permit Water Act 2000

Placing fill or excavation

in a mapped watercourse

after DNRME

classification of

watercourses is

undertaken.

Department of

Natural

Resources,

Mines & Energy

(DNRME)

Following Item 2.2 < 1 months4 < 1 months5






Preparation

Time

Assessment

Time

2.4 Entire Project

Operational work

that is

constructing or

raising waterway

barrier works

Fisheries Act 1994

Project potentially

impacting fish passage

within a mapped

waterway.

Department of

Agriculture and

Fisheries


2.5 Entire Project

Permit for the

movement of

protected animals

Nature Conservation

Act 1992 (NC Act)

If protected species are

identified during the

environmental

assessment or pre-

clearing survey.

Department of

Environment

and Science

(DES)


2.6 Entire Project

Protected plant

clearing permit or

exempt clearing

notification

NC Act

If protected plants are

found in areas to be

cleared or if no protected

plants found in areas to

be cleared.

DES Following Item 2.2 < 1 months4 < 1 months5

2.7 Entire Project

Species

Management

Plan

NC Act

If interfering with

protected native fauna

habitat and breeding

places.







Preparation

Time

Assessment

Time

2.8 Entire Project

Water licence to

take unallocated

water

Water Act 2000

Water licence to take

unallocated water from

the General and

Strategic Reserves in the

Flinders River catchment

area. Will also require

amendment to Gulf

Water Plan and

Resource Operations

Plan by DNRME (not an

approval).

DNRME Following Item 2.2 < 1 months4 < 1 months5

2.9 Entire Project

Operational work

for taking or

interfering with

water in a water

course

Water Act 2000

Taking or Interfering with

a watercourse after

DNRME classification of

watercourses is

undertaken.


2.10 Only on lease

land

Permit to occupy

state land Land Act 1994

Occupy any state land

including lease land,

unallocated state land

and/or road reserves.

DNRME (State

Land Asset

Management)







Preparation

Time

Assessment

Time

2.11 Irrigation

Areas

Permit to close

stock route Land Act 1994 Realign stock route.

DNRME (State

Land Asset

Management)


2.12 Entire Project

Operational work

to clear native

vegetation

Vegetation

Management Act 1999

Where the works require

the clearing of regulated

vegetation.


2.13 Entire Project Offset Strategy Environmental Offsets

Act 2014

If there is a significant

residual impact on a

prescribed environmental

matter.


2.14 Entire Project

Cultural Heritage

Management

Plan

Aboriginal Cultural

Heritage Act 2003

To demonstrate Cultural

Heritage Duty of Care.

DATSIP Concurrently with

item 2.2 - -

2.15 Rockfill

Borrow Pits

Environmental

Authority

Environmental

Protection Regulation

2019

Extractive and/or

screening activities more

than 5,000 tonnes per

year.

DES Concurrently with

item 2.2 < 1 months4 1-3 months5






Preparation

Time

Assessment

Time

3. Local Approvals

3.1 Entire Project

Material Change

of Use - Utility

construction

Shire of Flinders

Planning Scheme V1.1

Material change of use

for “other use”.

Flinders Shire

Council Following Item 2.2 < 1 months4 < 1 months5

3.2 Entire Project

Operational work

that is excavation

or filling

Shire of Flinders

Planning Scheme V1.1

Operational work

involving excavation and

filling in the Rural zone

for urban purposes that

involve disturbing more

than 2500 square metres

of land.

Flinders Shire

Council Following Item 2.2 < 1 months4 < 1 months5

3.3 Entire Project

Alteration or

improvement to

local government

controlled areas

and roads

Local Law No. 1

(Administration) 2015

Alteration to the local

government-controlled

road.

Flinders Shire

Council Following Item 2.2 1 month4 1 month5

1 Statutory timeframe.

2 Non-statutory timeframe and based on recent experience.

3 Other agencies will be determined by the CG and may include: Department of Agriculture and Fisheries, Department of Environment and Science, Department of Natural Resources,

Mines & Energy, Department of Transport and Main Roads, Department of Aboriginal and Torres Strait Islander Partnerships, National Native Title Tribunal and Flinders Shire Council.

4 Application information would be developed through the EIS or IAR process.

5 It is assumed the assessment timeframes will be reduced due to undertaking the coordinated project process.




15. SUSTAINABILITY ASSESSMENT

15.1 Key Points

▪ The Reference Project was assessed against the thirteen sustainability goals in the

Building Queensland Business Case Development Framework, BCDF (Building

Queensland, 2016)

▪ Both scenarios were assessed against the 13 criteria

▪ Option 1 Diversified Cropping rated higher in many categories due to its greater impact

on more criteria.

15.2 Purpose

The purpose of this chapter is to identify sustainability issues considered relevant to the

Reference Project and scenarios.

15.3 Overview

Utilising a sustainability assessment assists with comparison and contrast analysis,

especially the economic, social and environmental impacts of the Project. This chapter

outlines the process and results although noting this is very early in the process and the

ratings have not been subject to community consultation or third-party reviews.

15.4 Approach

A well- recognised and suitable process was adopted to consider the relevant material. The

BQ Business Case Development Framework (Building Queensland, 2016) was selected as

it had been used recently on contemporary projects.

The information gathered for the development of the PBC was used for this assessment.

No further information collection exercises or studies were undertaken as the information

previously captured was considered as comprehensive enough for this stage of the Project.

Chapters 14, 16 and 17 and relevant Appendices were used as the prime data input

sources.

Options were assessed against each goal and criteria as defined in Table 15.1.




Table 15.1 Options Assessed by Goal and Criteria

Impact Contribution Description

Uncertain Current data leads to uncertainty defining impact

No impact Assessed option makes no impact on the

sustainability goal

Minor Positive Option assessed as having a Minor Positive impact

on the sustainability goal

Medium Positive Option assessed as having a Medium Positive

impact on the sustainability goal

Major Positive Option assessed as having a Major Positive impact

on the sustainability goal

Minor Negative Option assessed as having a Minor Negative


Medium Negative Option assessed as having a Medium Negative


Major Negative Option assessed as having a Major Negative





Table 15.2 Sustainability Assessment for Diversified Cropping Scenario (Scenario 1) and Grazier Support Scenario (Scenario 2)

No Sustainability Goal Scenario 1 Diversified Cropping Scenario 2 Grazier Support Comments

1 Diverse and resilient economy Major Positive Medium positive By its nature most data indicates Scenario 1

provides materially higher improvements

2 Higher levels of productivity and economic

efficiency

Major Positive Medium Positive

3 Increased trade or exports Major Positive Medium Positive Each scenario will fundamentally improve

trade but exports more likely for Scenario 1

4 More competitive industries Medium Positive Medium Positive Competition per sector will likely be enhanced

with more products available in the regional

markets

5 Fairer distribution of income Uncertain Uncertain Both options will provide income to the local

community however no assessment has yet

been made about the impacts of fairness and

holistic income distribution

6 Improved public safety Moderate positive Moderate positive Road and river crossing upgrades will likely

be required. Mental health issues will also

likely be improved with injection of cash and

more positive outlook. Investment will also

likely attract more services and specialist

medical providers





7 Social cohesion and inclusion Minor positive Minor positive Unable to quantify however a more

prosperous community adds to community

well being and sense of place and ability to

enhance community identity

8 Equity Medium positive Minor positive Difference in the application of the water

available will likely open up equity injections

across market sectors. As more sectors are

involved in Scenario 1 there is likely more

equity opportunities

9 Preserving healthy landscapes Minor Positive Minor Positive Few if any immediate local issues. Both

projects could actually enhance if sustainable

practices used for construction and operations

including wildlife corridors /road

fencing/erosion controls

10 Reducing loss of habitat and biodiversity Minor negative Minor Negative If Reference Project is adopted then some

EFOs may be impacted however water will be

held in the landscape longer and will create

habitat and attract transient or ephemeral

species

11 Increasing the efficient use of energy and

water resources

Major Positive Medium positive The potential to use sustainable amounts of

water from the Flinders River as it passes

Hughenden is currently unrealised. It can be

transformational for the region. Pumps will be





used only as required since the scheme is

predominantly a gravity system

12 Protecting sites with heritage, indigenous

and cultural value

No impact No impact Initial mapping indicates no issues of concern

however a more detailed investigation will

provide more information

13 Enhancing the liveability and amenity of

urban centres

Major Positive Medium positive As this project injects economic stimulus into

the economy the propensity for businesses

and local government to provide more social

infrastructure and places of connection will be

enhanced




15.5 Summary of Assessment

Although unquantified and preliminary in nature the assessment shows the project has

predominantly major or medium positives with few negatives. Further quantification of the

analysis will be required as part of the next phase of the project however at this preliminary

stage no major sustainability issues have been identified.




