Project ‘on bud­get’, says Mur­ray Ir­ri­ga­tion

Southern Riverina news - - NEWS -

Mur­ray Ir­ri­ga­tion has again de­nied its mod­erni­sa­tion project has ex­pe­ri­enced a ‘‘cost blow-out’’.

The project’s bud­get con­cerns have sur­faced again af­ter the com­pany an­nounced the fi­nal stages of its sec­ond round of mod­erni­sa­tion would be­gin this month.

How­ever, it has ac­knowl­edged the cost will be an ad­di­tional $17.3 mil­lion com­pared to the orig­i­nal bud­get.

Com­pany chair­man Bruce Simp­son main­tains the project is be­ing de­liv­ered ‘‘on time and on bud­get’’.

He ad­mit­ted the in­vest­ment is larger than the orig­i­nally es­ti­mated cost first dis­cussed in the early 2000s, but still matches the of­fi­cial bud­get adopted by the com­pany in 2014.

‘‘The Pri­vate Ir­ri­ga­tion In­fra­struc­ture Op­er­a­tors Pro­gram (PIIOP) aims to mod­ernise the ir­ri­ga­tion in­fra­struc­ture and sup­ply sys­tem for the benefit of all our ir­ri­ga­tion cus­tomers, and to pro­vide im­proved wa­ter ef­fi­ciency and pro­duc­tiv­ity for our cus­tomers’ farm busi­nesses,’’ he said.

Mr Simp­son said it in­cludes re­plac­ing the tra­di­tional Dethridge wheel method of de­liv­er­ing and mea­sur­ing wa­ter, which he said has a known el­e­ment of inac­cu­racy, with fully au­to­mated gates.

He said as the project pro­gressed, it be­came ev­i­dent the orig­i­nal bud­getary es­ti­mates would not meet the scale of the project.

‘‘The com­pany is re­quired by law to meet the new me­ter­ing stan­dards by 2021 (orig­i­nally in the Na­tional Wa­ter Ini­tia­tive and now in­cor­po­rated into the Mur­ray Dar­ling Basin Plan) and that shaped the orig­i­nal scope of the project,’’ Mr Simp­son said.

‘‘The orig­i­nal scope in­cluded $169 mil­lion from the Fed­eral Gov­ern­ment, which has not changed, and $20 mil­lion from Mur­ray Ir­ri­ga­tion’s cap­i­tal ac­count. The cap­i­tal re­quired was based on the as­sump­tions of the num­ber of re­place­ments of both me­ters and reg­u­la­tors re­quired as part of the orig­i­nal scope ap­proved but the board, with the in­for­ma­tion they had at the time.

‘‘As the project pro­gressed, it be­came clear that the orig­i­nal as­sump­tions, which were based on the pi­lot project at Blighty, were wrong and that the project would fall short of the orig­i­nal as­sump­tions.

‘‘The board re­solved to stop and re­view the pro­gram, and read­just the as­sump­tions and change the scope to re­flect the fact that more units needed to go in com­pared to the orig­i­nal scope.

‘‘It needs to be recog­nised that ev­ery ad­di­tional unit that goes in, gen­er­ates ad­di­tional rev­enue.’’

Mr Simp­son said in June 2014 the board agreed on a new cost es­ti­mate, which be­came the of­fi­cial bud­get, that would re­quire an ad­di­tion $17.3 mil­lion in­vest­ment from Mur­ray Ir­ri­ga­tion.

‘‘Man­age­ment pre­sented the new scope, and the board and man­age­ment agreed that no re­dun­dant as­sets would be in­stalled cre­at­ing fur­ther sav­ings to the bud­get.

‘‘The Board set a min­i­mum us­age bench­mark to en­sure we wouldn’t be in­stalling stranded or re­dun­dant as­sets.

‘‘The ad­di­tional cap­i­tal re­quire­ment was not a cost blow-out, but recog­ni­tion of the fact we had to in­crease the num­ber of units that had to be re­placed.

‘‘So it is this re­vised scope the board signed off on three years ago that we re­fer to when we say we are de­liv­er­ing the pro­gram on time and on bud­get.’’

PIIOP round two is due for com­ple­tion by Oc­to­ber and over the next six months the project will com­plete the fi­nal con­struc­tion stages for both the reg­u­la­tor and out­let pro­grams.

The ma­jor projects team is pre­par­ing to de­liver the big­gest win­ter works pro­gram yet, with more than 260 reg­u­la­tors and more than 300 out­lets to be up­graded.

This works pro­gram in­volves up­grad­ing reg­u­la­tors along the chan­nels and up­grad­ing dated farm out­lets with modern and ef­fi­cient out­lets.

Part of this in­volves up­grad­ing Dethridge out­lets with the new FlumeGate and SlipMeter out­lets, which will ac­cu­rately me­ter and more ef­fec­tively de­liver wa­ter on farm.

Reg­u­la­tor sites are up­graded to re­mote con­trol. be­ing

Bruce Simp­son.

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