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2019 Government Businesses Scrutiny Committee - TasWater

Rosalie Woodruff MP

Rosalie Woodruff MP  -  Wednesday, 4 December 2019

Tags: Sewerage, Water, Water Quality, TasWater, Water Restrictions, GBE Scrutiny, Algal Blooms, Derwent River

CHAIR (Mrs Petrusma) - Good afternoon gentlemen. I will call the committee members to order. We are near the end of two days. Thank you all. The time now being after 4 p.m., the scrutiny of the Tasmanian Water and Sewerage Corporation will now begin. The time scheduled for the scrutiny is up until 6 p.m.

I welcome the members to the committee, and can I ask the Chair to introduce yourself and the others, and their names and positions, for the benefit of Hansard, please.

Mr CHIPMAN - We will just do it one by one, individually, if you like, Chair.

CHAIR - It is just that the members need to know the Chair, then the chief owners representative, so we usually go by the Chair first.

Dr GUMLEY - Stephen Gumley, Chairman of TasWater.

Mr CHIPMAN - Doug Chipman, Chief Owners Representative.

Mr BREWSTER - Michael Brewster, CEO.

Mr PAGE - Dean Page, Chief Financial Officer.

CHAIR - Chairman, do you want to give us a brief opening statement please? It needs to be brief.

Mr CHIPMAN - Chair, I might make a few introductory comments, to situate the relationship between us?

CHAIR - Alright, we'll go the Chief Owners Representative first, and then we'll go to the Chairman.

Mr CHIPMAN - Thank you. In the first instance, we welcome the opportunity to meet with this committee to discuss the activities, performance, practices and economic management of TasWater Pty Ltd, a company incorporated under the federal Corporations Act 2001.

The formation of the corporation was directed by the Tasmanian Water and Sewerage Corporation Act 2012, and the ongoing interest in the corporation by the Tasmanian parliament is greatly appreciated. While the corporation is not a GBE, I have noticed in your advice, that in the absence of a responsible minister for business, questions can be put directly to the Chief Owners representative, and I am here in that capacity. I do feel obliged to point out that as the Chief Owners Representative, I have no responsibilities under the Corporations Act, Water and Sewerage Corporation Act, or the Water and Sewerage Industry Act.

However, the Chief Owners Representative position is established under the company's constitution, and his or her responsibilities include: signing the appointment letter for the board chairman; discussing matters regarding board performance with the board chairman or all directors as appropriate; convening and chairing the Owners Representative group meetings, and formally representing all owners of the corporation when appropriate circumstances such as this arise.

Key functions of Owners Representatives, individually and collectively, include: being the official liaison between the board and their respective owners; appointing the chairman and directors to the board; setting board member remuneration; and monitoring the performance of the board against the shareholders' letter of expectations and the corporate plan.

The Water and Sewerage Corporation Act prescribes the purpose of the shareholders' letter of expectations, and that is to communicate and give guidance in relation to the shareholders' high-level performance expectations and strategic priorities to the board.

In accordance with the Water and Sewerage Corporation Act, all decisions relating to the operation of the corporation are to be made by, or under the authority of, the board.

On that note I would like to hand over to the Chairman, Dr Stephen Gumley, AO, for his opening remarks. Thank you, Chair.

Dr GUMLEY - Thank you Chair, and thank you to the committee. I appreciate the opportunity to make a few remarks.

Last time I came before the Legislative Council committee, about this time last year, I had only been chairman for less than a month. Since then, I have had a lot more opportunity to see firsthand both the challenges that face TasWater, but also the depth of expertise within the organisation. It has been a pleasing experience. It has shown me the strength of the organisation is in its people and their adaptability to changing circumstances.

An example this year has seen several notable achievements. Last month we opened the new King Island water treatment plant, a multimillion-dollar project that now supplies water to both Grassy and Currie customers through a 26-kilometre-long pipeline, sourcing water from the Upper Grassy Dam.

With many major water infrastructure improvements like this complete or underway, we have increased our efforts to improve the performance of sewerage infrastructure around the state. The upgrade of the Blackmans Bay Sewage Treatment Plant is one example, completed this June. The $50 million project involved construction of new pump stations at Electrona and Margate, a 15 kilometre pipeline connecting them to the upgraded plant. The project allowed the old Electrona and Margate plants to be closed, ending discharge of treated effluent into North West Bay. That in itself is a major environmental achievement. It is also a significant milestone from Kingborough helping protect the environment and supporting the growth of the region through to at least 2040.

One of the things that TasWater is doing at the moment is considering growth. There is growth going on in the state and our capital plan is reflective of that growth. If we are going to get the infrastructure correct we have got to be looking at 10, 20 and 30 years. That is what we are doing in our capital plan.

In April we saw the formation of the capital delivery office to deliver the $1.8 billion, 10-year capital plan. Following an alliance model the CDO is a joint venture between TasWater, UGL Limited and CBP Contractors. The CDO provides a vehicle to build the skills necessary for a sustainable water and sewerage sector into the future. That means retaining skills and knowledge within the state. Without this outcome the CDO will not be considered a success. The aim of the CDO is to ensure that Tasmanians are appropriately trained in project development and execution, so we have an ongoing capability in this space.

In June we saw a $380 000 upgrade at Dunalley sewage treatment plant. That upgrade reduces the risk of effluent escaping into waterways and impacting on the nearby oyster leases. It is part of the broader plan to minimise risk to sensitive growing areas and help support the oyster industry.

Our financial year 2018-19 capital spend closed at $131 million, which was 9.8 per cent below target. This under-expenditure can largely be attributed to two key areas. The first was the speed of our transition to the capital delivery office. While we were ready to go to market with two key large projects, Lake Mikany and Hendersons Dam, we determined the best approach would be to award the contracts under the new CDO terms and conditions. That was to avoid confusion to industry. If you have several sets of terms and conditions running simultaneously very quickly your contractor and community can get themselves a bit confused. We settled on a standardised approach and there was a month or two delay caused by that.

CHAIR - Chair, we have to ask you to wrap up your comments very soon, please.

Dr GUMLEY - The second area that directly affected the level of our expenditure was the number of projects ready for delivery at the beginning of 2018-19. There is a backlog, there is a large capital project and many are still requiring the business case before you commit the final dollars. The under-expenditure in the forecast will be made up in the final year of the current price and services plan.

Perhaps we could leave it there. I would be delighted to answer questions as required.

Mr O'BYRNE - Thank you for coming. This is your first presentation to the House of Assembly committee and we welcome that. We welcome Doug as a representative of the owners. Great to see you here. It is disappointing that there is no representative given this is a lower House committee from the state Government. I assume the minister you directly report to is the Treasurer, Peter Gutwein? It is disappointing that he has not shown any interest in this important hearing and the questions that we will ask and he has not decided to attend. Very disappointed that the state Government has not seen fit to support you in this hearing.

CHAIR - I want to remind all committee members that TasWater has a different ownership model to the other state Government businesses we have scrutinised over these past two days. TasWater is predominantly owned by local government. The Crown is a minority shareholder and currently owns only 1 per cent of TasWater shares, which will increase to a maximum of 10 per cent by 2022-23. TasWater's shareholders' letters of expectations requires the chief owners' representative, Chairman and the CEO to comply with a request to appear at a GBE scrutiny committee hearing, which is what happened last year in the Legislative Council.

As Mr Chipman has indicated before the chief owners' representative is here today alongside the Chairman and CEO of TasWater. Questions can be directed to the chief owners' representative and the Chairman. For TasWater the chief owners' representative performs the role that the portfolio minister has for the other government businesses that we have scrutinised over the past day and a half.

Mr O'BYRNE - Thanks for that clarification. We still make the point we are disappointed the Treasurer has chosen not to attend this hearing to support what is one of the key asset owners in the state.

I am glad that the agreement was finalised last year following a period of great uncertainty, with the state Government launching an attack on TasWater ownership and a hostile takeover. While I think that two-year period was a waste of time, the agreement was brought with much fanfare about what it would achieve. We understand that the funding that has been provided by the state Government would assist in the price freeze for one year and price capping for the following years as part of the agreement.

The other commitment or promise that the Government made in the agreement was that there would be a major change to the capital works program, new works would come on the books and works would come forward.

Could you outline, since the change of ownership and since the Government has taken an interest and given it capital, what has changed with the 10-year plan? Which new projects have come on the books? Which projects have been brought forward?

Dr GUMLEY - The total Government commitment is of the order of $200 million over 10 years. With the debt to equity balance we have the ability to do in the order of $400 million in extra projects. We have taken extra projects onto the books and we have spent a lot of the last six months prioritising which ones we do first. Now the CDO is up and running, we are structuring and planning those projects for the capital expenditure to occur, starting in 2020.

CHAIR - Just for the benefit of the Chair, at any time if you want further information, you can pass to the other members who are sitting at the table with you today.

Mr O'BYRNE - Which projects have been brought forward and which projects are new, post the agreement?

Mr BREWSTER - We are reprofiling our capital program. We did not immediately bring projects forward. We made it clear that in the first year we had to work our way through what we already had on the books. Then it was a key determinant of the capital delivery office because we could see that our program would be growing to over $200 million in the next few years. If you are moving to $200 million, you have to do that properly. We knew we did not have the capability to do that, so right now we are planning for that. We are well advanced on the $1.8 billion program.

Bryn Estyn is now underway. That is a circa $160 million project -

Mr O'BYRNE - That is not a new project though, is it?

Mr BREWSTER - We are targeting building our expenditure up. We are targeting $180 million next year. That is without Macquarie Point, the Launceston combined system, Freycinet, for which we are currently doing studies. We have absorbed a lot of additional studies that will lead to that extra program. That money will be spent but it will be spent in a way that ensures we do not fall behind our interest cover ratio.

