How To Develop A Project For A Dam In North West Of Australia

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2 Commonwealth of Australia 2014 Ownership of intellectual property rights Unless otherwise noted, copyright (and any other intellectual property rights, if any) in this publication is owned by the Commonwealth of Australia (referred to as the Commonwealth). Creative Commons licence All material in this publication is licensed under a Creative Commons Attribution 3.0 Australia Licence, save for content supplied by third parties, logos and the Commonwealth Coat of Arms. Creative Commons Attribution 3.0 Australia Licence is a standard form licence agreement that allows you to copy, distribute, transmit and adapt this publication provided you attribute the work. A summary of the licence terms is available from creativecommons.org/licenses/by/3.0/au/deed.en. The full licence terms are available from creativecommons.org/licenses/by/3.0/au/legalcode. Cataloguing data This publication (and any material sourced from it) should be attributed as Water Infrastructure Options Paper CC BY 3.0. ISBN No: (online) ISBN No: (printed) Internet Water Infrastructure Options Paper is available at agriculture.gov.au. Contact Australian Government Department of Agriculture Postal address GPO Box 858 Canberra ACT 2601 Switchboard Facsimile info@agriculture.gov.au Web agriculture.gov.au Inquiries regarding the licence and any use of this document should be sent to copyright@agriculture.gov.au. The Australian Government acting through the Department of Agriculture, has exercised due care and skill in preparing and compiling the information and data in this publication. Notwithstanding, the Department of Agriculture its employees and advisers disclaim all liability, including liability for negligence, for any loss, damage, injury, expense or cost incurred by any person as a result of accessing, using or relying upon any of the information or data in this publication to the maximum extent permitted by law.

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4 Contents Introduction 1 Role for the Commonwealth in water infrastructure development 2 Potential projects for possible Commonwealth involvement 3 Options to accelerate development 8 Appendix A: Prime Minister s Guidelines to the Water Infrastructure Ministerial Working Group 13 Appendix B: Summary of potential projects that have been identified for possible Commonwealth involvement 14 Appendix C: Projects identified by state and territory governments and others for consideration 25 Appendix D: Indicative water infrastructure project development phases used by the Ministerial Working Group (provided by the Department of Agriculture) 28 Appendix E: Consideration of funding and financing models for water infrastructure 29 Published: 29 October 2014 Photo credits Cover main image: Burrinjuck Dam (2009) Copyright Murray Darling Basin Authority, Photographer, Irene Dowdy

5 Introduction The Government made an election commitment to start the detailed planning necessary to build new dams to secure the nation s water supplies and deliver strong economic benefits for Australia, while protecting the environment. This options paper will assist to progress water resource development and cement the commitment to infrastructure and getting our nation moving efficiently and competitively. The paper has been developed in accordance with the guidelines provided by the Prime Minister to identify how investment in water infrastructure could be accelerated, priorities for investment in dams, opportunities in groundwater, and how these approaches will improve the management of Australia s water resources, taking into account economic, social and environmental considerations (Appendix A). The options paper has been developed so the government can consider its outcomes as part of the White Papers on Developing Northern Australia and Agricultural Competitiveness. Water resources development can encourage regional development and contribute to regional and national economic and social benefits. Investment in water infrastructure can raise productivity and economic activity, meeting critical needs for all Australians, including safe drinking water, sanitation and provide for flood mitigation. Water infrastructure also supports expanding industries such as mining and irrigated agriculture, particularly in rural and regional areas. Given the nature of our dry continent, it is critical infrastructure. Infrastructure development is complex, and water infrastructure has its own unique challenges. Development has long lead-times, requires substantial capital and maintenance for many years due to its life expectancy. Water infrastructure must be built to the right scale, at the right time, with sufficient demand and with the right supporting infrastructure if full benefits of the investment are to be realised and undesirable costs avoided. Water infrastructure also often requires significant supporting infrastructure, such as roads. Early planning is necessary if major infrastructure proposals are to be properly considered to meet future demands. 1

