Our Water Our Future The Next Stage of the Government’s ...images.theage.com.au/file/2011/12/09/2828453/water_policy.pdf · Our Water Our Future The Next Stage of the Government’s

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Published by the Victorian Government

Department of Sustainability and Environment Melbourne, June 2007

Also published on www.ourwater.vic.gov.au

This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968

ISBN 978-1-74152-861-9 (print) ISBN 978-1-74152-867-4 (online) ISBN 978-1-74152-873-9 (CD-ROM)

© State of Victoria, Department of Sustainability and Environment 2007

Disclaimer:

This publication may be of assistance to you but the State of Victoria and its employees do not guarantee that the publication is without fl aws of any kind or is wholly appropriate for your particular purposes and therefore disclaims all liability for any error, loss or consequence which may arise from you relying on any information in this publication.

For more information please call 136 186or visit www.ourwater.vic.gov.au

Our Water Our Future The Next Stage of the Government’s Water Plan

Fore

wor

d Boosting water supplies for Victoria’s cities and towns

Victoria has just experienced the worst year of drought and lowest stream flows in our State’s history.

In 2004 we put in place a long-term plan for water – Our Water Our Future. As a result we have implemented the most successful water saving campaign in Australia.

Industry and business are being made to save water and recycling has increased from two per cent of Melbourne’s wastewater in 1999 to 14 per cent today.

Victorians have responded magnifi cently. Farmers have become more water effi cient. Businesses and households have jointly reduced their water use by 22 per cent in Melbourne and by similar amounts in regional centres.

However saving water isn’t enough. We need to increase our water supplies.

As part of our plan, we’ve been working on a long-term solution. $4.9 billion will be spent in major water infrastructure projects to provide the biggest boost to Victoria’s water supplies in 25 years.

We will build Australia’s largest desalination plant and modernise irrigation systems in Victoria’s Food Bowl in northern Victoria to capture lost water for farms, stressed rivers and urban households and businesses.

This will increase the total supply for Melbourne by 240 billion litres annually by 2011 – half of our current annual water use.

We are also providing more water for regional centres including Geelong, Westernport, South Gippsland and Hamilton.

These new projects are an important next step in our efforts to secure Victoria’s water supplies, but we can’t lose sight of the ongoing need to save water at home, on the farm and in industry.

Climate change and drought are big challenges. Having a secure water supply will enable Victoria’s economy and population to continue to grow.

Steve BracksPremier

John ThwaitesDeputy PremierMinister for Water, Environment and Climate Change

Page 1

1 The Plan at a Glance 3

2 Securing Victoria’s Water Supplies 6

3 Water Supply, Drought and Climate Change 18

4 Progress in Managing our Water Resources 24

5 Actions, Investments and Timing 27Con

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Volumes of waterVolumes of water are measured in litres. Different volumes of water are referred to in this document.

One litre 1 litre 1 litre 1 L

One thousand litres 1,000 litres 1 kilolitre 1 KL

One million litres 1,000,000 litres 1 megalitre 1 ML

One billion litres 1,000,000,000 litres 1 gigalitre 1 GL

Page 2


The

Pla

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lanc

e 1Water availability and security are key strengths for the Victorian

economy. This plan provides water security for Victoria’s growing population and economy in the face of drought and the challenge of climate change. It will do this by:

≥ Diversifying and boosting water supplies in Melbourne, including through desalination

≥ Networking the State’s water resources in a Victorian Water Grid

≥ Enabling a rapid and flexible response to changing future water needs.

These actions will enable us to steadily move back to unrestricted water supplies in our cities and towns.

The plan involves:

1. A new desalination plant for Melbourne

2. Modernising Victoria’s Food Bowl irrigation system to capture lost water for farms, the environment and Melbourne

3. Expansion of Victoria’s Water Grid

4. Upgrading Melbourne’s Eastern Treatment Plant to provide over 100 GL of recycled water in 2012 and assessing a range of alternative uses of this water

5. Supporting new and existing water conservation programs for homes and industry.

Page 3

A new desalination plant for MelbourneDesalination creates new water that does not rely on rainfall. This plan provides for the construction of a major desalination plant to service Melbourne, Geelong and towns in the Westernport and South Gippsland region late in 2011.

The plant will be located in the Wonthaggi region which offers access to pure open ocean water from Bass Strait and its freely circulating waters to rapidly disperse the plant’s salty outfl ow. It will add up to 150 GL annually to Melbourne’s water system – around one third of Melbourne’s water needs.

The water will be transferred via an 85 kilometre pipe to Melbourne’s water supply system near Cardinia Reservoir.

The plant will use reverse osmosis fi ltration to remove salt and other impurities from sea water, producing pure drinking water.

Work to develop the plant will begin immediately following an extensive feasibility study which has investigated a number of sites.

The greenhouse gas emissions associated with the power requirements of the plant will be offset through the purchase of renewable energy, which means the plant will be carbon neutral.

Decisions on delivery arrangements for the desalination plant, including the role of the private sector, will be made later in 2007 following a procurement and market testing process. Final decisions on construction and operation arrangements will be made by mid 2008, enabling the plant to produce 150 GL by late 2011.

Modernising Victoria’s Food BowlVictoria’s Goulburn Murray region is Australia’s most important irrigation region. The Goulburn Valley accounts for well over one quarter of Victoria’s agricultural output.

This project presents a once-off, historic opportunity to ensure the future prosperity of the region through signifi cant new investment in modernising ageing infrastructure to create a genuinely world class irrigation system – a once-in-a-hundred years reform.

Modernising Victoria’s Food Bowl region will take up to eight years to complete and will involve a total investment of up to $2 billion. This is a nationally signifi cant project which provides the opportunity for both the State and Commonwealth Governments to invest and work together.

Currently around 30% – up to 900 GL – of water in the Goulburn and Murray irrigation systems is lost annually through system ineffi ciencies. These losses translate to around one quarter of Lake Eildon’s capacity.

Under this plan, a major irrigation modernisation project in Victoria’s Food Bowl region will generate new water by reducing system losses.

It is estimated that approximately half of the total losses across the system can be captured as water savings through modernisation – up to 450 GL per annum.