Mr O'BYRNE - So, at this stage, no projects have been brought forward based on that answer. You listed a number of projects that you're in planning for, but they are not funded under your forward capital program, are they?

Mr BREWSTER - The Government is committed to funding Macquarie Point, the Government is committed to funding the Launceston combined system. That will be circa $80 million for the Launceston combined system. The Government commitment to Macquarie Point is in the order of $100 million. They have made public announcements about that. They are on the books and we are currently working on them.

Mr O'BYRNE - Effectively the $200 million is to fund the loss of revenue from the freeze year and to cap price rises at 3.5 per cent per year. Under different scenarios, you would have an opportunity to make a presentation for a greater increase should you choose to fund capital?

Mr BREWSTER - Yes.

Mr O'BYRNE - That is correct. When the Government made the commitment that new projects will be funded by the commitment from state government, the projects will be brought forward. At the moment, that has not materialised. A number of projects have been identified that will need extra funding from the state Government.

Mr BREWSTER - What I said earlier was, we have looked at the $1.8 billion, I think it was, $1.76 billion we actually committed to. Then right through the process we were very clear that there would not be massive change in the early years because we had the plan for those projects. We would build a long-term capital program and capability to deliver the $1.76 billion and we would use any excess capacity we had from the Government to fund any additional projects.

That has always been the case. The reality is if we do better than that which is our hope that we are able to bring our projects in lower than the forecast capital expenditure, then that will enable us to tackle things like some of the underground infrastructure that we had planned to do in the second 10-year phase.

Dr WOODRUFF - Thank you, all for appearing. It is good to have the opportunity to speak with you about what TasWater is doing.

I want to reiterate what Mr O'Byrne said. Despite the fact that the Government only has 1 per cent ownership at the moment, the intention is to expand to 10 per cent. Let's face it; this is the same Treasurer who was out on the front foot bullying TasWater only a few years ago for a complete take over so it is fascinating that he is not here to look at the major assets and the responsibilities that TasWater has.

It is a huge body of work that you undertake for Tasmanians. I want to recognise the complexity of the asset that you took over. Having being on the Huon Valley Council at the time of the original three separate water owner corporations being established, I've been a small part of that of that history. There is a lot of work to be done. I acknowledge the complexity and the hard work of people who work for TasWater. My experience is that there is really good due diligence and good effort put into the organisation.

Having said that, we are here to talk about the mistakes that happen, unfortunately, and not to spend the time just talking about the good work. I acknowledge on behalf of the Greens we recognise that that is happening.

On 11 August the Macquarie Point sewerage spill occurred and 6 million litres of raw sewerage flowed into the Derwent River, all of it wholly totally untreated. That was the second major spill that has happened this year from that TasWater treatment plant. Previously 10 million litres of unchlorinated water went into the river in January.

It was reported in the media at the time that the untreated sewerage flowed into the river from 12 noon until 8 p.m. We wrote to the Director of the EPA after the incident. Mr Ford responded to our questions. He said, amongst other things that a failure of the uninterruptable power supply meant no telemetry or SCADA alarms were received by TasWater. He said that following that failure a backup alarm secondary system was apparently activated and the contractor that monitors that system notified TasWater's operational control centre.

Mr Ford from the EPA also said that for reasons yet to be established, the operational control centre did not respond immediately. Probably Mr Brewster, could you please tell me what was the exact time that Tas Water's operational control centre was notified by the contractor to say that the power had failed at the plant? How long did it take Tas Water to response subsequent to that notification?

Mr BREWSTER - I haven't got the time in front of me but I think the notification was fairly quick. We are certainly not denying the notification from Golden Electronics was fairly rapid.

Dr WOODRUFF - Could you be precise about that?

Mr BREWSTER - I would have to take it on notice to get the exact time.

Dr WOODRUFF - Could you take it on notice, please?

Mr BREWSTER - I am more than happy to. We aren't going to hide anything. The reality of that situation was that the alarm was notified. The alarm went off. Golden Electronics called our operational control centre. When we lost the uninterruptable power supply, we effectively lost all control. The operational control centre, which has limited visibility, looked at the SCADA screen, which is where you would go to see what is happening. In that event, SCADA held up the old data. When they looked at the screen, what they saw was nothing

Dr WOODRUFF - Screen freeze or something?

Mr BREWSTER - Yes, that is exactly what happened. Because of the loss of comms, the screen froze. In effect, they were trying to say, 'What is going on, is there an issue? Is it arguable, or should they have sent someone out immediately to investigate?' Yes, I think so, but I was not there in the middle of it. They were trying to work out what is going on.

Dr WOODRUFF - Sorry, who is 'they'?

Mr BREWSTER - Our operators in Devonport.

Dr WOODRUFF - The operators who are operating that plant?

Mr BREWSTER - No. I should be really clear. Sorry about that, Dr Woodruff.

When there is an alarm like that, it goes to our operational control centre in Devonport. They assess the situation and determine whether to call out one of our people in Hobart, given it was a weekend, from recollection, and to determine whether action is required at that point.

Dr WOODRUFF - How long did it take for TasWater to send the person out to do that?

Mr BREWSTER - From recollection, it was seven or eight hours to take it out. The next shift operator came on and said, 'Still getting calls. We need to dig a bit deeper'. It was quite a complex analysis to get to the bottom of it. When they did, they said, 'No, hang on a minute, we should send someone out'. So, they sent someone out seven or eight hours later. That is the reality of the situation.

Dr WOODRUFF - Someone physically went to the plant to do something to stop the untreated sewerage?

Mr BREWSTER - Correct. They went to the plant to investigate what was going on because they could not determine what the root cause was. As soon as they got there, the uninterruptable power supply had switched itself off, which is very unusual. We have undertaken multiple investigations into the interruptible power supply. We have sent it back to the manufacturer. The manufacturer cannot tell us why that unit went into standby mode.

I am not offering this as an excuse but our plants were all designed as stand-alone plants. This is the big challenge we have. This is part of the issue. We are upgrading them all, trying to get all of the controls into a central location.

CHAIR - I remind members that the questions need to go first of all through the Chair or the Chief Owner's Representative, who then can pass on to the CEO. As in other GBEs, that is the correct format.

Mrs RYLAH - The infrastructure organisation in its delivery must be very mindful of safety. Can you tell me what is TasWater doing to improve safety?

Dr GUMLEY - It has been a good year for safety performance and improvements. Mike, you have some data.

Mr BREWSTER - We take our safety performance seriously. Over the last five years, our safety performance has improved. We reduced our results by about 90 per cent. When we started our lost time injury frequency rate was over 20; now we are not down to 1.2 per cent. Our total recordable injury frequency rate has also significantly improved.

We are not satisfied with that because we still get incidents, we still have risks. We still have a long way to go. We have a focus on zero harm in our organisation. Our people have come on the journey. We are very focused now on mental health as well, so not only on the physical injuries. We are putting a lot of time into mental health support for people and a lot of time into soft tissue injuries, because most of our issues and injuries are actually soft tissue injuries, with an aging workforce. That is a key matter for us.

We are really keen to see improved results and to continue to focus on high risk events. That is where things can go really well. We have put a lot of focus into the overall performance of the business will continue to do that and support other organisations.

Dr GUMLEY - It would fair to say we are also putting a lot of effort into the safety of our contractors. It is not only the TasWater staff we have an obligation to. We have safe work systems for all the contractors on our sites.

Mr O'BYRNE - Just one question following on from that last line of questioning. With the capital investment from the state Government there was a view that local projects could be brought forward and there'd be extra projects. You clarified in your previous answer there's a lot of work being done on that. There are some extra projects that are unfunded that the Government will need to stump up for and maybe a reprofiling of the workplan. What do you have in place to ensure that the work can be delivered in that time frame? One of the pressures from the Government was to say - and I think you are on the record saying - that you can't do 20 years of work in 10. What's the plan then to ensure that local contractors and local workers will get access to that under this program, which is pretty thin really when you are concerned about the amount of money coming from government that's on the table at the moment.

Dr GUMLEY - We've done some workforce planning for what I call the contractor workforces but as our own people because with all these infrastructure projects the critical issue is supply side where there are in fact enough trained people to do all the work that's required. To a certain extent also we have to do work smoothing, because there is no point having too many peaks and troughs. The most efficient way of delivering a capital program is to get a balance year to year so people always have work to go on to, but not too much and not too little. The workforce planning we've done indicates it is around 500 people a year for the next 10 years are going to be required full-time on the infrastructure projects and as we start building up the mix of capital projects we want to be sure we don't overload or underload that base.

Mr O'BYRNE - Thank you. In terms of the interrelation with state Government, when they came into office in 2014 they announced a headworks holiday policy. I understand you elected to implement that policy voluntarily. I'm interested in the financial impact on the business of that policy. What was the cost to TasWater of the headworks holiday policy in the last financial year 2018-19 and what has been the cost of the policy since it's been put in place?

Dr GUMLEY - I don't have that data. Do you have that, Dean?

Mr PAGE - No, I think we would have to take it on notice. I would only be speculating. That was many years ago now, I think 2014-15, so to give you the data for the intervening four years we'd need to collate that.

Mr O'BYRNE - Are you able to take that on notice?

Dr GUMLEY - Yes.

Dr WOODRUFF - Despite TasWater being notified it sounds like almost immediately or within a short period after 12 noon about the Macquarie Point sewerage spill, you didn't send anybody out to check exactly what was going on for seven or eight hours. Meanwhile raw sewage was being pumped directly into the river. Why was that?

