The myth of plenty

Luci Tania

If only Professor Harold Hill had known about Tasmania! Whilst Solar Saliors is clearly a legitimate business, the economics of this proposal (at face value) are highly unlikely. And unfortunately the recent history of bungles in Tasmania has shown that project economics is not a strong suite for the Tasmanian Government. For this reason, and given the insular nature of Tasmanian culture, Tasmania has become a mecca for carpetbaggers, spivs, snake-oil salesmen and assorted charlatans (of all political persuasions). Tasmania is increasingly being seen as the “new Queensland” where the white-shoe-brigade can fleece easy cash from a “soft-touch” government who seem impermeable to political embarrassment. As a result Tasmania is now facing a bleak future with a long string of ridiculous decisions, bungles and incumbent welfare-industries hanging about the necks of our children like albatross.

The Hobart bushfires on 11 and 12 October may have been unwanted by all but they certainly provided a mechanism by which the Government Media Unit didn’t have to think up another ridiculous headline to feed the unquestioning fourth estate.

With the Government on the ropes over any number of bungles and accusations of corruption/incompetence, there has been a need to string a steady line of ludicrous stories to the media as part of the strategy of headline grabbing and diversion.

A new hospital to be built without money, a new state flag, foreshore walkways, parliament sitting in Launceston.

What next?

How about selling shipments of water to Sydney?

A ship of fools

The announcement that Minister David Llewellyn had entered into talks with Sydney company Solar Sailors to ship potable water to mainland capitals took the talk-back airways by storm. It certainly took local councils by surprise as nearly all water utilities in Tasmania are owned by local council authorities and none were aware of the proposal!

The plan appears to be that Solar Sailors (chaired by Bob Hawke) would use tanker ships to take 50 gigalitres of Tasmanian water per year to mainland cities (for a profit) and in return the Tasmanian Government would pocket $300 million over 20 years ($15 million per year.) Another Labor-mates deal or just a load of baloney?

Solar Sailors will present their eagerly awaited viability study to the Tasmanian Government on 3 November.

The most worrying aspect of this story is not the fact that precious Tasmanian water may be shipped to those greedy mainlanders. It’s the fact that no one bothered to question the economic viability of the story. It would appear that the solar “Aquatankers” to be used by Solar Sailors presently only exist as 3D computer graphic concepts and more alarming still is the likely cost of the project. One may guess that part of the proposal may include a capital investment from the Tasmanian Government. Did visions of another Spirit III just pass your mind?

If the Tasmanian Government is to pocket $15 million per year for 50 gigalitres, then the sale price must be $3.33 per kilolitre; not bad given that the Hobart Water sale price is $0.54 per kilolitre and that Launceston residents are presently paying $0.55 per kilolitre.

However Sydney Water usage price is presently $1.26 per kilolitre and $1.63 per kilolitre for excess water! So on the basis of sale price alone the proposal already appears to be ridiculous. But let’s explore this further.

The Turkey and the Albatross

In 1998 (8 years ago) the Turkish Government commissioned an economic evaluation of regular shipments (40,000 ton each) of potable water to Northern Cyprus (248 km). The study concluded that the likely cost of transport and delivery via a Turkish crewed tanker would be $US 0.79 per ton (kilolitre), not including water sale costs, with a breakeven cost of $US1.15 per ton. In today’s terms this would approximate $AUS1.44 and $AUS1.78 respectively (not including water sale price and escalated fuel costs). When one considered the differential in Australian charter costs plus the additional distance and fuel, it is unlikely that an equivalent 40,000 kilolitre delivery could be made in Sydney at less than $AUS 2.50 per kilolitre. This does not include port costs, profit margins and water purchase costs.

This price is clearly well above the $1.26 per kilolitre price currently paid by Sydneysiders through Sydney Water.