16. ECONOMIC ANALYSIS

16.1 Overview

The Hughenden Irrigation Project is a potential game-changer for the Hughenden region.

Without intervention, the Hughenden and wider Flinders region is forecast to see declines

in population and employment. The reduction in employment opportunities has had a

significant impact on the town, with the number of businesses in the region declining. This

Project has the potential to not only inject employment into the local community but

also provide a significant regional economic improvement well into the future.

Economic and financial/affordability assessments have been undertaken for the Reference

Project by the specialist economic consulting company NineSquared Pty Ltd

(NineSquared).

The economic analysis considers the broader costs and benefits that might flow to the

community through an economic contribution analysis and the direct impacts of the Project

through the cost-benefit analysis. The financial analysis considers the project as a stand-

alone investment, rather than assessing broader costs and benefits that might flow to the

community. This analysis is also important to assess how affordable the project might be to

the potential funders of the project, notably the customers (irrigators) and the Government.

Technical Reports on the economic and financial/affordability assessments are included in

Appendices M and N respectively. These assessments also relied on outputs from the

agronomic studies for which Technical Reports are included in Appendix J.

This section provides a summary of the outcomes of the economic assessment. The main

findings are:

▪ The benefits associated with increased agricultural production do not outweigh the

Project’s capital and ongoing expenditure. As a result, the benefit-cost ratio (BCR) for

the Project is estimated under the Diversified Cropping scenario at 0.72, indicating that

for each dollar invested in the Project, 72 cents are returned in direct Project benefits.

▪ While higher value cropping requires more water for production, the gross margins are

larger, and the capital cost requirements are lower which results in a higher BCR when

compared to a Grazier Support scenario (which has a BCR of 0.47). However, this

Diversified Cropping scenario attracts more risk, particularly the willingness for farmers

to produce intensive horticulture in a region where this cropping has a very limited track

record to date.

▪ Despite the BCR being below 1 under either of the scenarios tested, the Project has the

potential to lead to significant positive economic shifts in the region. This is primarily

driven by the ongoing employment impacts in the agricultural sector.

▪ Without intervention, the outlook for Hughenden and the wider Flinders region is for

declining population and employment. Investment in the water and agricultural sectors




has the potential to not only slow the decline, but to spark additional investment in the

region, leading to increased opportunity and economic growth.

▪ In addition to the local economy impacts quantified in this assessment, there is the

potential for additional job opportunities to be generated in the longer term if the Project

proceeds. This includes the attraction of new support industries or the expansion of

existing industries due to the improved opportunity.

16.2 The Regional Economy


at around 1,100. The Flinders Shire, in which it is located, had an estimated population of

around 1,500 in 2017. The Shire’s population peaked at over 3,000 residents during the

1960s and has declined significantly in the decades since.

In fact, over the last two decades the Flinders Shire has experienced the fourth highest rate

of population decline across Queensland with a total decline of almost 30% over the

period. Further, over the last five years, the Shire has exhibited an average rate of

population decline of 3.0% per year, compared to the State-wide average increase of 1.6%

per year.

Continuation of this decline, in the absence of regional economic growth initiatives, has the

Shire population projected to decline to around 1,260 by 2031, a further decrease of

approximately 17% from the most recent population estimate. Figure 16.1 illustrates the

historical decline in population along with the forecast continued decline.

Figure 16.1 Population in Flinders Shire (Source: Australian Bureau of Statistics)

Similarly, the total number of people employed in the Flinders Shire has declined and

across all sections of the local economy. The number of businesses, including farming

enterprises, has also declined.

0

500

1,000

1,500

2,000

2,500

2000 2005 2010 2015 2020 2025 2030

PO

PU

ALT

ION

Population (Historical) Population (Forecast)





▪ Primary production (farming and to a much lesser extent mining) of which agriculture

and beef production is dominant.

▪ Transport-related services.

▪ Tourism-related services.



Table 16.1 demonstrates the industry shift in employment for the region. Since this time,

the transport, postal and warehousing share has further declined due to the reduction in

Aurizon jobs during 2017.

Table 16.1 Share of Employment in Flinders Shire, by Industry (Source: Australian Bureau of Statistics)


Agriculture, Forestry and Fishing 35.3 35.2

Public administration and safety 11.4 12.7

Transport, Postal and Warehousing 11.9 8.2

Retail trade 8 7

Education and training 5.8 5.5

Accommodation and food services 5 4.9

Health care and social assistance 4.1 4.7

Construction 5.9 4.3

Administrative and support services 1.3 2

Electricity, Gas, Water and Waste Services 0.9 1.5

Manufacturing 2.7 1.4

Wholesale trade 0.8 1

Mining 1 0.9

Professional Scientific and Technical Services 0.7 0.9





Financial and insurance services 1 0.6

Rental, Hiring, and Real Estate Services 0.9 0.4

Arts and recreation services 0.3 0.4

Other services 2.1 2.5

Total persons employed (no.) 898 (total no.) 795 (total no.)

Based on the Australian Bureau of Statistics Socio-Economic Indexes for Areas index –

which measures socio-economic disadvantage – the Flinders Shire exhibits higher level of

disadvantage than more than half of the local government areas in Australia.

While the unemployment rate in the Shire is below the State average, this is driven by

population decline, rather than being representative of a high level of employment

opportunities in the region. Accordingly, the number of people in employment declined by

around 12% between 2011 and 2016.

While estimates of the Gross Regional Product (GRP) for the Flinders Shire specifically are

not available, the Queensland Government Statistician’s Office published data over the

period from 2000-01 to 2010-11, showing that the GRP for the North West region of

Queensland (which Flinders Shire is a part of) grew at 0.1 per year, well below the State

average.

The conclusion is that without significant regional development it is likely that Flinders Shire

will experience further decline. This provides an important backdrop to the need for a large-

scale regional infrastructure project such as the Hughenden Irrigation Project.

16.3 The Project

Following an options analysis exercise, the project was defined as comprising a suite of

bulk water infrastructure (dam, diversion channel and in-stream weir) and distribution

infrastructure (pumps and channels) to provide irrigation water to new farming enterprises.

Two cropping scenarios are assessed for the project and are the subject of this economic

analysis:

▪ Scenario 1 (Diversified Cropping): a mix of medium and low priority water for

diversified cropping, comprising horticulture (avocados, mangoes, lemons and

mandarins), grains and hay (sorghum, wheat, corn and rhodes grass hay).

▪ Scenario 2 (Grazier Support): low priority water for grains and hay production.




Based on the availability of water, the associated reliability of the allocations, considerations

of lot sizes and the conditions of the proposed site, two agricultural scenarios were provided

by PeritusAg (refer Appendix J). These are summarised in Table 16.2.