Mr BREWSTER - I think it is exactly as I said earlier. The operators in the control centre at Devonport looked at SCADA and at the data they had. SCADA said everything was working because it had frozen, so that's the fundamental answer to that question. Since then obviously there are learnings to come from that. We were very public about our mistakes when this was made public. Clearly that's not acceptable from our perspective in terms of our ability to ensure these things don't happen. We've upgraded, put in dual UPS systems, we've taken further alarms back into the operational control centre, we've increased the training for the operational control centre people and we are changing the SCADA system out.

Dr WOODRUFF - Okay. The other thing that happened was that TasWater didn't give any notification to the Hobart community except by a media release the next morning, whereas it's clear that you knew some time after 12 noon or eight hours later. Is that right? Between 12 p.m. and 8 p.m. someone was down there knowing that that was the case but people went swimming the next morning without any advance alert. They could have been on ABC news bulletins every hour from 2 a.m. in the morning or earlier.

Mr BREWSTER - As soon as I received a personal phone call we were already on to the media.

Dr WOODRUFF - What time was that?

Mr BREWSTER - It would have been within 15 minutes of them discovering that there was an issue that I had a phone call at home. I remember getting that phone call. I phoned our media people and asked where they were at.

Dr WOODRUFF - That would have been in the night?

Mr BREWSTER - It would have been about 8.15 p.m.

Dr WOODRUFF - Okay, so then you notified the Mercury or the ABC?

Mr BREWSTER - I am happy to check all the data and the time lines but we would have put a media release out as soon as we could to let people know. I don't think there would be too many people swimming at midnight in the Derwent, to be frank.

Dr WOODRUFF - The point is that people did go swimming and kayaking the next morning.

Mr BREWSTER - We got our message out as soon as we possibly could but I am happy to take that on notice and confirm when our media release went out.

Dr WOODRUFF - I am wondering whether it is an opportunity to change or look at your communications policy. Although that might have happened, given the scale and the physical amount of the untreated sewage that was going into the water, it is a popular area and these are the sorts of things that possibly should be looked at. Hopefully it would never happen again.

Mr TUCKER - Water mains breaks, bursts and leaks have been an issue that doesn't appear to have been addressed. What is TasWater doing to reduce this issue?

Dr GUMLEY - In any infrastructure network there will always be some bursts. Accidents do happen but there has been a gradual improvement. Mike, you have the data.

Mr BREWSTER - Yes. Last year we recorded about 36 breaks per 100 kilometres. The year before we recorded around 48. This year, if we continue at the rate we are, we will probably be around 24, so there is a pretty significant reduction. That is interesting because it has not been a matter of just throwing a lot of capital at it. One of the decisions we made is we that have to get smarter about how we reduce the number of breaks so we put a lot more focus on identifying weak spots in the network and doing preventative maintenance on those. We have increased our preventative maintenance activity, so our percentages three years ago of completed preventative would have been in the 40s and they are now in the 70s. We think we can do a lot better because the next stage for us is pressure management. That is the real nirvana for us. If we can get in and start managing our pressures better, and there is some complexity in that, we would hope to see those numbers further reduced.

Mr TUCKER - Could you explain a little more about the pressure management, go into that a bit further for us?

Mr BREWSTER - One of the issues we have is that our pumps don't have variable speed control on them in many cases so we don't have the ability to turn them down. The systems were obviously designed many years ago. The average age of our pipe network in many cases is 40 to 50 years. If you don't manage your pressure then you are going to increase the number of bursts. What we are looking at is modelling our networks. In the last few weeks we approved some funds to start putting in systems where we can track the pressure, monitor for leakage in the networks and start putting in even more infrastructure in the right location to reduce the pressure. We have to reduce it in a way that we don't impact the pressure that our customers receive. It is not a quick fix but it is the next level that a mature business would undertake.

Mr O'BYRNE - Chair, the events over the last week for the South-East Irrigation Scheme has caused great concern to not only that community but those who have a strong interest in agriculture and the jobs that are connected to that. This was a major surprise to a number of the users of that irrigation scheme. We have had Tas Irrigation in here prior to your meeting. When did it become apparent that there were going to be supply issues and when did you notify Tas Irrigation of that?

Dr GUMLEY - Michael, you have the detail.

Mr BREWSTER - Andrew, the CEO of Tas Irrigation, and I met in mid to late October. We were looking at what the future held at that point in time. We discussed that there could be challenges and I advised that at that stage we would work with them as closely as we could. We are going to keep working through the system. I cannot be certain that we can actually meet your demand going forward, but we will do everything we can, and Andrew and I kept in touch.

Mr O'BYRNE - That was in mid-October, when you first had that conversation?

Mr BREWSTER -Sure.

Mr O'BYRNE - That was leading in. When did you actually have the conversation that the water, as per the agreements that Tas Irrigation have with those irrigators, could not be fulfilled and that restrictions be put in place?

Mr BREWSTER - Andrew Kneebone and I did not have that discussion. Andrew, as you probably know, has the contract with the irrigators. Obviously he has a close relationship with them. If he is under the pump, I do not expect him to be telling me every minute what he is trying to do. We were focused on how do we get more water to them, and below us the two parties have been working together operationally, virtually daily, to try to manage the water situation right through that period.

Mr O'BYRNE - As the Government is one of your owners, did you notify the Government of this conversation, of this challenge with getting water to the South-East Irrigation Scheme?

Mr BREWSTER - No.

Dr WOODRUFF - Possibly back to Mr Brewster. Mr Brewster said that the SCADA screen froze, and there was no information coming, which is why it took a long time to work that out. It was quite quickly notified and recognised there was a problem. Can you explain how a SCADA screen could stay frozen for seven or eight hours and it not become apparent there was a problem? As I understand, those screens should be changing constantly. If a person is looking at the screen and doing their job, those numbers would be changing in real time, all the time. That is the point. I really do not understand. It raises worrying questions. Is anyone looking at the screens and really interpreting what is going on, or are they just waiting for alarms?

Mr BREWSTER - First of all, in that case, yes, it is difficult to explain why people would not be going back in. It is part of our investigation: why didn't people go back in and ask, why hasn't that changed?

Dr WOODRUFF - So, you have done that investigation?

Mr BREWSTER - Yes, we have. We have had two independent investigations after that event. We had an investigation into what happened with the electronics, and we had an investigation into our operational response, which obviously we did not think was satisfactory from our end, to try to work our way through that. We have since put in place responses to prevent or mitigate a repeat, as I explained earlier.

Dr WOODRUFF - It is probably fair to say that there was a problem, a human failure, with the person not paying attention to the screen. Is that the problem you identified?

Mr BREWSTER - I do not think it is as black and white as that. The situation is more complex. They have to pull down the alarms, they have to work through what alarms they have got, and try to interpret those. My recollection is that it was not quite as straightforward as that. No-one deliberately says, 'I am just going to let things flow out'.

Dr WOODRUFF - No of course not, but this is serious. Eight hours of raw sewage, 6 million litres of raw sewerage. It is not just a small thing. It is a massive thing. There are probably a bunch of reasons why it happened, not just one thing. The conditions that would lead to human error is something of an issue in itself to investigate, and to change practices around that. Clearly there is a manifest failure, either in the ability of the contractors, or the fact that they are working on multiple tasks, I am not sure. We wrote to the EPA and asked whether any enforcement actions would be happening, and whether there is an issue in relation to breaches of environmental conditions. Has the EPA put any infringement notices, or undertaken any enforcement activities with TasWater as a result of this?

Mr BREWSTER - I do not believe so, but I think their position was around the ultimate environmental impact of it. They do not make a judgment. Their judgment is about what is the impact of the issue, but you probably best put that to them.

Coming back to your earlier point, as I have advised earlier, we had two independent investigations. We have changed our practices. We are not denying, and I am not certainly sitting here saying that was acceptable in terms of the response from us. We have had to take our learnings from that, and it will not just be one person. It is a function. Management has to take responsibility for the systems - that ultimately our systems did not work. That is the reality of it.

Dr WOODRUFF - It is a bit hard for Tasmanians to understand why such a massive discharge would not constitute an offence, but that is another matter.

Mrs RYLAH - I would like to commend you. I am very impressed with the reduction by 25 per cent, and then 33 per cent the following year. I can see that there is a lot happening within TasWater. I give that preface because my question is around a complaint, so I do not want it to sound all terribly negative, but obviously you are doing good work, I can see that.

How is TasWater managing general complaints, and has there been any improvement?

Dr GUMLEY - There has been quite a significant improvement in the last couple of years. As to the 'how to', that is more for the CEO to answer.

Mr BREWSTER - Our complaints had been rising for a number of years, there is no denying that. We have spent a lot of time investigating what the source of those complaints are, and what we need to do differently to give customers a better experience. The primary source of our complaints is discoloured water, and the way we respond to the experience of our customers, taking too long to get out there. So we changed our process, so now we respond within a day. As soon as we get the complaint, we are straight out there, we are flushing and we are fixing it. In essence, if our complaints rate continues this year, I think we will be down 40 per cent on last year's complaint level. The water quality complaints, particularly, will probably be down; at the moment they are tracked to be down about 60 per cent.

Mr O'BYRNE - Thank you. Just to finish off on the South-East Irrigation Scheme, a number of things have been said in the media: farmers using water, drought, Airbnb in Hobart, all of those things. The Derwent River is a remarkable resource, as you know, and a number of the reasons offered up around the lack of capacity of TasWater to get it into the system is around Bryn Estyn and the Ridgway Dam. Could you outline what the restrictions are, and the problems and the challenges there?

Mr BREWSTER - Bryn Estyn went through an upgrade about three years ago, which reduced its capacity. This is because of the colour and the turbidity coming out of the Derwent, and so we had to improve the plant, and that did reduce its capacity a little bit.

