Victorians to compensate failed desal bidder

August 1st, 2009
Catherine Best

Victorian taxpayers are set to pay millions of dollars to a multinational consortium in compensation for it losing a desalination bid.

The day after the contract to build and operate Australia’s largest desalination plant was awarded, Water Minister Tim Holding said the losing bidder was likely to be compensated.

The AquaSure consortium, led by French water company Degremont, has won the tender to build and operate the $3.5 billion plant on Victoria’s southeast coast.

Losing tenderer BassWater is set to receive up $10 million for its failed bid in a gesture Mr Holding described as modest and appropriate.

He said the government was still considering compensation and could not provide a payout figure.

“We’ll reflect carefully on that. It’s obviously not going to compensate the unsuccessful bidder for the full cost of their bid, which would have run to tens of millions of dollars.

“But something appropriate, possibly in the five-to-10 million dollar mark, but we’ll reflect on that. We haven’t made a decision yet but it’s not unusual for the government to make a payment like that in these circumstances.”

AquaSure chairman Tony Shepherd said his group’s bid cost $30 million and compensating his rival might “heal some of the wound”.

He said compensation was a good practice that encouraged competition in the market.

“The state has got a huge benefit out of the intense competition on this project and sharing a small portion of that with the losing bidder, I believe, is quite appropriate.”

But the opposition said the government needed to dangle a sweetener or risk having no bids for the project, which will ultimately be underwritten by taxpayers.

“Taxpayers are being hit both ways here, a massive slug in their water bills but also through their taxes being asked to underwrite the losing bidder,” opposition scrutiny of government spokesman David Davis said.

He said taxpayers would be angry and the money could be better spent on hospitals, schools and transport.

The government has agreed to go guarantor on the 150 billion litre project if AquaSure fails to secure more financial backers.

However, Mr Holding said this outcome was highly unlikely because the project was fully financed.

He reassured Victorians the public-private-partnership would deliver the best value for money.

Just how much value won’t be known until the public sector comparator is revealed later this year.

A spokesperson for BassWater could not be contacted.


This is an insult to those being displaced by this desal plants construction.

The Vic Government can compensate a failed bidder, but they cannot build
or provide any low cost housing for those of us being forced out, due to the ridiculos
rent rises we are experiancing.

This money could have been used to help those loosing their homes to relocate!
C'mon Mr Brumby cant you see whats wrong with this picture ?