6 Role for the Commonwealth in water infrastructure development The Commonwealth can play an effective leadership role in facilitating the development of major water infrastructure projects in several key areas, including by: supporting future planning; continuing to promote national water management reform; providing or assisting with scientific and economic advice and analysis; efficiently administering national environmental legislation; and, in some cases where there is a clear national case for assistance, providing direct financial investment for construction. Commonwealth involvement in water infrastructure development should be directed to activities that are in the national interest, deliver net economic and social benefits and broader public benefits. It is also expected that given the primary state and territory responsibility for water resources there must be strong state or territory government support for projects. To determine whether a water infrastructure project warrants Commonwealth involvement principles addressing the above considerations should be applied. Projects need to be nationally significant and in the national interest. There must be strong state or territory government support with capital contribution and involvement of the private sector and where appropriate local government. The investment will provide the highest net benefit of all options available to increase access to water, taking into account economic, social and environmental impacts. Projects should address a market failure which cannot be addressed by proponents, state and territory governments or other stakeholders and limits a project of national significance from being delivered. Projects should align with the Governments broader infrastructure agenda to promote economic growth and productivity or provides a demonstrable public benefit and addresses a community need. Projects should align with the National Water Initiative principles including appropriate cost recovery and where full cost recovery is not deemed feasible, any subsidies are fully transparent to the community. If providing capital, a consistent, robust analysis of costs and benefits and assessment is undertaken. These principles have been based on transport infrastructure investment principles and the approaches contained in the National Water Initiative. 2

7 Potential projects for possible Commonwealth involvement In preparing this paper, consultation was undertaken with state and territory jurisdictions through relevant ministers and agencies as provision of water infrastructure is predominantly a state or territory government responsibility. All governments were asked to provide a list of priority projects for consideration; explain their processes for determining priority projects; identify any barriers to accelerate investment in water infrastructure and consider the role water infrastructure plays in improving the management of water resources. With relatively few exceptions, the states and territories are not actively pursuing significant, large scale water infrastructure development at present. A total of 63 projects have been identified by the states, territories and others for further consideration. The overwhelming majority of these are similar in preliminary concepts or in the very early stages of assessing feasibility. Only a small number have a reasonable prospect of being construction ready within the next year or two. Most are at least several years away from construction. The analysis of projects took account of the principles identified above. The projects have been categorised on the basis of when potential investment decisions may be necessary, the nature of activities for which assistance is being requested, such as investigations of feasibility or a contribution to construction costs, and whether more information is needed to enable an assessment of the project to be made. Further information on all projects would be needed before decisions regarding possible Commonwealth involvement could be recommended. In particular, although projects can be ranked in terms of stage of development, there is insufficient information at present to confidently rank projects in terms of net benefit. The categories of projects are: 1. Project already funded with existing Commonwealth assistance 2. Likely to be sufficiently developed to allow consideration of possible capital investment within the next 12 months 3. Could warrant future consideration of possible capital investment, but less advanced in stage of development 4. Likely to be suitable for further consideration for possible assistance to accelerate feasibility studies, cost benefit analysis or design 5. Likely to occur without direct Commonwealth involvement 6. More information is required from state and territory government to inform categorisation It should be noted that while a number of projects may eventually be developed to a point where the need Commonwealth assistance could be determined, a commitment to fund either further studies or to invest directly in construction should be subject to receipt of more detailed proposals from the states and the Northern Territory and rigorous analysis. Many of the projects may be capable of proceeding without the need for any Commonwealth Government assistance for construction. Also, before any commitment to a project is made, particularly for investing directly in construction, a comprehensive analysis of cost effectiveness and feasibility should be undertaken, noting that evaluation of this analysis by Infrastructure Australia is required for project proposals involving at least $100 million of Australian Government funding. With very few projects being close to construction ready, consideration 3