Table 16.2 Volume of Production by Scenario

Crop Type Scenario 1

(ha)

Scenario 2

(ha)

Avocado 900 0

Mango 600 0

Lemon 300 0

Mandarin 300 0

Rhodes Grass Hay 3,780 7,980

Sorghum 810 1,710

Corn 810 1,710

Wheat 270 570

Total production (ha) 7,505 11,351

Total water required (ML/year) 70,000 84,000

An important consideration when reviewing the chosen crop types is the volume of water

and the associated priority of water required for production. While the horticulture crops are

more profitable, more water is required for production. Further, the horticulture crops, being

perennial fruit trees, require a higher priority water. While the agronomic assessment found

that the reliability would be sufficient for production, it is recommended that this is further

market-tested as part of the Detailed Business Case. The individual crop water

requirements are displayed in Table 16.3.

Table 16.3 Annual Water Requirements by Crop

Crop Type Water Required

(ML/ha/year)

Water Priority

Avocado 16.0 Medium to High

Mango 10.0 Medium to High

Lemon 16.0 Medium to High




Crop Type Water Required

(ML/ha/year)

Water Priority

Mandarin 16.0 Medium to High

Rhodes Grass Hay 8.0 Low to Medium

Sorghum 7.0 Low to Medium

Corn 7.0 Low to Medium

Wheat 6.0 Low to Medium

Market assessments were undertaken on the identified crops to determine the expected

gross margins. The inputs to the gross margin analysis include the variable costs, unit

outputs and farm gate returns. When combined, total costs per hectare and total revenue

per hectare was determined specifically for the climate and production timing associated

with the Hughenden region. Table 16.4 summaries the total cost per hectare, total revenue

per hectare and the resulting gross margin by crop type. Adjustments are then made to the

gross margin to account for the price of water.

Table 16.4 Gross Margin Analysis

Crop Type Total Cost ($/ha) Total Revenue ($/ha) Total Gross Margin ($/ha)

Avocado $29,848.00 $44,899.92 $15,051.92

Mango $44,148.40 $50,194.20 $6,045.80

Lemon $66,600.00 $122,655.00 $56,055.00

Mandarin $51,000.00 $71,730.00 $20,730.00

Sorghum $897.00 $2,600.00 $1,703.00

Wheat $856.00 $2,275.00 $1,419.00

Corn $1,443.00 $4,200.00 $2,757.00

Rhodes Grass

Hay

$3,537.00 $5,920.00 $2,383.00

While improved economic results would be generated by assuming all the production is

high-value horticulture, it would be unrealistic to assume the region could immediately go

from no high-value horticulture to an entire scheme of horticulture. Instead, for the first




scenario it has been assumed that that there is a mix of broad-acre field crops which are

less intensive and would not require the same level of experience and expertise.

The primary economic benefit associated with the project is the increase in agricultural

production associated with improved availability of water supply. Development of

agriculture in the region has previously been constrained due to the variability of water

supply.

Total cost of the project is estimated to be around $500 million (varying between the two

scenarios), with construction costs mostly incurred between 2022 and 2024, with the

project’s first year of operation in 2025. Table 16.5 summarises the economic costs that are

included in the CBA calculation, noting that Scenario 2 costs are higher because the area

of irrigated land is larger. This requires additional distribution infrastructure which attracts a

higher capital cost. The other cost components, namely the dam structure, the diversion

channel and the in-stream weir, require the same level of capital expenditure between each

scenario.

Table 16.5 Capital Costs (discounted, undiscounted) – Scenarios 1 and 2

Cost types Undiscounted ($M) Discounted ($M)

Scenario 1 (Diversified Cropping) $498.3 $380.7

Scenario 2 (Grazier Support) $512.8 $391.8

16.4 The Economic Analysis

The project is assessed using two types of economic modelling:

▪ Cost-Benefit Analysis (CBA), which assesses the costs and benefits to the community

as a whole.

▪ Economic Contribution Analysis, which also assesses the wider impacts to the

community as a result of the project, but through an Input-Output model estimating the

impact of the project on Gross Regional Product and employment.

16.4.1 CBA Results

Scenario 1 (Diversified Cropping) generates higher economic benefits compared to

Scenario 2 (Grazier Support), due to the higher returns from the horticultural

production. Capital and ongoing costs are marginally higher for Scenario 2 due to a larger

cropping area able to be irrigated. Headline CBA results are a BCR of 0.72 for Scenario 1,

compared to 0.47 for Scenario 2.

The details of the costs and benefits identified in the CBA for Scenario 1 are summarised

in Table 16.6. The Project is assumed to commence operation in 2025 and the benefits will




accrue for a 50-year period of operations to 2074. This scenario generates higher economic

benefits when compared to Scenario 2 due to the higher gross margin of the horticulture.

As the results show, the additional water requirements for the high-value cropping is

overcome by the higher gross margin.

Table 16.6 Disaggregated CBA Results, Undiscounted and 7% Discount Rate – Scenario 1 (Diversified Cropping)

CBA Results Undiscounted ($M) Discounted

($M)

%

Capital costs $498.3 $380.7 87.2%

Ongoing costs

(including on-farm costs, sustaining capital and

maintenance)

$224.0 $55.7 12.8%

Total costs $722.3 $436.3

Agricultural Production $1,993.1 $303.7 96.3%

Leisure Visits $35.5 $7.0 2.2%

Residual Value $186.9 $4.5 1.4%

Total benefits $2,215.5 $315.2

BCR 0.72

NPV ($M) -$121.2

The details of the costs and benefits identified in the CBA for Scenario 2 are summarised

in Table 16.7. This scenario generates lower economic benefits when compared to Scenario

1 due to the reliance on lower gross-margin production.

Table 16.7 Disaggregated CBA Results, Undiscounted and 7% Discount Rate – Scenario 2 (Grazier Support)


($M)

%

Capital costs $512.8 $391.8 89.0%

Ongoing costs (incremental) $248.5 $48.7 11.0%

Total costs $761.3 $440.4

Agricultural Production $1,052.3 $192.7 93.6%





($M)

%

Leisure Visits $42.6 $8.4 4.1%

Residual Value $196.3 $4.8 2.3%

Total benefits $1,291.2 $205.9

BCR 0.47

NPV ($M) -$234.5

16.4.2 Economic Contribution Analysis Results

The impacts of the project on both employment and Gross Regional Product are

summarised below, as estimated on an annual basis over the 50-years of the economic

analysis.

Table 16.8 Economic Contribution Results

Employment

(FTEs)

GRP

($M)



Maintenance

61 $8.0

Agriculture 429 $64.9

Total 490 $72.8



Maintenance

66 $8.8

Agriculture 211 $20.9

Total 277 $29.7




16.5 Future Refinement of Modelling Assumptions

The economic analysis concludes that both the benefit and cost estimates will require

further refinements, specifically in the following areas:

▪ Construction costs, including contingencies.

▪ Agricultural scenarios, namely whether higher value cropping is likely to be implemented

by the market.

▪ Demand risk, in the form of the market’s willingness or ability to produce in the

Hughenden region.

▪ Potential for increases in tourism, potentially where additional infrastructure is delivered.

▪ The potential for the local economy to evolve over time due to the increase in the

agricultural sector.

However, such further refinements of this analysis are unlikely to change the current

conclusion that the gap between the economic costs and benefits of the project are of such

that a positive net present value will be a challenging result. However, the impacts to the

local economy and the wider region have the potential to justify investment in the water and

agricultural sectors in this region, particularly where the risks associated with construction

and demand are able to be minimised in the next stages of work.




17. FINANCIAL AND COMMERCIAL ANALYSIS

17.1 Findings and Conclusions

The Hughenden Irrigation Project is a potential game-changer for the Hughenden region.

