Sydney desalination privatization ‘could force inquiry’

With sale of the Sydney desalination plant on the agenda of the newly elected New South Wales (NSW) government in Australia, the state’s pricing regulator is quoted as saying that an inquiry would have to be held before any sale took place.

Jim Cox, chief executive of the NSW Independent Pricing & Regulatory Tribunal told the Australian Financial Review on 31 March 2011 that he would have to hold an inquiry, probably involving community consultation, before any such sale could take place.

The Treasury spokesman for the new NSW ruling coalition, Mike Baird, told the newspaper before the election that the sale would be used to retire debt to allow more borrowing for infrastructure. However, a credit analyst for ratings company Standard & Poor’s cast doubt on whether this would count against a debt rating if the plant was being leased back.

The plant at Kurnell was officially opened in February 2010, producing 55,000 m³/d, which is supposed to build to a 250,000 m³/d capacity. In December 2010, it produced 5,875 ML (190,000 m³/d).

The plant is turned on when Sydney’s water-supply dam levels fall below 70% capacity and off when they reach 80%. Current available storage is just under 75%, according to the Sydney Catchment Authority.

Blue Water, a joint venture between Veolia and John Holland, built the desalination plant, and Veolia Water operates and maintains the plant, which is owned by Sydney Water.