gladstone regional council integrated water strategy client namegladstone regional council project...
TRANSCRIPT
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Gladstone Regional Council
Integrated Water Strategy
Client Name Gladstone Regional Council
Project Name 1770/Agnes Water – Integrated Water ProjectDate 8 April 2008
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Gladstone Regional Council
Integrated Water Strategy
> Background to Water in 1770/Agnes Water Region> Key Issues> Integrated Water Project
– Options Considered– Technical Solutions– Environmental Approvals– Review Process
> Tender Process– Tender– Comparison of Offers– Comparison to Budget
> Contract Structure– Condition Precedent and Contract Position– Contract Payments
> Community Consultation> Financial Modeling> Recommendations
Summary
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Gladstone Regional Council
Integrated Water Strategy
> Rainwater tanks only supply till 1992> Sand excavation trench, bores and treatment installed> Reedy Creek water strategy
Water Supply
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Gladstone Regional Council
Integrated Water Strategy
Water Supply – Trench
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Gladstone Regional Council
Integrated Water Strategy
Water Supply - Bores
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Gladstone Regional Council
Integrated Water Strategy
Water Supply – Treatment Plants
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Gladstone Regional Council
Integrated Water Strategy
Water Resources
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Gladstone Regional Council
Integrated Water Strategy
Water Supply - Bores
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Gladstone Regional Council
Integrated Water Strategy
Water Resources
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Gladstone Regional Council
Integrated Water Strategy
Ground Water Investigations
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Gladstone Regional Council
Integrated Water Strategy
Defined Water and Sewerage Area
> The ultimate population for Agnes Water/1770 in the defined Water and Sewerage Areas is 26,500 ep
> Water Supply required - 2,000 ML/annum > Only 2 technical options
- Desalination- Pipeline from Gladstone
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Gladstone Regional Council
Integrated Water Strategy
Comparison of Options
Capital and NPV comparisons (6% growth)
$0
$20
$40
$60
$80
$100
Total CapitalCost ($m)
Net PresentCost ($m)
Year 1 Cost
Co
st
($m
)
Awongapipeline
Eurimbulapipeline
DesalinationPlant
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Gladstone Regional Council
Integrated Water Strategy
Water Supply Strategy
> Continued incentives for efficient use of water> Develop additional temporary bores at Red Pit> Extend the reticulation pipes to the Red Pit and feed
water back to Agnes Water> Construct a Desalination Plant
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Gladstone Regional Council
Integrated Water Strategy
1770 Water Supply
> Rainwater tanks> Private bores to supplement requirements> Small local bores supply caravan park and public toilets> Evidence of groundwater contamination in some private
bores> Decision made to extend the water supply scheme to
1770 in consultation with Community
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Gladstone Regional Council
Integrated Water Strategy
> Septic tanks only treatment till 1993> Reticulation and treatment plant completed in 2001> Treatment plant located 8km south of Agnes Water> Facultative lagoons (35 ML) and land based disposal to
an irrigation area (36 Ha) adjacent to Deep Water National Park
Sewerage Background
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Gladstone Regional Council
Integrated Water Strategy
Sewerage Treatment and Disposal
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Gladstone Regional Council
Integrated Water Strategy
Wastewater – Lagoon System
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Gladstone Regional Council
Integrated Water Strategy
Wastewater – Disposal Area
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Gladstone Regional Council
Integrated Water Strategy
> Permanent Restriction since Sept. 2000> High Water and Wastewater Pricing
Key Water Issues
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Gladstone Regional Council
Integrated Water Strategy
> Population Growth in Serviced Area
Key Water Issues
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Gladstone Regional Council
Integrated Water Strategy
> Lack of Reliable Water Supply
Key Water Issues
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Gladstone Regional Council
Integrated Water Strategy
> Over-commitment of Water Supply
Key Water Issues
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Gladstone Regional Council
Integrated Water Strategy
> Water Quality from bores is excellent; but trenches difficult to consistently treat satisfactorily
> Lack of Water supply in 1770> Groundwater Contamination in 1770> Poor quality of treatment infrastructure > Difficulty in recruiting & retaining professional and
technical staff
Key Water Issues
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Gladstone Regional Council
Integrated Water Strategy
BOD Results
Licence limit
Key Sewerage Issues – EPA Failure
BOD5 Chart
-20
0
20
40
60
80
100
120
140
160
180
19-Apr-01 5-Nov-01 24-May-02 10-Dec-02 28-Jun-03 14-Jan-04 1-Aug-04 17-Feb-05 5-Sep-05 24-Mar-06 10-Oct-06 28-Apr-07
Date
mg
/L
MP02/1 Lagoon 3 Outlet Lagoon 4 Outlet Acceptable Limits
Linear (MP02/1) Linear (Lagoon 3 Outlet) Linear (Lagoon 4 Outlet)
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Gladstone Regional Council
Integrated Water Strategy
Nitrogen Trend in Run-off Water
Total Nitrogen
-3
-2
-1
0
1
2
3
4
5
6
6-Dec-99 19-Apr-01 1-Sep-02 14-Jan-04 28-May-05 10-Oct-06
Date
mg
/L
MP97/1 MP97/2 MP97/3 MP97/4 MP97/5 97/6
M2 MP00/9 Linear (MP97/1) Linear (MP97/2) Linear (MP97/3) Linear (MP97/5)
Linear (MP97/4) Linear (97/6) Linear (M2)
Storm Water to Deepwater National Park
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Gladstone Regional Council
Integrated Water Strategy
Key Sewerage Issues
> Wastewater Capacity needs to be increased as at current licence:– Poor track record with existing system– EPA preference for higher value re-use
> Limited options for reuse of treated wastewater
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Gladstone Regional Council
Integrated Water Strategy
> Council commitment to sewer 1770> Council commitment to supply drinking water to 1770> Modular desalination plant> Modular wastewater plant> Outsource operation of existing Agnes Water wastewater
lagoons and water treatment plant to address professional staff issue
> Outsource operations, maintenance, asset replacement and upgrades to new water to wastewater treatment facilities
> Provision of additional services to Council.