This has been discussed in Section 16. However, to generate the regional benefits

described in the economic assessment, a large capital investment will be required. There

will also be ongoing costs associated with operating the bulk infrastructure (dam, in-stream

weir and diversion channel) and distribution infrastructure (pumps and channels).

This financial analysis has been undertaken to complement the economic assessment. It

considers the project as a stand-alone investment, rather than assessing broader costs and

benefits that might flow to the community. This analysis is also important to assess how

affordable the project might be to the potential funders of the project, notably the customers

(irrigators) and the Government.

This section provides a summary of the outcomes of the financial assessment for the

Reference Project (the Financial Assessment Technical Report is included in Appendix N).

The main findings are:

▪ The capital costs of the Project are estimated at $498 million under Scenario 1

(Diversified Cropping) and $513 million under Scenario 2 (Grazier Support), where the

latter includes additional water distribution infrastructure to deliver water to a larger

irrigation area.

▪ The funding gap for the project is estimated to be of the order of $398 million for

Scenario 1 (Diversified Cropping) to $429 million for Scenario 2 (Grazier Support), as

expressed in 2019 dollars. This assumes that the customers (irrigators) collectively have

a willingness-to-pay $100 million for Scenario 1 and $84 million for Scenario 2 to

purchase their water allocations.

▪ When account is taken of cost escalations between now and when construction and

operational costs are incurred, this funding gap rises to between $435 million for

Scenario 1 and $470 million for Scenario 2.

▪ There are three key revenue streams: government capital grant funding; the sale of

water allocations (at the commencement of water sales); and ongoing revenues from

water sales to customers. It is highly improbable that customer (irrigator) willingness-to-

pay for water allocations would be anywhere near enough to negate the need for

significant government funding of the Project’s capital costs.

▪ A sensitivity analysis of the impact of changes in cost and revenue assumptions to the

financial results concluded that it makes little difference to this headline conclusion in

most cases since the gap between capital costs and indicative water allocation charges

remains large.




▪ The assessment therefore concludes that the Project is only affordable if significant

government capital grant funding is committed.

▪ The financial analysis concludes that both the costs and revenue estimates will require

further refinements, including in the following areas: construction costs; irrigation

customer willingness-to-pay; and pricing analysis. Ongoing funding negotiations with

the Australian Government will be a central plank of these further refinements.

17.2 Approach

The financial analysis was undertaken through a conventional Financial Net Present Value

approach, where all capital and ongoing operational costs and revenues are assessed over

a 50-year period and then discounted back into present-day dollar terms. Table 17.1

summaries the approach taken in the financial analysis.

Table 17.1 Summary of Approach

Consideration Details

Approach Considers the monetary costs and revenues accruing to the proponent to

determine whether the Project is affordable

Key Inputs Water prices

Capital costs

Ongoing costs

Demand

Impacts Measured Present value of costs to construct and maintain the dam

Present value of revenues from the sale of water

Key Outputs Financial net present value (FNPV)

17.3 Project Description and Assumptions

Two cropping scenarios have been modelled as part of the financial analysis. Table 17.2

summarises the relevant details of the proposed Project and the two scenarios modelled

based on the two water allocation scenarios included as part of the assessment.

Table 17.2 Key Project Details

Project Details

Reference Project The Project involves the construction of a rockfill embankment with clay core

adjacent to the Flinders River on Saego station which makes use of the natural




Project Details

topography of surrounding basalt plateau to create a suitable “off-stream” water

storage facility.

Scenario 1

Diversified Cropping

Scenario 1 assumes a split in production between horticulture and grazier

cropping. Horticulture will require medium priority water with 30GL available, and

grazier cropping will require low priority water with 40GL/year available, with a total

of 70GL/year available.

Scenario 2

Grazier Support

Scenario 2 assumes all water is allocated to grazier cropping. In this scenario a

total of 84GL/year is available.

Table 17.3 details some of the key assumptions and the respective position adopted in the

financial analysis.

Table 17.3 Key Assumptions

Key Assumption Position Adopted

Evaluation period 50 years based on IA guidance, not including the construction period. Scenario

results presented using 30 years to align to the relevant Building Queensland

guidelines.

Financial evaluation discount

rate

Pre-tax WACC of 7.4% adopted for FNPV. Discount rate based on the most

recent publicly available SunWater WACC, noting a 2018 version of this

discount rate was adopted in the Nullinga Dam Detailed Business Case

undertaken by Building Queensland. In the absence of an established HIP

construction entity with its own unique WACC, using SunWater’s as a proxy is

considered appropriate due to its role as Queensland’s largest regional bulk

water provider.

Base price year 2019/20

Pricing policy for fixed and

variable charges

Fixed and volumetric charges to be based on National Water Initiative (NWI)

pricing principles, namely cost-reflective pricing for both capital expenditure

and operations and maintenance expenditure.

Fixed tariffs for bulk and

distribution schemes (Parts A

and C)

Options will be developed assuming government grant funding (which will not

be recovered from users) and one-off customer payments for water allocations

will off-set some of the capital cost and reduce the ongoing fixed tariffs charged

to users.





Volumetric tariffs for bulk and

distribution schemes (Parts B

and D)

Charges were developed on the assumption that only the ongoing cost

component is fully recovered from users, while government funding would be

required to support the capital component.

One-off water allocation sales

price

Water allocation sales will be based on willingness-to-pay. The agricultural

assessment also informed the considerations for the willingness-to-pay of

producers for a water allocation.

Asset Lifespans (Accounting) Asset lifespans were not available for each asset type. Without specific

information on each asset class, an assumption was made that the project will

have a useful life of 80 years based on advice from Engeny.

Design Yield for Reference

Projects

Central case assumptions for design yields have been advised by Engeny as

follows:

Scenario 1 (Diversified Cropping): 30GL/year of medium priority allocation and

40GL/year of low priority allocation

Scenario 2 (Grazier Support): 84 GL/year of low priority allocation

Proportion of allocations

assumed for calculating

volumetric charges

Engeny provided inputs regarding the expected availability of water annually.

This was used to determine the proportion of allocations able to be sold for the

purposes of volumetric charges.

The values used for each scenario are as follows:

Scenario 1 (Diversified Cropping): Medium Priority – 90%

Scenario 1 (Diversified Cropping): Low Priority – 70%

Scenario 2 (Grazier Support): Low Priority – 80%

Cost - Risk Adjustments

(Planned and Unplanned Risk)

Provided by Engeny. A formal risk adjustment process was not undertaken as

part of this analysis. In place of a probabilistic risk assessment, a deterministic

contingency was applied of 35% to capital items. In terms of total capital cost,

contingency is approximately 26% of total capital.

Escalation Using project phases was considered the best approach for inflation estimates

to reflect the long implementation lead times before the construction and

operational phases. The following escalation rates have been used, based on

relevant cost indices. 2.50% has been adopted for the implementation phase

prior to construction and the operations phase after construction in line with

long-term forecasts of inflation. The escalation rate during the construction

phase is based on the Queensland Non-Residential Construction Producer

Price Index from the ABS.





Project Phase Nominal (p.a.) RBA Inflation

Estimate

Real

(p.a.)

Implementation costs 2.50% 2.00% 0.50%

Capital costs (during

construction period) 3.07% 2.50% 0.57%

Operations & Maintenance

costs 2.50% 2.50% 0.00%

17.4 Headline Financial Modelling Results

A key challenge for this Project – which is common among large regional bulk water

infrastructure projects – is the magnitude of the capital costs and the size of the gap

between this and the likely revenues, based on the capacity-to-pay of irrigation customers.

On the cost side, the main findings are:

▪ The capital costs are high relative to the volume of water stored, irrespective of the

project scenario (e.g. medium and low priority water mix, or low priority water only).

▪ Most of the costs are those incurred during construction, which is assumed to be during

the period 2022 to 2024.