When the South-East Irrigation Scheme was started, Bryn Estyn had a greater capacity than it does now. You then add on what is of the order of 10 per cent population growth in the Greater Hobart area, plus the dry spring we have had - those combined - plus the Ridgway Dam, which for dam safety reasons, we had to lower its height by four metres. It is a 100-year-old dam that we had to do some safety work on. Put all of that together, and the system was stretched there for a few weeks.

Mr O'BYRNE - With the capacity issues at Bryn Estyn, and obviously now with the Ridgway Dam, they are known factors. In terms of the supply, you would have predicted population growth to a certain percentage, and therefore the population and use would be increasing, and then you have commitments you have made with Tasmanian Irrigation to provide a certain amount of water to those south-east irrigators -

Dr GUMLEY - Drinking water comes first, though, under the agreement.

Mr O'BYRNE - I have no doubt about that. But these issues, the upgrade to Bryn Estyn was started three, four, maybe even five years ago, I have heard. These things, I suppose, are known, so in terms of the challenges facing the business, in terms of risk management, I put it to that you could reasonably have predicted that there could have been an issue. I ask why these two projects were not brought forward?

Dr GUMLEY - First of all, we prioritised drinking water quality and public health first. That was made very public and that was what the '24 towns' was about - getting small towns off boiled water alerts and making those towns safe. It was always our number one priority.

We commenced early investigations, probably two years ago, into Bryn Estyn, but in terms of what has impacted this year from a supply scenario perspective, Ridgway Dam, as I said, only became an issue in June/July this year. It is not reasonable for us to suddenly expect that would happen. We had no choice but to lower Risdon Brook Dam. If we did not lower the dam and we did that leading into winter and through winter, we potentially would not have had that available body of water to supply to the Eastern Shore. We had a bore water alert there a couple of years ago. In order to ensure we had available water out of Rison Brook Dam, we lowered it to remove the vegetation and the organic carbon, so we could keep our chlorine levels up and have confidence that water would be available. That has resulted in reduced levels in there.

Supply from Bryn Estyn is always tricky and climate challenged. Sometimes it can be taste and odour. Certainly through the summer it is. Often it is turbidity. Right now, that is a real challenge for us.

The challenge that TI faced was because we had sudden spikes in turbidity coming down the river. We had spikes in colour coming down the river. When the turbidity gets up too high, we have to drop the plant down to maybe 90 megs a day instead of 120. The colour also meant that we got increased colour coming down the river. That makes it very difficult to treat and we have to slow it down. That is the supply end.

We also had Lake Fenton. We had the perfect storm. At Lake Fenton, when you get rainfall coming in, turbidity goes up, so you have to shandy that water and you end up with -

Mr O'BYRNE - Shandy, is that a technical term? That is something that my grandfather used to drink at Christmas.

Mr BREWSTER - Yes. We love shandied water here in Tasmania. Yes, when that happens, we have to mix it with the water from Bryn Estyn to ensure we keep the turbidity down and keep it safe.

Mr O'BYRNE - In terms of the priority for drinking water for southern Tasmania, no argument with that at all. However, when the Government made a range of commitments to businesses and landowners, did they, at the time, have discussions with you about ensuring you could supply the water for their commitments to the farmers in the south-east? There have been millions of dollars in investment. Now millions of dollars of investments and jobs and future investment are at risk because of the risk to a lack of supply to water. Did they come to you and say, 'We need to make sure that when we make these commitments, we can supply the water'?

Mr BREWSTER - The responsibility for ensuring that we can deliver water is with us. We communicated our position regularly to Tas Irrigation which was trying to manage its situation. I had not seen it as the Government's responsibility. We had the funding for this, so it was about when we started the funding for the Bryn Estyn plant.

Mr O'BYRNE - It is more about timing of the upgrades as opposed to funding?

Mr BREWSTER - It is about timing.

Dr GUMLEY - It is fair to say we do have the upgrades in our capital plan. We are not waiting on money to do the upgrades.

Mr BREWSTER - Where David is going is, why didn't you pull it forward a year? That is your fundamental question. Why did you not prioritise Bryn Estyn over this because it would have made a difference of one year. We also have other levers and these other things had not played out. It is always a risk management exercise. Hobartians are not going to run out of water. We have to carefully manage it. We have been quite clear that water needs to be conserved. We have been running a campaign on that.

Mr O'BYRNE - Let us be clear. There is arguably plenty of water in the river. It is about how you manage it through your assets to get it to where it needs to be. Would that be fair?

Mr BREWSTER - There is plenty of water in the river. The question is, the quality of that water and whether you can produce water.

Mr O'BYRNE - Through your assets, that is right.

Mr BREWSTER - Yes. That water quality changes consistently. There are two other sources of water that you are relying on, so you are forever balancing those things to ensure Hobartians have good, clean drinking water.

Mr O'BYRNE - At any stage, when the Government made these commitments to these producers in the south east, did they have any discussions with you to say, 'What can we do to help you make sure we can we can provide water surety to these farmers'?

Mr BREWSTER - We did not ask them to come to us.

Mr O'BYRNE - Arguably it is not your role. Your role is to provide the water based on the contracts in front of you. Did the Government come to you and say, 'We need to make sure we can fulfil these commitments because we talked a big game'?

Mr BREWSTER - They would need to be aware of the issue.

Mr O'BYRNE - Did they meet with you on this topic?

Mr BREWSTER - On that particular issue, no. We would not have advised them it was an issue at that point in time.

Mr O'BYRNE - Thank you.

CHAIR - I remind members that the questions should be addressed to the Chair or the Chief Owner's Representative who will then pass on to other members at the table. That is the correct manner to ask the questions, please.

Dr WOODRUFF - Thank you, Chair, I think I have been following your directions.

Mr O'BYRNE - I think she is having a go at me.

Dr WOODRUFF - Chair, on Monday the CEO, Mr Brewster, announced that there would be the possibility to implement water restrictions for Hobart, that Tas Water would announce this Friday, in a couple of days' time. That conversation came out of water restrictions. It caught people by surprise, irrigators and Hobart residents. It is very unusual and very surprising right at the beginning of summer to be talking about water restrictions.

I've heard everything that has been discussed and I understand it is a complex matter. Mr Brewster, in different forums, has mentioned four main drivers, which is the reduced treatment capacity at Bryn Estyn; the increase in water use in Hobart; farmers and irrigation and the amount that is being used there; and the drier conditions - less rainfall.

We heard the other day that there is an extra 10 megalitres a day increase in demand in Hobart and that also there has been a growth of 10 per cent in the last three to five years. Ten megalitres a day would be 3650 megalitres a year - that sounds like a massive amount. I am not a water expert. Could you please talk more about what is going on with this water usage issue? Tourists have been mentioned, watering for gardens, but both of those things don't seem to be able to substantiate that very large amount of extra water.

Dr GUMLEY - Perhaps I should start by saying that all of those factors have added to the total; there is no one factor it is the four you mentioned. There has been a lift in irrigation demand. We have some data that indicates that that has gone up quite a bit over the last few years. That is probably good for the state because it means the farmers are growing crops and doing productive enterprise.

The fact is, if you are going to do that, you need the water. We have looked at our overall resources. Mike might now take you through the thinking that answers you question precisely. It is perhaps not surprising that there has been a lift particularly if there has been a dry spring, and it has been a dry spring. As far as I can work out, the weather bureau is predicting a fairly dry summer ahead.

CHAIR - I will pass -

Dr WOODRUFF - Hang on, I believe the question was being passed to Mr Brewster to go into more detail. The question is, the more detail is around the forward planning ability for Tas Water. It has not been a surprise that we have been in a dry spring, we have all been in it for a long time, or that a dry summer was coming. The question is, what advance notice does Tas Water give farmers so that they can plan their crops and irrigation? It's one matter to tell people to stop watering their driveways next week, but to tell a farmer that they will have less water next week when things are already in trained for a season for cropping is quite an order of difference.

I note that the Houston's farm where we are speaking very desperately about the impact it would have on their massive operation and their big water usage. I don't understand why there can't be more advanced planning on these things. I don't understand what the relationship between Tas Water and Tas Irrigation and the state Government is. Perhaps one of you could talk about comprehensive lack of water planning for the future. It is not just Tas Water but Tas Water is part of this, so could you please explain.

Mr BREWSTER - I think there was about five questions in that so you will have to pull me up for each one I don't hit.

Mr O'BYRNE - She gets one so pick the one you want.

Mr BREWSTER - Pick the one I prefer. I won't do that to Rosalie. I was quite careful with this in speculating about the source of the increase demand. I said on Leon Compton that I can only go with what I have in front of me; there has been an increase; there has been clearly lower rainfall in September/October. We have a 10 per cent increase over the previous year. As to what that is down to, you can say low spring rainfalls, more demand, et cetera, but at the end of the day we get our meter readings once a quarter and it is very difficult to tell what is driving that demand. That is why I was quite cheerful about that.

In terms of your water planning question, all 60 of our drinking water systems are reported to the executive team every month and 36 of those are particularly on watch. That includes the Greater Hobart system. We are constantly being updated on where we are at. We have been planning the upgrade for Bryn Estyn for some time. We always knew we would have to upgrade it and as we got to the end there would be more risk in terms of failure of the plant. What is happening in the Derwent can be quite challenging because of the nature of the raw water coming down is not always predictable and we have to be able to respond quickly, and sometimes you lose supply.

Dr GUMLEY - There is also an element of randomness about the quality of the water coming out of the Derwent - the turbidity and the colour.

Dr WOODRUFF - Coming into the Bryn Estyn treatment plant?