8 could be given encouraging the states and territories to accelerate the development of projects through possible Commonwealth assistance for investigations and feasibility studies. Based on the outcomes of consultation with state and territory governments, 31 projects have been identified as having the potential for Commonwealth involvement. This involvement would not necessarily be in the form of financial assistance for construction as noted above, Commonwealth assistance for construction costs would need to be determined rigorously following consideration of detailed business cases from state governments and in light of the Government s broader fiscal objectives. Map 1 shows the potential project locations and they are outlined below. 1. Project already funded with existing Commonwealth assistance a. The Commonwealth has already provided a financial commitment of $18 million to progress the augmentation of Chaffey Dam in New South Wales, which has commenced construction in October b. A sum of $180 million has been committed to improve the operation and efficiency of the Menindee Lakes. Detailed project planning, stakeholder consultation and design work for the agreed scope of works is currently underway. c. The Commonwealth provided $ for a feasibility study for the Nimmitabel Lake Wallace project. The project has been identified by the New South Wales Government as a high priority project for funding under their Water Security for Regions Program. d. The Great Artesian Basin Sustainability Initiative will be extended for a further three years in New South Wales, Queensland and South Australia with the Commonwealth providing $15.9 million. 2. Likely to be sufficiently developed to allow consideration of possible capital investment within the next 12 months a. Gippsland: Macalister Irrigation District / Southern Pipeline, Victoria b. Tasmanian Irrigation Tranche II: Southern Highlands c. Tasmanian Irrigation Tranche II: Scottsdale d. Tasmanian Irrigation Tranche II: Circular Head e. Tasmanian Irrigation Tranche II: Swan Valley f. Tasmanian Irrigation Tranche II: North Esk Project identified by the Water Infrastructure Ministerial Working Group 4

9 3. Could warrant future consideration of possible capital investment, but less advanced in stage of development a. Gippsland: Lindenow Valley Water Security Project, Victoria b. Emu Swamp Dam Severn River, Stanthorpe, Queensland c. Nathan Dam, Dawson River, Queensland d. Wellington Dam Revival Project, Western Australia 4. Likely to be suitable for further consideration for possible assistance to accelerate feasibility studies, cost benefit analysis or design a. Apsley Dam Walcha, New South Wales b. Lostock Dam enlargement Hunter Valley, New South Wales c. Mole River Dam, New South Wales d. Needles Gap, New South Wales e. Burdekin Falls Dam (including Water for Bowen), Queensland f. Connors River Dam Sarina, Queensland g. Fitzroy Agricultural Corridor construction of Rookwood Weir and raising Eden Bann Weir h. Mitchell River System, Far North Queensland i. North Queensland Irrigated Agriculture Strategy: Flinders-Gilbert, large scale infrastructure proposals (e.g. IFED) and on-farm developments j. Nullinga Dam Cairns, Queensland k. Urannah Dam Collinsville, Queensland l. Ord Irrigation Stage III (water infrastructure components), Northern Territory and Western Australia m. Pilbara and/or Kimberley irrigated water pipeline system, Western Australia n. Expanded Horticulture Production on the Northern Adelaide Plains - Waste Water Re-use, South Australia o. Intensive Livestock and Horticulture Expansion Northern Dams Upgrade Clare Valley, South Australia p. Exploring off-stream storage opportunities to increase water availability for agricultural development, Northern Territory Project identified by the Water Infrastructure Ministerial Working Group 5

10 q. Upper Adelaide River Dam / off stream storage, Northern Territory A summary of each of the 31 projects listed above is at Appendix B. The remaining 32 projects have been categorised as likely to occur without direct Commonwealth involvement or more information is required from state and territory governments to inform categorisation (Appendix C). A number of small scale flood mitigation projects were suggested by the states. On the basis of scale and capacity for costs to be recovered from future developments these were not considered as requiring Commonwealth involvement. However, both Queensland and New South Wales are currently investigating flood mitigation options in south east Queensland and the Hawkesbury-Nepean area respectively, and may come forward with related project priorities in the next year or two. Managed aquifer recharge was also identified by some states, including Western Australia and the Northern Territory as worthy of further investigation, particularly in Northern Australia. 6