The State Government will commence the fi rst stage of the project to secure savings of up to 225 GL annually with investment of up to $1 billion, with new State funding of $600 million as well as further contributions from water authorities associated with this project.

This investment will build on existing small irrigation modernisation programs in the Shepparton and Goulburn irrigation districts already underway.

Water savings, up to 225 GL annually, will be shared equally with the irrigators, the environment and Melbourne.

1. 2.The fi rst available savings from the project will be made available from 2010 for Melbourne via a new pipe – the Sugarloaf Interconnector – linking Melbourne to the Goulburn River.

As part of this signifi cant investment, the Government will also fi nalise the feasibility study currently underway for the Murray-Goulburn Interconnector, which will link the Murray Valley irrigation areas to the Goulburn Valley. This would increase the reliability of irrigation water supplies by linking these two large systems and enabling water trade between them.

The impacts of the Food Bowl project will be positive and far reaching, delivering the biggest water upgrade in the systems’ history. Given the size and complexity of the project, the Government will work closely in partnership with the community to fi nalise key elements of the project, including:

≥ Governance arrangements that involve local government and community input into key issues, such as the work program and sharing of water savings

≥ Safeguards for northern Victoria concerning water savings destined for Melbourne

≥ How the water savings destined for irrigation and the environment will be delivered and managed.

The Government will immediately establish a Steering Committee comprising local councils, interested groups, the Food Bowl Alliance and the broader community to guide the further development of the project.

In addition, the Government will consider setting up a purpose-built body to oversee the delivery of the project to modernise the Goulburn and Murray irrigation systems. This body will work with local communities and all levels of government to manage and complete the project.

Page 4


Expansion of Victoria’s Water GridVictoria has a collection of water storage dams and pipes based on rainfall patterns of the past hundred years or more. These systems are unlikely to be suffi cient in an era of extreme weather events and climate change.

The Victorian Government and water authorities will expand Victoria’s Water Grid - a network of rivers, channels and pipes linking Victoria’s major water systems. Key new elements of the Grid will be built to enable water to be moved from where it is to where it is needed most. Major Grid initiatives already underway include:

≥ The Goldfi elds Superpipe connecting Bendigo and Ballarat to the Goulburn River

≥ The Wimmera-Mallee pipeline system.

New Victorian Water Grid projects outlined in this plan will see the construction of over 250 kilometres of new pipe. Projects include:

≥ The new Hamilton-Grampians Interconnector

≥ The new Melbourne-Geelong Interconnector

≥ The new Sugarloaf Interconnector connecting Melbourne to the Goulburn River

≥ The new desalination plant link to Melbourne.

Another link being investigated is a Murray-Goulburn Interconnector to bypass the Barmah Choke on the Murray River.

Geelong will now be able to rely on the Melbourne system (including desalination and the Sugarloaf Interconnector) for its future growth. Westernport and South Gippsland will also have future reliability improved by links to Melbourne’s system once desalination commences.

Increasing recyclingRecycled water provides a secure, rainfall independent supply of water that is fi t for a wide range of uses. It must be made available as part of a strategy to diversify supplies, and a strategy to improve environmental health.

Around half of Melbourne’s wastewater is treated at the Eastern Treatment Plant (ETP). Recycled water from this plant is able to be delivered to sites nearby for a range of potential uses. The Government is committed to upgrading the ETP to tertiary standard, a level where a wide variety of reuse is possible. The upgrade of the ETP will be completed during 2012. It will produce over 100 GL of high-grade recycled water.

We are already recycling 14% of the city’s wastewater through agricultural, residential, parks and gardens and industry recycling schemes. These uses of recycled water will be progressively expanded.

This plan commits to broadening the options under consideration for use of this recycled water. While substitution for Latrobe Valley river water in power system cooling remains an option, other possible uses of recycled water will be investigated. The Government will also work with the power generators to examine ways of reducing water demand.

A further option being considered is substituting recycled water for high seasonal fl ows in the lower Yarra River to allow more fresh water to be retained in Melbourne’s storages. The Government will also investigate alternative industrial uses for recycled water near the ETP, including the West Gippsland region.

3. 5.Supporting new and existing water conservation programs All Victorians need to be involved in water conservation if we want water security. Our recent water conservation efforts have kept our water storages at a higher level than they otherwise would have been.

We will continue to develop our approach to water conservation and household and industrial use of water, building on the excellent effort of Victorians to conserve water.

How Victoria’s communities, businesses and environment will benefitCareful management of Victoria’s water supplies will provide communities, businesses, farms and the environment with water security for growth in case of ongoing drought and the extremes that may come with climate change. We will steadily move back to unrestricted water supplies in our cities and towns, while continuing water use effi ciency.

The combined impact of new water supply projects will increase Melbourne’s water supply by 240 GL by 2011 – half Melbourne’s annual demand.

The Food Bowl Modernisation Project will assist Victoria’s agriculture and irrigation industries to expand their strong contribution to Victoria’s economy and exports.

The environment will benefi t from one third of the savings made from the Food Bowl Modernisation Project, improving river health and wetlands throughout the Goulburn and Murray regions and into South Australia.

Our households and industries will be assured of reliable, safe and affordable water supplies with good reserves for future growth. With secure water supplies, our economy and population will continue to grow.

4.

Page 5

Even with the excellent achievements of Victorians in conserving water, more supply is needed to guarantee security for cities and towns in the light of the reduced inflows to our storages that are likely under climate change.

The Victorian economy is strengthened by a secure water supply. A growing population also requires growing supplies.

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DesalinationAs set out in the Central Region Sustainable Water Strategy, the Government has been working with Melbourne Water to thoroughly examine the feasibility of a desalination plant for Melbourne. That work has now been completed.

Work will begin immediately on one of the world’s largest desalination plants, with a capacity of up to 150 GL per annum. The plant will be capable of being upgraded to 200 GL per annum if needed. It will be situated in the Wonthaggi region, which offers access to pure open ocean water from Bass Strait, and freely circulating waters which will rapidly disperse the plant’s salty outfl ow.

