Page 995 - Week 03 - Wednesday, 21 March 2012
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I want to make two important comments at the outset of this debate. Firstly, I want to confirm what the Canberra Liberals have said in relation to water security projects as a matter of principle. The Canberra Liberals support the major water security projects for the primary outcome those projects will deliver. That outcome is to provide the people of the ACT with more certainty as to their future water supply.
This, of course, must be kept in balance with a net economic benefit analysis and, as I said earlier, for this project there seems to be no doubt, but overall there is some doubt in my mind and in the minds of many in the community, as to whether some of the projects should have gone ahead. It also must keep in balance the amount of water to which the ACT will have access as a result of sustainable diversion limits proposed by the Murray-Darling Basin plan.
The second comment is that this motion is not about Actew Corporation; it is about keeping the government accountable to the people of the ACT—the people who are paying for these projects.
I have been very critical of Actew Corporation for their management of the project through its development phase; I emphasise “development phase”. There was a lack of transparency and accountability through that process. There was an unwillingness to provide complete and accurate information through the development phase. Added to that was the level of inconsistency in information.
Let me reflect on the nuts and bolts of that inconsistency and lack of transparency and accountability. In April 2005 Actew Corporation’s future water options report estimated that the cost to enlarge the Cotter Dam to 78 gigalitres would be $120 million. A year and a half later, in October 2007, the former Chief Minister, Jon Stanhope, announced that the Cotter reservoir would be enlarged at a cost of $145 million. So in 2½ years the cost had escalated by almost 21 per cent. Another six months later, in April 2008, a report of Halcrow Pacific, commissioned by the ICRC, notes that Actew believes “the final target outturn cost may be up to 30 per cent higher”, so that would make the cost $188½ million. This was confirmed on 18 May 2009, when Actew’s managing director told the estimates committee:
In early 2008 the ICRC accepted an estimated cost of $145 million. We are working on an estimate of costs that we warned in the report would be 30 per cent higher than that again.
So in May 2008 Actew confirmed to the estimates committee a cost of about $188½ million.
Less than two weeks later, on 30 May, the Canberra Times reported Actew’s managing director as suggesting that the cost would be up to $246 million. So in a period of two weeks the latest cost had escalated by a further 30 per cent. Just over three months later, on that famous date, 3 September 2009, Actew announced that the total outturn cost would be $363 million—yet another increase, this time by more than 47 per cent. So in the space of 4½ years the cost of the enlarged Cotter Dam had risen from $120 million to $363 million, an increase of more than 200 per cent in 4½ years.
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