Dr GUMLEY - Yes. When the turbidity and colour go out of spec, Bryn Estyn has to work harder to produce the same amount of water. In other words, we have quite a bit of work to do. There is an element of what the inputs look like.

Mr BREWSTER - My number one priority is always safe drinking water. If we push that plant too hard there can be a breakthrough through the filters and pathogens get through and that is my number one concern. We will not take chances with that. Sometimes that means we have to lower the throughput to protect our customers.

Mrs RYLAH - Since settlement of King Island, water in the summer has been a major issue, in particular the quality of the water that people have been able to get. You mentioned in your opening statement that you have done an upgrade and are using the Upper Grassy Dam. What have you done to reduce the water supply, the supply of water basically and the quality of water on King Island?

Dr GUMLEY - We opened the dam up two weeks ago, the new plant.

Mr BREWSTER - King Island has been challenged for a long time by its water source. Currie has had a very hard water source. It is hard for them to promote economic growth when you don't have high-quality water. They are trying to become a golfing tourism destination and when people go there and can't get a decent glass of water or have a proper shower because it won't foam up, it is pretty disappointing. Last year we might have gone to stage 2 restrictions. That is a significant matter for that island. If they want to go forward they need good drinking water and reliable supply. We have invested heavily in King Island in upgrading and giving them a reliable supply from Grassy through a 26-kilometre pipe to feed Currie, so now the people of Currie don't have to put up with hard drinking water. The only complaint I have had is that now the water foams up too much when they have a shower and I have said publicly I am happy to take that if that is their complaint.

When I was there - and I went to the opening because I am proud of that plant and what our people have done to make that work - I walked around the streets and tried to get some feedback from the users, from the people in the shops in Currie. I heard nothing but positive feedback about what a difference it is going to make to King Island. It is a big matter for the island and we are certainly proud of what has been delivered.

Mrs RYLAH - That is an old King Island Scheelite dam, is that correct?

Mr BREWSTER - Yes.

Mrs RYLAH - They are hoping and working towards opening, so that will have some impact. Are you in conversation with King Island Scheelite?

Mr BREWSTER - Yes, we are working with King Island Scheelite and also working closely with the general manager and the mayor. I had a discussion about that whilst I was over there and we have come up with a shared arrangement where they are able to use our wastewater from the water treatment plant so our rejection water will become available to them. It has been a bit of a win-win and if that went ahead it would be fabulous for the island and particularly for Grassy. We are keen to see that happen and in our planning we are making sure we build in the potential for additional development and the scheelite mine coming on line.

Mrs RYLAH - That's a second positive from me. Well done.

Ms WHITE - Earlier today Tas Irrigation was at a hearing just like this and they said they'd be able to deliver full water rights to irrigators on the south-east scheme this season. I was wondering if you could tell me whether you're as confident of that occurring as well.

Dr GUMLEY - Mike met with their CEO this morning and he has the most recent information.

Mr BREWSTER - Honestly, that is a matter for them. I can only tell them based on the modelling what we believe we can supply. As I think I've said earlier, the relationship with the farmers is rightly with Tas Irrigation. We don't have insights into their contracts or relationships. Our relationship is with them and we've shared what we can do.

Dr GUMLEY - We don't have insight into their individual demand as farmers either, so whether they're in 12-hour or 24-hour cycles, we don't have that data.

Mr BREWSTER - We are working together to look at every opportunity to get them whatever additional water we can and that flows into considerations about whether water restrictions should be considered because we have undertaken surveys through our price and service plan for a proposal which is going out. We've asked customers if they are prepared to make small sacrifices to help the farmers and we've had an overwhelming response that they would. I think the relationship is working as it should and to the extent we can make any modifications or changes to support them while not putting our drinking water at risk we will do so, but our fundamental issue is about supporting the level of the dams and that's what it all comes down to for us, our storages, and if they drop too far then we create a problem for next year and the year after.

Ms WHITE - Thank you. Are you able to share with us the modelling you have done that shows how much you can deliver this season to the south-east scheme?

Mr BREWSTER - I'm happy to share what we've done, that's not a problem, but I don't have it in front of me.

Ms WHITE - That's something I can put on notice.

Mr BREWSTER - I can share exactly the modelling we've done to try to inform ourselves. It's a constantly changing and evolving issue and it's as much about scenario modelling as it is about anything else because for us it's about the risk that we lose part of the plant, the risk that we don't get the rain on the way through, the risk that demand doesn't get pulled back and we have to pull harder on restrictions, the risk that we get a pipe burst, which has happened every year pretty much from Lake Fenton, and the risk that we get a change in water quality. All those things are being balanced all the time and that's why we do scenario analyses. It's not as simple as just saying give me the model and I can tell you whether we'll have the water or not. It's all about those judgments.

Ms WHITE - I will put that question on notice. Can I have one more question, please, Chair? This is about the overall future for the south-east scheme. Can you indicate whether it's TasWater's preference that they no longer provide water to the south-east scheme?

Dr GUMLEY - I think the long-term answer has to be that the irrigators take their water from the Derwent that is not treated. At the moment, by taking treated water for farming you have energy costs and chemical costs and it's probably in the long term not the most productive way of doing it. In time, one would think that you'd bring a pipe down the other side of the river roughly drawing raw water where we draw water out for the treatment site, and send that down to the Coal River Valley and similar regions.

Ms WHITE - Connecting at Bridgewater.

Dr GUMLEY - Connecting at Bridgewater or similar, and eventually that will save a lot of operational costs and also increase the reliability to everybody.

Mr O'BYRNE - That project's not in your forward plan, is it?

Dr GUMLEY - It's not a project for TasWater.

Dr WOODRUFF - On Bryn Estyn and the treatment of drinking water as was discussed earlier, the compounds that arise from algae breaking down to methylisoborneol, or MIB, and geosmin are taste and odour compounds that have been a problem for TasWater for a long time. They made the water undrinkable in 2015 for Hobart residents and there was some carbon filtrations put in place at that point.

Mr BREWSTER - Powder activated carbon -

Dr WOODRUFF - That is right, that was put in place at that point. On your website you state that -

catchment research has shown that a combination of land use and climate change are likely to be causing the increased levels of MIB and geosmin.

Can you please talk about what you mean by land use in that context and how has TasWater investigated the causes of the land use component of MIB and geosmin?

Mr BREWSTER - First of all, we partially fund the Derwent Estuary Program along with a number of other key players who undertook quite a comprehensive report in 2018 into the potential sources of increased nutrients in the river. That has informed us to some degree, but like every report there is never any certainty. But it identified intensification in terms of agriculture, which is more population as potential sources in the river. I recommend that anyone who wants to better understand to read that report.

Dr WOODRUFF - I am glad you mentioned the DEP because you would also be aware of Dr Christine Coughanowr's research that she did on 24 March. She released some results of water quality monitoring that she had done below the Saltas, Wayatinah and Florentine hatcheries. She took water quality after Hydro Tasmania records had shown that there were five to 10 days of very intense water fall prior to that, so there was flushing of the upstream and there were no stagnant water bodies sitting. She found very high levels of dissolved phosphorous and nitrogen up to 40 times more below Wayatinah and up to 128 times more below Florentine.

You've mentioned aquaculture. With these massive amounts of nutrients going into the water from hatcheries, do you think what proportion of the problem is being caused by those hatcheries?

Mr BREWSTER - My reading of the DEP report did not make it clear exactly what proportion it would be. I would have to take that on notice and get that data for you. I am not going to sit here and guess what numbers were in there. My recollection is that what it said was it did increase the level of nutrients as it passed the hatcheries but I do not recall it being so conclusive as to say that was the primary driver of the increased nutrients, which are potentially driving the MIB and geosmin increases.

Dr WOODRUFF - Things have changed since that report. Christine Coughanowr's work was done this year. Since then there has been another massive hatchery approved at Meadow Bank just this week. That is on a far greater scale than the others. At the moment there are five hatcheries in the Derwent River catchment area, plus the Meadow Bank one, which is massive, will make six. Has TasWater had conversations with the EPA about their monitoring below these hatcheries?

Mr BREWSTER - It is possible but I would have to take the question on notice. It would probably have happened below my level.

Mr TUCKER - Chair, you mentioned in your opening statement that you were working with the aquaculture industry. I was wondering whether you could expand on what you are doing with the aquaculture industry?

Dr GUMLEY - We are attempting to improve the quality of our sewerage so that we do not get as many spills. It is very important to all the shellfish producers of whichever type that they can keep operating as long as they can and be productive as they can. We are looking carefully at each of our plants that go anywhere near the oyster or mussel or other leases and improving our environmental compliance. It is an ongoing program.

Mr BREWSTER - We have been investing heavily in new technologies. It is very challenging to prevent spills. It can just be a foreign object gets into your sewer network, whether it is a tree or whether a simple Coke bottle or something gets in. You get blockage around it, it spills. If I take Pittwater, we literally have hundreds of kilometres of pipe, many manholes, and we have about 20 pump stations. What we started to do is test putting sensors underneath manhole lids. We started developing algorithms that will predict, which look for changes in diurnal flow patterns, and say, 'Hang on a minute, something has changed, you need to get out there'.

We have invested heavily in additional preventative maintenance programs through every at risk part of our network where we are adjacent to shellfish areas. We have put money into research, supporting the shellfish farmers. We are very focused; it is a critical industry for the state. It wasn't going well for us a few years ago.

Mr O'BYRNE - Let's move to the Capital Delivery Office. This is a massive business change for you to deliver new contracts. Obviously, the change will be that instead of TasWater being the head contractor, since you are the CDO, you become the head contractor for the subbies. We are hearing from industry that there are a lot of delays and a lot of frustration with work coming out. Industry is very concerned about the pipeline of work over the coming months and years. You released the structure for CDO in July of this year, I think, so how many of those positions in that structure are currently filled or vacant? How many are Tasmanian workers?

