The Australian Water Industry - A summary

Australia has a federal government, but the State and Territory governments still have most of the responsibility for the management of water resources and the delivery of essential services. The State governments fulfill those responsibilities via public utilities with monopolies and statutory obligations, or by passing on responsibility to local governments. There is a lot of variation from state to state and within states, making the sector very complicated. There is a small private sector presence in the provision of services, with some utilities outsourcing the operation and maintenance of assets, or using BOOT style contracts to finance the construction of new infrastructure.

Drought and Climate Change

Australia's water industry is going through a stage of unparalleled change and expansion. Many areas of Australia have experienced a dramatic period of drought, with the major cities of Perth and Brisbane both coming very close to running out of water. The drought, combined with low levels of infrastructure investment over the last 50 years, has resulted in the current infrastructure boom. The Water Services Association of Australia estimates that 30 billion dollars will be spent on water infrastructure over the next ten years, straining the resources of design consultants and contractors.

Desalination and Infrastructure

To maintain urban water supply, almost every major city has turned to large scale desalination, with Perth's first desal plant already completed and many other projects in various stages of conception, tender or construction. Also, reuse projects, dam raising and construction and long distance pipelines are being used to guarantee water supply to major cities. Waste water is also an area of major investment, with many treatment plants being upgraded with advanced treatment systems, or unsewered towns getting plants for the first time. 

Irrigation

Water supply to the farming sector is also a contentious issue, with an unsustainable amount of water being removed from SE Australias major river system, the Murray-Darling. Governments are attempting to buy back irrigation allocations and looking at investing in more efficient irrigation infrastructure.

Governance

On top of this, there is significant institutional change in process. The Queensland State government has taken control of the water assets previously held by local councils in the populous South East corner, claiming that it can be run more efficiently when divided along functional lines rather than regional. Meanwhile, the NSW State government is also reviewing how regional water and waste water services are delivered. The NSW legislature recently passed legislation (Water Industry Competition Act) allowing competition in the water sector, intending that private sector operators will commence sewer mining, or deliver reticulation and retail services to new developments.

Change means opportunity, and there has never been a more exciting time to be involved in the water sector.

by Andrew Kable, Director, H2O Talent