THE Victorian Government's water policy will place the state's urban, environmental and agricultural sectors in competition and at risk, says CHRIS HARRISON

This year, for the first time in history, Melbourne will consume more water than is allocated to irrigators in the Goulburn system.

The Victorian Government knows full well the acute shortage of water in the Murray Darling Basin but is still proceeding with the north-south pipeline.

This project has deservedly been widely condemned by grassroot populations, scientists, think-tanks and the leaders of every political party other than Labor.

The Government maintains the pipeline is a vital component of Victoria's emerging water grid.

The use of the term "water grid" to describe the pipeline is a misnomer.

The pipeline is a one-way street. Water can flow in only one direction - from the Murray Darling Basin to Melbourne.

However, the term is valid in the sense that the pipeline allows for the development of privatised water markets in the non-agricultural sector.

The pipeline allows investors to purchase water in the Eildon dam and sell it to Melbourne, to Geelong via the Geelong interconnector and to Bendigo and Ballarat via the Goldfields Superpipe.

This network of pipelines gives more than four million people access to water from Eildon, a population base expected to double over the next 40 years.

The pipeline is strategically important to the Government's plans to allow urban populations to source their own water, in turn divesting it of a core governmental responsibility.

If in the future your town needs water you will be told to go into the market and buy it, and the Government will claim it has built the infrastructure to enable you to do this.

The Wonthaggi desalination plant is also a key component of the Government's plans, as it underpins the security of the water for these populations and the developing market.

The failure to understand some basic principles of water has led the Government to drive the development of the water grid.

This policy places the urban, environmental and agricultural sectors in competition and at risk.

The neo-rationalist economic mantra of "water must move to its highest value use" has been a monumental failure.

The theory of this mantra has been replaced by the reality - water moves to the place where it can achieve the most financial and political leverage.

The Goldfields Superpipe has already shown us some of these failings.

The Superpipe and associated infrastructure cost $280 million but it remains essentially dry because the water purchased by water authorities has the same security as in the agricultural sector.

An allocation of only 9 per cent in the Goulburn system means that of the 20 billion litres of water purchased by Ballarat and Bendigo, less than two billion litres is available.

The Goldfields Superpipe experience represents a historic and fundamental change for urban authorities.

For the first time, urban water security is linked with rural water supply.

Urban populations are suffering the same fate as irrigators and the environment.

The Government is creating water markets that force rural and urban populations to compete for water.

The outcome of this competition will be determined by the relative political and financial strength of each sector.

How the environment will fare is unknown.

Last year, the temporary price of water hit a record high of $1200 a megalitre when Adelaide entered the market.

The market dramatically fell to just $400 a megalitre weeks after Adelaide and horticulturists stopped buying. There was no doubt about the effect of competition.

It has been suggested by some that Bendigo should purchase more water than is needed to improve the city's water security.

The futility of this approach parallels Federal Water Minister Penny Wong's experience.

The Federal Government has spent $50 million for a cited 28 billion litres - but just enough to fill 10 swimming pools of water was available to contribute to the Murray Darling Basin.

Ballarat and Bendigo are looking for 38 billion litres of water via the Superpipe.

With water allocations from the Goulburn standing at 9 per cent they will need to purchase 420 billion litres of water entitlement to receive their objective of 38 billion litres of water.

The Goldfields Superpipe experience is a blueprint for the north-south pipeline and Melbourne.

Both pipelines will be tied to irrigation water availability - Bendigo's allocation percentage will be the same as irrigators and Melbourne's allocation will be tied to savings generated from the irrigation areas.

Sufficient water savings will not be achieved under the scenarios experienced for the past five years, and the CSIRO predicts water scarcity to only worsen.

Melbourne will be forced into the market and that will be to the detriment of urban communities, irrigators and the Murray Darling Basin.

The Government has failed to understand that cities along with irrigators and the environment need real water, not virtual water.

  • Chris Harrison is a fifth-generation farmer from Durham Ox and a member of the Plug the Pipe group.