Independent study to inform water allocations

Date posted: 05 July 2016

Hon Ian Hunter MLC

Minister for Water and the River Murray

Independent study to inform water allocations

An independent cost-benefit study has confirmed desalinated water would not be economically viable to use to increase water allocations for River Murray users.

The study, finalised in June 2016, found that running the Adelaide Desalination Plant (ADP) would not be a cost-effective way of boosting allocations for irrigators at the current market price for water.

The findings reflect the fact that the ADP was built to provide water security for metropolitan Adelaide during times of drought.

The cost-benefit study is available here www.environment.sa.gov.au/desalination-plant

Background

The State Government commissioned the independent cost-benefit analysis earlier this year to consider if increasing the use of the ADP, to make additional River Murray water available to holders of irrigation entitlements, would be of economic benefit in 2016-17.

The study was conducted by one of Australia’s leading natural resource economic consultancy, Marsden Jacob. The Essential Services Commission of South Australia provided independent advice on costs associated with running the Desalination Plant.

Findings from the cost-benefit study will help inform longer-term state policy on how allocations and costs could be shared between different water users.

Quotes attributable to Water and the River Murray Minister Ian Hunter

The desalination plant was designed to be Adelaide’s insurance policy in times of drought and ensures our community will have access to water.

It is clear that using water from the desalination plant to replace River Murray water for our irrigators is unlikely to be cost effective for them.

We will continue to work with the MDBA to ensure the Murray Darling Basin Plan that we fought for is delivered on time, and in full, for the benefit of river communities, and all South Australians.