Other sites were considered as part of the feasibility work by Melbourne Water. Port Phillip and Western Port Bays and the Surf Coast were examined. However sites on the bays would face challenges regarding source water quality and salty outfl ow into relatively poorly circulating waters. In addition, Western Port sites would impact on internationally signifi cant RAMSAR wetlands. Surf Coast sites would require signifi cant and expensive infrastructure upgrades to transfer the water across Melbourne from west to east, as current water infrastructure has been built to transfer water from east (where the catchments are) to west.

What are the environmental impacts?

The two main environmental impacts of the desalination plant will be the salty outfl ow and the greenhouse gas emissions from powering the plant and piping the desalinated water to Melbourne.

Desalination produces a by-product of water that is about twice as salty as sea water. This will be piped back into Bass Strait through an underground and undersea tunnel. Within a short distance of the undersea outlet, the salty outfl ow will have dispersed with low impact on the sea environment.

The plant requires an inlet structure under the sea to allow water to be piped to it. It will draw in water at a low speed so as not to affect sea life. The inlet and outlet structures will be designed in accordance with Environment Protection Authority requirements.

A 150 GL per annum plant will use approximately 90 megawatts of electricity from the Victorian energy grid. The resulting greenhouse gas emissions will be offset through the purchase of renewable energy. In other words the plant will be carbon neutral. The cost of this renewable energy will be part of the project cost and will be paid for through water charges.

Page 6


Size

The inlet and outlet structures and the transfer pipe to Melbourne will be built with a capacity to increase output up to 200 GL per annum. It is signifi cantly less expensive to size these components for the maximum capacity from the outset, rather than duplicating or upgrading them if this is needed in the future.

The plant itself can be built in modules to allow for economies of scale in operation. While 150 GL is the planned capacity, the capacity will be capable of being varied prior to the Expression of Interest phase of tendering in 2008. Variations may occur for a number of reasons, including better information from studies of climate change.

Delivering the plant

Work will begin immediately, with the design and approvals phase completed during 2008. The plant will be ready to supply Melbourne with desalinated water by the end of 2011.

A decision will be made in the second half of 2007 on the best delivery arrangements for the plant, including the role for the private sector. The delivery arrangements will be consistent with the Government’s policy of retaining ownership of water resources in public hands.

Figure 2.1 Desalination using reverse osmosis

The desalination process

The Melbourne desalination plant will use a process called reverse osmosis to produce fresh water. Reverse osmosis pushes sea water through a membrane that takes out salt and other impurities. The result will be drinking water that complies with the Australian Drinking Water Guidelines. Most important, desalination does not depend on rain which is why it is being increasingly relied upon by cities in Australia, including Sydney, Brisbane and Perth, and around the world as climate change reduces rainfall reliability.

Page 7

Food Bowl ModernisationTogether the Goulburn and Victoria’s Murray irrigation systems account for over 70% of Victoria’s stored water, and provide 3,500 GL of water for irrigation annually. Up to 900 GL of water is lost annually from these systems due to poor measurement, leakage, seepage, evaporation and an outdated irrigation delivery system. Around 30% of water in these systems is lost.

Irrigators and their regional communities want to fi x irrigation infrastructure and reform irrigation practices. Irrigation modernisation provides an opportunity to generate new water and share that water between improving reliability of supply for irrigators, environmental fl ows and urban use. It also provides an opportunity to improve the level of service to irrigators.

Until now, irrigation modernisation projects have been undertaken on a small, localised basis. This plan commits to a comprehensive modernisation strategy across the Goulburn and Murray irrigation areas.

Under this plan, a major irrigation modernisation project will generate new water by addressing system losses.

This Food Bowl Modernisation Project has potential to capture up to 450 GL of lost water annually. The Government and water authorities will invest $1 billion in this project. It is expected that this will deliver up to 225 GL annually to be shared between the irrigation system, the environment and Melbourne.

As part of the Food Bowl Modernisation Project, the Sugarloaf Interconnector linking Melbourne to the Goulburn River will be built. It will deliver up to 75 GL of new water annually to Sugarloaf Reservoir in Melbourne. Melbourne will benefi t in 2010 from the fi rst available water saved through irrigation modernisation.

The Government will immediately establish a steering committee to guide the further development of the project.

Murray-Goulburn Interconnector

The Barmah Choke is a narrow section of the Murray River near the town of Barmah. The Choke limits the volume of water that can be moved along the river to supply peak demands downstream of the Choke. This impacts on irrigation, household and industrial water supplies from Echuca to Adelaide. The impact of the Barmah Choke in constraining fl ow has been exacerbated recently with the development of water markets and the drought.

The Government is investigating the feasibility of building a Murray-Goulburn Interconnector which would enable water to bypass the Barmah Choke. It would also enable water from the Murray Valley irrigation area to be used within the Goulburn system. The bypass will enable the interconnection of the Southern Murray Darling Basin systems: the Goulburn system (1900 GL); the Victorian Murray system (1600 GL) and the NSW Murray system (2000 GL).

A key consideration in investigating the feasibility of the Murray-Goulburn Interconnector is to ensure that it and its operation would have no adverse environmental impacts on the iconic Barmah-Millewa forest and the connecting river systems. Where possible, it would be used to improve their condition. This is quite plausible, as the forest has been fl ooded in the past at inappropriate times, promoting poor environmental outcomes.

The Food Bowl Modernisation Project will provide the future structure through which the Murray-Goulburn Interconnector could be developed, if feasibility studies prove attractive.

Page 8


Figure 2.2 Food Bowl Modernisation and the Sugarloaf Interconnector

The Sugarloaf InterconnectorThe Sugarloaf Interconnector will be built to supply water to Melbourne by the fi rst half of 2010.

The Sugarloaf Interconnector will enable water savings from the Food Bowl Modernisation Project to be piped to Sugarloaf Reservoir in Melbourne. The Sugarloaf Interconnector is a key addition to the Victorian Water Grid. It will be the fi rst of the proposed large supply options for Melbourne to come on line.

It will transfer an average annual volume of 75 GL. This volume is less than 5% of the total volume of water available in the Goulburn system, and is compatible with the storage, treatment and distribution capacity available at the Sugarloaf Reservoir. Investment in treatment for the increased volume of water is part of this plan.

Two pipe routes have been investigated: one from Rokeby (near Tallarook) on the Goulburn River to Yan Yean and Sugarloaf Reservoirs in Melbourne via the Hume Highway, and the other from near Yea to the Sugarloaf Reservoir via the Melba Highway.

