The desal cup runneth over with our cash

Of course, it will really be powered by brown coal, probably from Hazelwood, the closest and cheapest power station. There are two reasons for this: wind power is intermittent and grid wind output calculations are based on 8 per cent of the wind farm capacity.

This means the 98 megawatts required to run the desal plant and pump water across Melbourne can't be supplied by existing or planned wind farms.

It looks as if the renewable energy charge is a sham to get renewable energy credits to justify using coal-fired power to placate an electorate concerned about global warming.

To calculate the cost of desal water to the household, we have to add in the cost of electricity and the mark-up of at least 25 per cent each for Melbourne Water and the three water retailers.

This means the desal water cost to the end user is $1.1 billion based on the output of 150 gigalitres a year.

This cost of desal water will be $7.05 a kilolitre compared to $1.20 now. Because the desal water will constitute about 40 per cent of Melbourne's water supply, the average cost of water in 2012 will be $4.14 a kilolitre.

This is embarrassing for the Essential Services Commission, which set the price of water in 2012 at $2.20.

It is no wonder the retailers are talking about different tariffs such as high security, scarcity and environment tariffs.

What is to be done about this scandalous mess?

The first thing is the blacked-out bits in the government contract with AquaSure must be made public before the election. There is nothing confidential in a contract for 30 years that has already been signed.

Anybody who takes the Queen's coin is not entitled to secrecy - especially when they know that the price of water will be higher than poor people in Melbourne can afford. It will be the end of gardens for pensioners and low-income families.

Once the contract is public, the options for a future government should become apparent. But one thing is already clear. The plant should be mothballed before any water is produced.

If the contract is inviolate the cost will be $570 million a year. If the plant is turned on the total cost of the guarantee and the water will $1.1 billion. If the plant is not turned on we will save more than $500 million, savings that will increase as the price of power increases.

This action should not wait for a royal commission, although it is apparent that one is necessary to restore good governance in Victoria.