Integrated Water Strategy
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Gladstone Regional Council
Integrated Water Strategy
> Conventional reticulated water to the town of 1770 > Low pressure sewer to the town of 1770
– Difficult terrain– Rock outcrop– Existing roads and services– Established residential landscape
Technical Solutions Proposed
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Gladstone Regional Council
Integrated Water Strategy
Membrane Operating Ranges
0.001 0.01 0.1 1.0 10 100 1000
Bacteria
Coal dust Beach sand
Metal ions
Aqueous salts
m (log)
Relative Particle Sizes
Ultrafiltration
Virus
Microfiltration
SeparationProcess
Effective pore size
Nominal pore size
Cryptosporidium Giardia
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Gladstone Regional Council
Integrated Water Strategy
Membrane Filtration
Air
Bacteria
Virus
Solids
Treated effluent
Membrane
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Gladstone Regional Council
Integrated Water Strategy
> Conventional Desalination plant– 7.5 ML/d intake pipeline (25,000 ep)– 1.5 ML/d modules
Technical Solutions Proposed
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Gladstone Regional Council
Integrated Water Strategy
> Modular MBR Wastewater– 600 KL/d with 300 KL/d Membrane
Technical Solutions Proposed
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Gladstone Regional Council
Integrated Water Strategy
Technical Solutions - Layout
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Gladstone Regional Council
Integrated Water Strategy
> Commonwealth Environmental Approval under the Environmental Protection and Biodiversity Conservation Act – deemed to be not a controlled action;
> Joint Marine Parks and Great Barrier Reef Marine Parks Approvals;> Environmental Protection Agency – Prescribed Tidal Works Approvals;> Queensland Transport – Maritime Safety approval;> Cultural Heritage Management Plans agreed with representatives of
traditional owners; and> Department of Natural Resources is prepared to sign off resource
entitlement for easements and Permits to Enter for the project Modification required to match alternate pipeline route
Environmental Approvals
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Gladstone Regional Council
Integrated Water Strategy
> DNR approval of planning reports for the project and DLGP funding commitment of $23m
> Cardno (Qld) Pty Ltd reviewed the costs of the pipeline options and desalination option
> John Chappell Engineers reviewed the offshore pipeline alignments that were proposed in the Parsons Brinckerhoff Feasibility Report.
> Review of the financial capability of shortlisted proponents by Probity Investigators Pty Ltd indicated that they were financially suitable for the project.
> Jacob Marsden & Associates carried out Present Value analysis of the tendered desalination option and estimate for pipeline indicating a minimum difference of 16%
> QTC have reviewed and are satisfied with the financial planning for the project
Peer Review & Checks
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Gladstone Regional Council
Integrated Water Strategy
> Project structured to attract quality Operator> Formal Tender Process Completed
– Transaction Manager – formal planning of Tender Process– Engineering, Legal and Probity Advisors
> 3 Respondents qualified under EOI process> 2 Technical competent offers received> DLGP provided with early advice on additional funding (7 Nov. 2007)> Probity and Evaluation plan followed> United Utilities Australia (UUA) recommended> Minister meeting and support 9 Jan 2007> Ministerial approval to sign contract> Negotiation to lock in prices, options and final agreement> Contract signed 16 January 2008 subject to Condition Precedent
Tender Process
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Gladstone Regional Council
Integrated Water Strategy
> DLGP request for review of Pipeline v’s Desalination> Full NPC cost comparison by Marsden Jacob > Desalination prices:
– Fixed tendered price– Maximum price model (risk adjusted)– Potential cost reduction of ~ $3.0m not included– Include full asset replacement– Include bore treatment plant and system management
> Pipeline price was Cardno estimate only. > Desalination NPC was materially lower by 16%
Desalination v’s Pipeline
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Gladstone Regional Council
Integrated Water Strategy
Desalination v’s PipelineObjective Pipeline DesalinationCost and Funding
Maximise State Funding 40% available 80% available
Minimise Capital Costs $42.3M plus 18 months inflation
$24.59M
Capital Cost Certainty Council risk Fixed Price
Operations
Operations cost certainty Council risk Fixed Price
Operations performance certainty Council risk Fixed Price
Compliance
EPA wastewater Compliance Delay of 18 months Contract signed
Water supply and groundwater contamination Delay of 18 months Contract signed
Professional & Operations Staff Issue remains Contract Condition
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Gladstone Regional Council
Integrated Water Strategy
> The Operator will, at its own cost and risk, design, construct, operate, repair and maintain each Facility so that it can provide the Services to at least the Quality Standards;
> Unless the Council expressly agrees to bear any risk … without limitation the Operator will accept the risk, whether or not this agreement refers to the risk;
> The Operator shall perform the obligations in accordance with the Minimum Standards and this agreement on the basis of the Operator’s Submission; and
> The Council shall pay the Operator for designing, constructing and operating each Facility to at least the Quality Standards.