The Melba Highway route has been chosen as it is shorter and will be quicker and less expensive to build than the Hume Highway route.

Construction will begin in 2008 enabling water to be supplied by 2010. Melbourne Water will be entitled to purchase the fi rst 75 GL of new water from irrigation savings for this supply.

Page 9

Expanding the Victorian Water GridSome of the State’s water systems are connected through a grid of rivers, channels, pipes and storages. But the focus has generally been on each river valley and its regional storages looking after the local region. In the face of the risks due to climate change, this approach is inadequate.

Developing the Water Grid can:

≥ Increase the security of water supplies by diversifying the sources of water available for communities connected by the Grid

≥ Enable water to be traded more readily, by making it easier to transfer water to where it is most needed and valued

≥ Increase the value of supply options (current and future) by increasing the fl exibility and diversity of uses.

The expanded Victorian Water Grid will allow more water to be transferred between water systems. It not only maximises fl exibility for water sharing across regions and between uses, it also provides a valuable insurance option to secure water supplies for households and industries across the State. Connections between rural, regional and metropolitan water supplies provide for greater security of supply in the face of rainfall uncertainty.

Figure 2.3 illustrates the Melbourne water Grid and fi gure 2.5 (on page 14) illustrates the Victorian Water Grid in its current and expanded form. Key new elements of the Grid include:

≥ The new Hamilton-Grampians Interconnector

≥ The new Melbourne-Geelong Interconnector

≥ The new Sugarloaf Interconnector connecting Melbourne to the Goulburn River

≥ The new desalination plant link to Melbourne

≥ Links to enable Westernport and SouthGippsland to share access to desalination.

These new elements, along with the Goldfi elds Superpipe and the Wimmera-Mallee pipeline, create a new network of almost 10,000 kilometres of pipe.

The Victorian Water Grid and the environment

We now understand the fl ow regimes necessary for river health. The Government will ensure that the Grid is developed and managed to minimise environmental impacts.

Environmental water managers will be able to manage risks across water systems and make the most effi cient use of environmental water. In future planning, the environmental entitlement to water will need to be treated as a resource which can and will be dedicated to achieving specifi ed environmental outcomes. The Grid can also be used to relieve environmental stress in some systems.

Page 10


New projects

Sugarloaf Interconnector

Melbourne - Geelong Interconnector

Desalination at Wonthaggi

Tarago Reservoir reconnection

Under investigation

Eastern Water Recycling Proposal

Environmental fl ows (Yarra River)

Melbourne Water Main

Service Reservoir

Water catchments

A

B

C

D

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F

Figure 2.3 Melbourne Water Grid

Page 11

Recycling Eastern Treatment Plant upgrade

The Eastern Treatment Plant (ETP) at Carrum on the east side of Port Phillip Bay is operated by Melbourne Water and is one of Melbourne’s two major sewage treatment plants. It receives around half of Melbourne’s domestic sewage and industrial wastewater. Currently this wastewater is treated to Environment Protection Authority standards before being either reused or discharged to the ocean at Boags Rocks, near Gunnamatta Beach on the Mornington Peninsula.

The Government has announced that the ETP will be upgraded, to be completed in 2012. There will be complex technical trials of different treatment methods in 2008, which will inform a decision on which method to implement in 2009. The full program to upgrade the ETP will then commence.

The upgrade will treat all water at the ETP to tertiary standard, producing between 110-130 GL of recycled water annually. This includes 15 GL committed to existing recycled water projects such as the Eastern Irrigation Scheme. This leaves up to 95-115 GL per annum available for the continued expansion of residential, industrial and open space recycled water use.

It will also underpin potential large-scale water recycling. With the further treatment provided by the ETP upgrade, this water will be safe and suitable for a wide range of purposes.

A number of options for use of this recycled water will be examined in the course of a business case for ETP reuse, due in 2008. This business case will examine the Eastern Water Recycling Proposal and the substitution of recycled water for environmental fl ows.


The power generation industry, based in the Latrobe Valley, is critical to the Victorian economy. The Latrobe Valley power generators and other major industries in the Valley use more than 130 GL of water annually, mostly for evaporative cooling in power plants. Most of this water comes from the Latrobe River and Blue Rock Dam.

Once the ETP upgrade is complete, the Eastern Water Recycling Proposal could transfer over 100 GL annually of tertiary treated water to the Latrobe Valley via a new pipe.

If this recycled water is supplied to industry, it would free up water for Gippsland and for Melbourne via a new pipe connecting Blue Rock Dam in Gippsland to Cardinia Reservoir, and for the environment. A feasibility study has identifi ed pipe routes, treatment processes and plant sites, and included a preliminary assessment of key environmental, social and economic issues.

With the current extended drought, and the uncertainty associated with climate change, the Government will work with the power industry to ensure it has access to secure water supplies. The business case will include examining the potential to reduce industrial water use in the Latrobe Valley to contribute to the security of water supply for all users in the Valley as well as for Melbourne. It will also assess the possible implications for the use of desalinated and recycled water.

Substitution of environmental fl ows – Yarra River

Water is pumped from the Yarra River at Yering Gorge into Sugarloaf Reservoir for Melbourne’s water supply. One option for using the recycled water produced after the completion of the ETP upgrade is to pump a portion of it north to the Yarra River just below Yering Gorge. This would allow more river water to be retained in Melbourne’s storages.

An initial investigation into delivering high quality recycled water to the Yarra River indicates that there are feasible pipe routes through Melbourne to transfer the water, and that treatment processes may be available to meet environmental and health standards.

Further investigations will:

≥ Confi rm the optimum and maximum volumes of additional potable water that could be taken from the Yarra River under a range of rainfall scenarios

≥ Examine the environmental impacts of the necessary separation of sites for extraction of river water and input of recycled water and the potential to manage this

≥ Confi rm environmental and health standards for the use of recycled water for river fl ows

≥ Examine the interrelationship with the Sugarloaf Interconnector, including storage availability in Sugarloaf Reservoir and capacity of the water treatment plant at Sugarloaf

≥ Provide detailed costing of this option

≥ Confi rm project delivery schedules.

