David Swan Mike Brearley

Safe and Secure, Safe and Secure,…..

We can’t do nothing.

Even with water, remote communities struggle. With no water, they fail.

It’s not raining today and it’s been dry for a while now. Could this be the start of the Drought of Record?

Except for very small communities (<50 people), trucking water by any transport mode is not feasible.

Acknowledgments

It’s not my Problem isn’t a response

Nearly 100 Reports across 12 Councils had been written and simply needed to compiled into a strategy Report. The hard work had been done.

The main researcher and writer of the Report was Owen Johns of Owen Johns and Associates.

The drive for this project came from DPI’s Mat Parmeter. His office is full of Council commissioned reports that have gone no where.

The Report came in 2 parts; a detailed strategy addressing the needs of each individual Alliance Council, and an 8 page summary document to hand out to anyone interested.

Now we know where to put our effort

The Report made specific recommendations for each Council. And from these, common projects across the Alliance were also highlighted.

Specific outcomes include:

look for new bore sites and connect these with pipelines.

For Coonabarabran, raising the storage level of Timor Dam

strengthen weirs and develop operating protocols.

For Dubbo, a pipeline from Burrendong Dam to Dubbo via Wellington.

Undertake a water loss investigation and rectification across the Alliance Councils to reduce water loss. Based on Alliance performance data, daily water loss is over 6mil litres which is valued $4mil/year.

Demand management issues including potable and non-potable reuse.

Investigate the sustainability of the existing bore supplies; to cover water security and MHB targets

others

Water licencing purchases.

These projects have become the Alliance focus for undertaking specific projects and/or for seeking funding.

One significant project highlighted was the Nyngan-Cobar water supply.

In 2007, Lake Burrendong dropped to 2%, with reduced water allocation to towns.

If it did not rain…….

Is it possible that the Macquarie River could run dry and no water is available for purchase? (Worst Case).

Water utilities must plan for more severe events, more often. Drought will return.

It takes a number of years to plan and construct water security infrastructure – PLAN NOW!

The funding partners require a business case

Cobar settled 1870’s for mining. Limited surface water. Mining almost abandoned during drought

Nyngan settled 1840’s with natural weir pools for water supply. Unreliable in drought

Weirs built across pools, APC constructed 1942

Burrendong Dam 1965

Cobar pipes in 1964 & 1983. Now 1000Ml of storage

Water supply crisis in 1980-81, 2003, 2004, 2006-7

Numerous Reports from 2003

Business Case 2016

Project Plan 2017

8900 Ml allocation

at Warren

Cobar - 6000 Ml

allocation

1850 Ml Town

4150 Ml Mines

Nyngan – 2750 Ml

allocation

Stock & Domestic

– 240 Ml

allocation

Approximately 25% of this is lost in the channel

Approximately 25% of this is lost in the weir pools on the Bogan River

Allocations are reduced in drought years

Worst case – Mining mothballed and populations forced to relocate

More storage ◦ 1 x 700 ML storage – $10M Funded YES ◦ Second 700 Ml storage - YES ◦ Larger off line storage – INVESTIGATE

Improve water transport system ◦ Pipeline – INVESTIGATE ◦ Channel lining – NO

Additional water sources ◦ Borefield – INVESTIGATE

Procurement of additional water ◦ Purchase larger water allocation - NO

Stage 1 - 1,400 ML Storage at Nyngan (700 ML under construction)

Stage 2 – Albert Priest Pipeline (to replace the Albert Priest Channel)

Stage 3 – An additional Storage (up to 3,000 ML) or a Borefield at Warren

Council has resolved to investigate Stages 2 and 3 concurrently.

67 km piping of the Albert Priest Channel

9 options tested by Public Works

Pipeline option 2 selected following analysis of long run costs

1000 mm diameter pipeline capable of delivering 33 ML/day under gravity and 55 ML/day with pumping

Long lead time for preconstruction activities

Capital cost $75M

A reluctance from stakeholders due to ongoing operation and maintenance costs, and costs of depreciation

Stakeholder engagement will take place

Further feasibility analysis will now be undertaken

Determine long run costs of water to inform stakeholders

Costs are for 1000 mm diameter pipeline with pumping, and 1470ML of storage

Costs include renewals, maintenance, operations

125 year spreadsheet model developed, based on DPI Water FINMOD model

Assumes that capital expenditure is fully funded by grants, with customers responsible for operations, maintenance and renewals

MODELLING ASSUMPTIONS CAN GREATLY INFLUENCE THE WATER PRICE

What will the average interest rate be on your investments over the next 100 years? DPI Water recommends 5.5% be used

What will the average interest rate on borrowings be over the next 100 years? DPI Water recommends 6.5% be used

What will the average inflation rate be over the next 100 years? DPI Water recommend 2.5% be used

What will the water demand be over the next 100 years?

What if less than 100% grant funding is offered?

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Renew valves at 30 years

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Customer Demand

Water unit costs by pipe usage - Option 2 with 1470ML storage- Sensitivity

NSWPW current demand NSWPW future demand Base: B) Gravity+ 10% scour Historic long run inflation

Interest -1%pa Interest -2%pa Absolute minimum cash Pipeline life 200 years

Decrease in interest earnings means greater cost to accumulate funding for renewals – increase unit cost of water

Greater water usage decreases unit cost of water

Increasing life of assets reduces unit cost of water

The financial modelling for the business case assesses a long run price for supply of bulk water over a 125 year period.

◦ includes the funding of renewals

◦ Includes impacts of interest and inflation

◦ Varies according to water demand

◦ Water user agreements will be important

Bogan Shire Council has been financially responsible, and has significantly increased its water rates to renew critical infrastructure

Bogan Shire Council is concerned about the impact of additional operation, maintenance and depreciation costs, which are 32% attributable to Bogan Shire Council.

A new Water Fund Financial Plan was prepared to asses the impacts on Bogan Shire Council.

◦ Assesses the renewal needs of all the Shire’s water supply assets

◦ Determines the impact of the ongoing costs associated with the water security projects for each stage.

Impact on Cobar Shire Residents not yet assessed

The projects are designed to provide for critical human needs during a severe drought

Increased water security ◦ Reduction in lost productivity ◦ Reduced risk to business ◦ Reduced social impacts

Avoided maintenance on the channel More water during non-drought

periods ◦ Opportunity for additional investment

in the Shire ◦ Mining opportunities ◦ Agricultural opportunities ◦ Environmental flows

Assumed that additional water will be available in 93% of the years

◦ Gross value added per unit of water consumed (GVA/ML) derived from ABS data

◦ 10% of the demand increase may be used by the mining industry, with a GVA/ML of $75,000

◦ 90% of the demand increase may be used by agriculture, with a GVA/ML of $2,000

◦ Any water that is available above future demand estimates will be assumed to be recreational or environmental benefits and will be assessed at $200/ML (same as a temporary water licence)

Benefit Cost Ratio average 1.52

The BCR will increase if we quantify the benefit associated with avoiding a worst case scenario

Procurement underway. Managed by Public Works

Confirm Water Security Needs

Confirm Costs and Benefits for each user group

Optimise pipeline design

Locate suitable sites for 3000 ML storage

Identify environmental & cultural heritage issues

Draft Business Case Stakeholder

Engagement Feasibility Report

Refine Financial

Modelling

Refine Business Case

Council Decision Detail design and

documentation Tender Phase Construction Phase