The Victorian Desalination Project

History

Project Overview

On 19 June 2007 the Victorian Government announced plans to construct a desalination plant as part of the next stage of its Water Plan.   This announcement followed the completion of a seawater desalination feasibility study conducted by Melbourne Water.

The Government committed to a single Public Private Partnership (PPP) package for the whole project and a comprehensive tender process commenced when expressions of interest were called in June 2008.

On 30 July 2009 the Victorian Government awarded the Victorian Desalination Project contract to AquaSure to finance, build, maintain and operate the project for 30 years. AquaSure's fixed price for construction of the whole project is $3.5 billion.

Construction of the desalination plant and water transfer pipeline commenced on 30 September 2009 and was completed in December 2012.

One of the largest PPP projects undertaken worldwide in recent years the Project was a significant milestone for PPPs given the difficult economic conditions at the time of its conception (at the height of the GFC) and the scale and complexity of the project.

The syndication requirement was completed in less than three months and was more than 50 per cent oversubscribed reflecting the strong interest in the project. The total maximum net present cost of financing, building and operating the plant over 30 years is $5.7 billion (assuming water orders of 150 billion litres per year).

Construction

Completing one of the largest and most complex infrastructure projects undertaken in Australia under adverse weather conditions and a changed industrial relations climate in just over 36 months was no mean feat.  Given the scale and complexity of the project and the extreme conditions, this was a good outcome.

The project was a well executed exercise in logistical management including:

  • Working closely with the wide range of stakeholders, including three Councils, road, rail and environmental authorities, utility providers, 125 directly affected and 400 indirectly affected landholders and the local Wonthaggi community, to minimise impacts and inconvenience during construction
  • Co-ordination of multiple crews working in various locations on the pipeline easement between Wonthaggi and Berwick
  • Transportation and storage of the vast quantities of large and small scale material required for construction including 72 pressurized filters, 51 reverse osmosis racks, 15,000 valves, 500 pumps, 200,000 tonnes of concrete and 750 km of electrical cable.

During construction:

  • More than 18 million man-hours were clocked up, with no serious injury, testament to the project’s safety standards
  • Overall more than 10,500 people were employed as part of the direct construction workforce, and many more thousands through the direct and indirect supply chain
  • The project contributed significantly to Victoria’s economy, generating around $1.3 billion of supply contracts with three quarters to Australian companies and two-thirds of these to Victorian companies.
  • 100% of the civil component on the plant site was procured from Victorian or Australian companies and 50% of both the mechanical and electrical components were procured from Victorian or Australian companies
  • On the pipeline more than 90% of the civil, mechanical and electrical components were procured from Australian or Victorian companies
  • The local economy enjoyed a significant boost through flow-on demand from a new workforce for housing, products from local suppliers and additional business for retailers and service providers.  Local people were employed wherever possible.
  • More than $500,000 was invested by AquaSure and TDJV in local community support programs during the construction phase.

The flow on effect was not restricted to the local area - many new jobs were created within Victorian businesses contracted to provide goods and services to the project.

Other positive initiatives during construction included:

  •  State government’s $12 million upgrade of key roads and intersections in Wonthaggi including on the access roads to the site and the connection to the highway.
  • Securing local water supply through the construction of a $5 million pipeline connecting Wonthaggi, Inverloch and Cape Patterson to the desalination plant. The 11 kilometre pipe travels from the plant site and connects to the existing South Gippsland Water supply network north of Wonthaggi.  It has the capacity to carry up to 10 million litres of water a day.
  • Contributing to the upgrade of facilities at the Lang Lang Showgrounds and Recreation Reserves at Koo Wee Rup, Glen Forbes and Grantville

Community Information Centre

During the construction phase a dedicated Community Information centre was operated by AquaSure to provide local community members and visitors to Wonthaggi access to up-to-date information on the project as it progressed.

A mobile community information facility also took to the road to provide updates on the desalination plant at major events and festivals in the region.