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The great water debacle

By Ian Mott - posted Monday, 21 August 2006


The antonym of synergy is asynergy. It describes a condition where the collective intellect of a group is substantially dumber than the sum of the individual minds that make up that group. It is not necessarily a synonym for government policy and administration, but many have observed a very strong association between the two. But unlike private sector examples that invariably go out of business, the public sector examples, and their consequences, can linger for decades.

From time to time an example comes along that literally makes your clichés stand on end. This one comes straight from the Premier’s Office, in the form of the South East Queensland water debacle. Asynergy provides one explanation for the extent of the variance between the individual intellects of the Premier and his advisors and the breathtaking stupidity of their current water plan.

Put simply, they are so busy trying to be seen to be solving their “water crisis” that no-one has bothered to measure the actual impact of all the measures put together. If they had, they would realise that each new measure diminishes the need for other new measures. And this means that the new $2.2 billion dams will have no customers because the market for public water will be shrinking faster than the population will grow.

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What they have not realised is that technology has already made the old centralised public water delivery systems redundant as suppliers of first choice. The shift from steel to UV stabilised plastic water tanks, and the resulting increased competition in that sector, has ensured that prices in this market have undergone little change in the past two decades and have actually declined in real terms.

But that doesn’t mean there is no longer a role for centralised water supply. In this new century public water will evolve into the supplier of last resort in a system that optimises the benefits of hard, artificial catchments like roof tops, with storage in tanks that have zero evaporation losses and are filled a number of times each year. The traditional dams will then optimise their benefits of very low warehousing costs and large storage economies to capture seasonal surpluses for later delivery in dry times when the contribution of tanks is lowest.

Most SEQ Councils have already introduced mandatory water tanks for all new housing and commercial developments and this will ensure that about 85 per cent of the projected increase in water demand by the million extra residents who will come here over the next 20 years will be met by these privately owned competitors in the household water market.

Our detailed modelling of the median roof area and average water use for a range of annual rainfall outcomes reveals that 13,500 litres of water tank capacity for the average home will supply 87 per cent of normal water needs in a normal year. In a typical drought year this would still only drop to 82 per cent because of the almost 100 per cent catchment efficiency of rooftops. Dam catchments have trees that take every single drop of rain in a drought year and only deliver 5 per cent of total rainfall in a normal year.

So even if there has been a structural change in our weather patterns and we no longer get those large cyclone induced floods of the past that dams are dependent on, the actual demand for water will only increase at 15 per cent of what Beattie’s advisors think it will.

In fact, in The Courier-Mail report on the Premier’s water plan, (Tuck Thompson, August 10, 2006) there is only mention of the minor savings of 4.2Ml a day from retrofitting 75,000 homes with water saving devices. This amounts to only 56 litres a day from each household and clearly does not include any contribution from water tanks at all.

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No attempt is made to properly gauge or inform on future water demand. We are told there will be 50,000 new residents each year but this only amounts to 19,230 households needing an extra 4,903Ml a year (13.4Ml a day) but if they all must have a decent water tank then only 15 per cent will be drawn from the mains water system. Household use will only increase by 735Ml a year or only 2.015Ml a day.

But wait, the stock of new houses is not simply driven by population increase. Houses are also replaced due to fire, conversion to commercial or factory space, road changes and dilapidation due to wear and tear: the “renovate or detonate” class. Roughly 2 per cent of the total housing stock is replaced each year and as the total number of houses in SEQ is about one million, this means another 20,000 new houses that will be required to install a water tank.

However, the impact on water demand by these replacement houses is much greater than that of the new arrivals. These new tanks will reduce existing water demand by 85 per cent each while the new arrivals merely restrict the increase by 15 per cent each. The 20,000 replacement houses will still need 5,100Ml a year as they did before but only 765Ml (2.1Ml a day) will need to come from the mains system. This will mean an annual 4,335Ml reduction in demand for mains water or 11.9Ml a day.

Furthermore, the number of residents per household is on a downward trend so a shift from the present 2.6 people to 2.5 people per house will require another 55,400 houses over the next 20 years. These extra 2,770 new houses with tanks each year will reduce mains water demand by another 600Ml a year or 1.65Ml a day.

And all this is before the wider community begins to recognise and respond to the ecological, economic and reliability advantages of tank water by retrofitting to their existing house. They are already a distinct selling advantage when trading up and the market will certainly respond as mains water prices go up. A very conservative estimate of only 1 per cent of existing houses buying water tanks each year will mean 10,000 new tanks and an annual reduction in mains water demand of 2,162Ml or 5.95Ml a day.

When all these factors are considered we get:

  • increased water demand from new arrivals of 735Ml a year or only 2.015Ml a day.

Offset by:

  • decreased water demand from replacement houses of 4,335Ml a year or 11.9Ml a day;
  • decreased water demand from density changes of 600Ml a year or 1.65Ml a day; and
  • decreased water demand from retro-fitted tanks of 2,162Ml a year or 5.95Ml a day.

To produce a net reduction in mains water demand of 6,362Ml a year or 17.35Ml a day.

So we have a situation where the Premier is signing off on infrastructure based on an assumption of increased water demand over the next 20 years of 98,000Ml a year or 268Ml a day while the actual demand is likely to decrease by 127,240Ml a year or 347Ml a day. Current use is 255,000Ml a year or 700Ml a day. The market for household mains water is likely to halve by 2026 before any of the additional measures even bite.

So what does this mean for the “Great Fixer” and his $2.2 billion legacy?

It means that the Premier, in his ill-considered haste, has failed to distinguish between urgent short term measures, like depleting aquifers, that will augment supply in response to the current circumstances and long term structural measures, like recycling pipelines and desalination plants, that substantially increase supply to a declining market. The latter measures require continuous operation to cover capital costs and are effectively rendering the existing dams redundant and extinguishing their asset value.

It means that by the time the new dams are brought on line there will be no market for their water. Any water sales from these dams will come at the expense of reduced sales from the existing dams. That may make sense when those dams are empty but sooner or later they will be full again. And when that happens they will be forced to operate at a level that is significantly below current efficiencies.

The combined storage volumes of the existing dams is 1.76 million Ml which is seven years supply. The new dams will take this volume to 2.6 million Ml. But in 20 years time demand will have declined to such an extent that the dams will hold at least 20 years supply. And this will mean that annual evaporation when the dams are full will be more than three times the amount that is used by the city each year. This will be a substantial reduction in storage efficiency.

In the long term this will mean that not only the new dams but also the existing dams will be operating at a loss that will need to be covered by either: all Queensland taxpayers including those who get no water from the system; or a dwindling customer base confronted by continually escalating costs.

When looked at another way, the new dams will never have sufficient water sales in their own right to cover anywhere near the annual interest on $2.2 billion. So without an immediate and continuous bail out from consolidated revenue funds, this interest will compound over time to a point where other key government services, like health, transport and education will suffer.

It seems there are few things more dangerous or more costly than fools in a hurry.

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About the Author

Ian Mott is a third generation native forest owner, miller and regenerator from the Byron hinterland. For more information on the "New Farm States" campaign contact Ian Mott at talbank@bigpond.com.au. Discover more Bon Motts here.

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