Dr GUMLEY - I think we are running a 40:60 ratio at the moment with TasWater having the 60 per cent.

Mr O'BYRNE - So 60 per cent of TasWater staff have moved in to the CDO?

Dr GUMLEY - That is the correct number.

Mr O'BYRNE - And 40 per cent -

Mr BREWSTER - Are from UGL, CPB and WSP.

Mr O'BYRNE - How many positions are currently vacant?

Mr BREWSTER - I would have to confirm it, but it would probably be 15 to 20. I think we have 140 people in the CDO right now. It is a significant investment.

We understand some of the frustration from the contracting market. We have not kept all of our promises in terms of time lines, and we are acutely aware of that. We are trying to build up a bank of work and release it in a way that we can have confidence about the outcomes for our customers.

The Chairman has reviewed the full forward workload. We are out there communicating with the contractors to ensure they understand what is coming out and when it is coming out, not so much about the size of the capital released in the year, but when the request for tenders go to the market. That is our focus right now. Ultimately, I think they will see a lot of work flowing out over the next few months.

Having said that, we are about on target in terms of our capital expenditure for the year, so it needs to be balanced with the fact that we are not sitting near $10 million or $20 million below our capital expenditure target, we are actually about there.

Mr O'BYRNE - How many contracts have been released by the CDO to date then?

Mr BREWSTER - We have not released any major contracts. We have released a lot of programs, worked through the CDO. That has been the primary focus because they are easier to get out. I could check the number of our pre-TasWater contracts which are run under the CDO. We have probably released three or four since the commencement of the program.

Mr O'BYRNE - Of the capital works program, you have some ongoing stuff that you presume would be business as usual, but in terms of the CDO, you acknowledge that you did not have the capacity internally, you went out to get capacity, and now it seems, based on your answer, that you are struggling to get it out in the new CDO.

Mr BREWSTER - We have taken too long, we have acknowledged that, to get that work out. I think we have probably gone too far in making sure everything is perfect. That is a learning for us, but the net result is that work is underway. There is a very big bank of work and it will deliver ultimately; just from sheer effort and planning we have put into it.

Mr O'BYRNE - I suppose the issue is when?

Mr BREWSTER - The first major projects will go out in the new year. We released earlier the Longford Sewerage Treatment Plant upgrade which is over $30 million. That would have been back in July; I would have to check the exact dates.

We have actually released some major projects, but I will be accurate and say that most of the planning for that was done before the CDO. The Markani Dam and the Henderson Dam will go out in the next month. They will be significant projects.

Mr O'BYRNE - I understand the most recent alliance program manager has been moved on by the alliance leadership team, is that right?

Mr BREWSTER - We are recruiting for another manager of the CDO, that is accurate.

Mr O'BYRNE - So you have had a leadership role in place since July, and that person has not worked out? Is that a part of you trying to fix the problem, or what has happened?

Mr BREWSTER - We have been working on leadership role for some time, in preparing for the change, and we are going to make sure we have the leader that works for us. That is always going to be the case. We are going to evaluate where we are, and the capability of what we have.

Mr O'BYRNE - To clarify, there has been no contract that has been released from the CDO since it was established, and you are looking at major contracts early in the new year, hopefully?

Mr BREWSTER - Yes, major projects. I go back to what I said. These are the major contracts. The programs are rolling out. That is why we are maintaining that in the pre-TasWater contracts, which are being managed by the CDO, to be absolutely accurate. The programs of work are continuing to be rolled out by the Capital Delivery Office.

Mr O'BYRNE - But that is the business-as-usual stuff?

Mr BREWSTER - No, it is not business as usual. We have to go out to panels, we have to form those panels. We have to go to the market to see what price they are going to charge for that, so they all have to be led. It is not a simple exercise to run the programs out. You still have to get those prior projects to the point where you can actually go to market and get your contracts underway. The bit where we have taken longer, and as I have acknowledged, are those that are fresh under the new CDO conditions of contract. They are running late, and we have acknowledged that.

Dr WOODRUFF - Back to the Bryn Estyn conversation earlier, and the nutrients in the system and TasWater's website, which points to land use and climate change. Clearly, climate change means warming waters; it is more likely to have algal blooms that create those undesirable compounds if there are high levels of nutrients.

One of the factors that is changing, and has changed fast, is the number of fish farm hatcheries in the upstream Derwent. We have had an unsubstantiated report from an ex-TasWater employee, who has expressed concern that TasWater did not do due diligence on the Meadowbank hatchery that Tassal has now approved - the massive hatchery there - particularly with what is going to happen to the water. Tassal is choosing not to employ recirculation techniques, even though it is clearly in a position to be able to do that financially, and that is best practice. Instead, they are going to spray water on the surrounding countryside, which does have very high salinity levels, and they will need to spray extra water on top of that. Hundreds, maybe 600 megalitres on it; I do not have the right figure. A lot of water will need to get sprayed to make sure that, in the short term only, that salt gets pushed down into the soil.

This is an issue because it is going to free up more of the untreated salmon effluent. We have totally untreated salmon effluent getting pumped into below Wayatinah and Florentine, and now we have this new hatchery, which has huge amounts being sprayed on farmland, which is going to end up in the Meadowbank Lake, and then consequently into the system. It seems that TasWater ought to be doing more work in this space.

My question is, are you concerned that the EPA has failed to detect these sorts of levels that have been identified by Dr Christine Coughonowr, and are clearly evident in what is happening in the system?

The second part of that question is in relation to the $160 million price tag to upgrade Bryn Estyn to remove these sorts of problems, not all of them fish farm-related obviously, but a substantial component. There is a big question mark. Who is paying for that, and why aren't we looking at companies that are producing high nutrient levels being party to paying some of these costs?

Dr GUMLEY - I don't have the science with me here. You have raised some questions, and I will have a look at these, certainly.

Dr WOODRUFF - Thanks.

Dr GUMLEY - On the science, because clearly we have to understand exactly what we have. I will give Mr Brewster an opportunity.

Mr BREWSTER - With assertions about whether we didn't do our due diligence, I can only take that on notice.

Dr WOODRUFF - Yes, I am just raising it.

Mr BREWSTER - I am not accepting that as fact. It may be the case, or it may not, and I would doubt it. Remember, we are not the approving authority. We don't control the water that comes down. We would certainly express a view if we had a view on it.

In terms of the cost of the plant, this circa 160 megalitre plant is basically a replacement, and whatever happens, whether the fish farms are there or not, I expect we will still be building in taste and odour capacity. We will still be building in the capacity to remove colour, whatever happens going forward. My caution is, how much of that is ultimately down to fish farming? I don't know how I would determine that. For us, we have a plan. We know what has to be built, and it will be covered.

Dr GUMLEY - Because it is going to be done anyway, building in odour and taste.

Dr WOODRUFF - Sure, but those problems weren't there. They came in 2015. Yes, we have been having warmer waters, but I am signalling deep concerns that people in the community have that salmon hatcheries are doing whatever they want, wherever they want. It is getting signed off. Hobart's drinking water, meanwhile, is costing ratepayers a lot of money: $600 a year to be flat on sewage, $600 a year to be flat on drinking water. That is a lot of money per person, or per household, to be hooked up to TasWater.

How much are those big companies paying towards the costs of that treatment plant? Has TasWater had conversations with Tassal and Huon Aquaculture and Petuna about putting some money towards the costs of that treatment plant?

That is the question I would be most interested in you answering.

Mr BREWSTER - The question of the hatchery has to go to the EPA. I am happy to review our processes, and whether they are adequate in terms of our connection, in terms of the impact on us. I will take that on notice.

In terms of the costs, we have factored in the cost of that plant in our long-term strategic plan. Our prices are not going to increase by more than 3.5 per cent. How do we compare? We know that people are challenged by paying their bills, but we are still below the average median price right around the country for water.

Dr WOODRUFF - I know, but we have the poorest people in Australia struggling to pay bills and spending so much money when we have big companies banking $78 million a year. The question should be asked, who should be paying?

CHAIR - Order, Dr Woodruff.

Mrs RYLAH - I would like to now go to the issue that you raised in the opening statements, and an interest that has come to me from the discussions from Mr O'Byrne regarding the Capital Delivery Office. My interest is in Lake Makarni, which as member for Braddon is definitely in my territory. Could you give me some understanding of it, as you said it would soon go out for tender? I have heard concerns in the community that the costs of this project have gone from a much smaller figure to a much larger figure, in fact doubled.

I would like to know about the capital expenditure. What is the size of it, and what is the time frame for delivery, because there is concern in the community?

Mr BREWSTER - We anticipate the Makarni Dam will be up by the new year. The executive team has had a look at the first cut of that. In terms of its exact cost, I will have to take it on notice. It won't spring to mind. I don't know whether you can?

Mr PAGE - A tad over $20 million.

Mr BREWSTER - We are challenging every aspect of that. We have independent estimators outside the CDO testing the validity of those costs and providing us with a review before we will sign off. It is not as if the capital delivery office just goes off and makes up a price and that is what we think. Everything that gets provided is tested independently through and independent estimator.

Dam projects are notoriously difficult to estimate. Ridgeway Dam is a classic example of how difficult it can be. You can't see inside the dam and sometimes the primary structures that support the dam are hidden away, so it is quite a planning exercise. Regarding the added cost, the price is higher than we had originally anticipated. Because we are getting better at the estimates, we are getting independent estimation, we have a lot more confidence in the final outcome.

In the past we might have to put in contingencies around the 20 per cent mark we are now down to 2 per cent or 3 per cent contingency levels, which the CDO would be expected to deliver within or they suffer penalties.

