Water Journal November 2003

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Volume 30 No 7 November 2003 Journ a l of the Aust ralian Wat er Assoc iat io n

Editorial Board F R B ishop, Chai rman

13 N Ande rson, W J D ulfcr, G Finke, G Finlayson, GA Ho lder, 13 Labza, M Muntisov, P Nadcbaurn , J D Parke r, F R oddick, G l~yan, S G ray ', fllater is a refe reed j ournal. T his symbol

indicates that a pape r has been refereed.

Submissions Instructions fo r authors can be fo und on page 12 of this j ournal. Subm issions accepted at: w w w .a wa .asn .au/ pu blicati a ns/


Recycled Water Benefits from Fresh Thinking; The World Stage and the Local Scene; My Point of View, Irrigation and the Economics and Value of Water, J Thwa i tes


Including IWA Auslralia Report and WEF Report

PROFESSIONAL DEVELOPMENT 10 Details of courses, classes and other upcoming waler events

Managing Editor


Peter Stirling

12 Featuring selected highlights from the AWA email News

Technical Editor


E A (Bob) Swinto n 4 Pleasant View Crcs, Wheelers Hill Vic 3 150 Tel/ Fax (03) 9560 4 752 Email: bswinton@ bigpond.net.au

Water Production Hallmark Editions PO 13ox 84, Hampton, Vic 3 188 Level I , 99 13ay Street, 13righton, Vic 3 186 T el (03) 9530 8900 Fax (03) 9530 89 I I Email: hall111ark@ halledit.co111.au Graphic design: Mitz i Mann

Water Advertising Na tional Sales Manager : Brian R a ult T el (03) 9530 8900 Fax (03) 9530 891 1 Mobile 041 I 354 050 Email: brault@halledit.com .au

Water (ISSN 0310 • 0367) is published eight times a year in the months of February, March, May, J une, August, Septembe r, Novem ber and Dece mber.

Australian Water Association

16 Report from AusAID; Knotts Hill Cover Projecl

CONFERENCE REPORT 20 Waler Recycling Australia · 2nd National Conference, B Shei k h ; Heads of Water 2003, A Da v ison, P Burgess; The A·Z of Australian Water Trading, H K urz


J R Sa bine


Federal President Rod Lehmann

Chief Executive Officer




Chris D avis Australian Water Association (AWA) assumes no responsibility for opinions or statements of fa cts expressed by contributors or advertisers. Editorials do not necessarily represent official AW A policy. Advertisements arc included as an information service to readers and are reviewed

before publication to ensure relevance to the water environment and objectives of AWA . All material in Water is copyright and should not be reproduced wholly or in part without the written permission of the Managing Editor.

Subscriptions Water is sent to all AW A members eight times a year. It is also available via subscription.

Visit the Australian Water As oc1at1011 HOME PAGE and access news. calendars, bookshop and over 100 pages of information at

·, WHAT IS DRIVING ACTIVITIES IN WATER MARKETS? Discusses the seven drivers affecting water markets H Bjorn lu nd


, WATER CONSERVATION - AN ECONOMIC INCENTIVE FRAMEWORK Developing economic incentives to conserve water T Cha p m a n


PO Box 388, Arrarmon, NSW 1570 Tel + 61 2 941 3 1288 Fax: (02) 941 3 1047 Email: info @awa .asn.au ABN 78 096 035 773

·, TELL ME AGAIN, WHAT RIGHTS WERE THOSE? Water rights, responsibilities and expectations

·, SALINITY LEVELS IN THE RIVER MURRAY Astrategy for management of salinity in the MDB to improve water quality M Kend a ll


·, THE TREATMENT OF URBAN STORMWATER USING VEGETATIVE FILTER STRIPS Trialling vegetative strips lo establish treatment efficiency under variable storm flows P Slay, D Walke r, T Da ni ell


•, STRATEGIC ASSET MANAGEMENT PLANNING FOR THE ORANGE COUNTY SANITATION DISTRICT Multiphased approach to Asset Management for a large utility D Stew a rt, B Ke n ne d y, D Rose, L Norto n, R Byrn e


" POTENTIAL IMPACT OF FUTURE SEWAGE TREATMENT CHANGES ON WATERBIRD USE OF THE LAKE BORRIE PONDS Discusses the impact that treatment will have on the habitat of waterbirds in Lake Borrie A J Ha mi lton , I R Tay lo r, BP Wil son


·, GERRINGONG GERROA SEWERAGE SCHEME Tertiary treatment of sewage enables successful re-use of effluent and biosolids M Boak e, G Oven s

OUR COVER: City of H1111ti11gdo11 Beach. See article on page 48. Permission /,as bee11 g i11e11 by tire 1¥at er E1111iro11111e11t Federation to p11blis/r a11 abridged version of this paper w/ric/1for111s part of tire Proceedings of tire 761/r A 111111al Water E11 11iro111nent Federatio11 Tec/111iral Ex /ribitio11 and Co11fere11ce (C D-ROM), Los A ngeles, California, October 11- 15, 2003: Water E1111fron11 1e11t Federation: A lex1111dria, Virgi11ia . WATER NOVEMBER 2003





RECYCLED WATER BENEFITS FROM FRESH THINKING l attended the New Zealand Water and Wastes Associa ti on enviroNZ03 Conference in Auckland in September, along with over 700 delegates. l met with NZWW A President Jan G regor and CEO Len C lapham co discuss how we might better work togeth er, since many compa nies are now workin g in both Australia and New Zealand and th ere is a bilateral framework for water policy development through the Ministerial Co un ci l s o n na tur al resources management, and env i ronmental protection and heritage. T he ouccome of the meeting was a strong commitmen t for better communicatio ns, commencing with a fu ll day meeting in January 2004 and the in vestigation of a proposal to run an 'A ustral ian scream' in the 2004 NZWW A Con ference and a 'New Zealand stream' in Ozwacer in 2005 . I also attended the Second National Water Recycling Conference in Brisbane in August. This was a high ly successful even t and it was followed by an equally successful H ealth Risk Workshop wh ich

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Rod Lehmann

had amongst its invited speakers some of th e world's leading experts on reuse and health risk. The presence of these notable experts on reuse fired up a num ber of our notable Australian 'heavy weigh ts' into developing an AW A response to the recently announced CoAG National Water Initiative (NWI). A key element of the NW l is the importance of reinforcing the need for urban water users to u se wate r more efficiently b y promoting water reuse and recycling, the adoption of more efficient technologies, and revi ewing the effectiveness of water pricing policies. A team was formed at the conference to prepare the response and terms like the ' Pl atypus Group' and the 'Went Somewhere G roup' were bandied around as possible names. At the end of the day the group has becom.e simply the AW A National Policy Group by merging the enthusiasts from the Reuse Conference with the existing National Policy Group. A draft response has already been prepared (many thanks to John Anderson), a teleconference held, and the document is being updated co incorporate the Group comments. W e will place a copy of the next draft on th e web for comm.em from members. It is worthwhile noting that one of the more interesting sn ippets from the R ecycled Water Conference related to the words 'potable reuse'. ln the past these words have been considered 'heresy' by bureaucrats , who are no doubt reflecting political concerns about p ublic attitudes. No more, as 'potable reuse' has now come out of th e water closet so to speak. It would seem that a number of water authorities are now seeing indirect potable reuse as a possible long term water supply strategy and it would seem that it is no longer taboo to discuss the concept in government circles.

I often hear p eople say that a proj ec t or scheme is sustainable, buc l have yet to understand exac tly what this means. T here is one school of thought that water re so urce managers look after the sustainable use of our water sources as part of the water resource planning/water allocation process and that once water is allocated to users (at a full price) it is up to the user to make sure the allocation is efficiently util ized. H ow does one then measure whether the users are operating in a sustainable way? Water use efficiency is only part of the answer and other issues need to be considered, su ch as the impact on the environment both internal and external to the project. It seems co me that we need to sta re d efi ning what 'sustain able' m eans and how it ca n apply to the whole as well as the parts. What is a sustainable urban developmen t fo r example' Any thoughts on this would be appreciated because this is a key issue for AW A as we seek to contribute to the development of the NW !. Please send your thoughts to president@awa.asn.au or by post to our national office . l attended the Queensland Branch's Water Leaders Forum in H ervey Bay and th e H eads of Water Conference in Syd ney, both in August. Both were very successfu l ventu res and indicated the different ways AW A Branches are going about involving politicians and water leaders in our activities. The H eads of Water R eception involved Members of State and Federal Parliament and the Sydn ey C ity Council. le was clea r from this meeting chat there is a need fo r AW A to talk co politicians and their advisors more often about what needs to happen in water. M.eetings such as this are a great start but perhaps we need to look at other ways th at we m ight be able to offer sound ing boards for politicians and senior bureaucrats. Finally, it is sad to report that Leon de W itt H enry passed away in September at the age of 84. H e'd been active in the industry to the end. Leon was a long serving m ember of AW A and an Honorary Life M ember. One of his many defining achievements was to develop the Qu eensland Clean Waters Act of 1971, which greatly advanced the standard of sewage treatment and water quality managem ent in that State.

Rod Lehmann



Heads of Water 2003 A NSW Branch Initiative. R eport by A Davison and P Burgess This year's H eads of W ater had a regional, natio nal and internati onal foc us in keeping w ith the need to consider water cycle management at all leve ls. A WA President R.od Lehmann gave th e open ing add ress to the de legates. R.o d's add ress in cluded th e need to maintain and grow the reputation of AWA not o nly in th e indu stry but also in t he w ide r com munity. Following on from Rod, Leith Boully and T icky Fu lle rton prese nted extrem ely en tertaining talks o n broad water cycle issues in cluding the Wentworth G roup's bluepri nt fo r water and how water is inextricably lin ked w ith mo ney. One of the issues peren niall y bein g w restl ed w ith in the water industry is how wa ter use ca n be optimi sed withi n a triple bo t to m line fr a m ewo rk . Th e NSW M i nistry of En ergy and U tiliti es, in conj unction with loca l governm ent, is deve loping and impl em entin g integrated water cycle manage me nt (I WCM ) to achieve th is goal. Adrian Langdon fro m the Min istry and Mark H ankinso n , fr om Eurobodalla Shire C ouncil, talked about the !WCM and its successfu l imple mentation for Eurobodall a Loca l Wate r Util ity (ELWU). So su ccessful in fact that the proj ect (a triparti te approach between th e Mini st r y, E LWU a n d th e N SW .Department of Com merce) won the N SW AW A's W ater Environm ent M erit Award. Intrinsic to !W C M is the need to look fo r many sources of water to suppl ement town needs. John Ande rson of th e NSW Departm e nt o f Co mm e rce gave a n exce lle nt ove rview, including indi cative costs, o f the use of desa li nation technol ogy for pro vi ding an alternative water source for towns. In th e after lun c h sess io n , topi cs inclu di ng the la test in mi crobiologica l testing fro m the USA (Kevin Co nnell ,

DynCorp), water suppl y on peace-keeping operatio ns (D r Pa ul Byleveld , N SW H ealth) and the application of HACC P throu gh water safe ty plans to deliver sa fe water to communiti es (Dr M elita Stevens, M elbourne W ater Corporation and WHO represe ntative) were explored. It was inte resting to see how many resou rces are utilised in the testing of w ater in developed co untries w hereas in many developi ng cou ntri es, it is actu ally the deli very of water for basic needs to communiti es that is mo re the issue. This sess io n succeeded, particularly with Or Paul Byleveld 's interesting and ente rta inin g pictures, in its aim to broade n th e outlook of th e w ater industty past maj or cities or areas w ith high living standards. T he sem in ar session w as co mpl eted by informative talks from Kevin Goss of th e Murray Darl in g Basin Commission and Wayne H arri s fro m ActewAGL w ho gave an extre me ly inte resting and e m otive presentation on the C anberra bus hfires. T he se minar organ isers (Peter Burgess and Anne tte D aviso n) wou ld like to thank eve ryone who agreed to speak as well as the sess io n c hairs (Dr Dan iel D ee re, Sydney Catchment Auth o ri ty (now w ith W ater Futures an d the CR.C for Wate r Quali ty and Treatment), and Or Anna lisa Co ntos, NSW .Department of Co mm e rce) . We wo uld also li ke to than k the sponsors, the N SW D epartment of Comm erce, C lexan Peak and BTF Pty Ltd Decisive Mi crobiology , fo r the ir support for H eads of Water an d in ma king it suc h a success. Th e more social aspects of the two-day conference were the Cocktail reception and conference dinner. Th e Coc ktail reception is provin g a major draw card for po li tic ians and the water industry. This yea r in vitations were exte nded to Mr K elvin T ho mson, Fede ral Shadow Min iste r fo r th e En vironment, Mr

Mi chael Ri chardson, NSW Oppositio n Minister fo r the Environment, M s Ali so n M egarrity, Parli amenta1y Secretary Assisting the M inister fo r Infrastructure and Planni ng, and Minister fo r N atural Resources, and Syd ney's D ep uty Lord M ayo r Di x ie Co ulton . The them e was very fam iliar: there is a limit to th e water we have and we must act to change peoples attitudes and to simplify and re move lega l road blocks. The Friday sem inar was followed by the NSW A nn ual Ge ne ral m eeting w h ere Andrew Kasmarik was confirmed as NSW President. T he conference then moved into se r iou s ne t worki n g a n d pre-dinn e r coc ktails. Th e co nfe rence Dinne r was a highlight of the year w ith many of the n,ain players booking a table and 111ultiple tab les fo r the ir staff and for gu ests. The a fte r d inne r speaker Prof. Mike Archer, a well known identity and head o f the Australian Mu se um , gave an enth ra ll in g description of the efforts to brin g the Thylacine b ack to life and the iss ues faced . This includ ed the true story of Dolly the sheep w h ose proble111s ste111med from her popu la ri ty rather than being cloned. This was th e o nly tim e during the night w hen the tables were qu iet apart from when the lucky door prizes were an nounced and when P eter's vo ice gave o ut . T he Sydney Water Gold M edal w as presented to David Dack by Paul Freem an, Man ager Asset O perati o ns T he student unde rgrad uate prize was presented to Sally Williamson by M r Will Strac han of th e sponsorin g o rga nisatio n NSW D epartment of Commerce. T he Water Environment M erit Award was presented to the N SW Ministry of Energy and Utilities, Eurobodalla S h ire Co unc il and the NSW D epartment of C omm e rce for their project of" integrated wate r cycle man agement.





The A-Z of Australian Water Trading Helen Kurz, Solicitor, Freehills In 1994, the Council of Australian Governments (COAG) adopted a strategic fram ework for the reform of the water industry. One of the key elements of the COAG framework was the institution of trading in water entitlements, as a means of promoting competition and improving efficiency within the industry. The vital role that trading continues to play in the water reform agenda was recognised in August 2003, when COAG agreed to develop a National Water Initiative, a key elemen t of which is to encourage the expansion of water markets and trading. "The A-Z of Australian Water Trading, held recently in Sydney, addressed the issues, impediments and opportunities associated with this key issue of water reform. The conference was organised by !BC Co nfe rences and delegates included representatives from the irrigation sector, all levels of government, the finan cial sector and the legal profession. Dr Stephen Beare, Research Director, ABARE commenced the proceedings with a broad discussion on water property rights and their implications fo r trading markets. He noted that rights in water can be viewed as comprising of a bundle of rights, such as extraction rights, storage access rights, delivery access rights and use rights. ln order to promote efficient water trading, there should be an "unbundling" of rights, such that extraction 1ights, infrastructure access rights and water use rights are separated. D r Beare emphasised the importance of well defi ned and secure asset rights to water and infrastructure in the development of optimal t rading environ m ents . H e noted, h owever, that trading wate r as a commodity will always be subject physical limits such as storage and delivery capacity, as well as impediments such as administrative restrictions . Dr Beare concluded that progress has been made by all jurisdictions, noting in particularly the Queensland Water Act 2000 as an example of progressive water legislation. Delegates were provided with an overview oflegislation governing trading across Australia, with presentations in relation to New South Wales, South Australi a, Queensland and Western Australia. Mark Hampstead, Manager of Water Management Act Products at the NSW Department of Infrastructure, Planning and Natural Resources discussed 24


the new access licence and approval regime provided for under the Water Management Act 2000 (NSW), which allows access licences to be held separately to land. This new regime will come into fo rce in January 2004 and will govern 80% of water extra ction in NSW . Paul Frederick of Kemp Strang and Partners addressed the legal requirements for trade under the new regime and gave examples of the inquiries and searches that lawyers acting for purchasers and vendors of water should undertake. Randall Cox, Manager of Water Allocations at the Queensland D epartment of Natural Resourc e and Mines provided an overview of the Water Act 2000 (Qld), emphasising that permanent trades in Queensland will only take place after the completion of a comprehensive planning process. Mr Cox noted that although Queensland is part of the broader Murray Darling Basin, it faces different water issues to Victoria and N ew South Wales as over allocation is a much smaller issue. Mike Smith, Deputy Director of Resource Allocation at the South Au stralian D epa r tment of Water, La nd and Biodiversity discussed Holding Allocations and Taking Allocations under the Water R esou rces Act 199 7 (SA). H olding Allocations, which reserve to the licensee a volume of water but prohibit use until the licensee applies for an approval to have it converted to a Taking Allocation, were originally introduced to facilitate rapid trading transactions and are an example how different rights to water may be separated. Jeff Camkin, Project D irector at the Western Australian D epartment of Envi ronment, addressed the wa t er allocation and trading regime established under the Rights in Water and Irrigation Act 1914 (WA), noting that Western Australia has an opportunity to learn from experiences in th e Eastern States. As many of Western Australia's water resources have not yet reached full allocation, the challenge facing Western Australia is to manage water allocations to avoid the problems experienced in the Eastern States as a result of over allocation. Louise R ose, Manager of Interstate Trade at the Murray Darling Basin Commission discussed the challenges of establishing interstate trading markets, such as the varying forms of entitlement across jurisdictions and the differing legal and administrative frameworks. These presen-

tations highlighted the extent to which water legislation and water entitlements vary from State to State. A key issue in water reform, and one which has been identified as an objective of the N ational Water Initiative, remains the development of a framework for water access entitlements that is compatible between jurisdictions, whilst reflecting regional variability. The National Water Initiative recognised that as trading markets develop further, it w ill be necessary to implement controls to prevent speculation in water entitlements. Jeff Camkin of the Wes tern Australian Department of Environment noted that the Rights in Water and Irrigation A ct 1914 (WA) includes provisions specifically intended to prevent speculation. Mark Hampstead from the N ew South Wales Depa rt ment of Infrastructu re, Planning and Natural Resourc es indicated that speculators are not likely to dominate the market but that the New South Wales government will be monitoring the development of markets to see whether regulation is necessary. Brian Peadon from the Water Exchange noted that large scale speculation by so called "water barons" was unlikely, owing to continuous accounting requ irements and the controls ove r trading exercised by government and irrigation cooperatives. George Warne, General Manager of Murray Irrigation Limited also noted that an influx of "big city traders" is unlikely, given that farme rs control the boards of irrigation cooperatives, w hich in turn control a large percentage of the water. George Gear, Chairman of the National Waterbank, discussed water reform in the context of the wider microeconomic reform. process, emphasising that reform in the water industry is an important part of making Australia's economy more competitive. As with any microeconomic reform, water reform has social implications. Phyllis Mill er , President of the Shires Association of New South Wales noted that local councils are concerned about the socio-economic impacts of water being permanently transferred out of particular regions. Councillor Miller indicated that a number of councils are working on regional projects aimed at assessing such impacts and exa mining solutions . Another important issue identified by Councillor


Mill er is the effect chat the separation of land and water has upon th e rating capa city of local governments. The separatio n of land and water also has implications for banks and other lendi ng institu tions. Steph en Carroll, Directo r of the Aus t ralia B anke rs Associa t ion n o t ed t h at b a nk s a re concerned about the impact that the separation of land and wate r w ill ha ve upon the security of fi nancial arrangemen ts and whe t h er comp lex new documentation w ill be necessary. It is recogni sed chat water is fund amentall y different to land , in terms of the adaptive management and regulatmy role exercised by govern ments. Banks are therefo re particularly concerned with sovereign risk and the impact of government decision making on the security of water entitlem ents. T his is clearly an important issue in the water reform process, with a key element of the N ational W ater In itiative b eing th e clear id entification an d assignment of risks between governments and water users over possible future reductions in entitl ements .


lt is recognised trading markets should n ot in terfere with water for th e environment . J ohn C hant and J o h n H owe from Murrumbi dgee Irrigation discussed the importance of trading being consistent with the principles of the Murray D a rl in g Basin Mi n isterial Co mmi ss ion cap on enti tlements. Delegates also heard from Professor Peter Cull en of the Wentworth Group, who emp hasised chat environmental health provides th e essential fo undation for all other consu mptive uses and is not an op ti o n al ext ra . In order that the e nvironment is provided fo r in the trading process, th e Wen tworth Grou p advocates the creation of independent environ me ntal crusts w hi ch would buy a n d se ll wate r o n behalf of th e environment. Delegates were also fortunate to h ear from Ken K nox, Assista n t State En gineer at the Colorado D ivision of Water Resou rces, who provid ed an overview of water administration in Colorado . Li k e mu c h of Eastern

A ustralia, most of Co lorado's wate r resources are fu lly or over allocated, w i th the result chat water trad ing plays an importa nt role . Mr Knox gave examp les of ag r i c ul tu r a l users fo r ego i ng produ ction in so m e years co sell water to municipa l a u thorities . T hrough the course of the conference, it b ecame increasingly apparent ch.at th ere are still man y issues to be resolved as water markets continue to deve lop through o u t Austra lia. The Natio n a l Water Initiative goes some way t o addressi ng these, however much of the detail remains to be developed. T his w ill involve extensi ve co nsul tation with experts and stake holders over the next 6 months as the National Water In itiativ e is developed into an intergovernmental agreement, setting o ut spec ific actions to be taken in each j urisdiction. In the words of P aul Welle r, C hairman of the National Fa rmers Federati on W ate r T ask Force, water reform is co mplex and the hard work is getting the detail right.

