Pipe contract locks us into ‘desal price rises’

KIM WATERS
An unbreakable contract for a pipeline from Melbourne has locked the Geelong region into paying desalinated water prices, according to State Government.
Water Minister Peter Walsh said the $137.9 million pipeline was a “legacy” of the previous Labor government.
The pipeline means Geelong consumers will help Melbourne bear the costs of its desalination plant, which the Government this week revealed would double water bills.
Mr Walsh said Geelong had no way out of the pipeline even though it was still under construction.
“We consulted the department about the status of the project shortly after coming into government. However, the contract for the project had already been awarded under the Brumby Government and construction has commenced,” Mr Walsh said.
“We are unable to break the contracts signed by the previous government.”
Mr Walsh said the final price for Geelong consumers under the desalination project was yet to be set.
“The price that Geelong will pay for water from Melbourne will be decided through an open process with the Essential Services Commission.”
Mr Walsh warned the Independent while still in opposition the desalination plant would leave Geelong consumers paying for “the most expensive water” when cheaper alternatives were still available in the region.
“This will have to be paid by Barwon Water customers whether the region uses the water or not,” he said in 2008.
Premier Ted Baillieu announced this week that the desalination plant could cost the state more than $23 billion over the next 30 years.
“To run the plant at full capacity in 2012/2013 would cost Victorians around $763 million,” he said.
“It is clear that the Brumby Labor Government’s desalination plant will cause increases in Victorian water bills, leaving Victorian families struggling from the legacy of Labor incompetence and mismanagement.”