11 Map 1: Potential water infrastructure projects for possible Commonwealth involvement 7

12 Options to accelerate development Leading future planning The Commonwealth has a role in identifying and assessing infrastructure that is nationally significant. Infrastructure Australia is responsible for identifying current and future infrastructure assets of national significance as part of its infrastructure audit currently underway. Infrastructure Australia is also responsible for evaluating infrastructure project proposals seeking at least $100 million of Commonwealth funding. Infrastructure Australia is developing a 15 year infrastructure plan covering water, transport, energy and communications, to be completed by the end of this year. Infrastructure Australia is also conducting an audit of infrastructure needs for Northern Australia. Project development Where a project is in the development pipeline it can be described in four stages: 1. assessing demand and general feasibility, including location 2. assessing economic feasibility through benefit cost analysis 3. gaining approvals and assessments 4. seeking finance for capital and establishing cost recovery for ongoing maintenance. Appendix D provides further information on the stages of development for water infrastructure. To fast track investment in water infrastructure the Commonwealth would mainly be involved in stages 1 and 4 of project development. Assessing economic feasibility is predominately the proponent s role, noting that a lack of a well developed economic case is a major barrier to development. Seeking capital is also predominantly the proponent s role. Stage 1: assessing demand and general feasibility, including location (early scoping) In this stage, proponents undertake preliminary scoping; establishing the demand for water, undertake water planning considerations, assess water resources and infrastructure options and fund preliminary studies of these. New infrastructure must address a forecast water supply requirement or provide a substantiated opportunity for economic growth. Options to accelerate investment could include funding pre-commercial pre-feasibility assessments, such as for groundwater, opportunities in hydro-generation or providing base-line information assessing water availability and sustainable extraction rates. Some work would draw on the expertise of agencies such as CSIRO and Geoscience Australia. These agencies already provide a level of assistance, but special projects could also be funded. Funding could be through development of a modest program that would provide matching funding to incentivise state and territory governments to focus on ensuring the feasibility studies, economic analyses and more detailed assessment and design is undertaken for projects in the early stages of development. 8

13 Stage 2: Assessing feasibility through benefit cost analysis (assessing feasibility) In this stage, proponents have primary responsibility for determining the economic viability and complete benefit cost analysis. Potential Commonwealth involvement in this area is limited. Any possible assistance can be guided by the Commonwealth s response to the Productivity Commission s inquiry into public infrastructure, including to the recommendation that all public infrastructure investment proposals above $50 million are subject to a rigorous cost benefit analysis. The Commonwealth is considering the recommendations made by the Productivity Commission and will formally respond to the inquiry in late The current government support for the analysis of base line information assists proponents and Infrastructure Australia, or other experts, to undertake analysis. Stage 3: Gaining approvals and assessments (decision to proceed) During this stage the Commonwealth plays a role in undertaking environmental approvals and assessments in relation to matters of national environmental significance which may be impacted by water infrastructure developments. Broader Commonwealth legislation and policies, particularly in the areas of competition policy, investment and taxation may also affect delivery of water infrastructure and influence investment decisions made by other governments and the private sector. The Commonwealth s implementation of a one stop shop for environmental approvals will contribute to fast tracking approvals. There could also be opportunities for broader policies through existing Commonwealth processes including a review of environmental offset policies, the White Papers on Developing Northern Australia and Agricultural Competitiveness, the COAG regulation agenda, the Commonwealth s response to the Productivity Commission s inquiry into public infrastructure, and the Productivity Commission s report into major project assessment processes. Stage 4: seeking finance for capital and establishing cost recovery for ongoing maintenance (ready to go) This stage includes finalising designs and securing investment. Capital investment is a key barrier given the expense of water infrastructure. Funding for capital (and pre-commercial feasibility studies) could possibly be through some Commonwealth programmes but the quantum of these funds is likely to be limited, particularly for capital. Potential projects that include a hydroelectricity component (e.g. Nullinga Dam, Urannah Dam, Apsley Dam) may be eligible for funding through new or existing energy initiatives. Capital funding for some smaller projects may be eligible through the National Stronger Regions Fund, which is a competitive grants programme available to local governments and not-for- profit organisations. It may be appropriate to develop a new type of funding model in the style of the New Zealand Irrigation Acceleration Fund or an augmentation of the existing Australian Government Sustainable Rural Water Use and Infrastructure Program. Commencing in 2011, the New Zealand Irrigation Acceleration Fund has been allocated $35 million over five years and includes three components to target the delivery of investment ready rural infrastructure proposals: 1) regional rural water infrastructure, 2) strategic water management studies, and 3) community irrigation schemes. Additionally, New Zealand Crown Irrigation Investments Ltd acts on behalf of the New Zealand Government as a bridging investor for regional water infrastructure developments by making targeted investments into schemes, alongside other partners, that would not otherwise be 9