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TELL ME AGAIN, WHAT RIGHTS WERE THOSE? JR Sabine Introduction T he debate he re is about "water rights" - or at least w hat som e people refer to as rights to water - and the associated trading in these ri ghts. In an important recent article (1), and elsewhere, Yo ung and M cColl have argu ed that in o rd er to clarify the confusion cu rrently reigning in this territo ry there is a critical need fo r some fo rm of "robust system" to defin e these rights. Their primary contribution was to present a compelling argun1ent fo r, as they put it, essentially "a robust way to d efine interests in water an d o ther natural resources". T hey took as precedents or m o d e ls fo r th e so r t of "gen e r i c fram ework" that they w ere seeking both the Torrens Title system (for registration of land o w nership) and the share m arket (fo r recognitio n of and trading in interests in a proprietary company) . As a counterpoint to this ap proach and as a direct response to the Yo ung and McColl pap er I argued in the previous paper (2) in this current series that if we are i nd eed co devise so m e gen eric fram ew ork to define legitimate interests in ou r natio nal water resou rces, then the fi rst and essential step is to clari fy the question of the owners hip of that wa ter. Wh o owns the wa ter we are discussing, particularly in this context the frac tio n of it that might be allocated for irrigation, that is the frac tion that migh t or mi gh t no t be the subj ect o f " rights"? I presented there a case for national ownership of water (that we all own it) and a concomitant call for national responsibility in its m anagement (that we all participate in its stewardsh ip). T hat previo us paper also raised fo r discussion one important consequence that wo uld flo w from acceptance of national ow nership o f o ur co ll ective w at er resources, namely that it would call into questio n the legiti macy or validity o f the whole " water rights" proposition. I argued then and will expand upon here the proposition that such rights, in fac t, do not exist. And thus that trading in "water rights" is no longer an issue since there is indeed nothing to trade . The whole rights debate is really no lo nger relevant. Licences however, and the trading thereof, might be a different story . But 26


every collection, distribu tion and supply system is now at least partially in private rather than government hands and there is now universal agreem ent that th e "needs" of the environ mental are indeed legitimate needs. The essential corollary of these changes is that present thinking must be in lin e w ith p resent, not past, realities.

Another critical reality only under very specific and very limited conditio ns.

Beginning at the beginning Before we enter into a direct discussion of th e rights or w rongs of the present water rights debate, however, perhaps three important and much earlier points should be noted . One, w hen Au stralia first started harvesting water from its waterways, and began inserting pumps into ri vers and s t r ea m s a n d building d a m s a nd constru cting distributio n channels to make this whole process much easier, there would seem to ha ve been som e general and of course unwri tten assumptio n that there was - and wo uld be fo r any fo reseeable fu tu re - more than enough water to go roun d, that is m ore than enough to satisfy the requirem ents o f all potential irrigators and associated industries and the need for adequate domestic and stock requiremen ts . T wo , virtu ally all of the massive infrastru cture involved was state ow ned . T he governmen t made its decisions as to w here and w hen such largesse would be provided solely on the basis of w hat it perceived to be the commo n good . (OK, and politi cal exp ediency as well.) T hree, " the en vironmen t" didn' t get a look in. N o-one, or at least no-one in authority, see ms ever to have argued that th e con tinued m aintenance of som e appropriate flow along any natural watercou rse was also a desirable co nsideration, that this too might be part of the common good. Obviously all three of these factors have now radically altered. It is now well recognized that there is clearly no t enough water for all of the competing demands,

The initial agricultural v1s1on that inspired many early water authorities has indeed become reality. A very significant p roportion of Australia' s to tal farm productivity is currently derived from irrigated agriculture and a substantial number of regional towns and cities and their su rro un ding c ommunities have developed and prospered alo ng with this fa rming growth. And by no means has this prosp erity bee n du e o nly to government m oney. Over ma ny ye ars many individual lando wners and companies have invested heavily in irri gation and irrigatio ndependent enterprises. And thus this is also part of the current dilemma. T hese investors, bo th town and cou ntry, have come to believe that their investments must be in som e way protected. But is this a " right"? D o they have a "righ t" to the water upon which their investments so critically depend? It seems to me that there are three closely related aspects involved in the present debate, namely rights, licences and trading. Any attempt to regulate the third o f these facto rs, trading, by manipulating the nature of the second, licences, depends totally upon the validity of the fi rst, rights.

What rights? It may be trite to say it, but it is nevertheless tru e that all fa rming is a gamble. Or rather an o ngoing series of gambles. N o matter how much tim e and effo rt and m oney a fa rmer and his or her fa mily, employees, partners, backers might choose to expend on the farmin g enterprise ultimate success still depends ve1y heavily upo n a range of other fac tors over which the fa rmer has little or no control nor choice. T he weather, obviously, and thus the availability or no t of sufficient water


of th e right quality at the right time , but also many other variables - disease prevalence, markets, supply prices, transport costs, to name but a few - are all not a m atter of individual choi ce. Th e farm er does not have guaranteed immunity from the possibly adverse effects of a negati ve shift in any of these o ther production and profitability factors . Should water be an exception ? Indeed is it an exception fo r any other enterprise, food pro cessing for instance would be a good example, w h ere profitability might equally depen d upon a reliable supply of water of appropriate quality? But wait. Before we rush to debate the answer to this question, let us look a little more carefully at the question itself. That is, what sort of a question is it? Is it simply a question of inherent logic , or is it more one of ethics or social justice or, worse but unfortunately probably correctly , one of politics? I agree that the basic historical context is quite clear - even though its pra ctical manifestation has differed, often dramatically, between the diffe rent states within Australia. In other words, over a long period of time relevant authorities in each state have granted "licences" to primary

produce rs to use (take, have access to , be supplied with) som e designated yearly water allocation. This is or was, presumably, only if the water were there to be had - although unfortu nately this qualification was often not specifically spelled ou t - and then th e licence allowed the farmer to have up to this am ou nt of water, but no m ore . This created an "expectation ", certain ly, that the appropriate water would b e there every year, but unfortunately such expectation seem s subsequently now to have been transfo rm ed into a " right".

More history - and derived mantras Seve ral fu rther hi sto ri cal or past elements are relevant to the present debate - some relatin g to the water itself and its use, some relating to the expectation of its being there. These previous considerations all bear critically upon the decisions, some times hard decisions, chat will now have to be taken. With I think o nly minor variations between licence types, all allocations so far have remained viable from year to yea r, that is irrespective of whether or not th e full amount was taken in any one year. Moreover, little stipul ation was made as

to w hat crops could be grown with the water taken, nor what fo rm of irrigation had to be used. Certainly today rather th an yesterday, but w ho knows about tomorrow , cer ta in crops irrigated by certain m ethodolo g ies are now seen to be greatly "better" - m ore p rodu c ti ve ? n1o r e effi cie nt? more economical? - for irrigated agriculture than others. D rip-fed grape vines are clearly a better deal than flooded dairy pastures . To my way o f thinking this drive for efficiency has led to two un fortunate ..... - one might ca ll them poli cies, buc I th ink of them simply as mantras. Th e first of these, "111ove the wa ter to where the 111011ey is", necessitates the appl ication of th e second, "1111co11ple the water and the land". I challen ge both of these assumptio ns. Both of chem assum e chat the o n ly so lution is to move the water. W h y? Parti cularly if that so-ca ll ed m ovement is halfway across the conti nent. And w h y, even more pertinently, if th ere is now just not enough water to satisfy evety body and effe ctive decisions mu st be mad e a n d effective measures must be taken co red u ce its total or overa ll extraction and use. lt seems to me that not on ly are th ese two propositions based on very shaky logic




b ut also, and vastly 1nore seriously, their application has resulted in some very clear, at least potential, environmental disasters. Let me give two exa mples that are particularly relevant to my home state, Sou th Australia, and both of which seem to me to be totally irratio nal. In th e past couple of years a very substantial potato-growing enterprise has been established a few kilometres from the Murray R iver at Nildrottie, a small co mmunity ou tside Blanchetown. Six or seven large-diameter pipes (in themselves, some wou ld claim, a terrible blight on the landscape) dip into the Mu rray south of Blanchetown and thro ugh th ese are pumped some X m egalitres of water each year to irrigate around Y hectares of potatoes. T he " licen ce" to use this water was traded, I u nderstand , from th e Goulburn Valley da iry district of Victoria . Th ree immediate problems arise. First, although I ca nnot be sure witho ut access to the appropriate documentation, but almost certainly this "water" was not old water, i.e . water previously used regularly to irrigate pasture, but new water, i. e. water previo usly all oca ted but not recen tly used (a so -called silent or sleeper licence). So total water extraction goes up rather than remaining constant. Second, even if this water were derived from a currently- active licence, of the X megal itres of water left in the river system at Sheppa rton how mu ch wo uld be still avai lable at Blanchetow n, that is what, a thousand kilometres dow n st r ea m ? Substantially less than X! So again, relative total extraction is increased. T hen third , whatever m_i ght be the environmental consequences of irrigating pastures in the Goulburn Vall ey, at least somethin g is known and understood about this. By contrast little is yet known nor understood about similarly flo odin g Mall ee sands at Blanchetown. My seco nd exampl e here is probably a good indication of the triumph of politi cs over logic and common sense. Until rece ntly met ro poli tan Adelaide, by agreem ent between the Co mmo nwealth and the relevant states, has been allocated som e 635 gigalitres per year of water fro m the Mu rray-Darl in g syste m. I don't believe that we have ever used the fu ll am o unt. Thus, the pollies argue, we have a surplus. And thus major reticulation schemes have or are being installed to pipe this " unallocated surplus" to th e Barossa and C lare Valleys, predominantly to irrigate wine grapes. Yet one, the Murray m outh almost closes through insufficient 28


ÂŁlow, two, Adelaide now introduces its first ever water restrictions and three, it can be (has been in fact) argu ed that extra irrigation water in the Barossa at least might in the long term be a bad rather than a good thing overall for the wine industry th ere .

Rights and licences and expectations Even if one cannot justify the existence of water " righ ts", and th us one eli minates any need to discuss mechanisms for their trading, what about trading just in water " licences"? Rights indicate some sort of moral imperati ve. The establish ment of rights always implies that 'someone', and that is always someone else, is obligated to guarantee and/ or provide for such rights. But no such guarantee necessarily comes with a licence. A reasonable expectation, perhaps, exercisable under proscribed conditions, b ut definitely not a guarantee. I would see little or no problem in trading these licences, but with two major and very simple cavea ts. First, all sleeper licences are cancelled . Second, any transferred licence remains valid only for the speci fic irrigation system and the specific irrigation area fo r which it was first issued. T ogether these reservations would ensure at least two environme ntal benefits, namely that no new nor additional water would be extracted (or promised) from any system and that no additiona l distribution systems would have to be constructed .

The question of compensation l free ly admit that I may not have heard all of the argu ments in fa vour of compensation, but those that I have heard do not impress me. As indicated earlier, the availability of water for any particular farming enterprise, irrespective of whether this be rain-fed or irrigated agriculture, is just one of the many variables that farmers must bu ild into their financial and operational equations. Some " drought" assistance migh t be justifiable and acceptable under restricted and proscribed conditions, I do n't see that compe n sation is. Two further points are relevant. First, in this specifi c context it should also be usefu l to recall that th e additi onal but oftforgo tten realiza tion that those who clain1 "rights" must also accep t concomitant " responsibilities" is also critically impo rt to the debate. Like all fa rmers, irrigators have a responsibility to plan appropriately fo r those times w hen water might not be as readily available as they had com e to expect.

And second, whateve r money is curren tly being obtained by the "sale" o f sleeper licences is, I believe, no more than a totally unexpected, and equally a totally unea rn ed , finan cia l windfa ll for the o riginal owner of the licence. H e or she had not used tbe water for years, it is not part of the cu rrent operational capital of their particular farm and thus no financial lo ss of any sort would accrue from their continuing not to use it.

Environmental flows Inextricably intertwined with these questions of rights and licences and co mpensation and so on is the also very vexed question of environmental flows. Or, more specifically, the question of who should pay, how much, and to whom, for this agreed environmental need. H ow do we arrange, physically and fin ancially, for our depleted rivers to carry once again some semblance of their original flow? To me the answer, or at least a major part of the answer, is quite simple. Don 't take the water out in the first place. Vircually all of the p resent relevant discussion seem s co revolve around the "problem" of finding water to allo cate back to our rivers. Much of this problem would disappear - or at least would be seen in proper perspective - if the water we decide must flow down the river were left in the river in the first place. Taking it all ou t and th en worrying about how to put some ofit back in again hardly see ms 21st century thi nking. To devote a huge am ount of time, energy, m oney, scientific and politica l angst to retllrn to any river system water that shou ld not have been removed in th e first place is not rea ll y a very productive exercise. This is not the time nor place for a scientific discourse about w hat environmental flow-rate any particular river system shou ld experience. Nevertheless, as an example, if the decision is made in som e specific situation that, say, 25% of the historical flow m ust be maintained in a particular ri ver, then at the first dam on that ri ver 25% o f whatever water comes in must be allowed to pass on down scream, by way of a m odified spillway system., on a continuing and on-going basis. I beli eve that the term " translucent" applies to this spillway practice and that it is curren tly being applied very successfull y to several Victorian rivers. And, eventually, the agreed percentage of inflow must be allowed to pass at all ti mes and in all years, not just in specific releases and certainly not just when o nly some predetermined "level" for that particular dam has been reac hed.


The question of efficiency - more water or less?

proposition w as a key concept addressed in my previo us paper (2) .

successful resolutio n to our nationw ide water crisis.

Before I cl ose let m e re turn to th e question of irrigation efficiency. C ertainly if by changing, from say flo od to drip irrigation , on e could achi eve the sam e yield pe r unit area with half the wate r, th en in th eory we cou ld save half th e wate r. But, in practice, wou ld we? No , almost certai nly not, since th e respo nse in virtua lly every case w ou ld be (has been) to double the area irrigated. A most desirable o utcom e, of co urse, fo r the rele vant farm ers and thei r loca l co mmuni ties, but j ust an other part of the o ngoing disaster if the real problem is that water must be conserved. The re is a partic ular po int , of cou rse, in that last sentence th at must be both rec ognized and acco mmodated. Many rural co mmun iti es are b ased almost entirel y upon irrigated agri culture and its associated indust1ies and businesses. These communi ti es must, em phasize mu st, be intimately in volved in the w hole decisionmakin g process regarding th eir wa ter futu re. Public parti cipation must be real, not pseudo, the public must be not just in fo rmed but also empowered. That

The question of ownership - the fundamental question


I may well be biased, obviously, but nothing I have heard no r rea d within this whole wa ter debate has shaken my firm conviction that th e fund ame ntal qu estion to be resolved , and upo n th e answer to whic h the wh o le so luti on rests, is that of the own e rship of th e wa ter itself abo ut whic h we are argu ing. Both th e recent C OAG meeting and rece nt re ports fro m th e W entwo rth G ro up have spo ken o f th e p ressing necessity to address th e qu estio n of water pricing. With all due respect, however, to these emin ent politi cians and scientists it seems to me that th eir w ho le notio n of " price" is d istorted. What th ey are rea lly describing is "cost", the cost o f collec ting, sto ring, treating, di stributin g, w hatever th e wate r - not the commodity price of the water itself U nti l that is realisti cally de term in ed , w ith co nc urre nt recognition o f fun dam e ntal nati o nal o w nersh ip and fund a me ntal nati o nal stewardship , we just have no fou ndation w hatsoever upo n w hi c h to b ui ld a

I. Yo ung, M .D. and McColl, J. C. (2002) R.obust separation of interests. Water, Vol. 29, no. 7. pp 62- 66. 2. Sabine, J. R.. (2003) Whose water is it anyway' Water, Vol. 30, no.2. pp 8, lO, 12, 14.

The Author Dr John Sabine was fo r many ye ars R eader in Animal P hysiology at the Wai te Agri cul tu ral R esearch Institute of t h e Un iversity of Adelaide and is now an Honoraty Visiting Research Fellow in th e University's D epartm ent o f Geograph ical and Environmental Studies. Since 1994 h e has been Managing Director and P rincip al Consultant for "J. Sabin e International", internatio nal consultants in environmental manage ment and sustainable agricultu re and has m ore recently been concentratin g on the e nvironm ental aspects of in effi cien cy and waste, especiall y waste wat e r, in the agricultural and fo od industries. H e is also C hairman of the (local governme nt) Burn s i d e En v ironm e n t Ad v isor y Comm ittee . Ph/ Fa x (08) 8379 27 15 o r e ma il jsabi ne@austarmetro.co m.au .

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WHAT IS DRIVING ACTIVITIES IN WATER MARKETS? H Bjornlund Introduction The use of Water n,arkets have increased sign ificantly within the three southeastern states during the last six to ten years sending strong signals about the econom ic value of water to users, while emerging legislation as well as CoAG and Murray-Darling Basin Commission policy initiatives aim to ensure that the economic signals also incorporate environmental and social values. This process has been supported by the emergence of water exchanges providing farmers with easy, cheap, fas t, convenient and secure means of transferring water on the temporary market (Bjornlund 2003a,b). frrigators are therefore becoming familiar with water markets, how they operate and their potential benefits (Bjornlund 20036) and markets have assisted them in coping with water scarcity, policy uncertainty, and adjustment pressures (Bjornlund 2003c, 2002a). Many irrigators are now making annual business decisions whether to buy or sell water based on flu ctua ting commodity prices and the level of water scarcity and follow the market from year to year. There is therefore evidence of a commod ifi cation o f water in th e temporary market, whi l e in the permanent market water is still perceived as an inherent part of the farm (Bjornlund 20036, Tisdell and Ward 2003). H owever, there are also clear indications that considerab le uncertainty and ignorance exist about the way markets operate, and many factors impede their efficient operations (Bjornlund 20026). To further the adoption of water markets it is important to understand what drives buyers and sellers in the markets and thereby influence supply, demand and prices. This paper w ill explore the issue of market drivers based on workshops, focus groups and interviews with inigators, activities on the Water Exchange, and records of water authorities. Seven categories of drivers have been identified and will be discussed in this paper.

Farming Patterns and Agricultural Practices Different commodities have a different use pattern and can afford or are willing to pay different prices at different times 30


Northern Victorian Water Exchange

ool Prices for Zone 1A & 1B Greater Goutburn

$250 . - - - - -~--- _- _- _- _- _- _- _- _- _- _- _- _- _ - _ - _ - _ - _ - - - - - - - - - - - - - - ~

-+- Pool Price 1998/1999 - - Pool Price 1999/2000 Pool Price 2000/2001 r-- - - -- ----l". . - - -------,

--+- Pool Price 2001 /2002





a, (/) (I)

N 0



" "




N <D

:z :z"' :z < 0









N -.J




Note: above dates are from the 2001/02 season, the actual dale of 1he exchange varies by a few days from year to year

0 L ~




-'n -'n L (I) m O' ~ O' Exchange No.




"' i:





"' i:





Figure 1 . Price levels on the Northern Victorian Water Exchange 1998/99 to 2001/02.

of the year. Dairy farm ers have a weekly income and therefore tend to buy water during the season, as they need it. They also have a higher gross margin per ML than most grazing and grain growing farmers and are therefore not as sensitive to price flu ctuations. Rice farmers an d most broad acre farmers have a fairly narrow cost margin and receive a bulk payment at the tim e of harvest; they therefore tend not to plant any more land than they can irrigate with the water they have or can buy at that time at a price where th ey can make a profit (about $30/ML). They wi ll then again be willi ng to buy just before harvest if the crop needs a bit extra to finish up or they need to fi ll the soil profile for a follow on crop. Dairy fa rmer are aware of this pattern and therefore plan their buying not to coincide. C hanges to fa rming practices also have an impact on demand for water. Within the dai1y industty there has been a trend toward split calving, which shifts demand to the winter period where the level of natural precipitation is higher, this reduces demand for water during the hot sununer months. Also, there has been a trend toward keeping animals in feedlots and then producing feed such as grain or silage. This has not been w ithout problems, since the use of feeding grain or silage requires different management practices and is more labour and capital-intensive as fomers need

co invest in equipment co harvest, handle and score the feed.