Mrs RYLAH - The second part of that question was, what is the time frame delivery for that project.

Mr PAGE - The estimates at the moment, assuming we can get it contracted. I should clarify it's not out to tender; it has been out to tender and there is a preferred contactor. This is now about awarding the contract and starting the work in mid-2021. We need two summers to stage the works. One to do the spillway and the concreting works on the spillway and then a second summer to do the dam wall face works. They are too complex and big to do in one summer. In winter you need to de-mobilise. So, mid-2021.

Ms O'BYRNE - In the opening comment you talked about the 24glasses drinking program. You said drinking water and public health was your number one priority. On that website it says the Pioneer replacement scheme, following overwhelming support for the program, was successfully completed in August 2017. Now one would contend the Pioneer issue is still ongoing given that there are surveys being undertaken at the moment, given that there are issues with replacement.

In recent testing done in 2019 on one property the water contained 280 times the limit of lead and it was over the limit in arsenic, cadmium and manganese. The 2014 tests at 58 Main Road were misinterpreted and that error was discovered in August 2018. The property owner was notified.

The briefing note I have from Tas Water a couple of weeks ago states that residents of affected properties had their tanks disconnected from the roof catchment, emptied, cleaned and refilled with potable water, which sounded like a great response. Can you confirm that took place sometime much later, in 2019, so quite some time after the 2018 Ombudsman negotiated tests.

Why was that not done immediately upon identification of that problem? Why would it have taken so long to be done?

Dr GUMLEY - Mike, you have the dates there.

Mr BREWSTER - Yes, I think we had two sets of tests. The first tests we had all came -

Ms O'BYRNE - If I can help you, in 2018 the tests came back clear but there was an argument about whether the tanks had just been refilled and whether they were accurate. Let's talk about when you identified that response and you said you were going to disconnect houses, what was the lag between that and it actually occurring.

Mr BREWSTER - I don't think we actually said that.

Ms O'BYRNE - It is in your briefing you wrote to me.

Mr BREWSTER - I think what I said was that the 2018 results all came back clear bar one, which had, from recollection, had cross-connected. They had connected their tank to another roof, is my recollection.

Ms O'BYRNE - It doesn't say that in the briefing notes.

Mr BREWSTER - I am sorry if we have the briefing note incorrect. I apologise. I shall have to have a look at it. My recollection is that the 2018 tests all came clear bar that one test.

Ms O'BYRNE - Your briefing note says that in 2018 concerns were raised that many of the houses had roofing materials including paint that had lead. Then the response says that you disconnected them immediately and cleaned out the tanks and filled them up. This is the same question, Chair, just to clarify. Why was there such a significant lag between that identification in August and the work actually being done?

Mr BREWSTER - Maybe we haven't written the briefing note clearly enough. My recollection is in 2018 those tests came back largely clear. When a customer asked for their results from the 2014 results that was when we discovered there was an issue with how the results had been read. We immediately informed the Department of Health. We immediately informed our customers that we had misinterpreted the results. We then put a program in place to investigate the state of the roofs. At the time the drinking water results were showing up clear.

Ms O'BYRNE - That's not what you've said in your briefing notes. Regarding roofing replacements you say 35 of the 43 properties in the briefing note are a bit suspect, if you've given me the right information, which is concerning.

Dr GUMLEY - Could you just clarify for me please -

Ms O'BYRNE - Thirty-five of the 43 properties have been tested.

CHAIR - Sorry, Ms O'Byrne, the Chair is just trying to clarify.

Dr GUMLEY - Can you clarify for me which briefing note you're talking about? Do you have a date or an identifier?

Ms O'BYRNE - This is a letter written to me. It was titled 'Briefing note on Pioneer water supply update' and it was from Juliet Mercer. You seem to know about it? You don't know about it?

Dr GUMLEY - Which date? There have been many.

Ms O'BYRNE - Sorry, 19 November 2019.

Dr GUMLEY - On 19 November.

Ms O'BYRNE - With the issue of the roof replacements, I understand that at least 12 of the properties have been given an offer for roof replacement.

I have two concerns that I would like you to address. Those residents are in a reasonably low-income area. They are being told they will have to pay somewhere between $10 000 to $15 000 to do the structural work to allow a roof replacement. Why is that the case and how is that worked out? I am also concerned about the survey conducted by you and council. TasWater's normal principle is that 80 per cent of residents have to agree for piped water. To have that survey out in a town where 12 to 14 of the 43 properties have been given an offer of roof replacements and asking for an 80 per cent buy-in to that at the same time as you're negotiating with individual residents about roof replacements and they can have one or the other, doesn't seem to be a genuine approach to resolve that issue. Clearly any review of that would indicate that the survey will be steered by the fact that residents are currently in negotiation about getting their roof replaced.

Is it going to cost $10 000 to $15 000 each and is that fair? Do you think there may be an ethical issue in having both of those questions being put to the community at the same time?

Mr BREWSTER - Let's go to the first one. This was a choice we made. This is not a Department of Health choice.

Ms O'BYRNE - I have seen the letter from you to the Director of Public Health.

Mr BREWSTER - Yes. It was ultimately a choice we made because it is about lead in water.

Ms O'BYRNE - Given that you've said the finding was fixed.

Mr BREWSTER - At that point in time it was fixed. We had clear results. Nothing was hidden. We had clear results on all of those results at that time. It was fixed. That's why we genuinely asked for it to be removed.

We recognise there's a challenge here because we engaged someone completely independent of us to assess all of the roofs. The challenge we found was how far to go. We committed that if there are any issues with things we've done we will pay for them. We will fix them.

Then you have to look at the cladding. The issue is the surface that the water is collected on. If we are going to make an optimal outcome, the advice we received back from our independent consultants was that to make the scheme work we would have to get involved in making structural repairs to the houses. There were four houses, we were advised, but we virtually have to rebuild them. We said, 'Where do we go with this'? That makes for a very challenging situation for us, so we said to the customer, 'How about an alternative? We'll offer a carport or a small garage, in effect, as an alternative, we will pay for that to give you the extra catchment area', and the feedback at the time was not overwhelmingly in support.

We then got quite a bit of feedback that there was a sense around the town that they wanted piped water. The Dorset Council had raised this. We were in the town, so we thought if that is really where they want to go and we have all these challenges facing us in terms of how we justify rebuilding houses ineffectively to put a new roof on, we said let's stop and -

Ms O'BYRNE - Are you saying that you're not negotiating roof replacement anymore and you're just -

CHAIR - Ms O'Byrne, can I ask that you let Mr Brewster please finish?

Mr BREWSTER - We stopped negotiations. We said, 'Let's go out and get the survey result and wait until we see what comes back from the Dorset survey and our survey'. It came back in a similar vein, so our survey was 54 per cent for and 46 per cent against. The Dorset Council was almost the reverse. Out of 90 people who were sent forms 20 supported reticulated drinking water and 21 wanted to continue with the tanks program. That left us in a very difficult position. We have gone back to the Dorset Council and said, 'If you're prepared to support this unanimously, we will pipe the water in, if that's what they want'. We also have to clear that with our regulators, so that is pretty much where we have landed.

Ms O'BYRNE - You talk about whether or not TasWater had an obligation because it was responsible for the roofs, et cetera, and we did put the tanks in which I imagine probably cost a little bit. You have put piped water in Herrick, which is on the southern side of Pioneer, and you have put piped water in Gladstone, which is on the northern side of Pioneer. You might need to take this on notice, but can you identify what the costs for both those schemes were, and what it would have cost to have done Pioneer at the same time? Is that an on notice question?

Mr BREWSTER - No, I can answer that. They were both around the $3 million mark. One was $2.7 million, one was $3 million. The estimate I had done about a year ago for Pioneer was around $3.5 million. When you do estimates, if you haven't done the detailed design you have to put boundaries around them, so I think I quoted publicly $2.5 million to $4 million for the Pioneer system, were we to do that.

Ms O'BYRNE - And that wouldn't have been the stand-alone cost? It wouldn't have been any cheaper to have done the work at the same time as you did the other schemes?

Mr BREWSTER - It possibly would have been cheaper, but to clarify, when all is said and done, there was a petition to Ben Lomond Water in 2012, and I have read the petition, where they absolutely wanted tanks.

Dr GUMLEY - It was a unanimous petition, wasn't it?

Mr BREWSTER - I don't know, but the town wanted tanks. We delivered tanks and at the point in time we left it, we thought we had left a good system. The reality has turned out that because we have had to go back and check the lead results, we have to go back and address our issue and we are committed to doing that. That is what we have been doing since we learned of the mistake with the lead.

We went back out to the community, explained what was going on, tried to make arrangements to make it work. We have considered a pipe solution as an alternative as part of that process, when we have looked at all the alternatives saying, 'Where do we go from here?' We can't be rebuilding houses. That is an inappropriate use of the state's money, so what are our options here?

Dr WOODRUFF - There have also been discussions by TasWater about several towns, Coles Bay and Bridport, possibly needing water restrictions. Could you please tell me whether any of Tassal's Okehampton Bay operations on the east coast are using drinking water? Would that continue during drinking water restrictions?

Dr GUMLEY - As always, drinking water has to come first.

Mr BREWSTER - Like any customer, I am sure they have an off date where they take drinking water for whatever needs they have in their plant, but we are not supplying them with a pipeline of water to clean their fish. Their solution has been to put in place a pump, as I understand it, and that pump will take any excess water that flows over the top of the Lower Prosser Dam, so they have access to that but only when it flows over. The other alternative is to take water from Hobbs Lagoon, which is entirely a matter for them, and supply that to the Tassal fish farm. Unfortunately that water is very saline and can't be used so that has been a matter the council has been trying to work through and we are now working in conjunction with all of the stakeholders and inviting others to say, 'Let's come up with one scheme and what we can do here to meet everybody's needs'. As Stephen said, we have been adamant that all the way through that drinking water must come first.