▪ The dam is the most expensive component of the Project, accounting for around two-

thirds of the total capital costs.

▪ The contingencies attached to each of the sub-projects account for around one-quarter

of the overall capital cost estimate, which is not unreasonable at this stage of the

assessment process. It would be expected to reduce as further project design and other

risk-mitigation work provides greater confidence in the final capital cost estimates.

▪ The capital costs need to be considered after cost escalations are applied, as this is the

best representation of the cost required to deliver the Project.

On the revenue side, the main findings are:

▪ There are three key revenue streams: government capital grant funding (timed to match

the construction costs incurred); the sale of water allocations (at the commencement of

water sales); and ongoing revenues from water sales to customers.




▪ It is highly improbable that customer (irrigator) willingness-to-pay for water allocations

would be anywhere near enough to negate the need for significant government funding

of the Project’s capital costs.

▪ Revenues from customers – both upfront water allocation charges and ongoing charges

once water sales commence – also need to be escalated, as these revenue payments

in future years will be more than the current estimates.

An analysis of the impact of changes in cost and revenue assumptions to the financial

results concluded that it makes little difference to the headline conclusions in most cases

since the gap between capital costs and indicative water allocation charges is so large.

17.5 Water Prices

Water prices in most Queensland irrigation schemes have two categories of charges, in

addition to the customer paying the upfront purchase price for the water allocation:

▪ Fixed tariffs — often referred to as Part A tariffs (in bulk water supply schemes) and Part

C tariffs (in distribution systems) — are paid according to the amount of water allocation

held by irrigators. These tariffs are ‘fixed’ in the sense they are set based on the size of

the water allocation held by the customer, regardless of the actual water used in the

year.

▪ Volumetric tariffs — also known as Part B tariffs (in bulk water supply schemes) and

Part D tariffs (in distribution systems) — are charges paid per megalitre of actual water

used by the customer.

Water prices to customers in Queensland irrigation schemes where there is a distribution

system (i.e. taking water from the river downstream of the dam through irrigation pumps,

channels, pipes, etc. to farms) can therefore have up to four tariffs, as summarised below.

This is in addition to any one-off price paid to buy the water allocation.

Table 17.4 Water Tariff Structure

Tariff Bulk System

(Weir, Diversion Channel,

Dam)

Distribution System

(Pumping, Channels)

Fixed tariff (per ML of allocation) Part A Part C

Volumetric tariff (per ML of water sales) Part B Part D

The financial analysis undertaken simplifies this approach to pricing as shown in Figure

17.1, which is based on:




▪ it is assumed that all capital-related charges (with the exception of “capital refresh”

costs1) are included in the water allocation charge, which is paid upfront by the customer

(the amount of which will be impacted by the level of any government grant funding as

discussed later); i.e. the ongoing A and C tariffs are included in the upfront water

allocation charge.

▪ once water deliveries are made to customers when the Project becomes operational, all

ongoing costs of storing and distributing the water are paid on a volumetric basis by

customers via the B and D tariffs.

▪ in existing Queensland irrigation schemes, there are additional A and C tariffs that

customers are charged every year, but these are not likely to be anywhere near as

significant a cost as the capital costs of constructing the infrastructure.

▪ this simplification of the pricing arrangements is considered appropriate for a Preliminary

Business Case assessment and can be further refined once costs are subject to further

refinement in any subsequent feasibility assessments of the Project.

Figure 17.1 Water Pricing Approach

17.6 Future Refinement of Modelling Assumptions

The financial analysis concludes that both the costs and revenue estimates will require

further refinements, specifically in the following areas:

1 Capital refresh costs are those costs that are incurred once the project is operational which are necessary to maintain the service

delivery capacity of the infrastructure. Specifically, capital refresh costs relate to capital cost items which reach the end of their useful life prior to the end of the evaluation period. For this project it includes the replacement of pump components after 25 years of operation.

Capital Expenditure

BulkA

DistributionC

Water Allocation Charge

A + C

Ongoing Charges

BulkB

DistributionD

Ongoing Cost

Capital Refresh




▪ Construction costs, including contingencies;

▪ Irrigation customer willingness-to-pay, including taking into account the water reliability

estimates;

▪ Pricing analysis, including the apportionment of capital costs across different classes of

water users (i.e. where those with more reliable water allocations pay proportionately

more in their ongoing water charges);

▪ Government funding capacity.

However, such further refinements of this analysis are unlikely to change the current

conclusion that the gap between the financial costs and benefits (revenues) of the Project

are of such a magnitude that significant government capital funding grant will be required.

The other studies undertaken for this Business Case, particularly the Economic Analysis

Report (Appendix M), provide justification for public investment of this nature.




18. AFFORDABILITY ANALYSIS

18.1 Key Points

1. The assessment is limited to the assumptions and uncertainties made for major inputs

such as government contributions, available water, construction costs and revenue

inputs, particularly farm revenues and the ability and interest to pay for water.

2. Given these assumptions affordability is considered as medium given the high capital

costs balanced by the indicative revenues and improvements to the base case

forecasts.

3. Operational expenditure is expected to be funded annually from water tariffs (Part B

and/or Part D) depending on the ownership model adopted.

4. The Project shows low affordability if all funds are required from the customers.

5. The Project is affordable if there is a material government injection of funds and

agreement on cost apportionment and water allocations can be achieved.

18.2 Purpose

This section outlines the main considerations and assumptions made for the purposes of

the preliminary Affordability Analysis. Further details on the Affordability Analysis are

included in the Financial Assessment Technical Report in Appendix N.

18.3 Method

As the options included the two different cropping scenarios (Diversified Cropping and

Grazier Support), both were assessed against current estimates of costs, modelled and

assumed water volumes and water pricing benchmarks.

No scenarios involved the provision of water for town supply and drinking water therefore

all water was modelled for agricultural purposes.

Step 1 calculated the required payment from potential clients. The analysis reviewed the

up-front allocation charge farmers would need to pay in order fully fund the capital costs

(i.e. negate the need for government funding). To undertake this analysis, the capital costs

of the Project were compared to the water allocation in each scenario. Where a higher cost

per megalitre results, farmers would be required to pay a higher initial allocation cost. Table

18.1 shows the discounted and undiscounted costs for both scenarios.

Loan funding or concessional funds have not been incorporated into the analysis at this

time as these will require higher costs as interest payments and return on risk will be

required.




Step 2 assessed the ‘gap’ between the capital available from a benchmarked water sale

price and the capital required as a grant to the project.

Table 18.1 Required Payment from Farmers (if project was fully funded)




Capital Costs $375,091,787 $418,260,839 $498,300,000 $556,370,015

Yield (GL, or ‘000 ML) 70 70 70 70

Cost per ML $5,358 $5,975 $7,119 $7,948


Capital Costs $386,006,559 $430,431,785 $512,800,000 $572,559,790

Yield (GL, or ‘000 ML) 84 84 84 84

Cost per ML $4,595 $5,124 $6,105 $6,816

Results are presented as both discounted and undiscounted and considered with and

without escalation. The discounted figures represent the cost of the Project with

considerations for the time value of money. Broadly, this captures peoples’ preference to

spend money in the future rather than today. Conversely, the undiscounted results may be

looked at as a total with no consideration for when expenditure is incurred.

Escalated figures are adjusted for the expected inflationary impacts over the evaluation

period. Unescalated figures are unadjusted. For the purposes of funding allocations, the

undiscounted escalated figures in Table 18.1 are the most relevant as this an estimate of

the cash cost of the Project at the time of construction.

Step 2 of the affordability process estimated the required government contribution if a

benchmarked water price was assumed. In this analysis a price of $2,000/ML for medium

priority water and $1,000/ML for low priority water was assumed. The results of this analysis

are detailed in Table 18.2.