Commodity Prices The prices of and demand for various commodities has an impact on supply and demand in water markets. The price of feedi ng grain is an example of this; during the first year of the exchange dai1y farmers were advised that at prices above $90/ML they wou ld be better-off buying feeding grain. This influenced the behaviour of farmers during the first two seasons (Figure 1) . In N SW, the rule of thumb was that as long as water prices stayed below the price of half a con of grain , the farmers wou ld be better off buying water. As a resu lt of the drought the supply of feed was very low both during 2001/02 and 2002/03 and therefore very expe nsive inc reasin g dairy farmers ' willingness to pay for water toward the end of 2001/02 and the beginning of 2002/03 (Figure 2) . During 2001/02 commodiry prices for the farmers normally supplying the temporary market; that is, the cattle, lamb, wool and grain growers, were very high; these farmers were therefore reluctant to sell, which reduced supply and forced up prices; at the same time, dai1y prices were high increasi ng the dairy farmers' willingness to pay resulting in record prices (Figure 1).




• )Watermove {(

7Anc I\&. I B - Grcutcr Goulhurn


Allocaiion 200112002


200% 180%



..~ - - - - - - ~-.--<..00



g 120%










~~~...................................................~~~~~~~ ..........__...,_...,..1-+-t<'i~ $100 $150 ~ •• • ... . . .-

40% 20%


• •• •• •• •• •• •• · • · • •• · • · • · • •• •• •• •• · • •• • $50 0% +-,~~~~~~~~~~~~~~~~~~~~~~~~~~-+so



< ~







~ d,






~ 8;. ~ z i 0 !:! :±









9 8




~ i




~ ~

~ ~ <" <" ~ ..,_ 8 N









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Exch:rnge D:ue

Figure 2. Price levels on Watermove 2001/02 to 2002/03.

Interviews with buyers and sellers of water during 1998/99 clearly confirmed the importance of commodity prices as a dri ver of temporary trade: 45% of sellers within the GMID and 34% within the M IL gave lo w commodity p rices as an important reason for se!Jing while 48% of the buyers w ithin the GMID and 36% within the MIL gave good commodity

AGAL Australian Government Analytical Laboratories

prices as an important reason for buying, while approximately 38% of bu yers in both regions gave 'a one-off opportunity to sell m ore of a certain produ ct' as an important reaso n to buy.

Climatic Variations If natu ral precipitation within the irriga ted area is down or evaporation is

up due to hot wea th er and strong dry winds, then demand for water will be hig h in o rder to su bsti tu te rainfall and replace evaporation. T he sprin g of 2000/01 was very wet reducing the need for ea rl y irrigation, whic h redu ced demand in th e market keepin g prices down (Figure 1 ). T he spring of2001/02 was very dry and hot with strong dry winds, as a result evaporatio n was very high; the combine d impact was a very high need for irrigation with use up by 13% to 15% compared to previous seasons. D emand and thus prices did not rise immediately, due to the experi ences from past years, despite the fact that some farm consultants we re advising to buy, because they could see that demand eventua!Jy would drive prices up. D emand did indeed build up during spring contributin g to significant price increases during D ecember and January . Finally, that yea r opening rains did not start until very late in autum.n causing demand to remain high; this was a contributing factor to th e high pnce level late that seaso n (Figure 1) .

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Supply of Water T hree main factors have an impact o n the level of water supply: 1) alloca tion level; 2) policy dec isions; and 3) n1ajor non- agricultural players. When seasons are dry in the ca tchment, allocations are low, th ereby increasing demand for water in the market. T able 1 clearly shows how volume traded as percentage of water use increases when allocations are low . During periods with only 100% allocation trade accounts for 15- 18% of water use and up to 24% when allocations only reached 57% in 2002/03, whereas when allocations are at 200% trade only accounts for 5-6%. lrrigators within the Goulburn System, which have not had any sales-water the last five years, are therefore far more active in the water market than irrigators within the Murray System, only 10% of fa rm businesses within the Goulburn System have never participated in any kind of water trading compared to 35% in the Murray System (T able 2). D uringl 998/99 the opening allocation was only 40% within th e Goulburn System; horticultu ral growers therefore panicked and bought water to protect their permanent plantings resulting in ve1y high opening prices (Figure 1). H owever, prices dropped again as allocati o ns reached 100% during September. The following two years opening allocations were also below 50%, but armed with their experiences from the fi rst year farmers did not panic and prices remained relatively low. At the start of2 002/03 the allocation was 34%, but contrary co previous seasons Goulburn - Murray Water (GMW) gave little hope that it would reach 100% (Figure 2). H orticultu ral growers therefore bought water co protect their permanent plantings. Initia ll y th ey expected an allocation of 60- 70% and bought wa ter co satisfy their demand at chat level. This demand caused prices on the Exchange to reach $500/ML early in the season. However it soon became clear chat the allocati on wou ld never reach eve n 60% . H ortic ult u ral growers therefore reentered the market co satisfy their dem and at that level, pushing prices back up to $500. During 2001/02 and 2002/03 G- MW for the first times allowed cemporaiy trade upstream into the Goulburn System under the substitu tion rule thereby increasing supply. When this was announced (late in January 2002 and early in Janua ry 2003) prices temporarily dropp ed, until the market had absorbed this additional su pply (Figure 2) .



Table 1. Relationship between seasonal allocations and extent of trade . Season

Goulburn System Allocation (%)1 % traded 2

1995/ 96 1996/ 97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03

150 200 120 100 100 100 100 57

Murray System Allocation % % traded

7 4 9 13 14 16 18

200 200 130 200 190 200 200



3 3 13 5 8 2 5 16

1. These are the maximum allocation level reached for each season. 2. Total temporary trade as percentage of water use for each season. Based on DNRE (2002).

Urban water authorities and other institutional water users are large suppliers to the temporary market, so their entty and exit from the market will have a significant impact on supply. Institutional sellers are typically not active in the market over the C h ristmas-New Year period while irrigators are still buying. This has traditionally caused a reduction in supply, and in both 200 1/02 and 2002/03 it w as a contributing facto r to rising prices in late D ecember.

Risk Management Farmers are increasingly concerned about risk managem ent, as the risk burden associa ted with flu ctuation in supp ly during th e seasons has bee n shifted from the authorities co the irrigators. Further, irrigators perceive chat the MDB Cap has reduc ed their access to water and presents a significant risk to th ei r long-term via bility (Bj ornlund 2002c). This perception was echoed by 49% of the permanent buyers within NSW w ho gave the impact of the Cap as an important reason co buy water permanently. Table 2 shows the mixture of different trades that farm businesses have been involved in until 30 June 2001 w ithin the Pyrami d Hill/ Boore area (PHB) supplied

by the Goulburn System and the T orrumbarry area supplied by the Murray System . V ery few have only bee n involved in permanent trade, while quite a large proportion have only participated in temporary trade as either buyers or sellers. The largest group within the PHB, with 25.3%, has participated in both te mporary purchases and sales. Th ese farme rs either adjusted their risk position during the season, or are making an annual decision whether to buy or sell depending on commodity prices and the price of water. The second largest group , with 24.1 %, has both participated in permanent and temporary transfers and have thus shifted their risk position. Cross tabulating th e latter group's activities in the perman ent and cempora1y market the follo wing were revealed (within the PHB): • 65.6% of those selling water perm anently, also bought water on the temporary market; they are sh ifting their risk position co rely more heavily on annual purchases in exchange for cash. Perhaps they have a production, w hich is more adaptable co changing supply, and they are therefor e better able to manage the risk, or they are willing co rely on temporary purchases.

Table 2. Mixture of trading activity by farm businesses.

Trading category

% of farm businesses in category Pyramid HilljBoort Torrumbarry

Only permanent se ller

0. 4


Only permanent buyer

1 .1 21.4 17.0 0.2

0.8 18.9 16.1 0.1 12.2 14.9

Only temporary sel ler Only temporary buyer Only permanent buyer and seller Only temporary buyer and seller Both permanent and temporary trader Non-trader

25.3 24.1 10.6



• 88.5% of those selling w ater pe rmanen tly, also sold w ater on the annual marke t; these irrigators have onl y so ld a proportion o f their unused w ater, and se!J what is stilJ in excess o n the annual m arke t; in effect they have no t shifted th e ir risk positi on but cashed in on an unused asset. • 79 .7% o f those buyin g w ate r on the permanent market, also bought w ater o n the te mpo rary market; th ey have bou ght so me drought insurance, but could no t affo rd full co ver. • 60. 9% o f ch ose bu ying w ate r o n the permane nt market also sold water on the temporary market; these irrigators bought full drought insurance and now se!J water annua!Jy, when they do not need it. They might be mo re conservative or risk averse, or have less fl exible produ ctio ns to manage such risk. W o rksho p parti c ipants argued chat sp eculation in buying and selling o f water is a growing dri ve r in w ater marke ts. In support of this state me nt interviews sho wed that 12% of te m po rary sell ers in NSW and 22% with in the GM ID gave speculation as an important reaso n for selli ng w ater on the temporary market.

Among pe rmane nt buyers, 11 % w ithi n NSW and 38% wit hi n the GMID said that speculati on w as an important reason fo r bu ying water on the perman e nt m arket. Some irrigators are willing to gamble on flu ctuatio ns in price during the season. Durin g the first three yea rs o f the Exc hange prices started high and e nd ed lo w (Fi gure 1) . A rm ed w ith thi s experien ce som e mi ght sell wa ter early in the season and bu y back later and reap the bene fi ts. lrrigators be having this way during 200 1 / 02 suffered a significant loss.

Cost and Financial Issues A n u mb er of c ost and fi nanc ial considerations are also driving the actions of irrigators. So me irrigators are selling wa t e r p e rmanent l y and b u y in g temporarily in o rder to redu ce counc il rates and water rates. Along the same lines a group o f irri ga tors took G on nawarra C ouncil to court challenging th e face that th e C oun c il includ es w ater rights in th e rating base, the case was however settled out of cou rt so no ruling was made on th e issue. W ater is considered co be a good longte rm investme nt, not so muc h du e to

Merck Pty. Limited ABN 25 005 064 791 207 Colchester Road, Kilsyth, Victoria 3137 Phone: (03) 9728 5855 Fax: (03) 9728 7611 Toll Free: 1800 335 571 Email: philip@merck.com.au

de mand factors bu t rather because of supply fac tors. As th e pressure in creases o n re cu rn i ng mo re w a te r to t h e e nvironment, supply for consumpti ve uses w ill decrease, fo rcing pri ces up. Whe n commodity prices are good, o r extra m o ney is inj ec ted into the fa r m eco nomy, su ch as dairy adju stn1e nt payout, cash might be available, a n d p e r man e n t wa t e r ri g h t s m ay b e considered a good investment. H oweve r, w he n interv iewing irriga tors wh o sold water on th e temp orary ma rket du ring 1998/ 99 it was fo und th at o nly 9% in N SW and 5% w ithin th e GM ID said t h at a n impo rtant reason fo r usin g t h e temporary market was that they expected pri ces on the perman ent market to increase. Whe n inte rviewing irri gators w ith in th e GM ID w ho have sold wa t er on the pe rm anent market in th e past, but subseque ntly used the temporary marke t, 41 % said that th ey d id so because they expecte d permane nt prices to in crease. Th is could suggest that sellers, w ho h ave o nce accepted a price on th e perm an e nt market, a nd th en see n pri ces increase , have give n this issue mo re tho ught.





The very high prices of temporary water during 2001 /02 and 2002/ 03, have driven the permanent market, because the relative p ri ce re lation ship between temporary and permanent water sh ifts in favour of the permanent market, and many irrigators report a dissatisfaction with chasing water eve1y year and the increased uncertainty of getting the w ater when they needed it. The level of penalties associated with use in excess of entitlement has had an important influ ence on demand for water and buyers' willingness to pay. Until 200 1/02 penalty rates within the GMID were $200/ ML, w hich was as high as prices went at the end of that season (Figu re l). For 2002/03 the penalty rate was set up to $500/ML, whic h again was one of the reasons why prices during that season went to $500/ML. There is also evidence that th e sellers have a strong desire to keep the land and water assets together, to protect th eir value and keep their options open. In NSW 54% and within the GM ID 64% of the temporary sellers said that an important reason fo r using the temporary market was to protect the value of their property. Also, within the GM!D, 79% of the irrigators who sold water on the permanent market, but used the tem porary ma rket for subsequ ent sales, said that an important reason for this change was to protect the value of their property . Again , irrigators who have actually done permanent transfers seem to have given the issue more thought. Tax consideration is also an important driver of temporary markets relative to permanent markets. Annual purchases are operatio n al costs and therefore tax deductible, while sales are annual income to be offset against costs. Since most sellers have relatively l ow farm incomes (Bjornlund 2002a) they pay little or no tax. On the other hand, permanent purchases cannot be deducted or depreciated in tax, and permanent sales might attract capital gains tax. Qu ite a large proportion of market participants are aware of this fact. Tax benefits were given as an important reason for using the temporary market byl4% of the temporary buyers in NSW and 16% in GMID, while 40% of the permanent buyers within the GMID using the tem p orary ma rket for subsequen t purchases gave tax benefits as an important reason for this change. Again, irrigators who have actually done permanent transfers seem to have given the issue more thought.



Administrative Issues Within all three states workshop and focus group participants stressed that the administratively lengthy, complicated and thereby costly processes of permanent trade as well as the uncertainty of the o utcome, compared to the relative ease, certainty and low cost of the temporary market , are significant drivers of the tempora1y market. T hese concerns came strongly through in the interviews with permanent traders who had used the temporary market for subsequent transaction, 39% of the permanent buyers said that an important reason for using the t e mporar y market for subsequ en t pu rc hases was the difficulty of the permanent tra nsfer process, and 32% referred to the high cost of permanent trade; similarly, 50% said that an important reason for changing to the temporary market was that with the Exchange in place it is so easy. Among the permanent sellers, 59% referred to the ease of use of the Exchange, whil e on ly 9% referred to the difficulty of the permanent transfer process - obviously, it is the buyers who have to face the difficulty of the administrative processes. The allocation level is revised the 1st and 15th of each month. This influences the trading pattern, as irrigators tty to hold off buying until after that day to see if allocations should be increased thereby avoiding the purchase.

Conclusions This paper has identified seve n categories of water market drivers : 1) fa rming patterns and agricultural practices, 2) commodity prices, 3) climatic variations , 4) supply, 5) risk management, 6) cost and financial issues, and 7) administrative issues. Th e major driver of the increased use of temporary trade has been resource constraints caused by a prolonged period of drought, the impact of the MDB Cap, and water trading activating unused entitlements; water exchanges have facilitated this expansion in temporary trade. Permanent trade is constrained due to the uncertain, complicated, slow and costly transfer process, the considerable policy uncertainty associated with the future security of water entitlements, and farmers perception of entitlements as an inherent part of the fa rm. Risk management was identified as one of the main drivers of both the permanent and temporaty markets as irrigators try to come to terms with the effect of new water allocation policies, significantly shifting the risk burden from water

authorities to the individual irrigators. Long-term leases and leaseback arrangements would improve irrigators' risk management capability. The implementation of such instruments would be enhanced by the formal separation ofland and water rights, which is now emerging in most jurisdictions, but there is still considerable opposition to this move within sectors of the irrigation communities. Changes might be required to the way water authmities structure water rates, and the way councils compute co uncil rates, in order to prevent rate avoidance.

References Bjornlund, H . (2003a): Efficient water market mechan isms to cope with water scarcity.

fVnter Resou rces Deveiop111ent (i11 pri11t) Bjornlund, H (2003b): Farmer Participation in markets for temporary and permanent water in southeastern Australia. Agriwlt11rnl Wnrer Mmwge111e111 63(1 ), 57-76. Bjornlund, H. (2003c): Water markets as risk management and adjustment cools with in irrigation communities. Proceedi11gfro111 the XI f,11orld Water Co11gress. Madrid 5-9 October. Bjornlund, 1-1. (2002a): The socio-eco nomic struccure of irrigation communities - water markets and the structural adjustment process. Jo11mnl of R11rnl Society 12(2), 123-145 . Bjornlund, H . (2002b): What Impedes Water Markets. Proceedi11gs J,-0111 the 4th Austrnlasin11 Water Lnlll n11d Policy Co1ifere11ce, Sydney 2425 October, 165-176. Bjornlu nd, H. (2002c) : The Adoption , P erception and Impact of the New Water Policy Paradigm within Two Australian States. Proceedings from the Conference 'Irrigation Water Policies: Micro and Macro Considerati on'. http/ / www. worldbank. agadirconference.com. DNRE, Department of Natural Resources and Environment (2002) : The Value of Water: A Guide to Water Trading in Victorin. DNRE, Melbourne, December. Marsden Jacobs 2000: Companion Paper 2 Economic and Social Impacts. In MDBC R evielll of the Operation of the Cnp. MDBC , Canberra, Tisdell, J.G. and Ward, J.R. (2003) : Attitudes coward water m arkets: An Australian Case Study. Society a11d Nnt11ral R eso11rces, 16, 6175. Young, M.D. and McColl, J.C. (2002): Robust

Separn1io11 n search for n ge11eric fra111ework to si111plify registratio11 n11d tmdi11g ef interest in 11nt11ml resources. CSIRO Land and Water, Adelaide.

The Author Dr Henning Bjornlund is a Research Fellow at the School of International Business, University of South Australia, C ity West Campus, North Terrace, Adelaide SA 5000, Tel: 08-8302 0064, Fax: 08-8302 0512, Mobile: 0439 802 684, e mail: henning.bjornlund@ unisa.edu.au


WATER CONSERVATION AN ECONOMIC INCENTIVE FRAMEWORK T Chapman Introduction Within the A ustralian w ate r industry t he o rganisati on stru ct ure ge nerally preferred for service delivery is the co mmercially-focused busin ess. Under t his mod el, the b usiness derives its revenu e from the sale of w ater to customers. To e nco urage customers to save w ater, it is desirable for a high propo rtio n of revenu e to be earn ed through vo lumetric charges. Short te rm profit for the busin ess w ill the refo re be maximised by selling more water. Against this background it is understandable that som e obse rvers bo th within and outside the industry wi ll be confused and cyni cal abo ut a w ater busin esses intenti o ns with respect to water conservatio n , even if that business is conscientio us in its endeavo urs to promote w ate r conservation. A paradi gm shift in ince ntives could occur if the profit for a water business w as m aximised by reducing water sales. Th is wo uld align business d1i vers w ith environm e n t a I d r i v e r s a nd c ommunit y expectations, and create improved co nsistency of purpose w ithin th e business. T his in centive co mbin ed w ith th e c reation o f a fund specifically for investm ent in water conse rva tio n by th e wa ter business mi ght pro vide a powerful, coherent frame work w ithin w hi ch a w ate r busi ness could o ptimise bo t h se rvice delive ry and wate r co nservati o n outcom es.

Outline of an economic incentive framework T o achieve the outco m es described in th e introducti o n an in centive fram ework w ould need to achieve the follo w ing minimum o bj ecti ves: • R e tail pri ces sh o uld e n co urage custom ers to conserve w ater, and hence should be biase d towa rds volumetric rathe r than perio d ic charges so that customers pay fo r each unit of water used. • W ater retaile rs sho uld have ince ntives to encourage wate r conse rvatio n (or at least no t to encourage water wastage), and hence sho uld have largely fi xed reve nue regardless o f volume sold.

• Water re taile rs should have incen tives to b ecom e more effi cient, and hence shou ld be rewarded for expenditure minimisa tion. • A rational fram ew o rk is requi red for reg ulatio n by an independent eco nomic regulator suc h as the Essential Services C omm issio n A fram ework that ach ie ves these o bj ectives might o perate as foll ows: 1. A cap o n revenue derived fro m water volumetric pri ces is set by the price regulato r, based o n th e re ta ile r's total service delivery costs (including interest, tax, & profi t) 2. T he appropriate level o f expenditure on water conservatio n is established by the reg ulator. To d o this it w ill be necessary to weigh up the environm ental, social and economic tradeo ffs in pursuing w ate r co nservation, and take account o f the water savings likely to be achieved for any partic ular level o f e x pe ndi ture . The regulator might establish this by accepting su bmissions fro m appro priate parties , su c h as a re l ev an t Go ve r nm e nt depa rtment. 3. Volumet ri c tariffs are set that will provide (at "average year" fo recast sales volumes) sufficient reve nue to reach the cap plus th e selected level o f funding fo r water co nse rvation . 4 . A ll revenue received in excess of th e reven ue ca p must be spent o n wa ter co nservation programs. This might b e m a na ged by d epo siting th e surplus revenue into a wate r conserva tio n fund to be spe nt o ver say a 5 -year ro llin g prog ram. 5. Bulk su pply costs correspo ndin g to an "average year" sal es fo recast are provided fo r in the revenue cap. Actual bulk su pply costs w ill vary dep ending upo n the actual sales volume. Exposure to a potential increase o r decrease in bulk supply costs pro vides an incenti ve for th e re tailer to impl ement ~[fectii1e w ater co nserva tio n p rog rams using the fun ds available from the water conservati o n fund .

6. C o mparative competition co uld also b e used as a m echanism to ensure that w ate r conservatio n fund s are used effectively .

An Example Following is a step -by- step nume ric exa mple ou tlining the applica tio n o f the frame work.

Establish the revenue cap and tariffs (1) E stablish t he reve nue cap Vo lu me-ind ep e nd en t c osts for th e busin ess (including interest, tax & profit) - $75 M Volume-depe nde nt costs (fo r annual " average w eather" vo lum e o f 100 C l) $25M T OT AL co ses - $ 1 QOM

Hence revenue cap = $1 00M (2 ) Es tablish des ired expe nd iture on wate r co nserva tio n, say $SM /year (3) E stablish tari ffs To tal re venue requ ired = $100M co co ver costs+ $S M fo r wa te r co nservation fund

= S105M Annual (average w eathe r) w ater sal es = 100 GI Tariff = S 1 .05 M I Gi (or $ 1 .OS/ kl) (assum ed 100% volumetric) The Results The results for three hypothetical actual years are set o ut in T able 1 . Fo ll o w in g is a brie f descrip tio n of each scenario. (Although the descriptio ns differe ntiate b e t w e e n und e rl y ing d e m a n d a nd wea th e r-related de m and , t he fram ework does not requi re this to be kn own in practi ce . On ly total wa ter sales data is actu ally required.) • Sce nari o 1 : T he business is e ffective in conserving water and underlying demand reduces by 2% (or 2 G I). T h e weather fo r the yea r is average. • Scenario 2 : T he busin ess is effecti ve in conserv ing water and underlying dem and reduces by 3% (or 3 GI). H owever, dry weath er ca uses a 5% in crease in dem and relative to an average year, causin g total WATER NOVEMBER 2003



water sales to exceed the original "average year" forecast. • Scenario 3: The business is effective in conserving water and underlying demand reduces by 3% (or 3 GI). Wet weather causes a further 5% decrease in demand relative to an average year, causing total water sales to be 8% below the original "average year" forecast. Although none of the scenarios have been designed to reflect ineffective water conservation activities, the results would be similar to scenario 2.

Critique of the Framework • A retailer would have a financial incentive to sell less water. Criticism that retailers can't be serious about water conservation would be neutralised. • For water supply services, retailers would have a long term cost reduction rather than reve nue maxi mi sa tion objective. • Better alignment of retailer staff to clear corporate goals (cost reduction and water conservation). Drivers would become more transparent within the business allowing improved understanding and decentralised decision making w ithin the organisation. • By limiting application of the cap to water sales revenue, retailers would not be excluded from pursuit of innovative new business ventures that wo uld contribute additional revenue outside the cap. • The shareholder's dividend from water supply would be less variable than at present. (The dividend could still be increased through cost reduction.) This reduces the need for budgets that take a conservative view on the weather. • An appropriate party would need to articulate the long-term incentive for water conservation. A benefit of the framework is that it demands consideration of the likely levels of expenditure to achieve various levels of water conservation rather than establishing a water saving target without consideration for the cost. • Another way of thinking of the allowance of funds for water conservation is that it builds into the price some cost for environmental and social externalities associated with water harvesting. The funds generated are used to reduce those externalities in the future. In addition, the funds are generated through higher volumetric prices w hich also stimulate water conservation through demand elasticity impacts.








Table 1 Scenario 1 WC effective avg weather

Scenario 2 WC effective dry weather

Scenario 3 WC effective wet weather

Underlying water sales (ie: adj usted for weat her}

98 GI

97 GI

97 GL

Variation caused by weather

0 GI

5 GI

- 5 GL

Total water sales

98 GI

102 GI

92 GI

$102.9 M

$10 7.1 M

$96.6 M

$100 M

$100 M

$100 M

Water Volumes

Water Sales Revenue

Total revenue (at $1.05 / kl) Business P&L

Capped revenue Volume-independent costs (incl interest, tax, profit)

$75 M

$75 M

$75 M

Volume-dependent costs

$24.5 M

$25.5 M

$23 M

Total costs

$99 .5 M

$100.5 M

$98 M

$0.5 M (extra EBIT)

-$0.5 M (reduced EBIT)

$2.0 M (extra EBIT)

$2.9 M

$7.1 M

- $3.4 M

Revenue less cost Water Conservation Fund

Cont ribution to WC fund

• Automatic adjustment is implicit. In wet years when the need for conservation is lower (ie: more water is harvested), the surplus funds available fo r conservation will be lower due to lower sales . In dty years when the funds are more necessa1y, more funds will be available . • T he framework operates effectively in a wholesale/ retail regime or with the allocation of capacity share bulk water entitlements to a retail water company.

Comparison of alternative frameworks A number of possible regulato1y frameworks ex is t for promoting water c onservation . Under t he c u r rent framework in Melbourne, the retail water companies are required as an obligation of their water and sewerage licence to develop and implement a Wate r Conservation Plan each year. Although guidelines exist on the content of the plan, the economic tradeoff between business revenue from water sales and business investment in water conservation is made by the management team and Board. As we transition towards more rigorous economic regulation like that proposed for economic regulation of the industry by the Essential Service Commission, internalising this tradeoff is unlikely to be considered acceptable. It is expected that only explicit binding obligations on the business will be funded. Table 2 outlines the fo llowing four possible institutional fr ameworks to encourage water conservation, along with a brief critique of each:

• Independe nt water co nservatio n authority • Input targets • Volumetric targets • Economic incentives

Conclusion From the perspective of a water retailer, an economic incentive framework has a number of features that make it an attractive option to provi de water businesses with the means and an explicit incentive to promote water conservation. While it is clear that further development of the concept would be required prior to any attempt at practical implementation, the proposed transfer of the water industry to economic regulation by the Essential Services Commission provides an opportuniry to take the next step.

References National Economic R esearch Associates for the Department of Natural Resources and Environment, A Review of Melboume's Water Tariffs, O ctober 2001. National Economic R esearch Associates for Yarra Valley Water, Water Conservation Economic Incentive Framework Scoping Study, January 2002 . Montgomery Watson Harza for the Independent Pricing and Regulatory T ribunal, Mid-Term R eview of Sydney Water's Demand Management Strategy, July 2002 .

The Author Tony Chapman is Business Strategy Manager with Yarra Valley Water. Email: tchapman@yvw. com.au







Table 2. Comparison of four possible institutional frameworks. Option

Water Conservation Authority

Input Targets

Volumetric Targets

Economic Incentives

Summary Description

Independent authority to promote water conservation, similar to Sustainable Energy Authority. Might be funded by a levy imposed on water companies, or from consolidated revenue.

Specific targets imposed on a retailer that require identified activities to be undertaken. The identified activities are expected to help conserve water.

Target imposed on retailer that requires reduction in the volume of water drawn from supply.

Retailer's water sales revenue capped. Tariffs set by regulator so that revenue wil l exceed cap. Surplus revenue must be used by retailer to fund water conservation initiatives. Cost reduction (esp bulk water cost) and comparative competition provide incentives for effective water conservation expenditure.

Key Features Economic regulator won't fund un-profitable water conservation activities by retailers, effectively preventing retailers from undertaking these activities. Retailer becomes a "water sales¡ business (not a "water services ¡ business)

Input targets can be very specific to avoid dysfunctional impacts.

Target may allow for connection of new customers (eg: per capita), and may be segment-specific to avoid deterring industry (but typically aren't). Typically target spans many years to allow adequate time for implementation and to assist in allowing for variations caused by weather. Retailer must justify to the economic regulator the funding requ ired to achieve targets. To assess success, actual volumes must be adjusted for weather as annua l savi ngs are typically small relative to variations caused by weather.

Incentive for retailer to sell more water is eliminated as extra revenue will not contribute to profit. Profit is maximised by minimising cost.

Strengths & Weaknesses

Targets do not resolve the need for tradeoff between profit maximisation and water conservation, and hence do not fully address the comm unity's concern. There is no incentive to exceed the target. The water company might seek a len ient target to maximise profit. Volume of water saved depends on t he quality of the original estimates of the likely savings from each targeted measure. These estimates may be questionable. Conflicting objectives cause gaming to maximise profits AND achieve targets. Incentive exists to implement targeted measure poorly. Water company must argue with t he regul ator over how much it will cost to meet the target. If regulator underallocates revenue then who 's to blame for failure to achieve the target? Consequences of fai lure to achieve target are usually unclear (eg: revocation of licence is unlikely).

Targets do not resolve the need for tradeoff between profit maximisation and water conservation, and hence do not ful ly address t he community's concern. There is no incentive to exceed the target. The water company might seek a lenient target to maximise profit. Measurement of performance against a volumetric target is problematic due to variations caused by weather. This also complicates establishment of the target. Water company must argue with the regulator over how much it will cost to meet the target. If regulator under-allocates revenue then who's to blame for failure to achieve the target? Consequences of failure to achieve target are usually unclear (eg: revocation of licence is unlikely).

Tradeoff is eliminated. Profit is maximised by reducing consumption in the most cost-effective way, addressing commun ity concern that reta iler wants to sell more water. Clarity in retai ler objectives: cost minimisation + water conservation. The retailer is a proponent of water conservation - a comprehensive "water services¡ business . Economic regulator must determine appropriate level of water conservation fund ing for community benefit, removing burden from retailer. Regulator can seek guidance from the community. Some dysfunctional incentives possible (eg: to to discourage industry) but can be avoided in theory or managed in practice. The consequences are clear success in water conservation increases profit. Variability in income to water conservation fund may be difficult to manage.

Apparent role clarity for retailer (ie: promote water sales.) But, underlying conflict between triple-bottom-line objectives will cause confusion and damage employee commitment. Major conflict will exist in some areas, eg: dealing with water-sensitive land developers. Retailers lose "h igh moral ground " and the potential for positive contact with customers. May be relatively ineffective in actual ly saving water. Potential lack of incentives for authority to spend effectively.




Abstract There has been and will continue to be a lot of discussion about volumetric flow in rivers and particularly the River Murray. It is also timely that the investment made to maintain the quality of the water that is being used, traded and circulated is discussed. This paper provides an overview of the salini ty levels in the River Murray from 1980 - 2003, a review of salinity levels in 2002 - 2003 (one of the worst drought years in history) and highlights future risks that will impact on the future water quality of the rivers within the Murray-Darling Basin. It is also important that when looking at salinity levels, and particularly in the River Murray, that long term trends be used in analysis and not selected figures that could represent lower salinity levels due to short term climatic conditions or management actions such as freshwater dilution flows.

diluti on flows, building and operating salt interceptio n schemes, and due to the effectiveness of State salinity action plans and Land and W ater Management Plans. The major salt intercepti on schemes co nstructed in the Murray-Darl ing Basin sin ce 1980 and their estimated effect in reducing average river salinity are shown in Table 1 .0.

Salinity Levels - 2002 to 2003 Salinity levels in the River M urray during last year's drought are shown in Figure 2.0, along with the estimated salinity levels if the above salin ity management actions were not in place. These recorded salinity levels were lower than the long term average as a result of several factors including the source of the

water, South Australia receiving full entitlement flow and the reduction in sa line inflows due to the drought. As a result of low inflows and low water levels in Menindee Lakes and Lake Victoria during the 2002/2003 season, the majority of flows along the River Murray were sourced fro m Dartmouth Dam, which ho lds some of the freshest water in the R iver Murray system. In addition South Austral ia received full entitlement flow of 1850 GL, thus ensuring adequate dilution of sa line groundwater inputs. This situa tion was in contrast to other drought periods such as 1982/ 1983 where flows were sourced from more saline storages including Menind ee Lakes and Lake Vi ctoria, and 1967 / 1968 when South Austra lia experienced a reduction

The Effect of Salinlty Management In the Murray-Darling Basin • Average Salinlty Levels In the River Murray at Morgan (South Australia)


Salinity Levels - 1980 to 2003 One of the clear successes of the Murray-Darlin g Basin Salinity and Drainage Strategy 1988-2001 has been the coordinated efforts of community groups and Governments to control and reduce salinity levels in the lower parts of the River Murray, and this success has been widely recognised in recent years (MDBC 1999, MDBMC 1999, 2001). The improvement in long-term average salinity levels in the River Murray at Morgan since 1980 is shown in Figure 1.0. This improvem ent in salinity levels has been in response to significant investment by Governments in



Recordad S1llnltv Levell Effect of SallnllY Mln1aemenl (•200EC) 300