Recycled water returned to water supplies

A number of countries use recycled water safely and successfully to supplement water supplies, known as “indirect potable reuse”. South East Queensland is currently building a large-scale water recycling scheme to add to its drinking water supply. While we are not planning to add recycled water to Melbourne’s drinking supply, it remains a potential source of new water that is protected from the impact of climate change and would provide diversity of supply.

The Government will continue to monitor advances in technology and international and interstate experience; however indirect potable reuse is not supported for Victoria.

Page 12


Figure 2.4 Per capita water consumption in MelbourneHouseholds and businesses are becoming more water effi cient

Water conservation in households and businessesAlong with water supply from our network of reservoirs, water conservation will continue to underpin future water security. A litre of water saved is equivalent to a litre of water added to the system by supply, but a litre saved is cheaper, is often quicker to fi nd, and involves lower greenhouse gas emissions and other environmental impacts. Water conservation also buys valuable time to implement new supply options.

The current range of water conservation programs, such as funding support for water effi cient products and water pricing to encourage saving water, will continue. The next generation of water saving programs will also explore innovative ways of conserving water, including smart metering, urban water markets and sophisticated behaviour change programs.

Through the Pathways to Sustainability program, Melbourne’s water retailers are working with around 1500 major industrial water users to develop water saving plans that will reduce industrial water use by 5 GL annually. In cooperation with industry, this target is being accelerated to see savings achieved from 2008.

Melbourne’s record of achievement with water conservation will continue to produce savings, set out in fi gure 2.4.

The water businesses will also soon begin a program of tailored household water savings where individual households will be encouraged, assisted, and given the tools they need to save water and live within a smaller, sustainable “water budget”.

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2.5 V

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Projects underway

Wimmera-Mallee Pipeline

Sunraysia Irrigation Project - Robinvale district

Goldfi elds Superpipe

Central Goulburn irrigation modernisation

Shepparton irrigation modernisation

Newlyn Reservoir Interconnector

Tarago Reservoir reconnection

Macalister irrigation modernisation

Campaspe Pipeline to Waranga Channel

New projects

Food Bowl Modernisation Project


Hamilton-Grampians Interconnector

Melbourne-Geelong Interconnector

Desalination at Wonthaggi

Projects under investigation

Murray-Goulburn Interconnector


Existing infrastructure

Page 15

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Dealing with water shortage while new supply is being builtActions already underway to secure water supply include:

≥ Adding water to the Melbourne supply system by reconnecting the Tarago Reservoir to the system, providing around 15 GL annually, coming on line in 2009

≥ Maintaining existing savings and accelerating our water conservation programs, by increasing funding to bring forward conservation programs such as installation of water effi cient showers and washing machines, and more industry water saving plans. Compared to 2002, this will provide 90 GL of water annually by 2015

≥ Increasing the operational effi ciencies of Melbourne’s water supply system, adding 20 GL of supply by the end of 2008

≥ Deferring additional new environmental fl ow commitments for the Yarra until Melbourne is back on Stage 1 water restrictions.

The fi rst of the new supplies under this plan will provide additional water into the Melbourne system in 2010, followed by further additions in 2011 and after 2012.

If infl ows continue to be extremely low in the interim, further action will be taken in the immediate future to ensure the security of Melbourne’s water supplies. This will include:

≥ Moving to Stage 4 water restrictions in August 2007 if necessary

≥ Reducing environmental fl ows in the Yarra and Thomson Rivers

≥ Further reducing demand.

If Melbourne is required to move to Stage 4 water restrictions, environmental fl ows will be reduced by 10 GL in the Thomson River and 10 GL in the Yarra River. It may be necessary to further reduce environmental fl ows if extreme drought conditions continue.

These are emergency actions that will cease when supplies enable Melbourne to move back to Stage 3 water restrictions. The impact of reducing environmental fl ows will be carefully monitored and environmental contingency and recovery plans will be put in place during this period.

Page 16


Table 2.1 Future Melbourne water supplies

Supply source Potential volume of water, GL per annum

Date on line

Tarago Reconnection

15 2009


75 First half 2010

Desalination 150 End 2011

ETP upgrade, recycled water

50-100* After 2012

Total 290-340 Comes on line progressively

*The volume available for supply will depend on use

Securing Melbourne’s water suppliesBy introducing supply from more than one source, including rainfall independent sources such as desalination and recycling, the new supply projects provide security through diversity of supply.

The new supply projects and the Tarago reconnection underway will provide around 240 GL per annum to Melbourne and surrounding regions’ systems by the end of 2011, with additional recycling options potentially coming on line later. In total this would provide a conservative addition to Melbourne’s water supply of 290 GL annually. By 2010 annual supply to Melbourne’s system will exceed annual water used in 2005/06. Supply will grow further after desalination comes on line in 2011, enabling rebuilding of storages (see fi gure 2.6).

This program of supply will enable Melbourne households to move off the current restrictions regime to the more secure level of service they have historically received. If the scenario based on the past three years (outlined in section 3 of this plan) is taken as a guide, the new supply will enable Melbourne to move to Stage 2 water restrictions by 2010 and progressively move back to low level or no restrictions by 2013. If infl ows closer to the average of past 10 years are restored, Melbourne will move out of water restrictions earlier.

Figure 2.6 New water for Melbourne

Average supplyfrom dams forlast 10 years

New water for consumption and to rebuild storages

2009 2010 2011

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Taragoreconnection

15 GL

Water used 2005/06

Desalination150 GL

600

500

400

300

200

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240 GL

387 GL

SugarloafInterconnector

75 GL

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Wat

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e 3 Secure water supplies are fundamental to the Victorian economy,

our way of life and the health of our environment. Efficient use of our water supplies has supported Victoria’s strong population growth and economic expansion.

A small part of the rain that falls on Victoria runs off into streams, rivers and aquifers. Of the water in streams, rivers and aquifers, often a signifi cant proportion is taken out for use on farms, in industry and by cities and towns.

As well as providing water for towns, industry and agriculture, our rivers, lakes and wetlands are highly signifi cant ecosystems, supporting diverse populations of unique animals and plants. They are also a major drawcard for recreation and regional tourism and a foundation for regional economies. The water we consume must be taken with recognition and consideration of the social, environmental and economic values of our freshwater environments.