Table 18.2 Government Contribution Required




Capital Costs $375,091,787 $418,260,839 $498,300,000 $556,370,015

Up-Front Payment $52,597,060 $65,686,520 $100,000,000 $121,840,290

Government

Contribution

$322,494,727 $352,574,319 $398,300,000 $434,529,725


Capital Costs $386,006,559 $430,431,785 $512,800,000 $572,559,790

Up-Front Payment $44,181,530 $55,176,677 $84,000,000 $102,345,843

Government

Contribution

$341,825,029 $375,255,108 $428,800,000 $470,213,947

Based on the assumptions outlined, including the amount of customer contributions towards

the capital costs through the purchase of water allocations, the funding gap for the Project

is of the order of $398 million to $429 million, expressed in 2019 dollars.

The difference in these estimates relates to which of the two modelled cropping scenarios

is adopted, as there are differing distribution infrastructure requirements and water

allocations between the two scenarios.

When account is taken of cost escalations between now and when construction and

operational costs are incurred, this rises to between $435 million and $470 million. This is

a matter that will require further negotiations between the proponent and the Australian

Government.

18.4 Conclusion

The assessment concludes, again not unlike other contemporary regional bulk water

infrastructure assessments, that the Project is only affordable if significant government

capital grant funding is committed. Other sources of non-customer funding sources, such

as loan funding, are not considered practical, as funding sources such as these require the

capital contributions to be repaid along with interest. Likewise, equity injections from

government or, for that matter, private sector investors, also seem impractical at this stage,

as this would require prices also covering a return to the investors.




It is not considered feasible, based on customer willingness-to-pay for water allocations,

that prices could be set which would be sufficient to cover either loan repayments with

interest or a return to investors.




19. CONCLUSIONS

The augmented desktop investigation as presented in the PBC suggests a strategic water

infrastructure intervention project to meet the identified service need of improved economic

outcomes within the Finders Shire region. The implementation of high value agriculture to

the region is not only consistent with the Service Need but also aligns to the region’s key

capabilities and utilises the natural geological and topographic advantages.

The PBC makes a strong case for further investment to refine the Reference Project and to

further de-risk the project before a construction commitment is made. This can be done

either through a committed and complete DBC or a staged and gated approach with

commensurate funding.

The PBC shows that significant and sustainable local and regional economic growth is

certain, and the lack of a reliable water supply is the key limiting factor.

The Project aligns with the key Australian and Queensland government strategies and

policies relevant to this part of Australia for economic development, water and food security

and drought and flood resilience.

The Project has no fatal flaws identified at the time of completion of the PBC noting the

importance of resolving the water licencing and willingness to pay risks.

In overall terms the Project requires only 4% of the Mean Annual Flow from the Flinders

River and utilises only 7% of the Flinders catchment area upstream of diversion and capture

points.

Unallocated water and buyback or trading of existing water licences is available in the Gulf

Water Plan although the product type, reliability and accessibility are still being addressed

and resolved with the DNRME.

The Project will manifestly improve regional and local economic conditions and will

substantially alleviate the relative disadvantage evident in the Flinders Shire.

The Project has a headline BCR for Scenario 1 (Diversified Cropping scenario) of 0.72 and

Scenario 2 (Grazier Support scenario) of 0.47 and will support from 277 to 490 jobs and will

have a positive impact on the GRP of up to $72.8M per year.

The potential impact to downstream flow conditions is the most significant risk for the Project

and warrants further investigation in subsequent Project phases. Other risks have been

assessed as medium to low and can be mitigated.

The Project requires substantial government support by way of upfront capital contribution

to the value of approximately $400M which is considered highly unaffordable due to

magnitude of costs however this is relative and contextualised as the Project addresses the

Service Need.




The Project has local, regional and Federal support, strategic goals and initiatives to

productively use water in the northern parts of Australia and has a very good chance of

success as it utilises the current skills and depth in the region and sustainably utilises an

unrealised potential. It has limited downsides therefore warranting further refinement and

funding commitments.




20. RECOMMENDATIONS

As a result of the investigation and conclusion and the compelling evidence to enable a

viable agricultural water supply scheme near Hughenden, it is recommended the HIPCo

Board:

1. Approach the Australian Government, potentially through the North Queensland

Water Infrastructure Authority (NQWIA), to progress to the next phase of the Project

to refine the Reference Project, analysis and design including probabilistic risk

adjusted cost assessments.

2. Consider a staged and gated approach to the DBC thereby de-risking funding

exposure.

3. Commence the preparation of the scope for the full DBC or gated components.

4. If the gated component approach is adopted, seek interim funding to address

remaining higher interest items while the PBC is undergoing review and critique.

5. Negotiate a new deed with the Australian Government for the development of the

DBC with appropriate legal and probity advice and suitable public interest tests.

6. Engage with the State Government (through DNRME) for review of the PBC and any

suggestions or advice for inclusion in the scope for DBC.

7. Engage with Infrastructure Australia to provide opinion and recommendations on the

scope of the next phase of work. This will likely entail a review of the PBC and

appendices and a ‘gap analysis’ with a focus on DBC specification.

8. Engage with SunWater to provide opinion and recommendations on the scope of work

for DBC and make comment and provide strategic advice.

9. Establish a governance and review structure to deliver the DBC (with appropriately

qualified individuals or expert advisors/panels) and engage the market as required for

prudent and efficient delivery of DBC or in defined stages as suitable.

10. Continue the stakeholder engagement process with DNRME for allocation of water

and include the required studies in the next phase of work to quantify risk of changes

to downstream flows and EFO compliance and amendments to the Gulf Water Plan.

11. Continue de-risking activities including geotechnical investigation for critical

infrastructure design work.

12. Engage the market as soon as funding allows to establish ‘willingness to pay’

parameters.

13. Develop ownership and operational models consistent within Government

requirements for public funding, allocation of risk, efficient and contemporary

operational use, realistic and economic returns and market opportunities, and

contemporary asset management approaches.

14. Continue with stakeholder engagement to ensure both public interest, sustainability,

and cultural and indigenous issues are managed and reflective of contemporary

expectations.

15. Explore efficiency options in the scope of works of the DBC to minimise evaporation

and other environmental losses, use of protected agriculture and technology to

maximise water use efficiency.




16. Commit further resources to investigate land suitability and land preparation to enable the proposed cropping strategy, or include sensible modifications, to be successful.

17. Refine pricing, financial and economic models based on updated costs and projected revenues including willingness to pay surveys.




21. QUALIFICATIONS

a. In preparing this document, including all relevant calculation and modelling, Engeny Water Management (Engeny) has exercised the degree of skill, care and diligence normally exercised by members of the engineering profession and has acted in accordance with accepted practices of engineering principles.

b. Engeny has used reasonable endeavours to inform itself of the parameters and

requirements of the project and has taken reasonable steps to ensure that the works and document is as accurate and comprehensive as possible given the information upon which it has been based including information that may have been provided or obtained by any third party or external sources which has not been independently verified.

c. Engeny reserves the right to review and amend any aspect of the works performed

including any opinions and recommendations from the works included or referred to in the works if:

(i) Additional sources of information not presently available (for whatever reason) are

provided or become known to Engeny; or

(ii) Engeny considers it prudent to revise any aspect of the works in light of any information which becomes known to it after the date of submission.

d. Engeny does not give any warranty nor accept any liability in relation to the completeness or accuracy of the works, which may be inherently reliant upon the completeness and accuracy of the input data and the agreed scope of works. All limitations of liability shall apply for the benefit of the employees, agents and representatives of Engeny to the same extent that they apply for the benefit of Engeny.

e. This report does not provide legal advice.




22. REFERENCES

ANCOLD (2012). Guidelines on the Consequence Categories for Dams. Australian

National Committee on Large Dams. October 2012.