~~~~~##~#~~~~~~#~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~ Dole

Figure 1.0: Long-term average salinity levels in the River Murray at Morgan since 1980.

ECONOMICS AND THE VALUE OF WATER - - -----------------------Table 1 .0 . Salt Interception Schemes and contribution to salinity credits at Morgan (Source MDBC). Salt Interception Schemes


Salt Credits EC at Morgan

M ildura-Merbei n and Buronga Salt Interception Scheme


33 EC

Noora Drainage Diversion Scheme


21 EC

Rufus River Salt Interception Scheme


43 EC

Additional Dilution Flows


28 EC

Upgraded Mildura Merbein and Buronga SIS


3 EC

Woolpunda Salt Interception Scheme


41 EC

W aikerie Salt Interception Scheme


1 3 EC

Mallee Cl iffs Salt Interception Scheme


13 EC

Psyche Bend Drainage Diversion Scheme

1 996

1 EC

Ba rr Creek Drainage Diversion Scheme -New Rules


6 EC - 200 EC


in its entitl ement flows du e to low resource availability. I n addition to these fac to rs the dry co nditions across che Basin in 2002/ 2003 contributed co a reduction below average levels for saline inputs from groundwa ter and irrigation return flows. Whil e South Australia received full entitlem ent flow in 2002/ 2003, wicho uc good rainfall throughout che ca tchment and an increase in resource availability fo r 2003/ 2004, flo w s may be cue and chis w ould be expected co result in inc reased salini ty levels along lo wer rea c hes o f the Rive r Murray o ver co ming months.

Future Salinity Risks - Dryland Salinity While che successes o f th e 1988 Salinity and Drainage Strategy have pro v ided some breaching space, recent effo rts co assess future D1y land Salinity

Ri sk have emphasised th at o ngoing efforts to manage sa linity are essential. The Sali niry Audie of che MurrayD arling Basin (MDBMC 1999) estimated future salt loads to the streams and rivers in the Basin over the next 100 years. This assessm ent showed that sa lt, previously stored in the landscape, is being m obilised by lo ng term rises in groundwater tables du e to land use changes across the Murray-Darling Basin. The Saliniry Audie es timated that 'Business as usual' w o uld m ean chat the reduction in lower River M urray salinity achieved ove r the last decade w ould be cancelled out within 20-30 yea rs, and median salinity levels wo uld exceed th e Australian Drinking Water Guideline for goo d q uality water w ithin 50-100 years. Following o n from the w ork o f th e Salinity Audit, the Australian Dryland Salinity Assessm en t (NLW R A 2000) undertook additional work to estimate the

The Effect of Sallnlty Management In the Murray-Darllng Baaln Dally Sallnlty Level•· Jan 2002 to July 2003 1200


:_ Recorded 81llnlty Level•



!fleet of 81llnlty M1n1;ement (• 70 to 270 I C)


Figure 2.0: The Effect of salinity management in t he Murray-Darling Basin, Daily Sali n ity Levels (Source MDBC).

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area at risk and the impact of the ir ca tchme nts. It establishes Table 2 .0 : Areas (hectares) with high potential to Australia's d1y land salinity over th e targets fo r the ri ver salini ty of each develop dryland salinity in Murray-Darling Basin next 50 years. tributa1y valley and the Murray(Source - NLWRA 2000). Darling system itself, which reflect Th e Australian Dryland Salinity the shared responsibi li ty for action State 1998/ 2000 2050 Assessment estimated that the area both between vall ey comm unities wi th a high poten tial to develop New South Wales 1 50,500 Ha 1,300,800 Ha and between States. dryland sa lin ity in Australia would Victoria 445,400 Ha 1,444,500 Ha increase from 5.6 million hectares The Stra tegy pro vid es th e Queensland 48,000 Ha 628,400 Ha in 2000 to 17.0 mill ion h ectares in framework for salinity m anagem ent South Australia 19,800 Ha 34,000 Ha 2050. Within the Murray-D arl ing in the Basin fo r the n ext decad e, Basi n it was estimated that about and has the follo w ing objectives: TOTAL 663, 700 Ha 3,407, 700 Ha 3.4 mi llion hectares of land in the • Maintain the water quality of the easte rn and south ern regio ns of the shared water resou rces of the Murray-D arl ing Basin w ill be at risk by over-a r chi n g Int er-gove rnm enta l Murray an d D arl in g R ive rs for all 2050, as shown in Table 2.0. Agree111ent. Th e NA P targets nine p1iority beneficia l uses - ri ver sal inity at Morgan, regio ns in the Murray- D arling Basin for G iven the estimated future d ryland S.A., w ill be m ai ntained at less than 800 addressing salinity and water qual ity salini ty risk w ithin the Basin, any complaEC for 95% of th e time; issues. cency in o ngoing efforts to manage salin ity • C ontrol the ri se in salt loads in all Th e B as in Salinity M anagemen t is cl early unacceptable. tributary rivers of the Murray- Darli ng Strategy (2001-2015) was pre pare d w ith Basin, and throug h that control, protect Current and Future Management substa ntial input from all six of the governtheir wate r res our ces and a quati c of Salinity m ents within th e Basin, th e Co mmuni ty ecosystem s at agreed levels - m eeting th e Advisory Comm it tee and tec h nical The National Action Plan for Salinity end of va lley salinity targets; experts, and was approved by the Murrayand Water Q uality (NAP) was endorsed • Control land degradatio n and protect D arling Basin Ministe rial Council in by the Council of Australian Governments important ter r es tri a l ecosyste m s, September 200 I. on 3 November 2000. It is a seven-year productive farm land, cultural heritage, national fra m ework that targets salinity and The Basin Salinity Management Strategy and built infrastru cture at agreed levels water quality protectio n with the joint g uides commun ities and govern ments in Basin-wide - expressed as "with in valley resources of the C ommonwealth an d State working together to control sal inity and targets"; and and Territory governme nts backed by an protect key natural resource values within • Maximise net ben efi ts from sali nity con trol across the Basin. Th e Murray-Darlin g B as i n Co mmissio n has recently published th e first an nua l report on implementation of th e Basin Salini ty Manage m e nt Strategy. This report provides an overview at a Basin sca le and also sepa rate reports from Queensland, N ew South Wales, Victoria an d South Australia. It can be ordered from the salinity section of th e publication s page of th e MDBC webs ite (www.mdbc.gov.au).







t wa er








ca ·a; C

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Water Recycling Asset Management Water & Wastewater Technology Catchment Management Risk Management Infrastructure Planning Strategic Partnership

Murray-Darling Clasin Ministerial C ouncil (1988). Murray-Darling Clasin Salinity and Drainage Strategy. Murray Darling Basin Commission (1999). Salinity and Drainage Strategy - Ten Years On 1999. Murray-Darling Clasin Ministerial Council (1999). The Salinity Audit of the M urrayDarling Basin. A I 00-year perspective, 1999. Murray-Darling Basin Ministerial Council (200 I ). Basin Salinity Managem ent Strategy 2001-2015. National Land and Water R esources Assessment (2000). Australian D tyland Salinity Assessment 2000.

