GAWB owns Awoonga Dam and a network of pipelines, pump stations, reservoirs and treatment plants and is the major bulk water provider for the Gladstone region, which comprises Gladstone City and the adjoining Calliope Shire, extending south to Miriam Vale Shire and west to Biloela.  Specifically, GAWB supplies water services to:

• the city of Gladstone and the towns of Calliope, Tannum Sands, Benaraby and Mt Larcom in Calliope Shire;
• major industrial facilities located within Gladstone, the Gladstone State Development Area (to the North of Gladstone)  and Boyne Island; and
• the power stations near Biloela.

GAWB’s pricing practices are subject to oversight by the Queensland Competition Authority (QCA).

In 2000 the Premier and the Treasurer declared the supply, distribution and treatment of bulk water by GAWB to be government monopoly business activities and referred GAWB's pricing practices in respect of these activities to the QCA for investigation and monitoring.
QCA has undertaken two investigations of GAWB's pricing practices in 2000 and 2004 - and developed a regulatory and pricing framework consistent with the objectives of monopoly prices oversight.

The Terms of Reference for the current QCA investigation comprise 3 stages, being:

(a)           GAWB’s proposed recovery of preparatory expenditure for the Fitzroy Pipeline, including the prudence of the pipeline as the appropriate contingent source strategy, the level of efficient costs, the timing of expenditures and the means for including costs in prices in future years;

(b)           The proposed criteria for triggering the implementation of the strategy in the event of drought or unexpected increases in demand; and

(c)           The changes proposed by GAWB to its pricing practices once the augmentation is completed.

QCA released its draft report on stage (a) of its Terms of Reference on 5 October 2007 and GAWB’s Response was lodged on 2 November 2007.  QCA released its final stage (a) report to the Ministers on 19 December 2007. 

QCA’s stage (a) report is available on it’s website www.qca.org.au/water/gladstone-2007.

GAWB has also now lodged its submission for stage (b) of the QCA Terms of Reference in respect to proposed augmentation triggers.
 

Link to: Fitzroy River Contingency Infrastructure Part (b) - Augmentation Triggers

GAWB engaged Wedgewood White Limited to prepare an analysis of indicative prices for four different supply augmentation options (30GL & 15GL Gladstone-Fitzroy Pipeline and 30GL & 15GL desalination plant) over several different demand scenarios.  The analysis shows that capital costs and operating costs (and hence indicative water prices) for a pipeline project are lower than the equivalent capacity desalination plant option under all demand scenarios.  The indicative post augmentation prices are comparable to future prices that are likely to apply elsewhere in Australia (see comparison table on page v).
 

Link to: Pricing Implications of a Second Water Source

It is emphasised that the prices are indicative only, being based on preliminary cost estimates and current demand estimates, without regard to any potential Government subsidies or grants which might become available.  The indicative pricing is provided solely for the purpose of assisting customers to determine future actions including alternate demand management strategies.