Pipeline company ‘shamed’

By Greg Stolz

February 02, 2007

A GIANT French company involved in two of southeast Queensland’s biggest water projects has a history of corruption, environmental degradation and price-gouging.

Paris-based Veolia Water has been awarded lucrative Queensland Government contracts to build and operate the Gold Coast desalination plant and western corridor recycled water pipeline.

But it can be revealed the company has been named on a “shame file” by Washington-based consumer watchdog Public Citizen, founded by activist and former American presidential candidate Ralph Nader.

Veolia has been embroiled in controversy since entering Australia in 1994.

Questions were raised in Federal Parliament about how it was awarded a $1.5 billion contract to manage Adelaide’s water supply, which has since been hit with problems including a major sewage stench problem and a giardia outbreak.

Two years ago, the NSW Government ordered an audit investigation into Veolia’s background after it bid for a contentious desalination plant earmarked for Sydney. The probe cleared Veolia to proceed with its bid.

Veolia has come under scrutiny in Queensland since The Courier-Mail revealed this week that the company stood to make hundreds of millions of dollars from its involvement in the desalination plant and recycled water pipeline.

A Brisbane ALP branch this week voted to ask Deputy Premier and Infrastructure Minister Anna Bligh for a “please explain” over the Veolia decision.

But Ms Bligh said independent assessments were undertaken before Veolia was awarded the contracts.

“It won those because of its international and Australian expertise and reputation,” Ms Bligh said.

Repeated calls to Veolia Water Australia executive director Rod Naylor were not returned. The company’s chief executive, Peter McVean, was overseas and unavailable, a spokeswoman said.

Building cost projections ‘flawed’, says auditor-general


Patrick Lion
July 01, 2009

ANNA Bligh’s building program has been slammed again with another report finding poor planning was risking cost blowouts and short-changing taxpayers.

In his third critical report in as many weeks, Auditor-General Glenn Poole yesterday identified a severe communication breakdown between departments that left them applying different methodologies to several similar policy areas.

The report found agencies were risking inaccurate cost projections and blowouts by using different methods to calculate the true cost of projects several years away from completion.

Mr Poole also found the same inconsistency was causing large project land resumptions to be leased back to landholders below market rates and for as little as $1000 a year.

The whole-of-government report comes after damning individual audits of Queensland Health and Transport and Main Roads departments and casts doubt on the billions being spent on water, road and hospital projects.

The report has also foreshadowed a future focus on the Rudd Government’s stimulus package after departments were asked to spend money in short time frames.

It also found a risk to the security of personal information with IT systems protecting sensitive data only comparable to those of a medium-sized business and not that required by a government agency.

Ms Bligh yesterday said it was the role of the auditor-general to find problems and recommend improvements. “I understand this report does that and we’ll certainly be looking at it very closely,” she said.

The report found Education Queensland’s OneSchool initiative, which profiles every state school student on an intranet, had no clear directions to deliver it on-time, within scope or on-budget. It was estimated to cost $45 million but had a current price tag of $97 million.

Opposition Leader John-Paul Langbroek said the report highlighted the appalling mismanagement of the Premier and her ministers.

“The Bligh Labor Government can’t manage their way out of a paper bag,” he said.

Residents say buildings cracking near Gold Coast desal plant

Greg Stolz and Patrick Lion

July 03, 2009

HOMES and a leagues club near the Gold Coast desalination plant are cracking and sagging in another debacle surrounding the so-called showpiece of the $9 billion southeast Queensland water grid, residents say.

The complaints came as the Bligh Government admitted that taxpayers might receive a final plant with defects, despite repeated claims the project would not be accepted from contractors until all problems were fixed.

The Courier-Mail revealed yesterday that the $1.2 billion Tugun plant was plagued with problems including corroding pipework, cracking concrete, faulty valves and leaching of contaminants from a rubbish dump.

Other faults detected in the review include corroding pipes, sub-standard valves, excessive vibration, inefficient motors and faulty concrete intake and outake shafts which are taking in groundwater, and possibly contaminants, from a rubbish dump on which the desalination plant was built.

The problems prompted the State Government to order an independent inquiry. It is refusing to accept handover of the plant, which is still only operating at one-third capacity seven months after it opened, until contractors fix the faults. Locals say the plant has been a disaster for the area, causing damage to homes including cracked walls and ceilings, sagging windows and doors and lifting and shifting driveways and patios.