200 Offices Worldwide

The Author


ca C> C 'i:






Australia Asia Pacific Head Office 71 Queens Road Melbourne + 61 3 8517 9200 www.earthtech.com.au


Matthew Kendall is Manager Salinity Program with the Murray-Darl ing Basin Commission in Canberra , Phone: 02 6279 0100, W eb: www. mdbc.gov.au , E m ail: salini ty .proj ect@m d bc.gov. au



THE TREATMENT OF URBAN STORMWATER USING VEGETATIVE FILTER STRIPS P Slay, D Walker, T Daniell Abstract A study has been co nducted into the e ffec t ive ness o f a Vegetated Fi lter Strip (VFS) in rem o vin g pollutants fr o m storm water ge nerated in an establi shed urba n ca tchme nt. Th e VFS, whic h w as 35 m e tres wide and 21.5 m etres long with an a v e rage slo pe of 3 .5%, was covered w ith 50 mm high kikuyu grass (Pe1111iset11111 Cla11r/es1i1111111) and installed in H ami lton Park adj ace nt to th e Ri ver Torren s in Adela ide. Flow and turbidity m e te rs were installed at th e upstream and downstream

e nds o f th e syste m toge th er w ith wate r samplers capable o f collecting 24 on e litre sa mples o ver th e duration o f a storm event. This gave a continuo us reco rd of flow and tu rbidity togeth er with discre te w ater sa mpl es over a numbe r of sto rm even ts. Fo ll owin g hig h initial sedi m ent loads th e qu ality o f the inflo w wate r gen erally reac hed a steady value o f appro ximate ly 3 l mg/ L whi ch is believed to be re lated to th e catchme nt characteristics. Sedim ent concentration at the outflo w w as generally

aro u nd 22 m g/L. O verall th e reductio n in sedimen t co nce ntration was found to be 29%. T he ad vantages of th e system are that it is relat ively inexpensive and compact, espec ially wh en co mpared to alternative treatm ent o ptions, d oes no t re quire hig h maintenance, and reduces the need to wate r th e area durin g su mme r.

Introduction T he handlin g and treatment o f urban storm wa te r provides the co mmunity

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with an opportunity to make the most of - AU504101 a natural resource, while at the same time --AU504102 p rotecting othe r aspects of the --AU504103 Exceedence probability(~) --AU504104 ,.__ _ _ _.. 99.99 99.9 99 95 90 80 70 50 30 20 10 5 environment, namely the creeks, rivers .01 and the coastal zone where the waters ultimately reside. The difficulty stems from ~ .,, the underlying nature of the stormwater ยง. 1000 which is intermittent with a tendency for :!? 0 intense events followed by long inter..,en event periods and polluted from its travel ..,C 100 through the atmosphere, over roads and paths, and through drains. :, en Traditionally stormwater was treated as I!0 10 1-a nuisance that should be collected and removed as quickly as possible. While the thinking has changed radically over the last few decades, many drainage systems .01 .1 5 10 20 30 50 70 80 90 95 99 99.9 99.99 designed on this basis remain, and provide Occurrence probability (:5) a challenge for engineers attempting to retro-fit treatment measures into existing Figure 1 . Event Mean Concentration total suspended solids (mg/L) probability networks. In systems based on open curves for South Australian Storm water drains. channels it has been possible to construct gross pollutant traps to contain large litter. monitored strips of 0.07, 0.14 and 0.28 38% and 52% and demonstrated TSS In areas with sufficient open space litres per metre width per second. reductions of 85% and 87% respectively. detention basins and artificial wetlands Trapping efficiencies of72% - 98% of An urban environment is considerably have proven effective, however, the land total sediment and 10% - 88% of total different to either agricultural or highway requirements for artificial wetlands (2% to phosphorus were achieved from a variety uses, as the ratio of catchment area to filter 5% of the catchment) are often not of strips 3m or 6m wide at slopes of 16% area is considerably greater. However, the available in older established suburbs. and 23% and through grass and nearremoval efficiencies demonstrated in It has been observed by Daniell and natural riparian forest environments. earlier research and a considerable amount Williams (1 997) and French et al. (1998) of anecdotal evide nce suggests that In a highway environment, Barrett et in the Adelaide metropolitan area that al. (1996) have outlined the results of a vegetated filte r strips could provide an large grassed swale drain systems remove study undertaken to demonstrate the appropriate solution for the improvement a considerabl e amount of the total of urban stormwater quality. efficiency of vegetative filter strips in the susp ended solids (TSS) from urban medians of two highways in Austin, Texas. Therefore to overcome the size and stormwater as shown in Figure 1. The In both cases the filters were grassed maintenance requirements of constructed highest TSS recordings are from the indusdrainage swales with widths of at least 8111 wetlands an alternative approach to the trial Dunstan Road (AU504103) from road side to the centre of the median, problem of removing suspended sediment catc hm ent, the lowest fr om the and taking sto rm water discharges from and attached pollutants from the flo ws, a Hindmarsh Enfield Prospect (AU504102) the area of pavement adjacent to the vegetated filter strip, has been trialed. The catchment which has a major grassed swale swales. The side slopes of the swales were VFS consists of a vegetated area that has drain system leading to the outlet. The less than 12% in both cases. The buffer stormwater directed to flow over it. An two residential catchments of North strips had ratios of filter to pavement of experimental VFS was installed in an Arm East (AU504101) and North Arm established grassed area of West (AU504104) Hamilton Park during 2000 by recorded similar the Walkerville Council in a suspended sediment levels. section of th e River Torrens Bre n et al. (1997) Linear Park, located 5 km Vegetative de scribe the removal filter strip north east of Adelaide CBD. Trench efficiencies demonstrated The VFS and some of its junction lid by a series of agricultural components are shown in buffer strips in Victoria in Figure 2. The key components a collaborative research of the system are the coarse project between CSIRO, VFS pipe gravel percolation trench Concrete the U niversity of spreader which is likely responsible for M e lbourn e, Royal some initial sediment removal, Melbourne Institute of the concrete spreader which is Technology, Melbourne required to ensure a good Wate r , Mona sh even flow over the strip, and Coarse gravel - - !~rirt University and the Tarago the strip itself w hich acts as a percolation Catchment Steering trench filter to remove much of the Committee. The ground particulate matter. above the filter strips was Figure 2. Upstream components of field VFS. The stormwater flows The catchment area for the tilled and water applied to up through the coarse gravel, over the concrete spreader and then VFS consisted of a well-estabproduce a flow at the onto the grassed area to the left of picture. lish ed residential area of 23

.. .





hecta r es, located to the north of the site. Prior to the installati on of the VFS stormwate r runoff fr om the urban catchm ent was handled by a standard kerb and gutter system leading to underground pipes chat di scharged directly into the River Torrens. Installati on of the VFS meant that the flows were diverted across the 35 111 wide and 21.5 111 long strip before being discharged into th e River Torrens. From a site map , the slope of the VFS was calcu lated as 3 .5 %. A sche rnatic of th e VFS is show n in Figure 3, including some details of the instruments employed during the study. W ithi n the VFS syste m storm water passes through an Ecosol gross pollutant trap (G PT ) before tra ve llin g to the upstream junction box. The junction box allows stormwater to flo w down th e VFS pipe a nd o nto the sprea der tre nch or, during high flows, an adj ustable height weir overcops and that flow is di scharged dire c tly into the River Torrens via an overfl o w pipe which bypasses th e VFS. Unde r high flow conditions this limits the flow co the VFS and therefore reduces the potential for sco ur damage. Under low flow con dition s th e weir pre ve nts storn1water from e ntering the overfl ow pipe, w ith all stormwater passi ng down the VFS pipe, through the trench junction and onto the VFS thro ugh a coarse gravel percolation or spreader trench. The tre nc h includes access poi nts for maintenance and, if necessary, the removal of material that has bui lt up. A leve l conc r e t e p li nt h l ocated on the downstrea m side of the gravel trench was designed to distribute th e flo w evenly across the entire width of the VFS and therefore produ ce evenly spread overland flow. The operati on o f the VFS relies on pro v idin g co nditions chat are co ndu cive to sediment d eposition and removal from. the flow. The deposition is enhanced by reduced ve locities and redu ced levels of turbulence as the flow spreads over th e strip and additi onal renw val occurs with the g rass acting as a filter and trapping fine sed iment. Kikuyu grass (Pen11ise/11111 Cln11desti1111111) w hich was maintained at a height of approximately 50 mm was fo und to be ideal for the pu rpose. D epending on t h e so il ch arac teristics and the antecedent moiscure conditions it is also possi b le tha t sedimentati on is enhanced due t o infiltration of the flow into the soil, but t his was not investigated at the site .



Spreader ench

Dense uniform

inflow DownsLream junction box flow samplers

trench GAMET, turbidity, and depth sampler~

Figure 3. Schematic secti on through a field VFS. Flows enter from the left, emerge from the spreader trench, pass over the strip of dense uniform vegetation and exit from the right of the diagram. Also noted on the diagram are the locations of data monitoring equipment.

Stormwater Monitoring Program As sediment is the most significa nt urban stormwater poll utant in terms of mass, and may contain hi gh concentrations of adsorbed co ntaminants the fi eld st u dy conce n trated o n m on itorin g sed ime nt loading (as Total Suspended Solids) and flow. Turbidity was also m onitored with in the fi eld program to produ ce a co mpre hensive reco rd of sto rm wacer quality. To monito r the dynamics of storm eve nts effectively, several instrum ents were installed prior to the comn1ence me nt of this study . The instruments installed included a depth and velocity meter located in the VFS pipe, curbidity and depth probes loca ted in the upstrea m junction box and between the downstream trench and junction box, and a GAMET automati c sa mpler located at the upstrea m. junction box an d betwee n the downstream trench and junction box. The m o nitoring program ran for two years although th ere were some problems in the first year du e to a slow regrowth

of grass o n the strip following construction activity. T his led, not only to some higher than expected washoff loads at th e bottom of th e stri p, bu t also to uneven flow pattern s chat in turn flood ed one of th e in strum e nt housin gs leading co instrum ent failure. For thi s reason the results presented in this paper have been determined based o n the monitorin g of all possible events during 2002 on ly.

Field Study Results In total, ten events were mon itored between March and Novembe r 2002 . A su mmary of all results can be found in Tabl e 1. It should be noted that in some o f th e events shown reco rds were not availab le from both the cop of strip and the bottom of strip. T hose have been left in th e list as they assist in giving a lo ngterm estimate of the overall water quality coming in to and leavin g the strip. The rem oval efficiency shows a wide range of behaviour with values varying between 60% removal to a 76% addition

Table 1. Summary of TSS (Total Suspended Solids) concentration and VFS removal efficiency for 2002 . Average Concentration (mgL¡1 )

Date Sampled To


Top of Strip

Bottom of Strip

Removal Efficiency

















7-J un-02

19 27



19 26






















to the sediment load tra versing th e strip. Most events were i1nproved by the strip and overall the perform ance is such that the strip shows a definite benefit fo r water quality. ft has not been possible to explain th e negative effici e ncy from 24th April 2002 but th is result was based on a single co mposite sa mpl e which may ha ve been unrepresentative. T his is discussed in more detail in Slay (2003). To ill ustrate the perfo rmance of th e strip under di ffere nt conditions two particular events have been stud ied in detail. T hese are shown in Figure 4 and Figure 5. The event of 25th March 2002 (Figure 4) de monstrates what happens when a second rain peak occurs fo ll owing the start o f an event. [nitially th e concentration of sediment in the incoming flows is relatively high, and the concentration of sediment in flow coming off the strip is also high. It is believed that this may represen t sediment existing on the strip and bound loosely to the grass that is easily removed by the initial flows. After the first hour the qualiry of the inflow and outflo w have both improved because it is no w o n th e receding limb of the hydrograph and there is less materi al being transported onto the VFS and even less being washed off. The seco nd pea k in the flow that occurred after 140 ni.i nutes led to a second flush of sediment from th e catchment altho ugh the strip was working well enough to absorb this material completely . The event of 28th September 2002 illustrates rypical performance fo r the strip under simple rain conditions. Initially high concentrations in both the inflow and outflow settle, after approxima tely an hour, to long- te rm steady va lu es . Sediment washed off the sttip by the initial flows means, in th is case at least, that the outflow is in fact more polluted than the inflow but once the strip is 'clean ' th e long-te rm removal rate shows th e strip working well. A significa nt advantage of the strip is that it is able to remove sedime nt at very low conce ntrations and therefore acts and an effective polisher of the storm water.

Discussion of Field Results B ased o n an a nalys is of re co rds coll ected over 2002 a number of conclusions have been reached: l. Th ere is evid ence of a 'first flush' of sediment from the ca tchment with the inflow at the top of the V FS showing the highest Total Suspended Solids at the start of each event, after w hich the concentrations generally decreased. 2. The bottom of the VFS also showed a peak in Total Suspended Solids at the commencem ent of the event . This may



Total Suspended Solids and Flow - 25/3/02


0 18

· · · · · · topofstr..,

- -boclom ol •np

0 16




01 4



0 12

~ ~

,."·, ·,


jg ~ 8


008 I

0 06




















100 110 120 130 140 150 160

170 180 190 200 2 10 220 230 240

1,me (min.)

Figure 4. Resu lts from 25/3/02. Notice t he second flush of sediment 200 minutes from t he start of the event and the fact that it does not affect the downstream water quality.

partl y reflect th e poorer water quality corning fro m the top of the VFS or may also be due to transport of accumu lated material on the strip over the period si nce the previous event. 3 . Following initial high sediment loads the quality of the inflow water gene rally reac hed a steady value of approximately 31. mg/L w hich would be related to the catchment characteristics. 4. Sediment concentration in th e o utflow was ge nerally around 22 m g/ L wh ic h shows a significant reduction in sediment concentration occu rring over the VFS . T he operation of the VFS has show n that has been effe ctive in th e urban e nvironment . Vege tated Filter Strips have been used previously in rural situations (e.g. Bre n et al., 1997) where they have been shown to be very effective at reducing runoff from fo rests and agricultural land into rivers and stream s. The efficiencies measured at H amilton Park are be.low chose claimed for the rural strips, but stil.l represent good sedin,ent rem oval. Based on the results of the study a number of recommendations can be made with regard to the use of VFS in the urban en vironment: • A Gross P ollutant T rap sho uld always be used in conjunction with a VFS. The purpose is to fil ter o ut gross material that could otherwise bloc k th e top of strip spreader trench and lead to signifi cant maintenance costs. • The trenches used at th e top and bottom of the strips sho uld be constructed to allow m aintenance flu shi ng (for example by pro viding a hard 0oor and inspection points in the pipes) . Geotextile

fabri c is also recommended to lin e the trenches to prevent the movement of fines fro m the surroundin g so il. • A con crete spreader plinth is recom mended to allow an even distribution of the flo ws over the full width of the VFS. The plinth m ust be constructed to a close toleran ce with regard to its level to prevent c hannelling of the flows . • Considera tion should also be given to the construction details at either end of the plinth to prevent flows from escaping at either end and bypassing the strip completely. • The VFS should be constru cted with no significant cross- fall. This will prevent flows disc hargin g beyond th e strip boundaries. • Experience at this and one other urban site has shown that VFS can be effective at slopes up co 20%. As the slop e in creases, greater care must be taken with levelling the strip and the spreader plinth to avoid channelling of the flows. • Efficiency is likely to increase as the length of the VFS increases (fo r a given flow per unit wi dth). T he authors beli eve that the 20 metre length used in th e present study should be taken as a 111 1111111 U 111 •

• B ased on experience from two VFS in South Australia the area should be at least 0. 3% of the catc hme nt area to maintain a satisfactory level of performance. • A dense hardy grass, such as K ikuyu, should be used on the site and sho uld be well-established prior to the first flows to prevent premature erosion .


Future Directions Total Suspended Solids • 2819/02

Th e w ork unde rtaken to date on the urban V FS has indica ted that in the short term at least, signifi can t water quality impro vements are poss ibl e. An iss ue that has n o t been addressed yet is th e maintenan ce re quireme n ts fo r co n t i nu e d optimum operation in th e longer term. Assessment of thi s is con tinuin g and includ es logging th e mass of m aterial rem oved from th e Ecos ol GPT an d reviewing the build- up of materia l in the roc k fill ed spreade r trench . In an earl ie r VFS system in stall ed on a large subdi vision prior to constructi o n activity starti n g very high sedim ent loads resulted in a fil ling of the tre nch wh ich eventually requ ire d flu sh ing using a co u ncil wate r truck . While this was an issue for the VFS the alternative, of having the materia l mak i ng its way to lo cal wate r co urses, w as avo ide d. Give n cou nc il support in the future it may also be possibl e co reco m m e n ce in flow and o ut fl ow monitoring soon an d obtai n pe rformance fig u res for a more m atu re V FS. The other area wh ere addition al work is planned is to exte nd the applicabil ity of numerical models designed for rural situations to the urban env ironm en t w h e r e th e c h arac t eri stics of urban sedim e nt loads are taken into account togethe r with the issues assoc iated with th e c h ann ellin g of fJ ows in gutters and existing pipe networks before th e flows re-em e rge onco the VFS.

ooa 1

---;:==========::;----------------------7 -

- - - bottom of stnp

0 .06



005 004

§ 8

003 0.0 2








+--~--~-~--~-~-~--~-~ --~-~--~-~--' 40













Ume (min.)

Figure 5. Results from 28/8/02 showing t he improvement in quality that is

possible under long-term steady conditions.

Ma ster of En gi nee r in g Scien ce, T he University of Adelaide, 153pp.

The Authors Peter Slay is an e ngin eer with the Onk ap a rin ga Catchm e nt Wate r Man age m ent Board . Em ail Pe tsla@

on kaparinga.sa.gov.a u . David Walker (da vid .wa lker@ ad ela ide. e du .au) an d Trevor Daniell (t revor .da n e ill @ adelaide.edu.au) are senior lecturers in th e School of C ivil and Env ironm e nta l E ngineering at the Uni versity of Adelaide.


References Barre tt, M.E., W alsh, J. F., Malina, J r. , and C harbeneau R..J. , (1996) Performance of Vegetati ve Controls for Treat ing High way Runoff. J o11r11a/ of E111Jiro1 w1e11tal E1t~i11eeri11,~, 11 2 1 - 1128. Bre n , L. ; Dyer, F.; Hairsine, P.; R.iddiford, J.: Siriwardhena, V. and Zierho lz, C. ( 1997) Co ntrolling Sed im ent a nd Nutrient Mo vement with in Catchments. Cooperative R.csearch Centre for Catchment H ydrology, In dust ry R eport 97 / 9. Dani e ll , T.M . and Williams , B.G (1997) D e termination of Urban R unoff Pollutant Load - Both Quality and Quantity of Flow arc Important, W o rkshop on Local Scale H ydrological Processes in Islands, H ighlands and Urban Areas in Malaysia : Needs for Fu ture Direction, 12-H N ovember 1997, Kua la Lumpur, IH P Malaysia and Unesco. French, R.. ; Daniell, T.M.; Walker, D .J. and W illiams, B. ( 1998) The Effect of Build-up and Washoff on Pollutant Concentrations from the Barker In le t W etland Catchment. H y dras torm 98, Joint I ntern a ti ona l Symposium on Stormwater Management and Inte rnational Conference on H ydraulics in C ivil Engineering, Adelaide, -t51-456 . Slay, P . (2003) Grass Filtration - An Innovative Approach to the Treat ment of Urban Storm Water. Thesis presented for the degree of

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STRATEGIC ASSET MANAGEMENT PLANNING FOR THE ORANGE COUNTY SANITATION DISTRICT ''THE ESSENTIAL STEP TO A SUCCESSFUL ASSET-CENTRIC ORGANIZATION'' D Stewart, B Kennedy, D Rose, L Norton, R Byrne PARSONS-GHD ALLIANCE LEADS THE WAY IN ASSET MANAGEMENT GHD, a leader in strategic life- cycle asset management, saw value in developing a global alliance partnership in North America. In 2002 GHD forged a three year exclusive agreement with Parsons Corporation of Pasadena, which has a strong commitment to AM and runs a fully fledged Asset Management Centre. This powerful alliance is delivering across all infrastructure lin es. The Orange County Sanitation District's Improvement Strategy is one of the early commissions undertaken by the team's Roger Byrne of GHD.

Introduct ion

Orange County's oxygen activated sludge plant.

In April 2002, the Orange County Sanitation District (OCSD) embarked on a journey to change itself into an assetcentric organization, using advanced asset management principles, processes and methods patterned after world's best practice organizations in Australia and New Zealand. OCSD realizes that the services it provides to its customers is dependent on infrastructure assets, and that the proper management of these assets is essential to attaining lowest total life cycle costs, sustainable delivery of se rvi ces , appropriate infrastru cture reinvestment and maintenance programs, and intergenerational infrastructure equity. This journey is seen as a multiyear process of continuous improvement. Asset Management has been identified as the single most important activity for the

organization to undertake to increase its overall management effective n ess. Consequently, becoming an asset-centric organization is considered by many, in the organization as the key business strategy, for OCSD for the next several years. Understanding our assets, including collections systems, treatment plants, outfalls, and other civil assets, from a whole life cycle cos t pe rspec tive; knowing what we own, what conditi on the assets are in, how those assets will likely fail and when, combined with an understanding of risk, consequences of failure, levels of service, and customer expectations leads to a comprehensive asset-centric management approach. Organizing the work of the organization around this asset-centric management



paradigm focuses the organization on the singularly most important mission of the organization: sustainable infrastructure. Wholesale cultural change within a large organization is seldom easy and usually a long-term proposition. OCSD has chosen to use a strategic planning approach to introduce an asset management paradigm into the organization. This change process and our early results are the topic of this article.

