Row erupts over payments to Sydney desal plant

A row has erupted over payments to Sydney Desalination Plant after it emerged that the facility remains out of action following storm damage in December 2015.

Price to rate payers of Sydney Desalination Plant was set in 2012

Price to rate payers of Sydney Desalination Plant was set in 2012

A paper published by New South Wales energy, transport and water services regulator IPART confirmed that repairs to the plant whose roof was ripped off have not yet begun; they will start in October and continue for a year to October 2017.

Meanwhile the annual cost to rate payers of the plant is set at $194 million.

Sydney Desalination Plant is operated by Veolia Water Australia under a 20-year operating and maintenance contract. Payments made under the contract cover the majority of the plant's direct costs, excluding energy supply costs.

The paper from IPART contains preliminary views on the price determination that it will make next June for water services beginning July 1, 2017. The previous determination, which was made in 2012, covers the period from July 1, 2012 to June 30, 2017.

The plant was procured in 2007 by a Labor government and completed in 2010, producing water until 2012 when it went into standby mode. It was originally funded by New South Wales government and owned by Sydney Water Corporation, but was sold in 2012 to investors Hastings Funds Management and Ontario Teachers' Pension Plan, on a 50-year lease. 


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