What a bargain: Meander Dam a subsidy gold-mine
13 Sep 2003
WWF-Australia is extremely disappointed the Minister for the Environment, Dr. David Kemp, has today rubber-stamped the financially dubious Meander Dam in Tasmania.
In addition to significant environmental concerns, WWF has demonstrated the proposed dam's lack of financial viability. WWF has repeatedly asked why the dam needs to be subsidised if the benefits to farmers are as lucrative as claimed.
Central to the Meander Dam Proposal is the use of a private operator to build and run the dam. This operator will then assume the risk for the commercial success of the dam as a profit-making venture.
"If this really was a viable commercial proposal, would this business venture ever attract investors?" David Butcher, WWF-Australia CEO said.
"Over 90 per cent of the benefits of this dam project flow directly to irrigators. However farmers are only willing to pay 20 per cent of the value they will receive", according to the consultants.
"Government subsidy should only be used where there is significant public interest. Why is the Tasmanian Government willing to subsidise farmers to receive a benefit the government consultants say is worth a gold mine?"
The level of subsidy required for the financial viability of the dam has not been fully declared.
If the dam is to be heavily subsidised, it may not conform to COAG's Water Reform Framework, which requires the full-cost recovery of the supply of the water (refer to clause 3 (a)(I) of the Water Resources Policy).
WWF strongly objects to subsidising projects which have been proven to pose a serious threat to flora and fauna in the region.
The State and Commonwealth governments need to be transparent - If they are to provide subsidies, they must be justified by a public benefits test.