Facts About OCSD OCSD is the third largest wastewater utility on the West Coast of the US, providing regional collection, treatment, and disposal of wastewater to 23 cities and one special district. The service area is located in northern Orange County, CA, and encompasses about 2 .4 million


people. The collection system consists of 475 mil es of regional sewers, 175 miles of local sewers, and 20 pumping stations. The majority of the loca l sewers are owned and o perated by the cities in the service area. OCSD has two treatment plants with a combined average dry weather flo w rate of 260 rngd. Effiuent disposal is by means of a deep ocean outfa ll , 4.5 mi les in length, in the Pacific O cean . In June 2002, the OCSD Board of Directors voted to relinquish the C lean Water Act 301 (h) waiver and directed full secondary treatm ent of effiu ent by 2013. OCSD has a $1. 9 bill ion 20-year capital improvement program, excluding the co st of increasin g treatm ent to fu ll secondary levels.

Genesis of Asset Management at OCSD In March 1996, as a result of an external competi tive assessm ent, OCSD's O&M D epartment for med an in-house District Assessment and R ein ve ntion Team. (DART) to close the competitive gap suggested by the assessment. The DART ini tiative incl ud ed planning fo llow ed by impl emen t a t ion of

numerous work practices, policies, and procedures to successfully close the perceived competitive gap, and will be full y completed by O ctober 2003 . T he accomplishments of DART have been many- fold, including reorganizing O&M to gain efficiencies, institu ting a managed maintenan ce program, establishing a planning and schedul ing group in maintenance, trainin g staff in prevent at ive an d p roa cti ve m ain t e na n ce techniques, and building a computerized maintenan ce manage m ent pa ckage, amo ng many others. Coincide nt with DAR T, OCSD also co mpleted an auto mation rein ve ntio n project in the two trea tment plants that physically tagged all of the major di stri ct assets, developed computerized records of the co mpu ter automation control system, built a co mpu teri zed records maintenance system for OCSD's engi neering drawi ngs, and doc um.ented the process and instrumentation of the treatment plants, am o ng o th ers. These previo us efforts, focused on O &M department efficiency , have become the foundation fo r the asse t managem ent initiatives that are currently

underway. It was recognized early on that the DART process, because of its limited scope and its focus, could not by itself affect agency-w ide effectiveness gains. It would take a concerted agencywide program chat could integrate alJ of the tech nical disci plines in the organization to realize true effectiven ess change. T he OCSD manageme nt team recognized that any single technical disciplin e (department or "silo") could become very efficient at what they do, and in fact all of them could , but it is not until all of the technical disciplines are fo c use d on commo n busin ess strategies and goals, su ch as o ptim ized stewa rdship of assets, that the organization moves toward true effective ness. After much research, in 2000, the staff d i scove red t h e I nt e r national Infrastru cture M anagement M anua l (ll MM). Australia and New Z ea land published the ll MM , as a compendium of asset m anagement practices being used in their count1ies. The methodology, and new man agement paradigm, had been located to achieve the effectivenes gains desired by th e organi zation. Staff also rea li zed that institu tio nalizing asset




management agency-wide meant that the first step would be to establish a strategic level plan. The strategic planning process was seen as key to developing a common vision fo r asset management and to start to develop widespread buy-in to further implementation. In June 2001, the Board authorized staff, through the budget process, to proceed with the initial implementation o f a n asset management program. A R equest fo r Proposals and a Scope of Work were issued in November 200 1. In April 2002, the Board ap pr ove d a cont r act w ith P a rso n s/G HD for th e asset management strategic planning effort.

• Rank operations, maintenance, acq ui sitio n , and re n ewa l on benefit/ cost basis ATEAM Program • R ationalize our budget (Capital ls ALL About and Operations) • Optimize operations and mainteKnowledge nance activities Increasing Management • D evelop and revise strategic Confidence objectives for each asset, and • Review and revise plans at suitable intervals ... which, in turn, enables us to ... • Effectively manage the process of asset creation, renewal, handover and commissioning, disposal and/ or rationalization, and Figure 1. Knowledge Staircase . • Corif,dently provide sustained performance at lowest life-cycle cost. achieve a sustained level of service at the Figure 1 illustrates that knowledge lowest life-cycle cost. We therefore What Is Asset Management? is integral to an AM management distinguish this agency-wide, integrated improvement program , and results in Asset Management (AM) provides for focus from standard asset management inc reasing levels o f co nfidence in the systematic planning, acquisition , pract ice with the term "Total decision-making. deployment, util ization, control, and Enterprise Asset Management" decommissioning of capital (infrasH ow does an organization go about (TEAM). tructure) assets. It integrates p olicy transitioning to a TEAM based culture? We define TEAM as: (s trat eg i c- le vel) ma n ageme nt , This is best accomplished through a • A management paradigm and a body system/netwo rk (m id-l eve l ) "value-chain" analysis. A value-c hain is of integrated management practices management, and operations a management concept embraced by management into one focus. It extracts • That is applied to the entire portfolio virtually every major corporation in the maximum value from perfom1ance of the of infrastructure assets and at all levels of US and Europe/Canada/ Australia/ N ew assets (performance per dollar invested). the organizatio n Zealand. The value-chain is made up of l n sh ort, AM focuses on the • That seeks to minimize the total cost those key organizational processes that "stewardship" of substantial community of acquiring, maintaining, operating, and be successfully managed if the must asse ts by local government officials renewing the assets is to survive, much less organization working within a political environment. • While continuously delivering the thrive. T his value-chain concept is the AM has been variously defined as: service levels customers/stakeholders source of our benchmark for assessing the " ... a comprehensive and structured desire and regulators require. current state of the OCSD's asset approach to the long-term management management practices and capabilities. of assets as tools for the efficient and The AM "Knowledge Staircase" effective delivery of community The value-chain for an asset intensive At th e he art of effective asset benefits." (America n Pu blic Works organization is made up of seven primary management is knowledge - knowledge Association AM Task Force) elements: that is built on valid, reliable data and " . . . a systemat i c pr ocess o f 1. Processes and practic es timely, accessible information. maintaining, upgrading, and operating 2. Information systems Knowledge of.. . physical assets cost effectively." (Federal 3 . D ata and knowledge • Our level of service (target and actual) Highway Agency & American A ssociation 4. Commercial tactics of State Highway Tran sportation Officials) • Existing assets (location, attributes) 5. Organizational issues " . .. managing infrastructure assets to • Physical condition (remaining useful 6. People issues, and minimize the total cost of owning and life) 7. T o tal Asset Management Plan operating them while continuously • Performance of assets delivering the service levels customers Figure 2 portrays the relationship of • Current utilization, and desire." (American Metropolitan Sewer these components to the generation of • Ultimate capacity Association) a total asset management strategic plan. .. . gives us the ability to .. . Public sector managers have been These six components of the value-chain managing assets for decades within form the structure around which a • Predict demand for service from technical "silos" in their organizations. TEAM program is built. customers Our focus is on integrated decision• Predict how and when assets will fail The Strategic Planning making, that is, capital asset-based • Forecast likelihood of fail ure Approach decisions that run up and down all levels • Assess probable consequences of failure of the organization, and across all "silos" O CSD chose to approach imple... which allows us to ... within the enterprise. More fundamenmenting asse t manage ment in a • Analyze alternative operations, maintetally, it embraces a broad management multi-phased approach. The first , develparadigm that systematically seeks to nance, and treatment options oping a comprehensive strategic plan




w hi ch included a gap analysis How Do Our Current AM Asset Processes between world's best asset Practices Measure Up? and Practices management practices and OCSD 's Asset Information Australia and New Zealand are current practices, setting three and recognized world leaders in ten-year targets based on OCSD's advanced asset management. A chosen best appropriate practices. sophisticated and comprehensive The second phase is to develop a Organizational Data and assessment tool developed in detailed implementation plan based Issues Knowledge Australia, which has been applied on the best appropriate practices to over 100 utilities and is calibrated from the strategic plan. The third against recognized worldwide asset phase starts a series of continuous management best practices, was Commercial improvement projects to reach the • Tactics used to objectively measure and three and ten-year targets. evaluate OCSD's current asset OCSD established the follow ing Enables Optimum Stewardship of Assets management practices. major goals for the strategic planning T h e assessment tool sco res process: on the basis of "confiorganizations • Document a "shared vision" for Figure 2. Components of a Total AM Strategic Plan. dence level" which is a rating that th e d esired asse t management reflects the level of confidence an improvements . • To determine the Best Appropriate organization and its stakeholders can have • Identify desired outcomes in qualitative Practice (BAP) for OCSD in the data, information, and decisionand quantitative terms. making to ols and p r ocesses an • To provide a coordinated, w hole• Provide the business case to gain organ ization uses related to its infrasage nc y p ers p ec t ive on AM as a support and approval for fur ther develtructu re managem ent and the services management parad igm , rath er than a set op m.ent of the asset management that infrastructure provide. Confidence of disjointed improvement efforts or the p rogram . tools used to do asset management level scores relate directly to the appli• Develop a gap analysis and needs cation of best practices. T hey are • To bring agency focus on AM as a assessment between the existing state of quantifiable and m easurable, and provide management paradigm to all levels of the asset management practices and the an objective rati ng of asset management organization desi re d improvement program. • Develop strategies and recommendations for the effective deployment of the desire d asset management program. • Id en tify the structure, accountability, and responsibilities for implementation of the improvement program. T h e strategic plan was developed using the fo llow ing fundamental steps: • Measure our AM practi ces against world's best practice • C hoose ou r fu ture level of best appropriate practice • Analyze gap in ou r current practices • Id entify specific components in ou r AM I mprovement Program "More UFRVs for your money, • D eve lop a framework for how to and better quality water" implement AM improvements • Establ ish benefi ts of improved AM practi ces and likely costs to implement • De t ermine next steps • Develop strategic plan and framework analysis OCSD chose to develop a strategic plan, rather than si mpl y implem ent a series of separate improvement projects, to obtain the followi ng benefits: • common vision and understanding of QUALITY 319 Parramatta Rd asset managem ent ENDORSED AUBURN NSW 2144 COMPANY • Organizational acceptance and buy-in Phone: (02) 9748 2309 AS/NZS ISO 9001 to an alternate way of making business Fax: (02) 9648 4887 STANDARDS dec isions in the organization Email: AUSTRALIA • U p - fr ont education on the AM Licence no: 1628 jamescumming@jamescumming.com.au processes across the organization









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Pre-Dart Level 3-Year Target Level



Current Level Best Appropriate Practice Level

Figure 3. Gap Matrix Showing 3-Year & BAP Targets.

practices . T he assessment tool can also be used co audit the progress of an organ iza tio n's development of AM practices. Through a combinatio n of information gath ering, structured interviews and comprehensive work shops, an assessment o f OCSD's cu rrent state of AM practices was performed using the gap analysis tool. The assessment showed that OCSD curren tly performs with excellence in many of the areas measured; however, there are several significa n t asset manageme n t best practices that simply have not bee n deployed at OCSD, or any other major US utility. There are also several existing practices, processes, and tools tha t can and should be enhanced. Figure 3 is a summa1y of the entire gap analysis . Review of the chart will reveal the current assessment of the confidence level for each of the primary quality elements . The overall assessment confidence level rating scores fo r OCSD are: • Pre DART Program (1996) status 47% • C urrent status (2002) - 68% The following confidence level benchmark scores are provided for companson: • Average large Australian wastewater business - 81 % • Top 10% of Australian businesses 90% • Average of all assessed Australian Water businesses - 86% It is important to note that the best practices changes in both operations and



maintenance associated with the DART in itiative and other internal initiatives sign ifi cantly improved OCSD's asset 111anagement rating. Enhanced 111ainten an c e practices, work pro cess modifications, and infor111ation syste111 advance111ents were all developed by DART. Other initiati ves not included in DART resulted in work process refine111ents, such as the restructuring in Engineering, which enhanced capital project planning and deli very. Other initiatives like the J-42 project that provided loop diagrams and equ ipment numbering, the Facilities Atlas project that provided enhanced system drawings, and internal modifications co invent01y practices were all best practices enhancements

What is the Appropriate Level of AM for Us? A second, comprehensive workshop, numerous interviews, and a comprehensive gap analysis process led to consensus regarding the specific and best appropriate Total Enterprise Asset Management (TEAM) improvement components with which to "fill the gap." In a second comprehensive work shop, OCSD's Asset M anagement Committee, Executive Management Team, and other members of the staff collaboratively set confidence level improvement targets fo r prima1y and secondary quality elements. Some 1500 specific best practices, which correspond directly to confidence level scores, were considered in the gap analysis process. In addition, the District decided that

deploying Best Appropriate Practices should be accomplished within 6-10 years, and there should be a "progress target" sec for the 3-year point. The overall confidence target levels are: • 3-year improvement target - 81 % • 4 to 10-year (BAP) improvement target - 92% T here was consensus by all OCSD staff and management members participating in the AM strategic planning processes chat advanced asset management is appropriate for OCSD.

How and When Should We "Fill the Gap"? The target setting process was actually applied each of the quality element categories shown in Figure 3, and each of the individual 3- year and BAP targets are shown. When this occurs a gap is established in each of the quality element categories, thereby identifying the opporcu n i ty fo r a specific sec of AM improvements. The AM improvements can take the form of policies, processes, practices and tools. Specific improvement components for the TEAM Program were selected and prio ritized into two major implementation phases: a 3-year period, and a Best Appropriate Practices (BAP) period of 4 to 10 years. Th e targets set fo r each implementation planning p e ri o d , and t h e improvement components identified and selected co accomplish filling the gap, were predicated on the approval and deployment of the implementation strategies contained i n the TEAM Program Charter, which is discussed below in " H ow Shoul d the AM Improvement Program be Organized'"

Considering the Gap, Which Component Projects are Needed for AM Program? Through collaborative workshops, 274 individual best appropriate practices improvements were selected fo r inclusion in the OCSD TEAM Program, and are the basis for the targeted confidence level score goals. These improvement components are necessa1y to "fill the gap" between current practices and targeted Best Appropriate Practices, and are required for OCSD to ach ieve the benefits chat can be realized from improved asset management.


How Should the AM Improvement Program be Organized? A proposed TEAM Program C harter was d eveloped in the Strategic Plan th at established the critical strategic framework for th e program . The T EAM Program C harter was collabo ratively developed as part of the strategic plann ing process The T EAM Charter pro vides the unified strategic level guidance necessary to advan ce th e program 's d evelopm ent throug h the implementation planning and imple m entation ph ases of th e TEAM Program . The TEAM C harter in cludes th e fo llowing statements: • Future External Stakeholder Perception • Inte rnal TEAM Missio n, its logic and dri ving phil osophy • Key Business Strategy • Impl ementation Strategies, and • TEAM C o mmitm ents to AM (o verarching principles)

Why is Asset Management Right for Us? The AM Program is ri ght fo r O CSD beca u se it is expected to reduce the Distri ct's total infrastructure life cycle costs by at least 15% over and above the savings alread y achi eved by the DART p rogram and o ther initiatives. This reduction in cotal life cycle costs could easily exceed $600 million in valu e over the life of the assets, based on cotal replacement asset valu es that will approximate $4.0 billion or mo re. Th e TEAM Program will help ensure the sustainability o f th e D istrict 's infrastructure and services, and will h elp the District continue to meet its environm en tal goals. The US EPA estimates that application of TEAM P rogram approach at typical U.S. utilities can result in total life cycle cost reductions in th e 20-30% range. Based on the best practices assessment process, and OCSD's resultant confidence level score, the Parsons / GHD Team found that a portion of this " typical" cost redu c tion potential has already been achieved at OCSD as a result of the DART Program and other initiatives. The best a ppropriate practices recommended for the O C SD TEAM Program are expe cted to reduce the total life cycle costs by at least another 15%. Th e 25- year TEAM P rogram financial benefit forecast 1s: • 25-year Capital Improvement Program reallo cation/ reduction benefits of about $75 millio n (which is in addition tO

savings that are anticipated from traditional va lu e e n g i n ee ri ng a nd p r ogra m ma nagement efforts alrea dy underway) . • 25-year Total Life Cyc le bene fi ts are estimated co be $350 milli on In additio n to th e signifi cant fina ncial benefi ts that th e T E AM program is expec ted to provide, the positive level of service impacts and en vironmental and publ ic health benefits that will com e fro m enhanced infrastru cture sustainability are in th em selves ample reaso n to undertake the asset m anagem ent jo urney. Usin g a strategi c approach has already provided substanti al o rganizational bene fits tO O CS D. Th e obj ective best practi ces based assessm ent allowed th e organiza tion to compare its asset management practices w ith r eco gnize d b es t prac ti ces . It co nfirmed th e bene fits of th e DART initiative , and showed the o rga nizati o n where additio nal o pportunities ex isted tO further enhance OCSD 's effectiveness and stewardship . Th e organizatio nal unity, mo mentllm and fo cus that em erged from th e strategic p lannin g process are profound ly important benefits to OCSD . TEAM prov id es OCSD w ith and important unifying pu rpose and sense of directio n. T hese were stimulated through the hi ghl y co llaborative and participatory pro cesses that fo ll owed th e assessm ent and were a part of th e strategic plan ning process. Throu gh th e strategic pl a nnin g pro cess O CS D b eca m e convinced th at the TEAM program is a journey well worth taking. In December, 2002, th e O CSD Board of Direc tors approved and adopted th e Strategic Plan, and staffs attention turned to how best co implement th e AM improvement program.

Summary O CSD has undertaken a substantial challenge that will materially change w hat it kno ws abo ut itself and how it does

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b usiness. The change is anchored on a commitment to continuo us lea rning. More fun da m entally, this learni ng is systematically foc used o n developing a corpo rate culture intensively targeted o n advanced asset management paradigms and manage me nt practices in the relentless pursuit of sustained performan ce to th e custome r at the lowest life-cycle cost.

Epilog Sin ce th e adoptio n of th e Asset Managem ent Strategic Plan in D ecember 2002 , implemen tat ion of th e Asset Management Program has not directly proceeded. When the approval of a multiye ar compre h e n si ve co n tr ac t fo r implemen tation of the program was co nsid ered by th e OCSD Board of D irectors in the sprin g of 2003, the Board chose to delay the program for furth er co nfirma tio n o f the validi ty of th e approach adopted in the Strategic Pl an. Th e program is currently being rested w ith a peer review process that will give furt her guidance tO th e O CSD Boa rd in th e fall of 2003. Th e major lesson lea rned fro m this experi ence is that all o f the good work in th e strategic plannin g pro cess, altho ugh highly successful within the organization , did not fu lly engage the ultimate decisio n makers in th e process soon en ough. P rior tO the o nset of the Strategic Plan development, it was decided that the Asset M anagem ent Committee wou ld b e the focal point. le was unclear how much time if any coul d be devoted by upper level managem ent , and in particu lar, th e Board, tO learning th e fea tu res and valu e of advanced Asset Management. As th e p lann ing unfolded , howeve r , upp er manage ment beca me highly engaged, suppo rtive and enthusiastic about ho w advanced AM can benefit the District . However, the features and benefi ts of a programmatic application of AM across the organization are difficult to co nvey to Board m embers in Board mee tings. W e learned that a strategic approach , su ch as OCSD is undertaking, is most successful when staff, m anagem ent and the pol icym ak ers are engaged fro m the o nset . This is a copic for yet another pap er in the n ear future .

