SEQ recycled water - Water backflip to hurt French firm ...

Excerpt from the Australian:

Water backflip to hurt French firm

29 November 2008

Payments of hundreds of millions of dollars to French infrastructure giant Veolia are set to be slashed following the Bligh Government's backdown on recycled water.

The revelation came as the Queensland Water Commission refused to give a commitment yesterday to make permanent this week's decision to withhold recycled sewage and industrial effluent from southeast Queensland dams unless their average level fell below 40 per cent.

The commission would say only that it would decide "at a later stage" the circumstances in which recycled water would be turned off if dam levels rose above 40per cent after falling below that level.

Following a series of reports in The Australian, the Government this week backed down from plans to begin pumping 60 megalitres a day of recycled waste water to Brisbane's Wivenhoe Dam from next February or March, rising to 230ML later in the year.

The average dam level yesterday was 46per cent and was expected to rise further over the summer. Under the new policy, recycled water would not be added to supplies unless they fell below 40per cent.

Veolia Water has been advising the Queensland Government on the $2.5billion recycled water scheme's installations and infrastructure. The French company will be operating its three treatment plants. The company, which has an annual turnover of $70billion, will also manage a $1.2billion desalination plant being built on the Gold Coast.

The Australian reported this week that Veolia and the Queensland government-owned Western Corridor Recycled Water company were funding the $2.5million Chair of Water Recycling at the University of Queensland, which has been involved in the Government's campaign to defend the safety of recycled water.

Although recycled water will not now be added to the reservoirs, between 40ML and 80ML of recycled water a day will be used to operate the Tarong and Swanbank power stations, and 10ML a day will be available for other industrial use.

Deputy Premier Paul Lucas refused to reveal how much Veolia was being paid for its management role.

However, he said up to $1.2billion would be spent over the next decade to operate the recycled and desalinated water schemes.

Industry sources said Veolia would receive about half the operating expenses.

Keith Davies, chief executive of WaterSecure, the new government body that will manage the scheme, made it clear the operator faced a pay cut.

"Veolia water will be paid less if less water is produced," Mr Davies said.

Mr Lucas said no compensation was payable to Veolia under its contract if the production of recycled water fell below the level that was planned.

"The contract makes provisions for a wide variety of operating conditions," Mr Lucas said.

The water commission was unable to say if any of the three plants in the western corridor would be shut down as a result of this week's decision, or how much production would fall.

See - Water backflip to hurt French firm.