The Tugun Leagues Club has suffered some of the worst damage, with major cracks and other structural problems and sinking grounds.

Club officials say construction and vibrations from the neighbouring plant have left the club “looking like a warzone”.

“It’s dangerous for the players, supporters and members,” life member and former president Mark Goodwin said.

“The conditions are Third World.”

The club’s junior president, Greg Solway, said the club had been promised a new headquarters on nearby land but that was now in limbo because of future plans to expand the desalination plant.

“If they take this away from us, they may as well give a (graffiti) spray can to every kid in the area, because the footy club is such a big part of this community,” he said.

Southern Gold Coast Liberal MP Jann Stuckey said there had been many complaints.

She said a burst pipe had caused major damage to a Tugun road last year “and could have killed someone”.

“My concern is that when the desalination plant finally does run at full capacity, there will be more faults and more damage,” she said.

Ms Stuckey said 360 homes around the desalination plant and pipeline were given structural inspections before the facility was built but only 36 had been tested since it was finished.

Infrastructure Minister Stirling Hinchliffe insisted the plant, which had operated at 100 per cent capacity for “only one or two days” since January, would still work properly after the handover.

But he admitted that some sections may have lesser longevity than the promised 50 to 100 year lifespan.

A letter to co-ordinator-general Colin Jensen released yesterday reveals some defects at the plant may be unable to be fixed and may instead require a commercial settlement.

“(That may happen) where the issues are resolved to both parties’ satisfaction,” Mr Hinchliffe said.

But Opposition infrastructure spokesman David Gibson said the plant problems were symptomatic of broader poor planning from Labor.

“The problems plaguing this desalination plant show exactly what the Auditor-General was talking about - when a project isn’t planned properly, costly mistakes can and will happen,” Mr Gibson said.

Desal plant builders threatened with legal action

Tony Moore
July 2, 2009

Builders of the $1.2 billion Tugun desalination plant face a legal settlement of “tens of millions of dollars” if they cannot make repairs to 16 issues identified in a report given to the State Government this morning.

Infrastructure Minister Stirling Hinchliffe said while fixes for some problems - including replacing 45 rusting pipe couplings - were underway, other issues would require the plant to shut down for at least “two to three months”.

The Tugun Desalination plant is being built by John Holland and Veolia Water Australia and was supposed to be able to provide 125 megalitres of water to Queensland’s $9 billion Water Grid by January 2009.

The Tugun plant shut down in April after a string of complaints was revealed in January, including the corrosion in the pipe couplings and excessive vibration in parts of the desalination plant.

Mr Hinchliffe said the builders needed to continue replacing other stainless steel piping, fixing leaks into the 70-metre intake shaft and changing wrongly-installed high-pressure pumps.

“They face a significant pay day in the order of tens of millions if they don’t meet our requirements,” Mr Hinchliffe said.

He could not specify when that decision would be made, but said the desalination plant, the largest on Australia’s east coast, would be brought up to 100 per cent capacity by the end of July.

Mr Hinchliffe said the report identified a series of issues which still need to be addressed before the State Government - through the company who will manage the plant, Water Secure - take ownership of the desalination plant.

“It is like building a house, in every circumstance those people who build a house do the inspections and they raise issues with the builder to get things resolved before they make that final payment,” Mr Hinchliffe said.

He said $95 million was set aside in the Queensland Government’s 2009-10 Budget for the final payment on the plant, which has already sent 4.5 million litres of water to the grid.

The report named the following issues that still need to be repaired:

- corrosion to 26 non-return valves because of manufacturing errors.They will be delivered by September 2009;

- lower-grade steel was used in places throughout the plant. This needs to be replaced meaning “shutting down the plant for “two to three months”;

- minor cracking in the intake and outlet shaft of the plant, allowing groundwater into the shaft. There is a possibility this has allowed leachate from a nearby landfill to contaminate the groundwater, though this was this morning denied by Keith Davies, the CEO of WaterSecure.

- incorrect water pressure pumps have been used in parts of the plant, which the reports says “will result in an increase in the plant’s power consumption” and a “likely increase in the annual running costs.”