At the cheapest end of the scale (assuming a meagre 15% profit margin) and with water purchased from Tasmanian utilities at cost ($0.55 per kilolitre), the likely cost of shipping water to Sydney would be around $AUS 3.43 per kilolitre. On a more realistic scale (assuming a 50% profit margin) and with water purchased from Tasmanian utilities at $3.33 per kilolitre, the likely cost of shipping water to Sydney would be around $6.98 per kilolitre. This means that the base price that Sydneysiders presently pay for their water through Sydney Water would need to increase by at least three-fold and more probably six-fold before this venture could even approach some degree of economic viability.

The myth of plenty

The greatest advantage provided to the Tasmanian Government related to this story is to perpetuate the myth of plenty. Released on the same day that the Prime Minister was being assailed by scientists regarding the nation’s dire water situation, the ludicrous Tasmanian water shipment story presented the ongoing myth of Tasmania as an oasis of bountiful water. Indeed Alderman (Dr) John Freeman, Chairman of Hobart Water, was eager to be interviewed on ABC radio to assure the masses of Hobart that there was plentiful water with no need to panic. However the good Doctor struggled to quantify how much water was plenty and also stated that he had given up on calculating the viability of the Solar Sailors proposal as he had got lost in the zeros (not that anyone had approached him about it anyway).

However on this same day, Dr Christine Mucha (CEO of Hobart Water) was imposing water restrictions as a result of the deadly bushfires surrounding Hobart. It may appear that the left hand doesn’t know what the right hand is doing.

With the absence of spring rains and the state on the brink of drought, with Campbell Town serviced by undrinkable water, with St Helens and Scamander facing the trucking of water supplies, with water from the North Esk catchment becoming increasingly turbid and Launceston needing a second dam, with the Great Lakes of central Tasmania struggling to maintain 30% capacity and with Basslink only just meeting 50% throughput at 300MW, the promulgation of the concept of bountiful drinking water in Tasmania is laughable. In addition to this there remains a question mark about the quality of water in Tasmania given the increasing incidence of pesticide and herbicide shows in water supplies across the state. Whilst Sydney has suffered periodic scares related to microbiological contamination of drinking water (remedied by boiling and chlorine) it has never encountered the more serious problems associated with herbicides such as atrazine; increasingly being detected in Tasmanian water.

Sydney Water takes herbicide and pesticide contamination seriously and is likely to enforce the requirements of the Australian Drinking Water Guidelines
whereby the presence of traizine chemicals, regardless of health limits, is considered unacceptable.

The 76 trombones leading the parade

If only Professor Harold Hill had known about Tasmania! Whilst Solar Saliors is clearly a legitimate business, the economics of this proposal (at face value) are highly unlikely. And unfortunately the recent history of bungles in Tasmania has shown that project economics is not a strong suite for the Tasmanian Government. For this reason, and given the insular nature of Tasmanian culture, Tasmania has become a mecca for carpetbaggers, spivs, snake-oil salesmen and assorted charlatans (of all political persuasions). Tasmania is increasingly being seen as the “new Queensland” where the white-shoe-brigade can fleece easy cash from a “soft-touch” government who seem impermeable to political embarrassment. As a result Tasmania is now facing a bleak future with a long string of ridiculous decisions, bungles and incumbent welfare-industries hanging about the necks of our children like albatross.

One can only hope that the water shipment proposal is simply another media distraction. We now await the next release from the Government Media Unit — the next outstanding development opportunity — a 50 metre “big” Princess Mary.

That’s right!

My contacts tell me that the Minister has just entered into discussions with a prominent Brisbane developer who wants to build a giant reinforced concrete Princess Mary on the site of the old Taroona Hotel. It will attract 50 million tourists a year, generate hundreds of billions of dollars in state revenue and employ 73,000 Tasmanians.

Tourists visiting the big Princess will be able to take the lift to crown and absorb the sweeping views of construction cranes across Hobart (building new
hospitals in every suburb). They can then enjoy a meal in the revolving restaurant located in HRH’s tiara whilst sipping from a glass of Tasmania’s finest export water. A project of state significance with generous government financial support.