ARQ Australia Pty Ltd (2019a). Hughenden Dams – Concept Layouts & High Level Cost

Estimates. 8 April 2019.

ARQ Australia Pty Ltd (2019b). Hughenden Dams – Saego Dam, Saego Catch Dam and

Gap Dam – Concept Layouts & High-Level Cost Estimates. 11 June 2019.

Australian Bureau of Statistics. (1993). Agriculture statistics – small area data:

Queensland.

Australian Bureau of Statistics. (Jun 2014 to Jun 2018). 8165.0 Counts of Australian

Businesses, including Entries and Exits.

Australian Government. (2018). The Reef Plan 2050.

https://www.environment.gov.au/marine/gbr/long-term-sustainability-plan

Australian Government. (2016). Australian Infrastructure Plan – Priorities and Reforms for

the Nation’s Future. https://www.infrastructureaustralia.gov.au/sites/default/files/2019-

06/Australian_Infrastructure_Plan.pdf

Ball J, Babister M, Nathan R, Weeks W, Weinmann E, Retallick M, Testoni I, (Editors).

(2019). Australian Rainfall and Runoff: A Guide to Flood Estimation, Commonwealth of

Australia (Geoscience Australia).

BOM (2003a). The Estimation of Probable Maximum Precipitation in Australia:

Generalised Short Duration Method, Bureau of Meteorology Hydrometeorological

Advisory Service. June 2003.

BOM (2003b). Guidebook to the Estimation of Probable Maximum Precipitation:

Generalised Tropical Storm Method. Bureau of Meteorology Hydrometeorological

Advisory Service July 2003.

Building Queensland (2016). Business Case Development Framework – Overview.

Release 2. December 2016.

Building Queensland (2017a). Nullinga Dam and Other Options – Preliminary Business

Case.

Building Queensland (2017b). Detailed Business Case – Lower Fitzroy River

Infrastructure Project. October 2017.

Bureau of Meteorology (2019). Hughenden Weather. Retrieved from

http://www.bom.gov.au/places/qld/SV7S/

https://www.environment.gov.au/marine/gbr/long-term-sustainability-plan

https://www.infrastructureaustralia.gov.au/sites/default/files/2019-06/Australian_Infrastructure_Plan.pdf

https://www.infrastructureaustralia.gov.au/sites/default/files/2019-06/Australian_Infrastructure_Plan.pdf

http://www.bom.gov.au/places/qld/SV7S/




Commonwealth of Australia - Australian Government. (2015) Infrastructure Australia:

Northern Australia Audit – Infrastructure for a Developing North Report.

https://www.infrastructureaustralia.gov.au/sites/default/files/2019-

06/ia_northern_australia_audit.pdf

Commonwealth of Australia (2015). Agricultural Competitiveness White Paper, Canberra.

Commonwealth of Australia. (2015). Our North, Our Future: White Paper on Developing

Northern Australia.

https://www.industry.gov.au/sites/default/files/June%202018/document/pdf/nawp-

fullreport.pdf?acsf_files_redirect

Construction Sciences. (2020). “Geotechnical Investigation – Factual Reporting.”

10599E/P/106

CSIRO (2009). Water in the Gulf of Carpentaria Drainage Division. A report to the

Australian Government from the CSIRO Northern Australia Sustainable Yields Project.

CSIRO Water for a Healthy Country Flagship, Australia.

CSIRO and Bureau of Meteorology (2015). Climate Change Australia Information for

Australia’s Natural Resource Management Regions: Technical Report, CSIRO and

Bureau of Meteorology, Australia.

Department of Aboriginal and Torres Strait Islander Partnerships (2019). Cultural heritage

database and register. Accessed on 4 December, 2019.

Department of Agriculture, Fisheries and Forestry. (2012). Evaluating the viability of a

northern outback Queensland meat processing facility.

Department of Energy and Water Supply (2017). Guidelines on Acceptable Flood

Capacity for Water Dams.

Department of Energy and Water Supply (2017). Queensland Bulk Water Opportunities

Statement.

Department of Energy and Water Supply (2018). Queensland Bulk Water Opportunities

Statement. 2018 Update.

Department of Environment and Science (2019a). Queensland Heritage Register.

Accessed on 4 December, 2019.

Department of Environment and Science (2019b). WetlandMaps. Retrieved from

https://wetlandinfo.des.qld.gov.au/wetlandmaps/

Department of Infrastructure, Local Government and Planning (2016). State Infrastructure

Plan.

https://www.infrastructureaustralia.gov.au/sites/default/files/2019-06/ia_northern_australia_audit.pdf

https://www.infrastructureaustralia.gov.au/sites/default/files/2019-06/ia_northern_australia_audit.pdf

https://www.industry.gov.au/sites/default/files/June%202018/document/pdf/nawp-fullreport.pdf?acsf_files_redirect

https://www.industry.gov.au/sites/default/files/June%202018/document/pdf/nawp-fullreport.pdf?acsf_files_redirect




Department of Natural Resources and Mines (2014). Gulf draft amendment plans –

Overview report. December 2014.

Department of Natural Resources and Mines (2015). Gulf Resource Operations Plan.

June 2010. Amendment August 2015.

Department of Natural Resources and Mines. (2016). Queensland’s mining and petroleum

industry overview.

Department of State Development, Manufacturing, Infrastructure and Planning (2019).

North West Queensland Economic Diversification Strategy 2019 – Strategy Document.

August 2019.

Department of the Environment and Energy (2019). Protected Matters Search Tool.

Retrieved from https://www.environment.gov.au/epbc/pmst/index.html. Accessed on 3

December, 2019.

DEWS (2017). Guidelines on Acceptable Flood Capacity for Water Dams. Department of

Energy and Water Supply, July 2017.

DNRME (2007), Breach Model Spreadsheet Version 1.3. Department of Energy and

Water Supply, Last Updated 16/10/2007.

DNRME (2018). Guidelines for Failure Impact Assessment of Water Dams. Queensland

Department of Energy and Water Supply. November 2018.

Environment Australia (2001). A Directory of Important Wetlands in Australia. Retrieved

from http://www.environment.gov.au/system/files/resources/18f0bb21-b67c-4e99-a155-

cb5255398568/files/directory.pdf

GHD (2019). Report for Flinders Shire Council - 15 Mile Irrigation Project Impact

Assessment Report.

GHD Pty Ltd (2018). 15 Mile Irrigated Agricultural Development – Initial Advice Statement.

Grace Detailed – GIS Services (2018a). Hughenden Irrigation Project Corporation

(HIPCo) – Report / March 2018.

Grace Detailed – GIS Services (2018b). Hughenden Irrigation Project Corporation

(HIPCo) – Stage 2 Report / June 2018.

Jacobs Australia (2019). Granite Belt Irrigation Project – Detailed Business Case.

Mount Isa to Townsville Economics Development Zone. (2018). Flinders Shire. Retrieved

online from http://www.mitez.com.au/ourregion/flinders-shire/

National Native Title Tribunal (2019a). National Native Title Register. Accessed on 3

December, 2019.

https://www.environment.gov.au/epbc/pmst/index.html

http://www.environment.gov.au/system/files/resources/18f0bb21-b67c-4e99-a155-cb5255398568/files/directory.pdf

http://www.environment.gov.au/system/files/resources/18f0bb21-b67c-4e99-a155-cb5255398568/files/directory.pdf

http://www.mitez.com.au/ourregion/flinders-shire/




National Native Title Tribunal (2019b). Register of Indigenous Land Use Agreements.

Accessed on 3 December, 2019.