The Authors Doug Stewart, Bill Kennedy , Duncan Rose , Lynn Norton and Roger Byrne are all involved in the ParsonsGHD alliance, 180 South C h erry Street, Suite D, Monticello, Florida 32344. WATER NOVEMBER 2003




POTENTIAL IMPACT OF FUTURE SEWAGE TREATMENT CHANGES ON WATERBIRD USE OF THE LAKE BORRIE PONDS AT THE WESTERN TREATMENT PLANT: A THEORETICAL DISCUSSION A J Hamilton, I R Taylor, B P Wilson The Mission of AWA is: To promote s11stai11.able ma11ageme11t of 111ater The Missio11 is achieved by exchange of the latest research k110111/edge1 best a,1ailable technology and practice to improve sustainable water practices. Considerable attelltion is paid to mi11imising the impact ef all urban activ£ties 011 the e,wirownen.t by sound eHviron111e!ltal 1·11aHageme11t. Melbourne Water's policies on man.age1nent of u1aste1vater from the vVestern Treatment Facility are directed to minimise the en11iron.111ental impact 011 Port Philip Bay. A 11 drew Hamilton a11d his co-authors, all affiliated 1.11ith the Applied Omithology Croup, School of Environme11tal and Iriformation Sciences, Cha rles Sflut University, present a d!ffere/1.t philosophic approach to the e1111iro11.me11tal management of their case study at Werribee, as distinct fro m water quality in the Bay, rather the impact on bird life in lagoon /lake systems and, while the philosophy is not yet proven, I believe that it is worthy of scrutiny - we must always look outside the square. Frank Bishop, Chair, Journal Committee

Background Conservation significance of the Western Treatment Pl ant to waterbirds

The Western T reatment Plant (WTP) is loca t e d a b out 35 km west of Melbourne and occupies a total area of 10,851 hectares. It treats sewage from the nort hern and western suburbs of the G reater City of Melbourne, accounting for 52% of the city's sewage (Melbou rne W ater 1999) . Abou t one third of Victoria 's wetlands have been dra i ned, pr im a r ily fo r agricul t ure, since E uropea n settlement (Anon. 1988) . It is likely that this has had a negative impact on m any species of waterbirds. Permanent coastal wetlands in south-eastern Australia are believed to be important non-breeding refuges for many waterfowl species when inland we tla nds dry o u t (Frith 1982). It is possible that the many waste-stabilisation ponds (WSPs) at the WTP fu lfi l such a role fo r many waterfow l and other waterbirds. The WTP has long been recognised fo r its importance in providing waterfowl and shorebird habitat, and in 1984 the e n tire WTP and several other wetlands in the region w e re listed as a Ra msar Wetland of I nternational Importance (Ramsar Con vention Bureau 1984) . In a state-w ide survey of wate r fow l conducted in 1982, the largest popula-



tions of five waterfowl species occurred at the W T P. O u t of a state-wide total of 98, 100 (exclu d ing B lac k Swans), 28% were reco rded in a region that consisted mostly of the W T P (Brown & Deerson 1982, Lane et al. 1984) . In subseq uent state-wide waterfowl counts from 1989 to 1992 by the Royal Au stralasian Ornitho logists Union (now Dirds Australia) , the WTP was consistently ranked in the top five wetlands for a wide range of species (see T able 1.2 in H amilton 2000) . Changes to WTP operations I n orde r to meet revised EPA discharge requ irements, Melbourne Water are im p l eme n ti n g t h e 'Env ironment Improvement Project' (E IP) (M elbourne Wate r 1999). T his proje ct primarily involv es install ing Activated Sludge Plants (AS Ps) part way down two existing lagoon systems at the WTP. Many of the existing lagoon systems t hat cu rrently receive presedimented raw sewage will be supplied w ith ASP treated effiuent from one of these systems. Lake Borrie, which is known to support particularly large numbers of waterbirds (Elliget 1980, Lane & P eake 1990), is one of the lagoons that will 'swi tch' to receiving treated effiuent in 2005 (Gulovsen, T. 2001, pers. comm.). The potential impact of th is change on the waterbird community at the WT P

is unknown, and wo uld be d ifficu lt to pre d ict ac c u rately . I n thi s paper, th eoretical arguments about potential changes are developed, and these m ay help d irect future research.

Implications of nutrient reductions to Lake Borrie food-webs Concerns have been expressed that proposed reductions in nutrient levels in Lake Borrie m ight lead to reduced invertebrate biomass and ultimately red uctions in th e va lue of t he ponds to w aterbirds (Lane & H o u ri dis 1998). T he concept of nutrient limitation in wetlands is often t re ated at a supe rfi cial level. It is sometimes assumed that higher concentrations of nutri ents lead to a more produ cti ve food-web (Uhler 1964, Savard et al. ·1994). W ith the co ncept of nutrient limitation, it is essentia l to consider the concentrations of the various fo rms of nutrients; total nitroge n and phosphorus levels are of little value. If d issolved forms of nutrients are present at any co nce ntration , t h ey can be considered to be in excess, and thus not limiting (H ecky & K il m an 1988). It is also im po rtant to consider w hich trophic groups use t h ese di ss olved nutrients directly, as opposed to obtaining t hem ind irec tly t hro ugh consuming other organism s. That is, we need to fo cus on the o rganisms that are assim i-


lating these nutrients into o rgani c for ms, thus m aking th em available to hi g he r t rophi c leve ls. If nutrie nts bec om e lim itin g to t hese base levels o f the fo o dweb, they w ill most likely limit the produ cti vity of hi ghe r leve ls. D issolved ino rganic nutrie nts are essential fo r the growth o f phytoplankton (H eck y & Kilm a n 1988, H o lmboe et al. 1999, Sanc h ez & Zea 2000, Le vine & W hale n 200 I) . H ete rotrophic bacteria also use d isso lved inorganic form s o f pho phorus a n d ni t rog e n (Kir c hman 1994) . Howe ver, th ey can also o btain o rga ni c nut ri e nts such as d issolved free amino ac ids. Thus, it is m o re diffi c ult co imply n utri e nt li mitatio n for he te rotrophi c bacte r ia, and therefore most of th e followin g di scussion w ill focus on ph ycoplan kton . H e re, o nly som e aspects o f nutrie nt lim it ation a r e co n s id e r e d . T he co mplexity of nutri ent cyc ling and fo od- w eb d ynam ics must be acknowled ge d . Som e pote nti all y important but hi g hly complex interact ions, suc h as exc h a n ge o f nutri ents betwe en th e sedim e nt and wate r co lumn , arc not consi dered. Phosphorus Th e treated e ffiu e nt from the 55 East ASP a nd lagoons contains abo ut 7.9 m g L1 di sso lve d reac tiv e ph o spho rus as ph ospho rus (DR.P- P) (M elbourne W ater, unpub lished data, m ean from 16 d ates, M ay- August 2001, range 6.7-8.8) . Based on th ese data, phospho rus would no t be expec ted co be limitin g to eith e r algal o r ba c te r ial producti vity in th e first pon ds of t h e Lake Bo rrie system. It is also unlik e ly t hat ph osphorus w ill becom e li miti n g in ponds further down the series. W SP s are generally po or at re moving phosp h orus (M itchell 1980, G ross I995), and with aro und 8 mgL- 1 DR.P- P e nce ri n g the sys tem , it is still likely co be prese n t at th e end. It should also be no ted chat orcho-p hosphace (D R.P) can also be regen e rated; it has bee n reported co be exc re t e d by flagellates (Giide 1985) and ciliates Uoh annes 1968). Nitrogen A c tiva ted sludge treatment system s are m o re e ffi cie nt at re moving nitro ge n than phospho ru s. In O ctober 200 1, th e 55 East ASP was not operatin g at full c apa c ity w ith respe c t co ni t ro gen re mov al. Ammo nia- N , nitrite- N and nitrate- N in t he e ffiu ent fr o m the systen 1 were at around 13.9 (range 6.719.0), 0.7 (0.3-3.3) and 6.2 (5.0- 11.0) mgL - 1 resp ective ly (from data se t desc ribed above for DRP). T he targe t a mmoni a- N c on ce ntra ti o n fo r t h e

effiu e nt leaving the 55 East system is 3 mg L- 1 (Gulo vsen T. 200 1, pers. comm.). This is lo w w he n w e consider chat H ami lto n (2002) fo und concentratio ns of around 30-60 m gL- 1 ammonia-N in raw, primary-settled sewage. Hussainy (1979) also reported hig h levels of ammonia- N in the raw sewage e nte ring the WT P (m ea n 32 .0 mgL- 1, SD = 3.0). Wh ilst target values have not been set fo r nitrate and nitrite, it is li kely that they w ill also decrease substantia!Jy as the syste m is improved , and it is quite possibl e ch at they may e ven be reduced co O mgL- 1 (Gulovsen , T. 200 1, pers. comm.). E ven if nit rate and nitrite are abse nt, nitroge n ma y still no t be limiting to phyto plankton , so long as ammo nia is a va il a bl e . Al gae p r efe re n t ially use ammonia as a nitroge n so urce beca use it is redu ced; nitrate and nitrite , bein g o xidised, requ ire redu ctio n , w hi ch is e nergetically ex pensive (Po m eroy l 970). H o w ever, the substantial reduc ti o n in amm o nia co nce ntratio ns ente rin g Lake Bo rrie m ay lead to a situation w here all

th e amm o nia is exhausted aft er it has passed th roug h a certain number of po nds. T hus, nitroge n m ay becom e limitin g to the produ cti vity of th e ponds furth e r down a seri es, that is chose that are generally th e m ost utilised by wa te rb ird s (E lli ge t 1980 , H amilton 2002). H o wever, this argument also needs to take into account t he process of 'amm o nia regenerati o n' . It is not simply th e case th at a fini te a111ount of a111mo nia enters a lagoon system , and is consumed and never replaced. Ammo nia can be regenerated by juvenile copepods, rotife rs, cintin nids and hete rotrophic d inoflagellaces ( Paasche & Kristiansen 1 9 8 2 ) , a n d I e s s e ffi c i e n t I y b y hete rotrop hi c bacteria (Tupas & Ko ike 1990). Furthermo re, th is ammo nia (more spec ifically th e ammoniu m ion) can then be oxidised by n itri fyin g bac teria to nitrite and the n ni trate . Thus, nitrogen ' lost' to bio111ass is made availabl e agai n to algae thro ugh mineralisatio n. All these processes occur under aerobic condi tions. Ic sho uld also be no ted chat man y

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cy a n o b acteria, an o t he r impo r tant component of the phytoplankton at the WTP (Hami lton 2002), are able to fix atmosph eric n itrogen, and thus would not be expected to become nitrogen limited (Lord 1994) . As m en tioned ab ove, heterotrophic bacteria have been reported to use both inorgan ic and organic forms of nutrients (Kirchman 1994). Consequently, it is difficult to determine if a particular form of a nutrient cou ld become limiting to produ cti o n. For th e sake o f this argument, assume that heterotrophi c bacteria do become nitrogen limited. What effect is this likely to have on the fo od-web? Most me tazoans are inefficient at grazing bacteria (Peterson et al. 1978, Laybo urn- Parry 1992). Algae are considered to be the most important food source of Daphnia and m ost rotifers (G ilb e rt 1988). H owever, m a n y heterotrophic protozoans are efficient bacterial grazers. Laybourn-Parry et al. (1999) demonstrated in the 55 East ponds at the WTP that he terotrophic nanoflage llates accoun te d for th e majority of bacti vo ry, and c iliates were also imp ortant bacterial grazers. Rotife rs and planktonic crustaceans are known to feed on protozoans. Thus, a reduction in bac terial biomass might ultimately affec t zooplankton abundance via th is route, though it would probably have minimal impact if suffici ent algal biomass was available. H owever, food-w eb interactions are likely to be complex, and it is not possible to confidently predict how a reduction in bacterial b iomass would affect higher trophic levels.

Changes in the oxygenation status of ponds Whereas both phytoplankton and he terotrophic bac teria directly consume inorganic nutrients, only phytoplankton (i . e . cya noba c t e ria, a l gae a nd auto / mix otrophi c proto zoa ns) are capable of fixing carbon . The relative am ount of organic carbon available to heterotrophi c (carbonaceous) microorganism.s is typically represented indirectly as the amount of oxygen consumed by a sample over five days at 20°C. This is known as the five-day carbo naceous biochemical oxygen demand (CBOD 5 ) . At present, the CBOD 5 of the raw sewage influ ent at Lake Borrie, w hich is known to be well utilised by waterbirds (Elliget 1980, Lane and Peake 1990, Hamilton 2002), is around 400 mgL- 1 (G u lovsen, T. 2000, pers. comm., Hussainy 1979). The CBOD 5 of the ASP eilluent would be expected to be around 5 mgL-1 (G ulovsen T. 2001, pers.



comm.). The CBOD 5 o f the effiu ent leaving this system is around 4 .1 mgL- 1 (range 2-11, from data set described above for DRP). l t sho uld be noted that much of the CBOD rem oval occurs in a large anaerobic pond before the ASP. This pond reduces the initial CBOD 5 of around 400 mgL- 1 to abo u t 150-200 mgL- 1 before it enters the ASP (Gulovsen T. 2001, pers. comm.). In 2005, the treated eill uent for Lake Borrie w ill eith er come from this system or a similar one at the 25 West lagoon. A CBOD 5 of aroun d 5 mgL- 1 for future influent at Lake Borrie is very low in compari son to the present situation. For exan1ple, even fo r the ponds at the end of the Lake Borrie North and South system s (Lake Borrie is co mprised of two independent systems-H amilton 2002), where CBOD5 would be expected to be at its lowest, the levels are still substantialJy higher than this (N o rth : mean= 6 1 m gL- 1, n = 7, range = 30-90; So uth: mean = 59, n = 7 , range = 50-70. M elbourn e Water, unpublished data , 1990-1991). Thi s conside rabl e r e du ct ion in CBOD5 is likely to result in maj or ecological changes to Lake Borrie WSP s and W SPs in an y other systems that w ill receive this treated effluent. Al.I the ponds in the syste m are likely to become aerobic. Basically, lower levels of organ ic matter result in less oxygen being consumed (mainly by organotrophic bacteria, but also other microorganisms such as fungi) . T he suspended solids content of the water is also likely to be substantially lower, which wou ld be favourable fo r phytoplankton production, which in turn would lead to increased oi..')'genation of the ponds. Elli get (1980) identified the aerobic ponds of Lake Borrie systems (i.e. the ponds towards the end of each system) co be the most important to the waterbird community, an d this trend was confi rmed by H amilton 2002. Thus, it is possible that there w ill be even m ore useful habitat fo r waterbirds if all ponds become aerobi c. Aerobic ponds are m ore likely to suppo rt ab undant zoop lank to n communities (H amilton 2002) . Also, reductions in turbidity in the first few ponds of each series may mean that they w ill be able to support the growth of mats of filame ntous benthic algae, as appears to be the case at present in ponds furth er down the system (e.g. H amilton 2002). These mats are likely to be an important food source for Black Swans (Cygnus atratus), and possibly other bottom feeding species, such as the Australian Shelduck (Tadoma tadornoides).

Carbon limitation It is also possible that if the levels o f organic matter drop too low, which would be reflected in low CBOD 5 , carbon limitation o f p hytoplankton production could result. In addition to nutrients, algae and other photosynthetic primary producers also need a carb on source, wh ic h is fo und in the form of dissolved carbon dioxide (C O 2) . M ost of this carbon dioxide is released through bact erial deco mposition of o rgani c carbon. If C BOD 5 levels (i. e. organic matter) drop too lo w, then organotrophi c bacterial produ ctio n of CO2 may not be su ffi cient to meet the demands of photosynthesis, and thus carbon may become limiti ng to phytoplankton p ro duction. This has been d emonstrated previou sly for WSPs (Mitchell 1980), and it could ultimately lead to a reduction in invertebrate biomass. It is also worth noting that cyanobacteria are more efficien t at carrying out photosynthesis at lower dissolved CO 2 levels than are algae, and th us tend to dominate WS Ps where low co n ce ntration s of CO 2 are found (M itchell 1980) .

Potential impact of depleted food supplies on waterbirds Lake Borrie has been identified as an important feeding site for several species of waterbirds (Hamilto n et al. 2002). H owever, even if food resources do become depleted , it is possible that birds will simply compensate for this by fee din g fo r lo ng er (Lack 1954). H owever, food could become depleted to such a degree that intra-specific competition, inte r-specific competition or both might result. At an intra-specific level there are two theoretical extremes of competition (Nicholson 1954). Pure 'contest' comp etition is the situation w here there is a defined number of 'winners' (or survivors), and the fitn ess of these individuals is not reduced. Thus, if this occu rred, fewer individuals of a species would use a p ond, or ponds, but those individuals would not have reduced fitness. In contrast, w ith pure 'scramble' competition all individuals suffer reduced fitness and n one survive (o r stay at the habitat). In reality, an interm ediate situation is likely to occur. Furthermore, at both the intraspecific and interspecific levels, there are two possible ways in which competition could occur. An individual could be affected by others if they have depleted the amount of available food (or in theory any resource) . T hi s is known as 'reso urce ' or 'exploitation' compe tition. A study of


exploitation of Zostera in an estuary by Brent Geese (Bra11ta bcmicla) and European Wigeon (A1ws prnclopc) concluded that this was the dominant form of competition (Fox 1996). Alternatively, individuals may directly interact with each other in contests for food, leading to one individual missing out on gaining access to the food (e.g. feeding territories). This is known as 'interference' competition. It is important to attempt to understand what types of changes might occur that could lead to limited food supplies. A considerable amount of research has been conducted on the functioning of WSPs, including some at the WTP (Hussainy 1979, I3oyall 1995), but to date such knowledge has not been applied in ;m attempt to predict future changes co food-webs resulting from the sewage treatment amendments. Whilst the functioning of WSPs is complex, thus making predictions about future changes difficult, such an exercise can be seen at the very least as hypothesis generating, and thus useful for directing future research efforts. Moreover, the construction of theoretical arguments will increase our understanding of the system, and better equip managers to address problems if they do arise.

Conclusion The concentration of organic carbon the treated effiuenc that will be supplied to Lake Borrie in the future will be substantially lower than that for the pre-sedimented raw sewage with which the series of ponds is currently supplied. This will most likely result in ponds that are currently anaerobic becoming aerobic, and such ponds would be expected to support planktonic and benthic food-webs that are more suitable as food resources for waterbirds. Phosphorus and carbon limitation of pond ecosystems is unlikely to occur, but the possibility of nitrogen limitation, while probably unlikely, should not be dismissed. A diminished food supply would not necessarily have a negative impact on waterbird populations, and a detailed understanding of the behavioural ecology, particularly in relation to competition, would need to be constructed before predictions about likely impacts could be made. 111

Acknowledgements Darren Baldwin of the MurrayDarling Freshwater Research Centre provided helpful advice on nutrient che111istry, for which we are grateful. We thank Trevor Gulovsen from Melbourne


Water for supplying data. We also acknowledge the financial support of the Johnstone Centre, Charles Sturt University.

References Anon. (1988) 1Vct"1mls ct111scn 1111fo11 progr<1mft1r Victoria. Department of Conservation, Forests and Lands, Water Victoria and Ministry for Planning and Environment. Melbourne. 13oyallj (1995) 771c rcilc <:fprcil\1:::1l/l ill tltc sh11llm1 1

scr/li({!C tm111m·111 system r/1 the 11-'cstcm Trcm1!ICIII Pfo111, /Vcrribcc. BSc (Hons)


tlwsis, La Trobe University, 13undoora. Brown R S & Deerson ]) (1982) RAOU Conservation Group-duck survey. R.AOU Nrn 1.-lctrcr 52: 8-9. Elliget M (1980) II st11dy (:f Like !Jorrie, I Vcrribcc Scll'cn1gc FM111,1s a 11111tqfi.n1,J (A11,1tid11c) rrfi1gc area. BSc. (Hons) thesis, La Trobe University, Bundoora. Fox AD (19%) Zostera exploitation by Brent Ce1:se and Widgeon on the Exe Estu:ny, southern England. Bird S111dy 43: 257-268. Frith HJ ( 1982) M',ucrfim,f /11 A11srniliil 2,ul Ed. Angus and Robertson, Sydney. Gilbert J J ( 1988) Suppression of rotifer populations by Dap/111/<1: a review of the evidence, the mechanism, and the effects on zooplankton community structure. Li1ml()fogy ,111d OC!'r1110,{!mplty 33: 1286-1303. Gross P ( 1995) Lagoon treatment: A viable w;1stl'W;1ter trl·atment alternative. In: 1\lodcm Ti:dmiq11cs i11 IVt1/ff mu/ IV11stcH 111/ff Trcr11111c111,

pp. I.J-9-152. CSIRO Publishing, East Melbourne. Gi.ide H ( ! 985) Loss processes influencing growth of planktonic bacterial populations in Lake Constance. J()umal <!_( Plr111k1011 Rcscmt!i 8: 795-810. Hamilton AJ (2002) The ecology of waterbirds at the Western TrL'atment Plant (Victoria), with particular reference to waterfowl. PhD thesis, Charles Sturt University, Wagga Wagb,a· Download at http:/ /pink-earedduck. 0catch.com Hamilton A J, Taylor I R & Hepworth G (2002) Activity budgets of waterfowl (Anatidae) on a waste-stabilisation pond. E11111 102: 171-179. 1---kcky R E & Kilman P (1988) Nutrient !imitation of phytoplankton in freshwater and marine environment~: a review of recent evidence on the effects of enrichment. Li11111ofogy mu! 0fft11W_(!raphy 33: 796-822. Holmboe N, Jensen H S & Andersen F 0 ( 1999) Nutrient addition bioassays as indicators of nutrient limitation of phytoplankton in a eutrophic estuary. ,\lariue Ewfo<{!J' Prn.{!n'sJ Serie.- 186: 95-1 0.J-. Hussainy S U (1979) Ecological studies of lagoons at Werribcc: Removal of biochemical oxygen demand, nitrogen and heavy meta!. Pr11grcsscs i11 I Vil/er Tcd11wfo.{!y 11: .115-3.17. Johannes RE ( ! 968) Phosphonis excretion and body size in marine animals: Microzooplankton and nutrient regeneration. Sci('IICl' 146, 923-924. Kirchman D L (1994) The uptake of inorganic nutrients by heterotrophic bacte1ia. Microbial Ecofo.~}' 28: 255-271.

