Hundreds of millions of taxpayer dollars are being spent protecting dams against highly unlikely catastrophes that dam authorities have likened to the odds of winning Lotto.
The government this week responded to concerns raised by a parliamentary inquiry that vast sums of public money were being wasted bolstering dams against natural disasters that are ”not likely to occur”. Critics say the money would be better spent on hospitals, roads or better water management.
A recent KPMG report noted the cost of over-investment in dams was borne by the public through higher water charges and taxes. Debate continues over how best to secure the state’s water resources as drought conditions worsen in regional NSW.
More than $440 million was spent by government-owned water corporations in Sydney, the Hunter Valley and rural NSW during the past decade.
Millions more was spent by local councils that own almost half the state’s regulated dams. The work includes filters to reduce the risk of piping failure, strengthening and increased height and spillways.
The upgrades are required to meet guidelines set by the NSW Dams Safety Committee that aim to reduce the risk of dam failure and protect downstream communities in case of events such as floods or earthquakes.
A parliamentary inquiry into the adequacy of water storages in NSW last year heard evidence from State Water chief executive Brett Tucker that seven dams were being upgraded to withstand a once-in-200,000-year event. Second-stage work would protect against a once-in-a-million-year event.
Dams Safety Committee chairman Brian Cooper said the strict safety requirements were based on the probability of an event occurring in any one year, and compared it to the odds of winning Lotto.
”Someone wins Lotto every week [even though] they have odds of one in a million … They are not impossible odds, even though they might seem extreme,” he said.
But a number of participants questioned the stringent regulations, including dam expert and former public servant Paul Heinrichs who said money may be ”better spent on provision of new dams, or other areas of high risk such as traffic lights, hospitals, safer roads”.
The inquiry called for a review of spending on dam projects ”to protect against events that are not likely to occur”, describing it as ”an unnecessary use of resources” that may be better spent elsewhere in water management.
The government released its official response to the report on Thursday, saying dam safety laws were being reviewed. It did not say when the review would be complete.
It is considering a KPMG report on dam safety released in September that said ”the costs of over-investment are passed on to the community” through water charges and taxes.
A NSW Commission of Audit in 2012 found very small risk reductions were being achieved at a disproportionate cost.
Debate over dam safety ignited last year, when then prime minister Julia Gillard pledged $50 million towards raising the Warragamba Dam wall by 23 metres.
Experts were divided over whether the project, which would have cost up to $800 million, would reduce flooding.
Almost $60 million has been spent on the dam during the past five years, including upgrading its flood gates and electrical network.