Dr WOODRUFF - That is good to hear. So there is no drinking water currently being supplied by TasWater to Tassal?

Mr BREWSTER - I need to be really clear. What I said was, like every industrial facility, I am sure they have a water connection that they would be using in their industry, but we have not supplied them with bulk water to clean their fish.

Dr WOODRUFF - When I had briefing with TasWater - which was excellent and thank you to the staff who came - on a range of matters, they mentioned that TasWater was developing a climate change strategy. Could you tell me where that climate change strategy is up to?

Dr GUMLEY - The board is waiting for a report on this and so the management at the moment are doing the science, looking at the work, and it will come to the board when it is ready.

Mr BREWSTER - We are developing a comprehensive climate change strategy but the reality is it hasn't suddenly appeared on the desk. We broke our strategy up into water, sewerage, customers and community, and people and culture. Elements of climate change impact all of those things. Part of our response to date, rightly or wrongly, is that climate change impacts on our sewerage systems and our water systems have been embedded within sub-strategies. What we are asking now is whether that is really sensible given where we are and is it time to pull it all together and have a separate sub-strategy just focused on climate change. That is what we are preparing for the board right now. We have had to take this into account for some time because we have seen more flooding, when the rain does come it is far more intense and we have had to start designing our plants around those changes.

Mr TUCKER - Following on from my question before, I was wondering whether you could expand a little on the research which is being done with the aquaculture industry?

Dr GUMLEY - What research are we talking about?

Mr TUCKER - It was working with the agriculture industry.

Dr GUMLEY - We have tried to assist them and have sent our scientists through so we are DNA testing to find the sources of bacteria potentially in some of the bays. If we can better identify what they are there is more chance first of all that we can identify if it is actually a risk to the shellfish. The other things we have looked at are whether we are able to predict tidal patterns and flows around each of those catchments and if we can predict the flows and the timeframe, we give them more time if we get a spill to get their oysters out. The critical issue for them is to get their oysters out before they are impacted and have to withdraw from the market.

That has been a focus for some time and we will continue to support them with our science to the extent we can. We have good testing laboratory facilities, so if we need to we can do some testing and send some of that DNA lab testing off to our laboratory as well to support them.

Mr O'BYRNE - There has been a lot of coverage of water quality issues at Blackmans Bay Beach over the past year. Elevated enterococci levels have led to the southern end being closed for a year, and the northern end having to be closed for a number of days earlier this year, after detector levels were the highest ever recorded. How has TasWater investigated its own system in that area to ensure it is not contributing to the issues?

Dr GUMLEY - We have had a lot of activity; we have worked carefully with the Kingborough Council. We are trying to look at what the contributory causes are: stormwater; whether it is misconnections. We have been working our way through all the potential problems that there might be.

Mr BREWSTER - I think the right question is did we have broken pipes, for example, that were contributing to it? So, we investigated as much as you reasonably can. We went through and investigated our network, we have been monitoring for spills. Ultimately, I think most of the recent issues, in terms of sewerage were actually pipes where someone might have built a retaining wall, I think was one example, over a pipe and it crushed the pipe. When you crush the pipe, that sewerage has to go somewhere - what is not going down the pipe, goes into the stormwater system and that ends up in the bay.

A lot of the cause appears to be birds, as you have probably read a thousand times. Birds can make a big difference to enterococci. Our primary focus is that we want the beach open. It is not good for us or the council, it is no good for anybody.

One of the things we did, which is a bit of an anathema for a sewerage business, and took a bit of convincing with our engineers. One thing we hate in the sewerage system is stormwater because you are basically treating stormwater and that is not what you want to do. But we looked at all the other options with regards to the stormwater at Blackmans Bay and said to the council, 'We are prepared to run a trial so that in-low flow scenarios, we will actually take it into our treatment plant and treat it because what that does, it prevents that sewerage hitting the beach'. It is very early days, but our expectations are pretty positive about it.

Mr O'BYRNE - We have all been contacted by a number of residents who have raised serious concerns about TasWater sewerage spills in the area, and claims that some are fairly recent. How many spills have occurred in the Blackmans Bay area in the past 12 months? Once you get a notification of a spill, is this information provided to the Kingborough Council or the Derwent Estuary Program, either in real time or in a decent amount of time? More broadly, what processes are in place to ensure that local government entities, particularly in the Derwent Estuary; the EPA and other authorities are aware of spills that could impact recreational water quality?

Mr BREWSTER - I would have to go back and get the data on the number of spills. I am happy to take in on notice and provide it. I think in the last 12 months, it has actually been pretty good. The issue for us is whether it is going to reach the water. That is where we are most focused.

In answer to your question, above a certain spill level we are obliged to inform the EPA. We are obliged to, in terms of signage et cetera, inform the local council to make sure there are signs if there is a potential serious impact on environmental public health.

Mr O'BYRNE - That sounds like when there is a major spill you notify, but it is almost like there is an accumulation of problems at Blackmans Bay, particularly that end of the beach. When there is a spill, do you notify?

Mr BREWSTER - It is not as straightforward as that. If we thought the spill was going to end up running into the recreational water, then we would notify. It is not easy because the guys have to estimate the volume. We were under-reporting previously, I do not mind admitting. The guys trying to estimate the volume, sometimes they got it wrong. We went back to the EPA and they advised us, 'No, we do not think you are doing a good enough job here. You need to lift your game in terms of reporting'. We then said, 'Right, okay, where do you want us?', and then we were advised we were over-reporting.

Mr O'BYRNE - Who advised you that you were over-reporting?

Mr BREWSTER - The EPA.

Mr O'BYRNE - I am talking about the local government authority. I suppose that is the key for a lot of these things, the local government entity and the work you do with them. I am hearing from residents that they find out afterwards that something may have happened, but in the interim where something has happened, they have either hosed down their path, washed their car in their driveway or whatever. There are a series of actions that happen after the spill, which exacerbate the problem.

If they were aware that something had happened, you could mitigate and stop it reaching the water.

Mr BREWSTER - We are doing that, David. I am happy to take that on board because we do have an obligation to inform the environmental health officer at the council when there is a significant spill. The question you are going to ask is 'what is a significant spill?' I am happy to take that on notice and tell you how many kilolitres that is. We work pretty well with the council. Maybe it would be best to ask the council how they see our response.

Mr CHIPMAN - If I could add to that. Last week at our latest Owners' Representative Group meeting where all councils are represented, the issue of reporting was discussed. Even with Kingborough, there were complaints. People were very positive about TasWater's response under circumstances where there is a risk.

Mr O'BYRNE - I take that at face value. Obviously the local residents are still raising it with us and the beach is still closed, effectively.

Mr CHIPMAN - Reporting to the local residents or a reporting to the councils. It might be two separate things there.

Mr O'BYRNE - If it is a single report, then the council then has the responsibility of them.

Dr WOODRUFF - TasWater's annual report shows that by volume, TasWater is still only meeting 35 per cent of its environmental compliance of trade waste. What does that mean for the environment? Is that waste ending up in the waterways?

Dr GUMLEY - Trade waste is an ongoing issue. We have some plants where the industrial trade waste customer can typically be 90 per cent of the total through-put of the sewerage plant. We have to make sure that we treat the effluents appropriately.

There is an ongoing issue with industrial trade waste that is going to take some time to work through. On commercial trade waste, restaurants, cafes and so on, we have come up with a plan with helping them with their grease traps, four-year program, interest free. We are doing our very best we can at the moment to ease the transition for many of the commercial trade waste customers so that everybody is doing the right thing.

Mr BREWSTER - It is a challenge with the industrial trade waste customers. You have to work with them and that is what we are trying to do. Some come on board and want to work with us. Some are probably not so enamoured because they see it as going straight to their bottom line. We generally require pre-treatment to protect the integrity of our plants and it is a challenge. It does make it difficult for us to meet our compliance obligations.

We work closely with them. We have ramped up our program. We will continue to work with the trade waste customers to get the balance right.

Dr GUMLEY - Our underlying policy is that waste is part of the production process. It is the responsibility of those who are producing the waste, if it is industrial context. That is the policy but the pragmatism is that there is a lot of history here going back decades. It is going to take a number of years to get full compliance right across the state.

Dr WOODRUFF - My question still stands though: what happens if there is 65 per cent who are not compliant? What does that mean for the environment?

Mr BREWSTER - What is means is that it is more challenging for us to meet our environmental licence conditions in terms of the effluent discharge to the receiving waters. That is the fundamental issue because many plants were not designed for that type of waste.

Dr GUMLEY - In a commercial sense, it is a cost transfer.

Dr WOODRUFF - Chair, you took the extraordinary approach of writing to political parties. I assume other political parties were written to. The Greens were written to, requesting our help seeking federal funding to assist with the compliance shortfall of $70 million which you estimate is needed - $65 million for the industrial and $5 million for the so-called 'mums and dads' level of people who need to bring their places up to scratch. That is pretty unusual. Can you explain why this is not a state Government responsibility. It seems to me a big gap if we have a state government that is so uninterested in helping TasWater on this issue. Nodding for Hansard suggesting possible agreement with that.

Dr GUMLEY - We are looking for solutions and contributions from anyone who can assist with the problem.

Dr WOODRUFF - When you find a closed door, you try elsewhere? Have conversations been had with the state Government about this to no useful end?

CHAIR - Thank you everybody. The time for scrutiny has expired. I would like to thank you all very much for appearing before us today.

The Committee adjourned at 6 p.m.