Feature: Government ignored expert advice to put Tillegra on hold

Faulty directive to the Pricing Regulator

In July 2008, then Water Minister Nathan Rees used his power under section 16 A of the IPART Act, to prohibit the Independent Pricing and Regulator Tribunal (IPART) from considering whether alternative options other than Tillegra would result in lower household costs.

In effect, IPART was being forced to pass the costs of Tillegra through to consumers, regardless of the need for the dam or the existence of other lower-cost water supply options.

A technical flaw in Minister Rees’ original directive caused his successor, Phil Costa, to seek urgent advice from his department[1] about redrafting the order.

Senior water policy experts used the request for advice to express their outrage at Hunter Water’s abuse of the evidence to justify the dam.

They also advised the Minister to ‘defer reissuing the directive’ and instead to meet with the regulator to discuss a draft report from consultant Sinclair Knight Mertz that subsequently proved to be highly negative. 

Documents obtained by a Greens motion in the NSW Upper House have uncovered an email trail in early November 2008. You can view the documents here.

The email trail

On 4 November 2008, the Senior Manager, Metro Water Policy, Metropolitan Water, Katy Brady, wrote to her Assistant Director Ben Taylor suggesting that their department put a secret submission forward highlighting the problems associated with Tillegra Dam.

Ms Brady expressed her hope that a more rigorous analysis of Hunter Water Corporation’s (HWC) modelling for Tillegra Dam would lead to a government decision to depart from the ‘direction’ to build it.

In addition, Ms Brady had serious concerns about the public’s ability to pay for Tillegra Dam with the rising costs in living. 

By 13 November, Ms Brady and Mr Taylor had signed a response to the Minister’s request for advice. There is evidence that this document or an earlier draft was in the possession of Louise Whiting in Minister Costa’s office who appears to have forwarded it to others asking then to “check this and send up the line urgently”.

The ministerial advice

The document signed by both Ms Brady and the Assistant Director used the opportunity to raise three major criticisms of HWC’s case for Tillegra:

• Impacts on customer bills

• HWC’s use of “very conservative assumptions regarding climate change impacts which have been superseded by 2008 analysis indicating that runoff in the region my increase, not decrease” and
• HWC’s “very conservative approach to estimating” the amount of water that can be extracted from existing water supply infrastructure

The Department took the extraordinary step of including a detailed analysis of their ‘serious concerns’ (Tab D) and suggesting that the Minister should not reissue the directive because that would imply endorsement of the assumptions on which HWC relied to mount their case for Tillegra.

Ms Brady and Mr Taylor were taking the extraordinary step of telling the Minister that he should no longer trust Hunter Water and should not be seen to be endorsing their planning.

The effect of their advice would have been to stop the regulator considering the dam and hence Tillegra would have been on hold while the Minister consulted.

It appears that the Minister subsequently ignored the advice.

Background

The NSW government has already been embarrassed by scathing official criticism from four of its own agencies regarding the Tillegra Dam proposal in their November 2009 responses to the EAR.

These include the NSW Office of Water (NOW); the Hunter-Central Rivers Catchment Management Authority (CMA); the Department of Environment, Climate Change and Water (DECCW); and NSW Department of Industry and Investment’s (II-NSW).  Some criticisms include:

• clear breaches of several NSW Government Department Policies and Acts
• misuse of climate change data and yield
• inaccurate data in relation to effects of population growth
• lack of a proper socio-economic assessment and assessment of impacts on the local Hunter community
• inadequate data on the loss of freshwater flows to the estuary
• inadequate data on impacts on the environment including the Federal protected Ramsar wetlands
• loss of aquatic habitat and impacts on the fish and prawn productivity
• alternative options to Tillegra Dam not being properly investigated

Media comment

Greens NSW MP John Kaye said: “As early as November 2008 the NSW government’s own water experts were telling them that Hunter Water’s case for Tillegra was seriously flawed. The Minister was advised to use a technical defect in the direction to effectively put the project on hold.

“For the next 15 months the Rees and Keneally governments dithered over the future of the dam that their own water experts told them was not needed, expensive and damaging.

“The Keneally government is fast running out of time to stop this dam. For 15 months they have sat on official advice signed by the assistant Director of the Department of Water to put it on hold. It is now urgent they act on it.

“In November 2008, Water Minister Costa was warned by his own department not to parrot the case coming from Hunter Water.  He was told of serious flaws and given advice to not endorse the planning assumptions.

“Despite this warning he has continued to support the dam with arguments that he was told would not withstand scrutiny.

“The case for Tillegra has been exposed yet again as flawed and deceptive. The Keneally government cannot continue to rely on Hunter Water when its own Assistant Director of Water has told them that they should not endorse the planning assumptions.

“Then-Premier Nathan Rees came close to doing the right thing during the 2008 mini-budget process but lacked the political clout within his own government to pull it off.

“It is now clear why the NSW government was not surprised by the stinging criticism of the dam in their own departments’ November 2009 responses to the Environmental Assessment. Twelve months earlier, two of their most senior bureaucrats had officially advised the Minister to put Tillegra on hold,” Dr Kaye said. 

 For more information: John Kaye 0407 195 455

Sally Corbett, No Tillegra Dam Group said: “Hunter Water has failed in its job to consider the needs and wants of the Hunter community. The Keneally government must now rein in the water authority, tell it to check its figures and check in with the community on the level of service it wants and wants to pay for.

“Tillegra Dam was foisted on the Hunter community without proper consultation.  Rees saw the writing on the wall before his demise.  It is now time for Premier Keneally to take notice of the Hunter community and can the dam.

“Now is the time for Jodi McKay, member for Newcastle and Minister for the Hunter, to show she truly represents the Hunter community. She must go straight to Macquarie St and tell Premier Keneally to immediately stop the Tillegra Dam Environmental Assessment  process, and put an independent inquiry in its place.

“If the Hunter community does wish to increase its drought security beyond the current level, then this should be the subject of genuine community engagement and there should be a transparent analysis of all available options and their relative costs and benefits,” Ms Corbett said.

 For more information: Sally Corbett on 0403 892 093