Sydney's water crisis and the privatisation push
Bob Briton In the southern half of Australia the consequences of climate change, mismanagement and population pressures are combining to produce an alarming shortage of drinking water. Centres once used to plentiful supplies of town water with occasional mild restrictions on households are now adjusting to tough water conserving regimes. Back-to-back drought years have exacerbated the worrying situation in some areas. In Goulburn NSW, residents are suffering under level five restrictions involving a limit of 150 litres per person per day. A five-minute shower can use half that. Level four restrictions apply in Bendigo in Victoria and even the streets of the once green national capital look brown and parched. Perth's dam levels are down to 32 per cent of maximum capacity and even underground sources are running low. Sydney's main Warragamba Dam is at a record low of just over 40 per cent. Unless the catchment area gets good soaking rains it only has about two and a half years' supply left. Earlier this year state and federal leaders met in the Council of Australian Governments. They announced that households (who use nine percent of the nation's water) will have to live with virtually permanent restrictions while producers of crops like cotton and rice (who consume 11.7 per cent and 7.8 per cent of Australia's supplies respectively) will be able to carry on essentially as they always have. Electricity, gas, mining and manufacturing (which use 13 per cent of our water) will also be left largely to their own devices. Households are being softened up to pay significantly more for their water. Melbourne now has a two tier charging system -- 70c per 1000 litres for light use and $1.30 per 1000 litres for heavier use. Attention is being drawn to water-rich Sweden where consumers pay $5 for 1000 litres. And whenever governments talk about solutions to the water crisis, private investment is promoted. Furthermore, governments are under pressure to hurry along their plans for privatised water. Attacked from all sides Last week the Carr Government announced its scheme to tackle Sydney's pressing water problems. Over the next 10 years, it will spend $780 million on major infrastructure projects. There will be no new dams but $106 million will be spent on new pumps to access water lower down in the Warragamba and Avon dams and $680 million is to be spent on pipes and pumps to bring water from the faraway Shoalhaven River to Warragamba Dam. A trial costing $4 million will determine if bore water could be used to top up reservoirs. Another $4 million will be put towards the planning and design work for a desalination plant. The State Government is "pretty confident" that the private sector will undertake a $560 million project to recycle "grey water" back into the toilets and onto the gardens of new suburbs. A similar scheme already exists in Rouse Hill in Sydney's western suburbs. Reaction to the government's plan in the mass media has been lukewarm. There is relief that earlier leaked ideas for a huge offshore desalination plant or the shipping of water from Tasmania should not be necessary. While there has been some concern reported about reducing flows down the Shoalhaven River, the necessity of using the water is generally accepted. There is approval for the decision not to build any new dams because of their environmental impact. Where the government has drawn heavy criticism is its failure to invest in the recycling of the city's own storm water and sewerage. The ball was set rolling by Ticky Fullerton's City Limits report on the ABC's Four Corners program on October 18. The piece made the valid observation that Sydney is lagging behind other state capitals in recycling these sources. Adelaide, it was pointed out, recycles 20 per cent of its waste water while Melbourne reuses 15 per cent. Sydney recycles three per cent. Previous undertakings -- made seven years ago in WaterPlan 21 -- to build "water factories" have not been fulfilled and not enough has been done to promote the use of rainwater tanks. The reason given by Four Corners for this policy defect is that Sydney Water (the public water utility) has an interest in selling lots of cheap water that conflicts with the public interest for guaranteed longer-term supplies and a better environment. The program fails to note that this conflict arises because Sydney Water has been corporatised -- a first step towards privatisation. As a corporation its prime aim is to make profits which creates an incentive for selling more, not less water. Milch cows and "bottled electricity" Last Wednesday's Australian ran with the headline: "State monopoly a 'barrier to water solution'". A quote from Jeff Angel of the Total Environment Centre sat in the middle of a critical article in The Sydney Morning Herald of October 19. "It's the same old Sydney Water propaganda, intended to preserve their monopoly position", yelled the bold print. The point was made that not all the income from supplying water is reinvested in the utility. In fact last year Sydney Water contributed $100 million of its operating surplus to NSW Treasury. The situation in other states is similar. As Ticky Fullerton pointed out on the ABC, dividends to state governments in WA, SA, Victoria and NSW add up to around $600 million a year. The argument is that with these sorts of "profits", a corporate mentality creeps into the planning of the water utilities, a mindset that is made worse by their monopoly status. In reality, it was the corporatisation that introduced the corporate mentality. Pro-business representatives were appointed to the utility's board and the drive for profits unleashed. In the past, before the rash of privatisations, profits from public enterprises were an important source of government revenue that could be poured back into the community. Surely this was a far superior situation to what is being advocated now, where most of the profits are to be pocketed by a small number of the people through private ownership. Given the present corporatised arrangements, why would profit- driven Sydney Water be concerned with recycling -- unless it provided a new source of profit and did not eat into existing profit generation? It is doing very nicely out of piping the current, diminishing sources of drinking water. Critics of the government have even been encouraging the authorities to recycle sewerage water for drinking water. Opposition utilities spokesman Brad Hazzard has been seen drinking from a bottle of NEWater, a product from Singapore made from recycled sewerage. He dismisses the Premier's suggestion that there would be too much resistance in the community to the idea and continues to blame Sydney Water's defence of its monopoly for the lack of nerve. Another reason given for Sydney's poor record for recycling water is that any possible solutions to deal with stormwater would become mired in bureaucracy. No single authority deals with it. Sydney Water does business with the various councils and the Waterways Authority. Until recently, Premier Carr has been dismissive of ideas to top up Sydney's supplies with desalinated water. He called it "bottled electricity", referring to the large amounts of energy required to separate drinkable water from the briny residue. But now he is singing a different tune and spending money to come up with a new, less energy-hungry design. This is since Perth's decision to build a plant. Four Corners suggests that somebody must have reminded Bob Carr that the state also has a monopoly on the sale of electricity. Indeed, the Minister responsible for the water utility and electricity production are the same person -- Frank Sartor. This, it is claimed, is a clear "conflict of interest" and the real reason why desalination is getting the nod. The real agenda So what did Ticky Fullerton and the newspaper columnists suggest should be done about these problems besetting water management in Sydney? Private enterprise is their answer. Let the private corporations themselves move in and run the show. As for Four Corners, its piece appeared at times to be an infomercial for one of the companies seeking approval for a "water factory" to recycle the partially treated sewerage now being piped into the waters off Manly Beach. Company director John Van der Merwe was a David taking on the State Goliath with only the approval of the pro-privatisation National Competition Council to comfort him. Concerns about a corporate mindset at Mr Van der Merwe's company were glossed over in the presentation. The secrecy and environmental consequences of profit-driven utilities were similarly ignored. The disunity shown as being a problem in the present setup would, apparently, cease to be a problem if all the components were private enterprises producing the maximum possible private profits. The article in The Australian attacking Sydney Water's monopoly agreed that its function should be chopped up and privatised. It quoted Dr Coombes of Newcastle University: "We have to let the private industry in. We might have to highly regulate them, but we have to have incentive for innovation." It is not hard to imagine a quotation from an academic at some future time arguing that regulation of private water services has to be abandoned or eased so that the market can work its magic. Clearly a push is on to break up Sydney Water and open up the area to competition. As the big transnationals move in and take over the bits and pieces, accountability and quality will be jettisoned. Over time, competition will lead to collapses, takeovers and mergers. The public monopoly will become a foreign owned private monopoly for whom the provision of water is only a vehicle for profit generation. The arguments suggesting more public control and better services through the selling off of public assets must be exposed. The water crisis demands more planning and the exclusion of the private profit motive.