Mr Davies estimated this would add “tens of thousands of dollars” to the plant’s running costs, but did not elaborate how this would impact on the price of water from the desalination plant.

Mr Hinchliffe said it would not affect the price of water.

Dear Queensland Taxpayer,

We note that the State Government is seriously considering a report that may result in Public Sector employees not receiving promised wage adjustments in the near future and even suffering the loss of annual leave loadings and reduced superannuation contributions. This has been attributed to the current financial crisis and the stringent restrictions on government spending to be imposed by the Treasurer in the upcoming budget. The latest comments by both the Treasurer and the Premier state that the government will abolish the unique Queensland fuel rebate and will also sell government owned assets in an attempt to shore up the State’s crumbling finances and to pay the costs imposed by the recent wild weather in SEQ.

We wonder if taxpayers are aware that the Qld Government has already spent some $570,000,000 of taxpayers’ money on the proposal to build the Traveston Crossing Dam on the Mary River when the project has not even been signed off by the Co-ordinator General yet. In other words, the project has not even been approved by the Qld Government. If, or when that eventually occurs, the whole proposal has then to be submitted to the Federal Minister for the Environment (Peter Garrett) for assessment under the commonwealth Environmental Protection and Biodiversity Conservation (EPBC) Act. There is considerable doubt that commonwealth approval will be granted under the EPBC Act because of the probable severe negative effect that the dam would have on a significant number of protected, threatened and endangered species, including the iconic Qld lungfish, the Mary River Cod (endemic to the Mary River) and the Mary River turtle (found nowhere else in the world), all found in the freshwater reaches of the Mary, and, further downstream, the effects on the internationally protected RAMSAR wetlands of Hervey Bay and the Great Sandy Strait with their migratory shorebird inhabitants, and the World Heritage Area of Fraser Island. In all, there are some 18 protected, threatened or endangered species that stand to be further threatened if this dam is built. Federal Minister Garrett has already released some scientific reports concluding that the risks to the endangered species in the dam footprint area may be too great and would threaten survival in the wild should the dam be built.

In an attempt to mitigate these risks, Premier Bligh has already announced further spending of $100 – 150 million on environmental mitigation works in the dam footprint area before the dam construction could even commence which may, as a result, then be in 2 to 4 or even 5 years time. (It is unclear why this money should be spent “in the dam footprint” – the Premier’s own words – as the mitigation works would then be inundated if the dam is built) All this for a dam, costing an estimated further $2.5 billion and rising, that was originally announced to be in operation by 2011 to alleviate the effects of the drought on the SEQ water supply. And surely, by definition, if the region is in the grip of a severe drought, then a rainfall dependent dam will not fill.

In addition to the environmental consequences, it has been estimated that the economic downturn downstream of the dam would be in excess of $500 million annually including loss of agricultural production, probable collapse of both the commercial and recreational fishing industries in Hervey Bay and the Great Sandy Strait and consequent downturn in tourism . These consequences obviously mean massive job losses and social upheaval. The complete inundation of thousands of hectares of prime food production farming land by the dam is another issue with huge economic and social ramifications. Stage 1 of the dam is scheduled to take 70,000 ML of water to SEQ. The calculated evaporation figures for this large shallow (average depth at full supply level = 5 metres) dam are about 30,000 to 40,000 ML per year while the seepage rate from the dam built on an alluvial flood plain is estimated to be in excess of 12000 ML per year. Therefore, the water losses to the Mary River downstream of the dam would be in excess of 120,000 ML per year. That much water cannot be removed from a vital coastal river system every year whether in drought or not, without making a huge difference to downstream sustainability.

The extreme concern of many thousands of Queenslanders is evidenced by the fact that around 16,500 people felt sufficiently outraged by the proposal to put their signatures to submissions against the EIS during the brief public submission period.