Figure 3.1 Water use in Victoria and Melbourne – % used by sector

Source: State Water Report 2004/05

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DroughtThe current drought has highlighted the importance of water to the economy, community and environment. For more than 10 years, a large part of the State has struggled with rainfall signifi cantly below the long-term average. Its severity has been unprecedented, and its impact has been widespread across the State.

Many regional towns have been on strict water restrictions for years and irrigators have received reduced allocations of water. Our rivers and streams have suffered due to the combined effect of water extraction and low fl ows over an extended period. For some Victorian streams the impact of the drought was 10 times more severe than it would have been without today’s dams and weirs.

In a period of reduced rainfall, surface water run-off is the fi rst casualty. Less rain means even less water for our rivers and dams. As a rule of thumb, a decrease in rainfall results in a two- to three-fold decrease in run-off to rivers. With increasing temperatures and reduced soil moisture, catchments become less effi cient at producing run-off.

Over the past 10 years, run-off into the Murray Darling Basin, a critical resource to Victoria’s and the nation’s well-being, has reduced by half compared to the pre-1997 average.

Never, at the end of a 10 year drought, has such a signifi cant reduction in infl ow occurred as in 2006.

Figure 3.2 River Murray Inflows 1891 - 2007Infl ows in 2006 were the worst in recorded history

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For Melbourne, infl ows over the past 10 years present a similar picture. Over the 100 years until the mid-1990s Melbourne and surrounding centres had relatively reliable rain that provided the basis for confi dent planning of future water supplies.

That situation has changed: the past decade has been one of sustained drought. The total infl ows to Melbourne’s water storages from 1997 to 2006 were 35% lower than the pre-1997 average. Yet even with the continuation of this reduced infl ow, the system was capable of absorbing the impact and recovering.

Figure 3.3 Melbourne storage inflows 1913 – 2006 Infl ows in 2006 were the worst in recorded history

Coping with the record drought

Despite the record drought during 2006, Victoria’s towns and regions have coped. This is a credit to the successful drought planning by water authorities and responsible behaviour of communities.

Each of the 16 urban water authorities around the State has its own drought response plan, with in-built trigger points for water restrictions and contingency measures, such as fi nding new groundwater, temporarily taking more water from the environment and pumping more from storages.

To ensure adequate supplies in a number of those towns on Stage 4 water restrictions, it has been necessary to reduce, and in some cases cease, environmental fl ows in 18 river systems. But we cannot continue this way.

The extreme failure of winter and spring rains in 2006 (traditionally providing the bulk of infl ows) on top of our already dry catchments meant 2006 infl ows were 30% lower than the previous driest year.

The severity of the drought over the past 10 years, and during 2006 in particular, has raised questions about the impact climate change is having on our water resources. It is possible that Victoria is suffering a major long-term reduction in average rainfall – a step-change in water availability due to climate change.

Source: Melbourne Water

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Figure 3.4 Victorian Rainfall – Winter 2006Winter 2006 rainfall was much lower than the long-term average Source: Australian Bureau of Meteorology.

Climate changeClimate change is presenting worldwide challenges to all communities to reduce greenhouse gas emissions and adapt. Throughout Australia, water and other natural resource and infrastructure managers must now plan to adapt to an uncertain future.

The Intergovernmental Panel on Climate Change’s Fourth Assessment Report 2007 concludes that warming of the earth’s climate system is unequivocal. The evidence for this comes from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice, and rising global mean sea level.

As a result of climate change, Victoria is expected to become warmer and drier. It is forecast that there will be a signifi cant reduction in rainfall, and it will be more variable. This means less water fl ow into rivers and a decrease in water supplied to our reservoirs. The recent record of infl ows to the Murray River and Melbourne’s storages (see fi gures 3.2 and 3.3) suggest that we may have already experienced a step-change in our climate. Thirty years ago,

Perth started to experience a number of step- changes in climate, resulting in progressively less surface water run-off. After three decades of coping, Perth has built a desalination plant and now another is planned.

We are now planning major investment to meet the challenges of climate change, and we are conscious that knowledge is constantly evolving. The Government will be guided by the best analysis available to help us understand and manage the risks and uncertainties that climate change brings.

Understanding the impacts of climate change and variability on Victoria’s water resources is essential to water planning. To improve its understanding, Victoria is participating in a national, CSIRO-led, three-year research program - the South East Australian Climate Initiative - aimed at better understanding the factors that impact on our climate and its impact on our water resources. The results of this work, and continued monitoring of infl ows to our reservoirs, will inform future water planning.

Water security under uncertainty

The changes observed in rainfall and run-off over the past 10 years, and 2006 in particular, require a change in the basis for water planning. Future rainfall patterns may be different from the past, although the precise pattern is unclear.

We need to move away from relying on one major source of supply from our reservoirs to a portfolio of diverse water sources. We need to develop a new water balance of traditional sources alongside the contribution from water conservation, new rainfall independent sources of water and water reuse from recycling.

Like a portfolio of investments that makes up our superannuation funds, a diversifi ed water portfolio needs to be periodically reviewed and regularly updated as new information on costs, feasibility, climate and rainfall becomes available.

In this way we can maintain our water security and manage the risk and uncertainty associated with climate change. A key part of this portfolio planning is the development of robust rainfall scenarios.

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to Melbourne’s system (now underway) and add a major new supply in the medium term, along with reducing our use through ongoing conservation and effi ciency measures. Under this scenario, infl ows will be lower than in the past but this will still be adequate when combined with these additional measures to balance supply and demand.

These two scenarios were included in the Central Region Sustainable Water Strategy in 2006. The third new scenario takes into account what we now know is possible, by incorporating the extreme low infl ows of 2006 in a scenario based on the past three years’ experience. This scenario represents a step-change in climate.

If the past three years’ infl ows are taken as a guide, storage levels progressively decline and more than one major new supply source needs to come on line. Without this new supply, Melbourne households would remain on severe water restrictions for the foreseeable future.

Figure 3.5 Forecast Melbourne storage levels 2007-2016 under three inflow scenarios With no new supply

Scenarios to guide decisionsIn the past, long-term rainfall throughout parts of Victoria has been fairly reliable. Now, with the rainfall uncertainty due to climate change, many more outcomes are possible, and different rainfall patterns may emerge in different parts of the State.