14 developed. Schemes have to be technically feasible, have appropriate allocation of risks, sound management and governance (including arrangements that do not create competition policy issues), have consents in place, be of an optimal size and be commercially viable in the mediumterm. The New Zealand Government has signalled that it plans to invest up to $400 million, with $80 million provided in the 2013 budget and $40 million in the 2014 budget. The current white paper processes for Northern Australia and agricultural competitiveness will provide an opportunity to consider funding for investing in priority water infrastructure developments relative to other infrastructure opportunities. It would be expected in all cases the relevant state or territory government, and/or project proponent, contributes funding to the projects. Given the respective responsibilities of the state and territories and the potential flow of private benefits it would not be expected that the Commonwealth would fund more than 50 per cent of a proposal or ever exceed the state or territory contribution where a private sector capital contribution is obtained. Private sector participation, including foreign investors, can act as a driver in water infrastructure development. It encourages emphasis on a sound economic and financial case for the proposed development, as investors will require a return on investment. This should ensure that demand and willingness to pay are investigated, and that a user pays model is implemented. Foreign investment has been welcomed for Ord Stage II. In other cases private sector investment can be in partnership with government to deliver essential services, where private sector involvement can bring about efficiencies in the delivery of water infrastructure (examples include urban water development or flood mitigation where costs can be fully recovered). The recent report by the Productivity Commission inquiry into public infrastructure noted the efficiencies that private sector involvement can bring. Previous Tasmanian Irrigation projects had a public private partnership and have been successfully implemented. There is also potential to attract mining investment to allow the further development of mining resources. Financing models In addition to Commonwealth direct funding for capital, there are a range of alternative mechanisms to raise money, such as charges on users or beneficiaries of the infrastructure. Additional alternative financing mechanisms available to governments include concessional loans, government guarantees, equity injections and phased grants (availability payments). The use of alternative financing mechanisms can also remove some impediments to private sector financing, providing governments with greater flexibility to reduce budget outlays and improve opportunities to share risk with private sector investors. It is important that private sector co-investment in water infrastructure does not come at the expense of transferring unacceptable risk to governments. It should only be undertaken following a careful case-by-case analysis of the attribution of benefits and costs and risks. The ability to attract private investment in water infrastructure projects or implement alternative financing arrangements will be limited if a project is not economically viable or if it does not align to the guiding principles. 10

15 Options relating to financing include: Continue to promote and reinforce the commitment to asset recycling with state and territory governments as it provides an extra incentive to partner with the Commonwealth and private investors. The Commonwealth could further explore opportunities to facilitate private sector-led development of future water infrastructure projects, particularly in the agricultural and resources sectors. There are substantial benefits for these sectors developing projects that are built for a specific purpose, particularly where they alleviate supply pressures on existing water infrastructure assets. Most water infrastructure delivers multiple benefits such as domestic and urban water supplies, agriculture irrigated or mining water, flood mitigation and potentially electricity, so partnerships are most likely. Further work beyond the recent Productivity Commission inquiry into public infrastructure is likely to be required to identify those mechanisms that can be successfully applied to water infrastructure without transferring an unacceptable risk. This is particularly important for water infrastructure developed for agricultural purposes, which typically involve a high up front capital cost and generate economic returns over many decades into the future. The Treasury, the Department of Infrastructure and Regional Development and Infrastructure Australia have expertise in these areas and could be supported by portfolios that are related to major users of water such as agriculture and mining. It should be noted that in the current fiscal environment, the Commonwealth cannot be expected to be a guarantor for all large projects proposed by the states and territories. Appendix E provides further information on alternative funding models. 11