Lack D (195.J-) The 11<1111r1il J'(:~11/,11fo11 <:f r111i1mi/ 1111mhcrs. Oxford Uni\'ersity Press, Oxford. Lane BA, Schulz M & Wood KL (198.J-) Birds 1:f Port Phillip Bay. Report no. 1. Ministry for Planning and Environment, Melbourne. Lane B & Peake P (1990). i\1,1111rc m11scn1111fo11 ,11 the I Ferri bee 'frc111111c111 Cm11plcx: Rcpor1 1111111/Jcr 91 /008. Melbourne and Metropolitan Board of Works, Melbourne. Laybourn-Parry J (1992) Prohi:::clllll H111kl<lll EccJ/i~{!}'· Chapman and Hall, London. Laybourn-Parry J, BoyallJ & Rogers P (1999) The role of flagellated and ciliated protozoa in lagoon and grass filter sewage treatmem systems. /Vi11cr Rcscaffh 33: 2971-2977. Levine M A & Whalen S C (200 I) Nutrient limitation of phytoplankton production in Alaskan Arctic foothill lakes. HydrcJbiohwia 455: 189-20!. Lord I) A (199.J-) Coastal eutrophicnion: prevention is better than cure. the Perth Coastal Water Study. IVi1tcr 21: 22-27. Melbourne Water (1999) /VcJtcm Trcr111m·11t Plant Envinmmental Improvement Plan. Melbourne Water, Melbourne. Mitchell B D (!980) Waste Stabilisation Ponds. In: A11 ccc1fo.l!ier1/ b11sis jil/' 1/11/Sll' rcso111tc 11w11,{~c111c111 (ed. W. D. Williams) pp. 3W-375. ANU Press, Canberra. Nicholson A J (195.J-) An outli1ll' of the dynamics of animal populations. A11s1m/im1 Jo1m1<1! e:f Zt1(1/c~{!}' 2: 9-65. Paasche E & Kristiansen S ( 1982) Ammonium regene1~1tion by microzooplankton in the Oslofjord. M11ri11c Hfofogy 69: 55-63. Peterson BJ, Hobbie J E & Haney J F (1978) Daphnia grazing on natural bacteria. Li11111ol(l!;)' mu/ Occmw,{!rnphy 23: 1039-1044. Ramsar Convention Bureau ( l 98.J-) Pwcccdi11gs <!f tit(' Scw11d G11!fe'rc11cc (:f the Amit's; Grn11i11,{!l'II, i\Tctlicrlmuls, 7 to 12 May 198..J. Convention on Wetlands of International Importance especially as Waterfowl Habitat; International Union for Conservation of Nature and Natural Resources: Gland, Switzerland. Sanchez R M & Zea S (2000) Metabolism of inorganic nitrogen and phosphorus dissolved in a water column of a tropical lagoon in Caribbean Columbia. Carrilm111 Jo11n1r1/ c:f Sdc11cc 36: 127-1.J-0. Tupas L & Koike I (1990) Amino acid and ammonium utilization by hcterotrophic ma1ine bacteria grown in enriched seawater. Li11111()fogy 1111d Omm<t~mpliy 35: l 1.J-5-1155.

The Authors Andrew Hamilton, lain Taylor and Ben Wilson are all with the Applied Ornithology Group, Johnstone Centre, School of Environmental and Information Sciences, Charles Sturt University, PO Box 789, Albury, NSW 2640, Australia. Current contact details for A. J J-1.: Department of Primary lndustries-Knoxfield, Private Bag 15, Ferntree Gully Delivery Centre, Victoria 3156. Tel: +61 3 9210 9282, Fax: +61 3 9800 3521, Email: Andrew. 1-Iamilton@dpi. vie. gov .au. WATER NOVEMBER 2003




GERRINGONG GERROA SEWERAGE SCHEME M Boake, G Ovens Introduction The Gerringong Gerroa Sewerage Scheme (GGSS) is the culmination of an int e n s iv e e nvironmental imp act assessment process and community input to provide the area with a 'state-of-theart' wastewater treatment system. The sew erage sc heme serves the Gerringong and Gerroa townships within Sydney Water Corporation's area of operations (approximately two hours drive south of Sydney) where 3,500 people resid e. It encompasses all land currently zoned urban and allows for large seasonal population variati ons, catering to the area's popularity as a holiday destination. T he scheme, which is designed to meet th e local comm unity's n eeds up to the year 2022, has brought significa nt benefits to the area including sewer reticulation, an advanced tertiary treatment plant, and an agricultural-based reuse system designed to use greater than 80% of the treated effiuent and 100% of the biosolids. The project, which was delivered for $54 .5 m illi o n te n weeks ah ead o f sc hedul e, demonstrates how in novation and state-of- the-art technology can take wastewater treatment to the next level, and turn raw sewage into clean water.

Project Description Benefits of the Gerringong Gerroa Sewerage Scheme (GGSS)

Until the GGSS was com missioned in August 2002, the Gerringong and Gerroa area treated and disposed of sewage using septi c tank systems with pump-out and / or absorption tren che s. Septic pump-out was discharged to th e Gerroa Nightsoil D epot located south of Gerroa. The design, construction , commissioning and ongoing op eration of the GGSS has made significant contributions to the sustainable managen1ent of water in an environmentally sensitive region. Benefits to the local co mmuni ty and the surrounding environment include: • using leading edge technology to treat sewage to an advan ced tertiary level; • reusing at least 80% effiu ent and 100% biosolids for agricultu ral purposes; 58


Gerroa STP Flow Diagram ~

2 ML Tertiary Efflucnl Storage


~ Flow Lagoon

_ _ 11

-[-]WNJI_.~ ~ (-]


2.2 MUd


Step Screen (6mmapert\Jre)


I.______,,_.1 -~ ,- EJ .. bi oz~~1 J,' s.:,;


ll<o Oenlpho Process (2 x 900m 3 reactor>)



Backwash Alters (Altratlonrate

Grade A Stabllsed Biosolids




Rotary Drum Thld<ener (3-4% DS)

12ml / m3.h)

....,:__J AT/J,D

Overflow to natural wetland

UV Disinfection

Berson In-Linc

Figure 1. Process at the Gerroa Sewage Treatment Pl ant.

• protecting th e en vironm ent from septic contamination and improvi ng water quality in the Crooked River, Bl ue Angle Creek and W erris Lagoon; • d ec ommi ss i oning the Ge rro a Nightso il Depot and elimin ati ng th e discharge from this fac ility into the environment; • reducing poten tial h ealth hazards and negative impacts on su rface water and groundwater asso ciated with inadequate on-site sewage treatment fac ilities; • eliminating overflows associated w ith on-site systems preventing dampness and odour on properties and impro ving the quality of local waterways by preventin g run-off; and • redu ci n g odours and tru ck movements associated with septic tank pump-o uts. Design Basis

The scheme is designed to service an eq ui vale n t population of 11,000, cateri ng for the predi cted peak tourist season popu lation in the year 2022, and an ave ra ge d ry weat h e r fl ow of 2.2 M L/d. Th e sewage predominantly comes from domestic sources and a small number of commercial and ind ustrial contributors. Th e "peak" holiday population predominan tly occurs during the summer months.

Collection System

T he co ll ection sys tem comprises property service connections, reticulation sewers, sewer rising mains and sewage pumping stations. All sewage in the r e ti culation co mponent of the sch em e £lows by gravity; th ere are no vacuum systems. Below-ground pip es range in size from 100 mn1 to 600 111111. Access chambers are generally £lush with ground surfaces and range from light-duty to heavy-duty concrete type according to location. Some chambers have been elevated above flood levels. Rising mains, which have been sized to ensure adequate flo w velocities and to minimise retention t imes, tran sfe r collected sewage from sewage pumping stations to the Gerroa Sewage Treatment Plant (STP). T here are 11 submersibl e wet well type Sewage Pumping Stations (SPSs) with storage capacities of three ho urs Peak Dry W ea ther Flow (PDWF) plus two hours pumped dry weather £low upstream to ensu re: • no sewage overflows occur from sewage pumping stations in dry weather; and • no more t h an 20 wet weath er overflows occur in a 10-year period from


the sew erage reticu lation system o r sewage treatment plant. The design of each SPS is customised co suit th e individual chara cteristi cs of each site, giving consideration to geo cechnical conditions, water table, acid sul phate soils, proximity to waterways, and land site access. As a resu lt o f this custo mised approach various concepts have been adopted including: • cast insitu concrete wells; • precast con crete welJs; an d • fi breglass wells.

Gerroa Sewage Treatment Plant The process selected via th e EIS fo r th e Gerroa Sewage Treatm ent Pl ant was Advanced Tertiary T reatmen t (see Figure I). T h is dec ision was made to m inimise any impact on the Crooked River and the surrounding marin e environment durin g perio ds of discharge. Figure 2 outl ines the pl ant's design criteria. Pre-Treatment

Th e large bulk of sewage enters the plane vi a the inl et pump stati o ns whil e a small amount enters via the septic rece ival tank. Both flows are pumped through the m ec hanically raked scree n and into the grit removal system. Screen ings and grit removed du ring trea tm en t is transpo rted off-site fo r lan dfill d isposa l, in accorda nce with Kiama Municipa l Council regula tio ns. Potentia!J y odorous air is withdrawn from th e inlet works and treated by a bi ofi lter.

Population EP ,----7:Y:-ear---r-::P:-e_r_m_a_n_ent- :-T-------=p-ea""'k,---- - - - ~ 2002 3408 2022 6173 Plant is sized for a maximum population of 11,000 EP

6405 10737

Plant Flows

Plant Process Des ign


2.42 MUd 4 .67 MUd 19.36 MUd


Numbe r


1 dutv 1 dutv

6mm aoerture Vortex with air lift oumps

2 2

2 X 45 m3 3 2 X 900 m 4.5 ka/m~ 15 kW each

Screenina Grit Removal

28 Us 54 Us 224 Us

BioDenioho Anaerobic Selectors Bioreactor Ml SS Aerators Post Dentrification Clarification Sand Filtration Tertiarv Storaae Ozonation BAC Filtration Microfiltration UV Disinfection

3 per tank

55 m3 24m diameter, surface loading rate 1 averaae 0.4m 3/m 2/h Continuous sand bed filters, filtration rate 5 12 m 3/m 2/h 2M l Buffer storaae tank 2 X 50% duty 1160g Oa/h 1

4 1 1

Area per filter 4.9 m~ Memcor unit with 108 modules Berson lnllne UV svstem

Sludae Processina 2 2 1Ml

Rotarv drum thickeners 2 ATADs retention time 7.5 days Storaae tank

Chemical dosina Ethanol Alum Caustic Sodium HvPochlorite

5 kl 25kl 17kl 5 kl

Extra carbon source, Molar ratio Ethanol/ N0 3 • N: 1.5 Molar ratio AI/P : 1.5

Chlorine residual control for reuse water

Biological Treatment

Bi o logical treatment consists of a Kri.iger design BioDenipho process which removes organic matter (BOD), nitrogen, and phosphorus. T he BOD is con verted into bio mass and carbon dioxide by the acti vated sludge. A large percentage of the nitrogen is converted into gaseous form and released to the atm osph ere. Som e nitrogen is also assim ilated into the biom.ass . M ost of the phosphorus is assimilated in to the biomass. The biological plane includ es two anae robic selectors, two anaerobic tanks, two bioreactors, post denicrificacion tank, clarifier, return sludge pump station, and scum pump station . D egritted wastewater flows to the anae robic selectors and on through the anaerobic tanks . Efflu e nt from th e anaer obic tanks flows alternately into each of the bioreactors. The bioreactors contain a mass of freefloating mi cro-o rgan ism s (ac ti vated sludge). T he activated sludge is kept in suspe nsion by the action of the mixers and aerati on rotors.

Figure 2. Design Criteria fo r the Gerroa Sewage Treatment Pl ant.

The activated sludge leavin g th e main bioreactors flows through the post denitrification tank prior to the clarifier. Ethanol ma y b e dosed to th is tank to assist in the removal of the re maining nitrate if requ ired. The post denitrificati on tank provides an additional volume where denitri fying co nditio ns can be produced to refine th e biological nutri ent re moval process. From the post denitri6cation tank the effiuent flows to the clarifier. In the clarifie r, the mixed liquo r from the bioreactors se ttles co provide clean water and a more concentrated mixture of activated slu dge. The clean water overflows the weirs before pumpin g to th e sand filters. The sludge settl es to the bottom of the clarifier. A rotating bridge scraper pushes th e sludge into a sump in th e cen tre of the clarifie r, from where it is drawn o ff. The rotating bridge has a scraper on the surface of the clarifier for colJecting scum into hoppers.

From the sump in th e clarifier, th e sludge is returned via th e return sludge pump station to th e activate sludge process. This stream .is called return sludge, or return activated sludge (RAS). A small part of the return sludge stream , th e excess sludge, is sent to the sludge dewatering system. T he am ou nt of re turn sludge is adju sted according to the infl u ent fl o w rate, and the sludge settling properties and is controlled by th e SCADA system. Sand Filtration

Seconda1y effiuent fro m the clarifier is pumped to a bank of sand filters. Alum is added to precipitate out the remaining soluble phosphorus so it can be removed on the sand filters. T he tertiary effiuenc then flo ws to storage prior to the adva nced tertia1y treatment section of the process. WATER NOVEMBER 2003




Ozonation and Biologically Activated Carbon Filtration (Ozone/ BAC)

The first stage of advanced tertiary treatment is the O zone/BAC system. In co mbination, this process breaks down the remaining organic pollutants in the wastewater and removes them biologically. Th e ozo nation stage involves the introduction of ozone to the tertiary trea te d was t ewater. O zo n e is an aggressive oxidant that interacts with and brea k s down orga ni c mo lecu les (predominantly COD and o rganic nitrogen) that remain in the tertiary effiu ent. The ozon e also attacks bacteria and other p athogen ic organisms at this stage of th e process thereby offering a high degree of chemical disinfection. The che1ni cal oxidation breakdown products produced by the ozonation process are generally more biodegradable than their precursors. The BAC system is a biological filtration plus an absorption process where th e eilluen t passes through a bed of Gran ula r Activated Carbon (GAC) upon which an active biomass is formed. Th e bi o mass us es the breakdown products from the ozonatio n stage as its food source. Excess biomass is removed fro m the system during backwas hing of the GAC filter bed. Concen trations of pollutants such as pesticides and hormon e-like chemicals are signifi cantl y reduc ed ove r the combined Ozone/BAC system. Microfiltration

Mi crofi ltrat ion provides a final polishing step w here the remainin g suspended solids and micro-organisms are physically removed from th e effiuent. The m icrofiltrati on system in volves passing the efllu ent through a membrane with a nominal pore size of0.2 microns. This provides a very high degree of suspended solids removal along with the removal of bacteria and cysts. Membranes are backwashed approximately every 30 minutes to remove solids from the membran e surfa ce. A more intensive chemica l clean is undertaken approximately every th ree months.

I"'. °"•




.. ,

":" , .








Figure 3. Gerroa Sewerage Treatment Plant site and effluent re-use site.

dose of30,000 mWs/c m 2 at th e end of lamp life. T his UV dose would normally provide a greater th an th ree log inactivation of bacteria coupled with a one log inactiva tion of vi ruses. Sludge Stabilisation


Excess sl udge (waste activated sludge) is w ithdrawn from th e clarifier and fed to th e rotary drum thickener by a

UV Disinfection

T h e efflu ent fro m the microfiltration systen1 is disinfected via an ultra violet (UV) disinfection syste m. T he UV disi nfection unit delivers a leth al dose of radiation to any micro-organisms rema ining in th e effiu ent. T he UV system is d esigned for a minimum UV

'· 1

Figure 4. Lin ear move irrigators.

positive displacement pump. Polymer is dosed into th e line on th e o utlet side of the rotary drum thickener feed pump . Pol ym er improves the de-watering efficiency of the rotary drum thi ckener and produ ces th ickened sludge of about 5-6% solids. Excess water is returned to the ma in plant system. Stabilisation

The Auto t hermal Thermophili c Aerobi c Digestion (A TAD) system


provides co mprehensive stabilisa tion of the excess sludge from th e biological plane. The process opera tes in the 50° C to 60°C tempera ture range delivering a G rade A sta bilise d biosolids product in accordance w ith NSW EPA gu idelines. The stabilised bioso lids are sto red on site in li quid fo rm at approximately 4-5% solids be fo re agricultural reuse. No supernatant is return ed from th e AT A D sy te m or the stabilised sludge storage tank . Any o dours produced during the sludge stabilisation process and biosolids storage are withdrawn and created in the plant's bio filter. Th e fi nal biosoli ds produ ct does not prod uce offensive odou rs du e to the extent of treatm ent chat it has undergo ne. In August 2002, the Gerroa ST P was brough t online using septi c e ill u en t wh il e the first group of reside nts were co nne cting to se w e r. From Augu st 2002 u ntil M arch 2003 w h ile th e process was bein g optimised , the EPA set an inte rim lice nce criteria w hi c h was met. In April 2003 th e final E PA li ce nce took effec t w ith the exceptio n of phosphoru s w h ich is being optimised . Figu re S secs out th e design parameters for raw sewage and the curre nt cl ean water qual ity. Beneficial Reuse of Effluent and Biosolids

Effluent Reuse One of the scheme's obj ectives is to re use at least 80% of the treated wate r on average over the next 20 yea rs. Mu ltistage pumps located at the G e rroa STP are used to pump the advanced te rtiary treate d effiu en t thro ugh a rising main to a lo ca l dairy farm w here it is used for pastu re impro vement. As the water demand fro m the farm is seasonal, a S0ML storage dam balan ces th e water de mand and availability between periods of hi gh demand (sprin g and summe r) and periods of low demand (a utumn and w inter). The farm , pictured in Figure 4, has bee n equ ipped with two Lin ear Pi vot lrrigators that span 240111 and 320111 and irrigate approximate ly 70 hectares of the ISO-hectare property. T he property, which has been acquired by Sydney W ater Corporation and is operated by a local dai ry farm e r, has the capacity to inc rease the irrigation area as the Gerringong Gerroa Sewerage sche me grows. Figure 3 shows a map of th e site. T h e irrigators ha ve the flexibility to operate in ce ntre pivot and linear modes ,

Raw Sewage Component




Average 280










Total Kjeldahl



Total Phosphorus






Final Clean Water Component


EPA Licence 50%lle

Results From (Apr - Jul 2003) 50%lle <2








Total Nitrogen




Total Phosphorus (• Final Licence in place in 2004)








pH Faecal Coliforms


100%lle -t-


Figure 5. Performance Requirement for the Gerroa Sewage Treatment Plant.

w h ich max imise the irrigation area o n an irregular shaped property. A range o f irri gatio n ra tes ca n be applied w ith maximum fle xibi lity a n d minimum ope rato r input. Th e fa r me r use s a comp uter program to aid in irrigatio n schedu ling. This e nsures that th e eilluent re use sch e me is operated in accordance wit h th e sch e m e's e nvironm e nta l management system and the sc heme 's reuse targe ts are met or exceeded. Whe n water is un likely to be used fo r irrigatio n and the storage dam water level is high , water is discharged onto the sa nd dun e systems at a fixed rate of0.8 ML/ d (fo r six m on th s per yea r). In extreme periods of extensive wet weather, w ith the storage dam full , th e sand dune system may not be able to accept the entire flow produced by the STP. In this ra re even t, the surplus of effiu ent is directed to th e natu ra l on -site wetl and via a constru cted overflow c hanne l, and ultimately to the Crooked River. A small amount of final effl uent is also used on-site as process water. Biosolids All biosolids produced by the plant w ill be beneficially reused o n surrounding agricu ltural areas, su bject to compliance w ith contaminant and stabilisatio n criteria of the NSW EPA Biosolids Guidelines. Excess sludge from the biological process

is stored as a liquid in a 1ML on-s ite biosol.ids storage tank after undergoing full stabil isatio n in the AT AD syste m. Liqu id bi oso lids are removed fro m th e storage tan k via tanker and transported to nearby agricultural properties fo r bene fi cial use as a fe rtiliser. At the appli ca ti o n site biosolids are transferred to a Sl udge Injec tion Vehicl e (S IV) for application below ch e soil su rface .

Conclusion The G errin go ng Gerroa Sewerage Sche m e d e mon strates t hat through innovative design and state-of-th e-art wastewater treatm ent, raw sewage can be processed to produ ce clean water for re use. With the world running out of fres h wa ter, and Austra li a on e of the dri est continents curre ntly eme rging from one of its most seve re droughts ever, it is important that projects like Gerringong Gerroa continue to be delivere d.

The Authors Michael Boake is T echnical D irector w ith Veolia Water Australia , (02) 8572 0300 or m ic hael. boake@ veoliawater. co m .a u. Gavin Ovens is D eve lope r Manager - Special Proj ects w ith Sydn ey Wate r Corporation, (02) 9350 67 16 o r gavin. ovens@sydn eywater.co m .au




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