We have now developed a number of rainfall and infl ow scenarios to guide us in water supply planning for Melbourne. These are plausible scenarios, designed to cover the range of possible futures for rainfall and run-off. They will inform the way we adapt our water management to conditions as they unfold.

Put simply, if we use the past 100 years’ average infl ows as the basis for planning Melbourne’s water supplies, we don’t need to add to our water supply at all in the short to medium term. Under this scenario, good rains will come and fi ll the storages.

If the past 10 years’ average infl ows are used, we will need to add the Tarago Reservoir

Figure 3.5 shows these three scenarios in terms of their impact on Melbourne’s water storages over the period 2007 to 2016, showing the level at which Stage 2 and Stage 4 water restrictions are introduced.

Our water planning must enable us to deal with very low infl ows. When it comes to water, being risk averse and prudent makes good sense. The infl ows of the past three years will therefore be added to planning Melbourne’s future water supply system.

Despite the impact of climate change, we see this as a relatively unlikely scenario. Based on the average of the last 10 years, with conservation and planned new supply, it is more likely that we will see an earlier recovery in storages. But to manage the risk of very low infl ows, new water supply projects will be brought forward immediately.

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Examining the optionsA repeat of infl ows of the last three years requires new supply as soon as possible, even with active conservation measures. Some major supply options, such as the provision of recycled water from the Eastern Treatment Plant upgrade (to be completed in 2012), can only play an important role in the longer term.

As a result, this plan provides a number of new supplies. A portfolio of supply options has been developed which:

≥ Focuses on conservation and using water wisely

≥ Expands the Victorian Water Grid within Melbourne and regional Victoria

≥ Links with wider Victorian water reform to modernise irrigation and expand water trading

≥ Introduces diversity to supply, by drawing new water from several sources

≥ Responds to climate change by introducing supplies that are independent of rainfall

≥ Enables the progressive rebuilding of water supply in Melbourne’s storages.

In Victoria’s regional cities and towns, water authorities have been carrying out similar analysis of the water supply and demand needs of their areas. This plan integrates them into a solution via the Victorian Water Grid.

Choosing the best options for Melbourne and its region

Taking Melbourne off severe water restrictions (stages 3 and 4) and eventual restoration of unrestricted water supply on a sustained and secure basis is the key objective.

The range of available large supply options able to meet the shortfall were investigated considering the following factors:

≥ How much water does the option produce?

≥ When can it deliver water? Can it deliver water soon enough to avoid the prolonged use of severe restrictions?

≥ What does it cost?

≥ The way the option relates to or links with others (e.g. does it support or close off others?)

≥ The risks and uncertainty around the volume, timing, cost, approval processes and delivery for each option

≥ State of readiness. Are the required regulations or other controls in place?

Implementation of the options chosen will be subject to all of the required environmental approval processes during the development of detailed business cases, design and construction.

The reuse of stormwater from Dight’s Falls on the Yarra River was examined but is not proposed as one of the supply options for Melbourne. This option is faced with a number of technical and environmental constraints that make it unsuitable as a large supply option.

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We must continue to emphasise sustainable water management to protect the needs of future generations. Sustainable water management draws from:

≥ Reliable and safe water and sewerage services for cities and towns

≥ A high value, low environmental impact irrigation industry which strengthens rural and regional communities

≥ Healthy rivers, aquifers, fl oodplains, estuaries and catchments

≥ Communities that appreciate all the services water provides and that can make choices about how those services are to be delivered

≥ Communities and industries that value and conserve water

≥ Effi cient, accountable and innovative water service providers.

Victorians have achieved a great deal in saving water, looking after rivers, improving agricultural use of water, making industry’s use of water more effi cient and developing the Victorian Water Grid. This has enabled Victoria to adapt to and cope with the challenges posed by the 10 year drought, and sets our community up well to deal with the future.

Victorians have shown through their actions to save water that they are well aware of the importance of sustainable water management at the household level, in industry, and in the rural sector. Government policy – such as the 2002 Victorian River Health Strategy, the 2004 Our Water Our Future action plan, and the 2006 Central Region Sustainable Water Strategy – has taken up this challenge.

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Figure 4.1 Australian capital city water use 2005-06Melbourne is the most water effi cient capital city

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Conservation and efficiencyAs the previous section of this plan shows, Melbourne and other Victorian urban centres (along with the rest of urban Australia) cannot rely solely on easily accessible and low-cost supplies of surface water. In the past, this has been the cheapest and most energy effi cient option for water supply. While Victoria’s water storages will remain the basis for secure supplies of water across much of the State, water conservation and effi ciency provide cost effective and environmentally friendly measures to balance water supply with demand. Conservation reduces pressure on our natural water sources, saves energy and reduces greenhouse gas emissions.

In 2004, the Government’s Our Water Our Future action plan made water conservation the fi rst priority. As a result of the community’s efforts, Melbourne has become Australia’s most water effi cient capital city (see fi gure 4.1).

Since the 1990s, Melbourne’s annual per capita water consumption has reduced by 22% from 423 to 331 litres per day. With the additional savings achieved under restrictions, this reduction has increased to 28%. This includes reductions in both household and industry use. We have used a mix of conservation and effi ciency techniques including: water effi cient buildings and appliances; water effi ciency programs for industry; pricing to encourage prudent use; and rebates for water saving products and water restrictions.

Figure 4.2 Melbourne’s storages 2002-2007 Storages would be 250 GL lower without conservation

Victorians can be proud of their achievements in saving water. The water saved in Melbourne since 2002 has meant that our water storages are at a higher level than they would have been without conservation (see fi gure 4.2). The volume saved – 250 GL – is equivalent to fi ve and a half years of supply from Perth’s new desalination plant. Without this carefully planned and conscientious approach to water saving, Victoria would be considerably worse off today.

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Looking after our riversTo manage water use sustainably it is important to ensure that there are suffi cient fl ows to maintain river and fl oodplain environments. It is also necessary to improve water quality in rivers and restore degraded riverbanks and fl ood plains. These actions protect the integrity of river systems to ensure the continued supply of fresh water and sustain native plants and animals that live in and around rivers and wetlands. The Government’s 2002 Victorian River Health Strategy establishes the framework for managing these different aspects of river health in an integrated way, and it is reaffi rmed in Our Water Our Future.

