Melbourne desalination problems cost Suez € 237 million

Cyclones and labour problems in 2011 at the Melbourne desalination plant in Victoria, Australia, cost the Suez Environnement group a total of € 237 million, group CEO Jean-Louis Chaussade said when the group's figures for the year were announced on 8 February 2012.

Chaussade also announced that, at the end of January 2012, the project was 89% complete with first water expected in mid-2012 and finalization by the year end.

The Melbourne contract was signed in 2009 by Suez subsidiary Degrémont in partnership with Thiess. It is a 30-year construction and operation contract for a seawater desalination plant producing 450,000 m³/d with a total revenue of € 1.6 billion.

"In 2011, the state of Victoria was badly hit by cyclone episodes that generated abnormal weather conditions and a tense labour situation in our project," said Chaussade, "resulting in a low level of workforce productivity and in complementary costs."

The project had a negative impact on the group net result in the first half of the year of € 52 million and in the second half of € 185 million.

On the current site situation, Chaussade said there were no technical issues. On the labour situation, he said, "Since October the productivity improved thanks to reinforced supervision, increased shifts, new electrical managers and improved working schedule with a better climate with the unions after reaching an agreement on extra hours."

"This plant will be a worldwide reference in reverse osmosis, a technique in which Degrémont is a leader," said Chaussade.

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