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Saturday, December 2, 2023

Why Barnaby Joyce’s ‘gift’ to farmers of a $5.4bn dam could create the ‘most expensive water’ in Australia

$5.4bn dam

the 'most expensive water' in Australia

If the $5.4 billion Hells Gates Dam project, recently announced by Deputy Prime Minister Barnaby Joyce, goes ahead in north Queensland, it could create the most expensive water in the country, according to a water engineering expert.

“If you were to follow the principles of the National Water Initiative and have some sort of cost recovery built into the price of water, to cover the cost of constructing that infrastructure, I can’t put a number on it, but it would be the most expensive water in the country,” said Professor Stuart Khan, of the University of New South Wales.

“[It would be] well out of the range of current prices that farmers pay for water either in the Murray-Darling Basin or in parts of Far North Queensland where irrigated agriculture already exists.”

Mr Joyce announced the funding for the long-talked-about project in March and it dwarfs almost any announcement made so far during the federal election campaign.

Holding 2,100 gigalitres of water, the Hells Gates Dam would be the largest in Queensland and proponents believe it could turn some of the state’s driest cattle country into a 60,000-hectare irrigated food bowl.

a man sitting at a computer.
Water expert Stuart Khan says he’s a “huge fan” of dams but doesn’t believe the Hells Gates proposal will stack up.(ABC News: Simon Amery)

Joyce abolished water advisory body

Professor Khan, from the School of Civil and Environmental Engineering at UNSW, was, until recently, a member of the federal government’s National Water Grid Advisory Body.

He said Mr Joyce abolished the body just days after announcing Hells Gates Dam had received budget funding, and revealed that the government had not sought its advice on the project.

“It was really frustrating and disappointing to see decisions being made that aren’t consistent with the principles of the National Water Initiative … and really look like they’re being made in the lead-up to a federal election, potentially as a way of winning votes,” Professor Khan said.

An black and white photograph of an elderly couple taken in 1932.
As well as coming up with the first Hells Gates Dam concept, Dr John Bradfield was also the chief proponent of the Sydney Harbour Bridge. He’s pictured here with his wife, Edith Jenkins, at its official opening in 1932.(Supplied: State Library of New South Wales)

Hells Gates Dam was originally conceived by the renowned engineer John Bradfield in the 1930s and has long been championed by North Queensland crossbench MP Bob Katter.

But despite numerous government-commissioned reports over many years, no government has built it.

Doubts dam will ever be built

Professor Khan yesterday said he remained doubtful the dam would ever be built, noting the federal government’s $5.4 billion commitment was subject to a business case that was not expected to be released publicly until June.

Late yesterday, however, Townsville Enterprise — the organisation preparing the $24 million federally-funded business case for the dam — told the ABC its report had already been completed and had proved the dam concept was economically viable.

Townsville Enterprise chief executive Claudia Brumme-Smith provided a statement to the ABC but did not share the business case document.

“After two and a half years of comprehensive research, technical investigation and economic modelling, the Detailed Business Case has been completed,” Ms Brumme-Smith said.

“[It] presents a Benefit to Cost Ratio of greater than one, which means that, economically, the project benefits outweigh the costs.”

a map showing the Hells Gates Dam would be built west of Townsville and north of Charters Towers.
The yellow shading on this map shows where several irrigation zones would be created if the Hells Gates Dam were to be built.(ABC News)

According to Townsville Enterprise, the project would see the Upper Burdekin River dammed at a location 160 kilometres west of Townsville, called Hells Gates.

It’s anticipated the water the dam stores would be used to grow high-value crops, like avocados, citrus fruits and table grapes.

But Richard Hoolihan, the chairman of the Gugu Badhun Aboriginal Corporation, said there were a number of sacred sites in the area that would need to be considered before any construction work began.

“We should be … working out whether it’s a viable project at all and then having the discussions, rather than having the discussions right in the middle of a political free-for-all.”

Growers fear water will be too costly

Jon Caleo, who grows fruit and vegetables near Charters Towers and Townsville, supports the project.

“It would give us more water security. There are times in the latter months of the year, prior to the wet season starting, when the Burdekin River can dry up,” he said.

But Burdekin River Irrigators Association chairman Mario Barbagello fears Hells Gates water would cost more than growers could pay.

“They’ve got to tell the guys how much the water’s going to cost,” he said.

If the project did go ahead, Mr Barbagello feared it would see prices in already over-supplied markets crash further.

“You’re seeing the impact now with avocados,” he said.

a man smiling in a blue work shirt
Grower Jon Caleo would like to see the Hells Gates Dam built but doesn’t think growers should get the water it stores for free.(ABC News: Jade Toomey)

Joyce suggests dam will be a gift

When asked last week how much irrigators could expect to pay for Hells Gates water, Mr Joyce said he did not know.

“Because that is a question I would actually take away and model and come up with the figures,” he said.

“What I rely on is competent people like … Townsville Enterprise.”

But Mr Joyce suggested the dam itself would be a gift from federal taxpayers to Queensland farmers.

low angle shot of Deputy Prime Minister Barnaby Joyce speaking at a press conference
Barnaby Joyce says the Queensland government would set the price for users of water from the Hells Gates Dam.(ABC News: Bridget Murphy)

Mr Joyce then challenged the Queensland government on whether it would charge growers for the water.

“Are the Queensland government, the Labor government, going to come out and say we want a return on money we never actually invested?” Mr Joyce asked.

According to Professor Khan, state governments usually develop water projects and therefore are the entities that charge growers for water.

Given Queensland will not have paid for the dam, he doesn’t anticipate that growers would be asked to pay costs that would go anywhere near to covering a $5.4 billion investment.

“They [the Queensland government] will still charge but not a price that builds in cost recovery,” Professor Khan said.

Cattle walk in a line through a drought impacted paddock.
Proponents say Hells Gates Dam would turn some of Queensland’s driest cattle country into a food bowl.(ABC Rural: Tom Major)

ALP wants to see business case

Queensland Water Minister Glenn Butcher brushed off questions about whether the state government would charge for the water, instead pointing out Hells Gates Dam still lacked a detailed business case.

“This means it hasn’t even received necessary federal approvals,” he said.

A federal ALP spokeswoman said if the party won the federal election, the project would only be built if it provided value for money.

“Labor is keen to support water infrastructure projects like Hells Gate Dam provided, of course, that they stack up,” she said.

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