To provide environmental fl ows for rivers, the Government has established an initial Environmental Water Reserve (EWR) for all rivers. The EWR ensures water provided for the environment is protected under legislation.

Victoria has acted to improve the health of rivers of high community value through restoring habitat, improving water quality and recovering water to improve environmental fl ows in stressed systems. These rivers include the Thomson, Macalister, Goulburn, Broken, Wimmera, Glenelg and the iconic Murray and Snowy Rivers.

This work to improve the health of our rivers will continue to underpin our efforts to secure our water supplies while maintaining the integrity and resilience of our rivers.

Irrigation reformIrrigation is the major user of water in Victoria, using 77% of harvested water. In return, irrigated agriculture is immensely valuable for the State and its communities, generating $9 billion in production annually and $1.53 billion in exports.

Some irrigation infrastructure is nearly a century old, and needs to be modernised. The goals for irrigation reform are an increasingly productive irrigation sector and lower environmental impact. A key to increasing productivity is to enable irrigation water to move from where it is available to where it is most needed and most valued through water trading.

The Government has instituted major reforms to water entitlements to facilitate water trade. Central to this is the unbundling of traditional water rights into water shares, shares of delivery capacity and water-use licences. Unbundling of water rights will commence in northern Victoria on 1 July 2007. These reforms will facilitate the development of water markets and the movement of water to high value uses.

Modernisation of the irrigation sector – to reduce water lost through ineffi ciency and to improve service to irrigators – helps to achieve the goals of increasing productivity and improving results for the environment. In this plan, a third benefi t – improved water security for households and industries – has been added.

Examples of irrigation modernisation already underway include programs in the Macalister, Shepparton and Goulburn irrigation districts. Channel automation and repairs already underway to ageing infrastructure in the Goulburn irrigation district will save 20 GL of water annually by the end of 2008. In the Shepparton irrigation district, the fi rst major modernisation project will commence this year. It is expected to save 50 GL of water annually when completed at the end of 2009. Channel automation in the Macalister irrigation district in Gippsland is saving 5 GL of water annually. Further work in the district is expected to save a total of 15 GL of water annually.

Victoria’s reliable system for storing and allocating water has provided water security for users in all but the worst year of infl ows in recorded history. Victoria’s irrigation reforms will ensure a thriving irrigation industry in the face of drought and climate change. The further development of the Victorian Water Grid will provide even more opportunities to gain greater value from our water resources.

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Investment and pricingThe signifi cant costs associated with providing more water for Melbourne will be paid for by the Melbourne water companies and passed on to customers through water charges. This is consistent with current practice, and with water pricing policy under the National Water Initiative.

Securing future supplies for Victoria, along with continued investment to upgrade water infrastructure, will put increasing pressure on water prices. The Essential Services Commission (ESC), the State’s independent pricing regulator, will determine the new water prices to cover the cost of the future supply projects for the next pricing period from 1 July 2008 to 2013. The water companies will release their draft pricing proposals in July/August and submit their fi nal proposals to the ESC later this year. Prices will be set by the ESC in the fi rst half of 2008.

The Government expects the price increases to be signifi cant. It is likely that the average Melbourne water bill will double (in real terms) by 2012. Melbourne water bills are currently low compared to other Australian cities and major Victorian regional centres.

This will reinforce to water users the true value of water, and will support continued efforts to save water. A program of concessions on bills for water users is already in place. This program provides benefi ts to around a third of all Victorian households. The water concessions regime will be reviewed before the new prices come into effect.

Investing in the Water GridThe costs associated with regional water projects will be paid for by regional water authorities and passed on to customers through water charges. However, regional customers may also need support to limit the price impacts of major connections to the new Grid. The State has already funded major contributions to the Wimmera-Mallee pipeline, the Gippsland Water Factory and the Goldfi elds Superpipe. Consistent with these decisions, the State will commit $10 million to the Hamilton-Grampians Interconnector and $20 million to the Melbourne-Geelong Interconnector.

Investing in irrigation modernisationIrrigation modernisation will provide benefi ts for irrigators, the environment, households and industries. The Victorian contribution to the fi rst stage of the Food Bowl Modernisation Project is $1 billion, with State Government funding of $600 million, along with contributions from associated water authorities. The Government will consider setting up a purpose-built body to oversee the delivery of the project.

Securing Victoria’s future water supplies involves a multi-billion dollar investment to boost supplies. Details of the actions, investments and timing are as follows.

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DesalinationWork will begin on the desalination plant immediately in order to supply water to Melbourne by the end of 2011. Signifi cant work has already been carried out to develop the desalination proposal. First steps involve fi nalising design, gaining approvals, acquiring land, and reserving the pipe route.

A decision on delivery arrangements regarding whether the project will be delivered and operated by the private or public sector will be made in the second half of 2007, prior to tendering for construction of the project in 2008.

Food Bowl Modernisation ProjectThe Food Bowl Modernisation Project Steering Committee will be established later in 2007. It will guide the further development of the project.

The full modernisation project will take up to eight years. The fi rst savings will be available from 2010 for Melbourne.

Figure 5.2 Food Bowl Modernisation Project

Figure 5.1 Desalination

Table 5.1 Typical water and sewerage bills in 2005/06 compared with other cities

Adelaide $720

Brisbane $627

Canberra $747

Darwin $725

Sydney $694

Perth $750

Melbourne $473

Sugarloaf InterconnectorWork will begin immediately to develop the Sugarloaf Interconnector linking the Goulburn River to Sugarloaf Reservoir in the Melbourne system. Tenders will be issued in 2008. The pipe will transfer an average of 75 GL per annum and will begin delivering water in the fi rst half of 2010. Work to upgrade treatment plant capacity at Sugarloaf Reservoir will commence in the same timeframe.

Figure 5.3 Sugarloaf Interconnector

Source: National Water Commission and Water Services Association

of Australia, National Performance Report 2005-06

Page 28

Documents

Our Water Our Future The Next Stage of the Government’s ...images.theage.com.au/file/2011/12/09/2828453/water_policy.pdf · Our Water Our Future The Next Stage of the Government’s