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17 Appendix A: Prime Minister s Guidelines to the Water Infrastructure Ministerial Working Group The members of the Ministerial Working Group include: Minister for Agriculture, the Hon. Barnaby Joyce MP, Chair Deputy Prime Minister, the Hon. Warren Truss MP Minister for the Environment, the Hon. Greg Hunt MP Assistant Minister for Infrastructure and Regional Development, the Hon. Jamie Briggs MP Parliamentary Secretary to the Minister for the Environment, Senator the Hon. Simon Birmingham. The ministerial working group will: identify how investment in water infrastructure, such as dams, could be accelerated, including methods for assessing feasibility and cost benefit analysis of particular proposals, the role of Infrastructure Australia, and financing identify priorities for investment in new or existing dams, including the merit of proposals already well-developed and the productivity and/or economic benefits of new or existing dams outline how proposed approaches will improve the management of Australia s water resources to support economic development, flood mitigation and respond to community and industry needs consider opportunities for ground water storage (aquifers), water reuse and water efficiency to ensure investment in dams occurs where it is the most suitable solution take account of economic, social and environmental considerations, including consistency with National Water Initiative principles. 13

18 Appendix B: Summary of potential projects that have been identified for possible Commonwealth involvement The 31 projects have been identified through consultation with the state and territory governments and from the Water Infrastructure Ministerial Working Group. 1. Project already funded with existing Commonwealth assistance # Project Name State Description of Project 1 Chaffey Dam (MDB) NSW Stage of development: Construction Raising dam wall, from 62 GL to 100 GL, modifying related infrastructure, and relocating/realigning some roads, bridges and recreational facilities. It will secure future water needs for communities and Peel Valley irrigators, and improve ability to withstand extreme floods. Project agreement signed. Contract for construction has been awarded to John Holland. Construction commenced in October 2014 and anticipated completion is June Funding secured, including Commonwealth investment of $ million, New South Wales Government investment of $9.668 million and Tamworth Regional council investment of $3.968 million (total $ million). Proposed dam would be located in the Murray Darling Basin. Any water use associated with the new infrastructure would need to comply with long term sustainable diversion limits (SDL) described in Schedule 2 of the Basin Plan. If the dam were to create new entitlements in a catchment that already uses its full SDL these would need to be offset elsewhere in the catchment. Dam design would need to meet environmental objectives and impacts on downstream flows would need to be considered by the state. The NSW Government has indicated the potential for further works to Chaffey Dam to increase storage capacity to 200 GL (correspondence from Minister Humphries, 16 July 2014). 2 Menindee Lakes NSW Stage of development: Assessing Feasibility (Stage 2) New regulators between lakes, an outlet regulator at Lake Menindee and the Darling Anabranch and drainage channels to access dead storage. It will reduce large evaporative losses and contribute to the Murray Darling Basin Plan. The NSW government is currently undertaking detailed project planning, stakeholder consultation and design work for the agreed scope of work. The Commonwealth provided $ to deliver this preliminary assessment work. The Commonwealth has approved $180 million to assess the feasibility of the project and undertake infrastructure works if necessary (to end of financial year). 14

