Almost all Australian cities and towns need to augment their water supply and in many places substantial investment is already taking place. This need to augment water supplies has come about, as noted above, from a combination of increased demand and diminishing supply from existing (mostly surface water) sources.
Australian cities have traditionally sourced their water from surface water, in most cases stored in large reservoirs. These have delivered a reliable and low cost source of water. New sources are often expensive, often involving transporting water long distances or processes such as recycling or desalination. All require substantial investment. For example, the Independent Pricing and Regulatory Authority (IPART) estimated that the marginal cost of additional water supplies in Sydney will be in the range of $1.20 to $1.50 per Kilolitre (IPART June 2005 p.105).
Additional investment is not simply required to augment water supplies but also to ensure that our existing water resources are used more efficiently. In some areas the need for infrastructure maintenance and renewal to reduce leakage and wastage is acute. In the urban sector figures for leakage rates vary. In Sydney for example, leakage rates are reported at 10.7 per cent of demand with the average leakage rate for urban Australia estimated at 18 per cent (Smith 2004 p.10).
The 2003-04 the Irrigation Benchmarking Report quotes the average proportion of water lost in 28 irrigation districts, after being diverted from headwaters to consumers, is 24 per cent. Of this the largest amount lost is 40 per cent in open channels (Table 25 p. 42). Overall, in Australia there are more than 70,000km of open water conduits including 12,000km of stock and domestic supply systems (Talking Water 2004 p.12).
In 2006 the BCA reported the need to invest in infrastructure to minimise water sector leakage, irrigation system reliability and other areas of wastage. The BCA identifies that in urban areas: there is a lack of forward planning to address supply and demand issues; water is priced as if it was plentiful and does not reflect the next likely supply source; there is limited rural/urban trading; and little focus on rules for access to water infrastructure to allow a larger private sector role. In the rural sector the BCA highlights: the poor reliability of many irrigation systems; insufficient water for high-value uses; poor water quality; and unhealthy rivers. The BCA expects that improvements in urban water planning, including price reform, will encourage greater investment in infrastructure and boost Australia's GDP by 0.35 per cent. In the rural sector the BCA expects that expansion in water trading could encourage investment in rural water infrastructure and boost GDP by 0.5 per cent.
The Institute of Engineers 2005 Infrastructure Report Card notes that spending on renewals for water infrastructure that provides potable water is not keeping up with asset deterioration and that major capital expenditure will be necessary for many years to come (2005 p.4). Econtech which was commissioned to research infrastructure issues for the Centre for Economic Development of Australia (CEDA) estimated that significant infrastructure backlogs have developed in Australia and quotes a potential under investment of $3 billion in the water sector (Econtech April 2005).
Many rural-based irrigation water suppliers and water utilities appear to have limited access to funds and expertise to upgrade water supply systems. For example, in the Murrumbidgee region, the Pratt Water Project noted that irrigation corporations do not have sustainable capital structures in place to maintain long-term infrastructure support (2004 p. 21). In other regions, such as western New South Wales and central and southern Queensland and rural towns, such as Goulburn, water supplies are already severely limited. It is not at all certain if irrigation and local government water suppliers in many of these regions will have the financial capacity or expertise to meet the future challenges of providing water services.
Q1: | What are likely to be the most important issues that urban water utilities will need to address to meet future demands? |
Q2: | What are likely to be the most important issues that rural water utilities will need to address to meet future demands? |