Is Townsville water mispriced?

Bill and Mal. Mal and Bill. Have been competing over funding for the Townsville water supply. This is interesting because the current Townsville web page on water supplies says this:

Townsville residents use over four times more water per person than in most major cities

The average Townsville household uses 1,700 litres of water per day, while in Brisbane, Sydney and Melbourne households use around 210 to 285 litres per day

More than 70% of Townsville’s water supply is currently being used on residential lawns and gardens

On those numbers the “average” Townsville household also uses just more that three times the “typical” Cairns household indicated on the Cairns Council website.

At the same time a Townsville household can be supplied with a fixed quantity three times the typical Cairns household at a rate more than 10% lower per KL. Water costs in SEQ are substantially higher again by significant multiples.

It is not at all clear to me why the rest of Australia appear to be required to fund the costs of inappropriate water pricing policy in Townsville? Perhaps I have missed something?

This should not be interpreted as a criticism of Cairns water pricing. Also it is wise to remove water pricing in any relevant comparison of council rates.

Update: Gene Tunny has previously posted on this at Queensland Economy Watch: Unsurprising Townsville running out of water when Council is charging so little for it

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3 thoughts on “Is Townsville water mispriced?

  1. It may appear so from the outside but the Townsville water pricing is actually fairly close to the mark. There could be some small alteration downward in regards to a somewhat generous allocation and a modest lift in the cost of that allocation that would result in a small drop in consumption to remain revenue neutral but anything outside of that would be counter productive. The problem for Townsville is the Ross River dam was never designed for storage, it is primarily there as flood mitigation in its original design and has a very small catchment area, whilst some capacity was added during dam wall raising and reinforcement a decade or so ago the basic efficiency of the dam did not change, it has a very high evaporation rate, particularly when it’s full, the outer rim of the dam is very shallow. Townsville Water have tried to balance selling the water before it evaporates, particularly down to about the 30% capacity level where the deepest water of the dam remains in the area of the old river itself, at that point the evaporation rate is much lower and at this time water restrictions kick in. This is why they don’t pump from the Burdekin until the level gets down to 20%, it keeps losses to evaporation to a minimum, considering the water is pumped through an open channel anyway where losses are about 25%. Townsville has been lucky that it has had wet seasons above normal for quite a few years, which has lead to the council not proceeding with upgrades from the Burdekin scheme which have been discussed for many years, now it has come back to bite them, the upgrades to the Houghton pipeline should have been done many years ago when the dam was filling regularly and revenue was high, but why do it then when you can wait until it all turns sour and then run around screaming and hope someone else pays for it and does it all for you !!

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    • Thanks Glen. I understand what you are saying on the evaporation but not sure I’m completely convinced on this relative to water usage and pricing without detailed analysis.

      I did some time in Emerald which included some experience with water management at a mining operation. That was the period around the late 90’s drought and El Nino event when water supply from Fairbairn Dam started to approach critical levels. There was actually some contingency discussion on pumping the ‘dead storage’. The evaporation factor was significant particularly with decisions related to water allocations for farm irrigation. Not sure though that comparatively low water pricing can be justified by that factor where there would appear to also be significant inefficiencies in water usage?

      The respective water supplies make an interesting comparison between Cairns and Townsville in contrasting tropical climates and geography. I had thought Rockhampton may make a better comparison with Townsville and it does at a quick look also appear to have cheap water. However, Rocky is at the end of the Fitzroy catchment easily by a long way the largest on the east coast. The BOM seems to indicate the Fitzroy Barrage has provided more stable supply than almost anywhere over recent years.

      Regardless, I cant see any case for Fed funding beyond strategic issues related to defence facilities. There is ample scope for any funding internally from within Townsville from water pricing. Presumably Dep’t of Defence pay their water bills so would contribute that way.

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  2. I agree.Townsville should fund much of the work itself, the issue has evolved around responsiblility to supply storage, Ross River Dam is essentially a second storage for domestic use and as such is inadequate in its ability to provide Townsville with enough supply by about half, compared with storage of other cities in Qld, coupled with some of the worst evaporation rates I have seen, from memory it would lose approx 1% a week at 100% capacity and taper from there as levels drop. The old Townsville/Thuringowa water board used to advertise daily usage and evaporation rates and at full capacity evaporation was twice the volume of consumption.The current pipeline and guarantee allocation form the Burdekin was a bit of a bet each way. The hells gate dam proposal is essentially another irrigation driven scheme upstream on the Burdekin River from current storage that would allow a flow to the Ross River dam that doesn’t need mechanical pumping to the degree of the current Houghton Pipeline, if the govt funded that proposal as an irrigation project with some capacity to supply Townsville as well I could see value in the scheme, Townsville council would still need to fund associated costs and commit to an allocation. I like you have worked on both sides of the market, originally on the bulk side of supply and now days on measurement and revenue outcomes and the Townsville pricing could do with a tweak, it is one of the few authorities to still have an allocation in place, something it applied for many years ago as competition policy demanded councils move to an access fee and price per KL, they were allowed to keep the allocation system as long as a second option was available which they implemented about 10 years ago from memory. I would like to see a drop in allocation from 768kl to 600kl and maintain the current price structure, even then it would only add 6-9 months of supply provided households that currently stayed under the allocation continued to do so. Other area Townsville council could investigate are deepening the current dam to increase storage and reduce evaporation as a total percentage, recycled and grey water projects, even a wet place like Cairns had a shot at recycled water some years ago out at a developement in Smithfield.
    In regards to Rocky they only metered the entire city 15 years ago when competition policy demanded it, the barrage works very well.

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