19 1. Project already funded with existing Commonwealth assistance # Project Name State Description of Project 3 Nimmitabel Lake Wallace 4 Great Artesian Basin Sustainability Initiative NSW Multi (NSW, QLD, SA) Stage of development: Seeking finance for capital and establishing cost recovery for ongoing maintenance (ready to go) Construction of a new dam to increase water security for the village of Nimmitabel, New South Wales. A 2010 feasibility study (led by the Nimmitabel Advancement Group with financial support from the Commonwealth) identified a 200 ML dam on Pigring Creek as a feasible option to reduce the impact of drought and secure Nimmitabel's water supply. Cooma Monaro Shire Council accepted the recommendations of the feasibility study and has committed to construct a dam, to be known as Lake Wallace. Cooma Monaro Shire Council has completed pre-construction activities such as completion of the detailed design and environmental assessments required for planning and Commonwealth environmental approval was granted on 30 June The Commonwealth contributed $545,771 financial support for the feasibility study and pre-construction activities. The project has been identified by New South Wales Deputy Premier, the Hon. Andrew Stoner MP as a high priority project for funding, subject to final business case approval, under the New South Wales Government s Water Security for Regions program. $5.3 million has been committed by the New South Wales Government to progress the project. Additional Commonwealth assistance has not been requested. The programme replaces old bores and pipe networks legally operating in an uncontrolled state with controlled bores and efficient watering systems which generates benefits to water users and the environment. The estimated cost of completing the programme is in the order of $199 million across the jurisdictions of New South Wales, Queensland and South Australia. The programme commenced in 1999 and ended on 30 June The Commonwealth announced on 16 October 2014 it will provide $15.9 million to extend the initiative for a further 3 years. The Commonwealth will work with the New South Wales, South Australian and Queensland Governments on their provision of matched funding. The Commonwealth will also work with the relevant state governments and the Great Artesian Basin Coordinating Committee to develop a new strategic management plan for the basin. Project identified by the Water Infrastructure Ministerial Working Group 15

20 2. Likely to be sufficiently developed to allow consideration of possible capital investment within the next 12 months # Project Name State Description of Project 5 Gippsland: Macalister Irrigation District / Southern Pipeline Sale - Maffra VIC Stage of development: Assessing Feasibility (Stage 2) Conversion of 85 km open channel to pipeline to increase agricultural production and generate environmental benefits (reduced nutrient flows into local waterways and the Gippsland Lakes). Business case prepared and pipeline design is underway. Expected to be construction ready late Estimated cost is $80 million. 6 Tasmanian Irrigation Tranche II: Southern Highlands TAS Stage of development: Assessing Feasibility (Stage 2) 6500 ML dam and 49.6 km pipeline. For irrigation for cropping, grazing and potential new dairy conversions, and supplying reliable drinking water for the community. Business case being approved by Tasmanian Government. Expected to commence construction from March 2015-March Estimated total capital cost is $28.5 million. Estimated Commonwealth requested contribution is $19.8 million. 7 Tasmanian Irrigation Tranche II: Scottsdale TAS Stage of development: Assessing Feasibility (Stage 2) 9300 ML dam on Camden Rivulet to deliver 8600 ML a year for dairying, cropping, vegetable production and some livestock finishing, with a 2000 KW mini-hydro power station. Business case to be finalised June Construction estimated from March 2015-September Estimated total capital cost is $46 million. Estimated Commonwealth requested contribution is $31.9 million. 8 Tasmanian Irrigation Tranche II: Circular Head TAS Stage of development: Early Scoping (Stage 1) ML off stream storage, 100 km pipeline and 7 pump stations to supply ML high surety summer irrigation water for dairy production. Early scoping stage with preliminary information being sought on demand for water. A preferred option was submitted to Tasmanian Irrigation Board in June Investigations into engineering design, environmental and economic assessments underway. Construction time estimated June 2015 and December Estimated total capital cost is $60.7 million. Estimated Commonwealth requested contribution is $41.8 million. 9 Tasmanian Irrigation Tranche II: Swan Valley TAS Stage of development: Assessing Feasibility (Stage 2) Dam and 38 km pipeline to deliver 2000 ML from Swan River to high value irrigated agriculture, including viticulture, grazing, irrigated cropping and walnut production. Business case expected to be completed in Estimated total capital cost of $12 million. Estimated Commonwealth requested contribution is $7.7 million. 16