Northcote et. al. (1960-68). Atlas of Australian Soils (digital). Retrieved from CSIRO Data

Access Portal:

https://data.csiro.au/dap/landingpage?list=BRO&pid=csiro:40340&sb=TITLE&rn=4&rpp=2

5&p=1&tr=77&bKey=tn&bVal=Soil%20Sciences%20not%20elsewhere%20classified&dr=

all

NQ Dry Tropics (2016). Burdekin Dry Tropics Natural Resource Management Plan 2016-

2026.

Petheram C, Rogers L, Eades G, Marvanek S, Gallant J, Read A, Sherman B, Yang A,

Waltham N, McIntyre-Tamwoy S, Burrows D, Kim S, Podger S, Tomkins K, Poulton P,

Holz L, Bird M, Atkinson F, Gallant S, Kehoe M (2013). Assessment of surface water

storage options in the Flinders and Gilbert catchments. A technical report to the Australian

Government from the CSIRO Flinders and Gilbert Agricultural Resource Assessment, part

of the North Queensland Irrigated Agriculture Strategy. CSIRO Water for a Healthy

Country and Sustainable Agriculture Flagships, Australia.

Petheram C, Watson I and Stone P (eds) (2013). Agricultural resource assessment for the

Flinders catchment. A report to the Australian Government from the CSIRO Flinders and

Gilbert Agricultural Resource Assessment, part of the North Queensland Irrigated

Agriculture Strategy. CSIRO Water for a Healthy Country and Sustainable Agriculture

Flagships, Australia.

Queensland Country Life. (7 Dec 2016). Aurizon job losses to hit Hughenden hard,

https://www.queenslandcountrylife.com.au/story/4340887/a-dark-day-for-hughenden-

mayor/

Queensland Government. (2016), Advancing North Queensland.

https://www.premiers.qld.gov.au/publications/categories/plans/assets/advancing-north-

qld.pdf

Queensland Government (2009). Biodiversity planning assessment - Einasleigh Uplands.

Retrieved from Queensland Spatial Catalogue - QSpatial:

http://qldspatial.information.qld.gov.au/catalogue/

Queensland Government (2016, July 15). Queensland waterways for waterway barrier

works. Retrieved from Queensland Spatial Catalogue - QSpatial:


Queensland Government. (2019). Queensland Health. Hughenden Health Services.

https://www.townsville.health.qld.gov.au/facilities/hughenden-multipurpose-health-service/

Queensland Government (2017). Water Plan (Great Artesian Basin and Other Regional

Aquifers) 2017.

https://data.csiro.au/dap/landingpage?list=BRO&pid=csiro:40340&sb=TITLE&rn=4&rpp=25&p=1&tr=77&bKey=tn&bVal=Soil%20Sciences%20not%20elsewhere%20classified&dr=all



https://www.queenslandcountrylife.com.au/story/4340887/a-dark-day-for-hughenden-mayor/

https://www.queenslandcountrylife.com.au/story/4340887/a-dark-day-for-hughenden-mayor/

https://www.premiers.qld.gov.au/publications/categories/plans/assets/advancing-north-qld.pdf

https://www.premiers.qld.gov.au/publications/categories/plans/assets/advancing-north-qld.pdf



https://www.townsville.health.qld.gov.au/facilities/hughenden-multipurpose-health-service/




Queensland Government (2017). Water Plan (Gulf) 2007. Reprint 2 September 2017.

Queensland Government (2018, February 26). Biodiversity planning assessment -

Brigalow Belt. Retrieved from Queensland Spatial Catalogue - QSpatial:


Queensland Government (2019). Biomaps. Retrieved from

http://qldspatial.information.qld.gov.au/biomaps/

Queensland Government (2019, December 3). Wildlife Online Extract. Retrieved from

https://apps.des.qld.gov.au/report-request/species-list/

Queensland Government (2019, June 21). Matters of state environmental significance -

Regulated vegetation - essential habitat - Queensland. Retrieved from Queensland

Spatial Catalogue - QSpatial: http://qldspatial.information.qld.gov.au/catalogue/

Queensland Government (2019, November 27). Vegetation management regional

ecosystem map - version 11.0 - By Area Of Interest. Retrieved from Queensland Spatial

Catalogue - QSpatial: http://qldspatial.information.qld.gov.au/catalogue/

Queensland Government (2019, October 4). Groundwater Database - Queensland.

Retrieved from Queensland Spatial Catalogue - QSpatial:


Queensland Government. (2014, November 9). Queensland geology detailed web map

service. Retrieved from Queensland Spatial Database - QSpatial:


Queensland Government. Office of Information Commissioner. (2020). Public Interest.

https://www.oic.qld.gov.au/search-

results?query=public%20interest&collection=oic&userkeys=7

Queensland Government. (2013). Queensland Agricultural Land Audit.

https://www.business.qld.gov.au/industries/farms-fishing-

forestry/agriculture/agribusiness/agricultural-land-audit

Queensland Herbarium (2019). Regional Ecosystem Description Database, Version 11.1.

Queensland Water Resources Commission (1985). Upper Flinders River Irrigation

Scheme. Report on Flinders River Damsite 828.5km Investigations.

Shire of Flinders (2018). Shire of Flinders Planning Scheme V1.1.

SMEC Australia Pty Ltd (2003). Irrigation Project – Alstonvale. Report prepared for

Flinders Shire Council.

SMEC Australia Pty Ltd (2014). Flinders River Water Resources and Irrigation Project –

Hughenden Section. Report prepared for Flinders Shire Council.


http://qldspatial.information.qld.gov.au/biomaps/

https://apps.des.qld.gov.au/report-request/species-list/





https://www.oic.qld.gov.au/search-results?query=public%20interest&collection=oic&userkeys=7

https://www.oic.qld.gov.au/search-results?query=public%20interest&collection=oic&userkeys=7

https://www.business.qld.gov.au/industries/farms-fishing-forestry/agriculture/agribusiness/agricultural-land-audit

https://www.business.qld.gov.au/industries/farms-fishing-forestry/agriculture/agribusiness/agricultural-land-audit




Standards Australia (2018). AS ISO 31000:2018. Risk Management – Guidelines.

Tomkins K (2013). Estimated sediment infilling rates for dams in northern Australia based

on a review of previous literature. A technical report to the Australian Government from

the CSIRO Flinders and Gilbert Agricultural Resource Assessment, part of the North

Queensland Irrigated Agriculture Strategy. CSIRO Water for a Healthy Country and

Sustainable Agriculture flagships, Australia.

Townsville Enterprises Limited (2019) “North Queensland Market and Agricultural Supply

Chain Study” TEL, KPMG, Premise, AEC

USBR (2015). RCEM – Reclamation Consequence Estimating Methodology. Interim

Guidelines for Estimating Life Loss for Dam Safety Risk Analysis. U.S. Department of the

Interior – Bureau of Reclamation. July 2015.

W. Wightman Advisory (2019). HIPCo Electricity Strategy – Phase 1 Report, Draft Report

Version 1.2.

Waltham N., Burrows, D., Butler, B., Wallace, J., Thomas, C., James, C., Brodie, J (2013).

Waterhole ecology in the Flinders and Gilbert catchments. A technical report to the

Australian Government from the CSIRO Flinders and Gilbert Agricultural Resource

Assessment, part of the North Queensland Irrigated Agriculture Strategy. CSIRO Water

for a Healthy Country and Sustainable Agriculture Flagships, Australia.

Windlab. (2018). Kennedy Energy Park – Knowledge Sharing (FinClose report).

engeny.com.au | P: 07 3221 7174

Lvl 7, 500 Queen Street, Brisbane QLD 4000 | PO Box 10183 Brisbane QLD 4000

Documents

HUGHENDEN IRRIGATION PROJECT CORPORATION PTY LTDhipco.com.au/wp-content/uploads/Hughenden...HUGHENDEN IRRIGATION PROJECT CORPORATION PTY LTD PRELIMINARY BUSINESS CASE M7220_003-REP-001