Scope of Agreement
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Gladstone Regional Council
Integrated Water Strategy
Contract Structure> Contract Price
– All inclusive with allowance for rock, acid sulphate soils and difficult geotech in sea water pipeline
> Form of Contract – Design, Build, Operator and Assist*
> Team – 10 years plus two 5 year extension (Council Option)
> Similar and Reference Contracts – Wagga, Wodonga, Noosa (2), Redcliffe, Bendigo etc.
Activity Responsibility
Design UUA
Construction UUA
Operation UUA
Maintenance UUA
Asset Replacement UUA
Payment Council
Land Council
Pre-existing Contamination
Council
Approvals Joint
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Gladstone Regional Council
Integrated Water Strategy
Contract Structure> Security of $3.0 million reduced to $1.5 million after commercial acceptance and
performance trials;> Liquidated Damages:
– Water Treatment Plant ($2,000/d), – Wastewater Treatment Plant ($2,000/d) and – 1770 Pipeline ($2,000/d);
> Onus of Proof – is on the Operator.> Toll Abatement (Revenue Deduction)
– Pre determined % reduction in toll;– Maximum is 20% (eg Reservoir level not maintained)– Abatement is to maximum level– 6 individual monthly failures over one year can lead to Contract default and costs.
> Variations– Pre- agreed deductions for sea water pipeline (subject to Geotech)– Pre-agreed rates for rock and acid sulphate soil– New variations to be signed off by Authorised Officer
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Gladstone Regional Council
Integrated Water Strategy
> 2 Public Meetings in 2005– 50% community support
> Community Reference Panel (CRP)– Nomination called in 2007– Representations for development, social and indigenous area are
nominated– Purpose is to inform and provide feedback from the community;
> UUA supportive of CRP
Community Consultation
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Gladstone Regional Council
Integrated Water Strategy
> 20 year financial model– Review Marsden Jacob – Review and audit by QTC– Council provided individual water and wastewater reserves for funding capital works– Assumed 4.5% Council cost increase– No additional rate increase – Assumed PIFU growth of 6.5%– Full user pay with no ratepayer subsidy
> Affordability - Refer Section 6.3 of Report– State funding approved to $23M (SCAP and WASP funding)– Additional $4.8M required (normal 40% WASP funding)– Additional $5.9 M (DLGP funding)– Combining water and sewerage business units– Internal loan from Constrained Works Reserves (Developer Water and Sewer reserves) for
initial 7 yearsNo cross subsidy from general rates
Financial Modeling
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Gladstone Regional Council
Integrated Water Strategy
> The Agnes Water - Water supply scheme is overcommitted and requires immediate augmentation
> The sewerage treatment plant is not performing satisfactorily and requires immediate remedial action
> The sewerage scheme requires remediation and additional treatment capacity> Council undertaking to provide reticulated water and sewerage to 1770 to alleviate health risks> Pipeline options considered at key stages since 1992 have not proved economic or affordable> There is no alternative proposal that can meet the objectives or deadlines required by this
project> The Integrated Water Strategy has been examined and peer-reviewed by engineers, scientists,
State Government Departments and Queensland Treasury Corporation, and is recognised as the most economical and affordable water supply option for Agnes Water/1770
> Council has a low risk contract with one of the Worlds Best Operators> There is substantial financial assistance from the State Government for the project.
Summary
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Gladstone Regional Council
Integrated Water Strategy
Recommendation
Recognising the needs of the community of 1770 and Agnes Water for secure and reliable water services, Council continue with the Integrated Water Project and proceed to attain additional funding to satisfy the Condition Precedent.
Recommendations - Refer Section 7 of Report
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Gladstone Regional Council
Integrated Water Strategy
> Secure additional State Funding from DLGP by 22 April 2008
> Develop Contingency Plan for alternate funding– Funding alternatives– Extension of Condition Precedent Time Limit
Strategy Moving Forward
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Gladstone Regional Council
Integrated Water Strategy
QueenslandGround Floor171 George StreetBrisbane QLD 4000 Australiat +617 3228 0700f +617 3228 0799
VictoriaLevel 10350 Queen StreetMelbourne VIC 3000 Australiat +613 9691 0088f +613 9691 0001
www.perongroup.com.au