Political stupidity and hydrocommerce madness

As the most essential life-sustaining substance and the most critical input to economies around the globe, water is the only commodity that has absolutely no substitute at any price. This fundamental fact creates an intractable demand for water and has historically made global hydrocommerce a stable, non-cyclical, low-risk investment. - Summit Global Management (PDF 917KB).

If it's good enough for international marketeers like Summit Global Management to see water as a "stable, non-cyclical, low-risk investment", why isn't it good enough for the New South Wales State Government?

Premier Nathan Rees was quick off the mark to announce that Sydney’s water supply is secure for the next 50 years with Veolia Water - a private company - being granted a licence to draw from the Fairfield Sewage Treatment Plant, recycle the waste and sell it. On top of the desalination plant - which coincidentally is also being built by Veolia Water and John Holland Group Pty Ltd - this will, we’re told, have a positive effect on dam levels.

Media reports confirmed that the 4.3 billion litres of treated water produced by the plant annually will be transported through a 20km network of retrofitted gas pipes and used at places like Rosehill Racecourse and the Shell refinery at Clyde. What they didn’t mention is that another state government licence permits Jemena Limited - formed when Singapore Power acquired assets and asset management business from the sale of Alinta Ltd in 2007 - to build, own, manage and operate a recycled water network that will initially transport up to 4.3 billion litres of recycled water a year from Veolia Water’s recycled water plant to industrial and irrigation (PDF 76KB) customers in Western Sydney. They also fail to mention the involvement of AquaNet Sydney Pty Limited, which also is part of the Jemena group.

All good in terms of our water future? Not if you look more carefully. At the April 2009 Australian Water Summit Maude Barlow (PDF 74KB), Senior Advisor on Water to the President of the United Nations General Assembly, said:

… governments at all levels have bought into the notion that water is a commodity, best allocated by the market, and now increasingly in the hands of largely unregulated private water brokers. This development dates back to the 1994 decision to establish an open water market in Australia … there is no vision and no overall plan to save Australia’s water heritage other than a vague belief in the magic of markets and kneeling to the throne of big technology ...

The steady slide to a market system of water allocation will have dire consequences: the rich will have preferable access; there will be no incentive to protect source water as it is not profitable to do so; and nature will have to fend for itself …

Australia must declare its water to be a public trust ... Governments simply do not have the power or right to afford water ownership rights to corporations or private interests, or tradable rights without a mandate from the Australian people who are the rightful owners along with the environment, of Australia’s water resources … privately owned municipal water service providers should be replaced by not-for-profit public systems delivering clean safe water as a public service … corporations should not determine the allocation of water; that is the role of government ...

During the same summit Ms Barlow noted:

Building big desalination plants, weirs, and pipelines such as the Victoria government’s North-South pipeline (being done without an environmental assessment), also gives control over Australia’s water to foreign water corporations. It is ironic that the two big French companies bidding on the Wonthaggi plant - Suez and Veolia - are about to lose their Paris water licenses when they come up for renewal in a few months.

Has Premier Rees bothered to investigate why that might be so?

What Premier Rees doesn’t make any statement about is how these recent allotments tie in with the Water Industry Competition Act 2006. It commenced on August 8, 2008, with the backing of the Opposition, opening the doors for private players - including foreign companies - to control, among other things, drinking water for retail consumers.

Where was the government’s mandate to introduce this legislation, which seems to me to be a critical part of the process of privatising a critical public resource by stealth? The NSW Government is only too well aware what voters think about privatising public resources, like electricity: ask Mr Iemma. In a country where water is becoming scarcer, has the government properly explained the effect of its water legislation to the people of New South Wales, let alone sought or obtained their approval?

The Act was designed to “encourage competition in the water industry and to promote innovative solutions to the water supply-and-demand balance, particularly in so far as the development of infrastructure for the production and distribution of recycled water is concerned”. Experts like former CSIRO Chief Research Scientist Mike Young are of the view that Australians don't pay enough for their water, especially during times of shortages, so can I assume no water-consuming citizen of New South Wales raised concerns about “industry competition” with the state government? Where did the impetus for these changes really come from?