It has been calculated that evaporation and seepage from allowing Brisbane’s water to flow down the Brisbane River from Wivenhoe Dam to the treatment plant at Mt. Crosby totals around 70,000 ML per year. Simply piping that water would save the entire output proposed for Traveston Crossing Dam at a fraction of the cost and completely obviate the need for building a dam that will devastate the entire Mary valley. Recent rain into the SEQ dams has lifted the combined storage to around 75% of capacity and around 9 years supply equivalent without another drop of rain falling in the present dam catchments, and significant runoff is still occurring.
The Qld Government’s own figures state that, even if their projected population increases actually occur (any projections of population movements 20 – 50 years ahead cannot be scientific, but more likely simple extrapolation of current trends and wishful thinking), SEQ does not need any extra water supply until at least 2028, so why the extreme haste to build this dam and spend billions of dollars which could be used to provide permanent jobs and services for Queenslanders, especially in what will be a prolonged period of financial crisis ? The government’s figures were also based on 300 litres per capita consumption per day, a plainly ridiculous amount considering present consumption is less than 150 litres per person per day.

Traveston Crossing Dam will be a large, shallow, unreliable, rainfall dependent and hugely expensive dam that cannot possibly drought proof SEQ and is not necessary to be built. And it begs the question: Why are we considering using 15th century technology to unreliably store water and then pump it out of the catchment to supply water to coastal urban communities in this, the 21st century ? It is a dinosaur solution to a modern problem.

A major independent report prepared by Prof. Stuart White of the Institute for Sustainable Futures, and Cardno Engineers Brisbane, states that, with proper demand management, more provision for domestic rainwater storages, recycling storm and waste water and other viable, less expensive alternatives, even the population increases postulated by the government will be adequately supplied with water into the future without building Traveston Crossing Dam and so damning the entire Mary River catchment and beyond. The Traveston Crossing Dam option is also by far the most expensive option to provide water, and Prof. White has calculated that methane and carbon dioxide emissions from the dam surface would increase Greenhouse Gas emissions by up to 270,000 Tonnes per year, while the total GHG emissions including those created by pumping 70 million tonnes of water a year to Brisbane would be of the order of 400,000 Tonnes, by far the greatest emissions of any of the alternatives. That quantity of additional GHG’s would obviously generate serious concerns given Australia’s commitments under the Kyoto agreement. While it is recognised that provision of any government sponsored water infrastructure will always have a negative impact on GHG emissions, the future water requirements of SEQ can be easily met by other far more sustainable alternatives which are far less expensive, far less invasive, and far less damaging to our environment.

In summary, the Queensland Government has already spent more than half a billion dollars with a further minimum of $2.5 billion to be spent if it goes ahead with Traveston Crossing Dam – a dam that is totally dependent on rainfall and will be just as unreliable as the existing SEQ dams during drought periods and a dam that will not even be required for at least another 20 years. Much of the money already spent can be recouped by simply selling back the thousands of hectares of land, already slyly purchased, to private citizens who will reuse it to produce food and fibre to benefit all Queenslanders.

We urge you, as taxpayers, to consider the present ramifications of wasting this huge amount of money during what is being termed the worst financial crisis since the Great Depression, while the government is seriously considering capping the wages and reducing the benefits of its own employees, and will scrap the fuel rebate and sell off some of Queensland’s state owned assets. In the short term future, would this money not be better utilised in maintaining and improving workers conditions and in employing more skilled workers in fields such as health (reducing elective surgery waiting lists and supplying extra hospital beds), paramedics, police, teachers (we are already at the bottom of the nation’s learning tree), road maintenance and improvements (road deaths this year have reached alarming levels), driver training, provision of flashing lights at all major rail level crossings – the list is endless. Initiatives such as these would benefit all Queenslanders now, create many jobs and allow further consideration of new technology strategies to provide extra water supply to SEQ in the future if, and when, needed.

Scrapping the $3 billion Traveston Crossing Dam would also provide the funds to continue the Queensland fuel rebate for at least another 5 years, or provide working funds to save the “fire sale” disposal of essential State assets such as the Ports Authority, Q Rail, Forestry, Water Infrastructure, etc, to private industry with their understandable profit motive, which would take the control of such assets from the people with the inevitable result of cost increases to be borne by all Queenslanders.

Surely ex Premier Beattie’s infamous statement, proudly still supported by his then Deputy, that “We will build Traveston Crossing Dam whether it is feasible or not” has now come home to roost.

Queensland simply cannot afford this profligate waste.

Should you wish to further discuss the issue or receive more factual information about the seriously flawed, totally unsustainable, unnecessary and wasteful proposal that is Traveston Crossing Dam, please contact us.

Darryl Stewart
Chairman,
Greater Mary Association