❓ Opposition questions the Premier about cost overruns in the Muja A and B power station refurbishment, initially promised to be privately funded. The Premier deflects, blaming previous Labor government decisions and corrosion issues.
AnsweredQoN 276Legislative Assembly
QuestionView source ↗
MUJA AB — REFURBISHMENT
276. Mr M. McGOWAN to the
Premier:
I refer to the Premier's
announcement on 11 May 2009 that he had decided to refurbish the Muja A and B
power station and, specifically, the Premier's comments that ''around
$100 million will be spent on them, 100 per cent funded by the private sector''.
(1) Will this project cost taxpayers
$250 million or more?
(2) If not, what does the Premier expect the final bill for
this project to be?
(3) Why is it
that taxpayers are meeting these bills when the Premier promised the project
would not cost taxpayers a cent?
276. Mr M. McGOWAN to the
Premier:
I refer to the Premier's
announcement on 11 May 2009 that he had decided to refurbish the Muja A and B
power station and, specifically, the Premier's comments that ''around
$100 million will be spent on them, 100 per cent funded by the private sector''.
(1) Will this project cost taxpayers
$250 million or more?
(2) If not, what does the Premier expect the final bill for
this project to be?
(3) Why is it
that taxpayers are meeting these bills when the Premier promised the project
would not cost taxpayers a cent?
AnswerView source ↗
(1)–(3) It
is a sorry tale about Muja A and B, but I remind members of the sequence of
events. Muja A and B power station was commissioned in the 1960s, so it is an
old plant compared with more recent projects. In March 2007, Verve Energy
retired Muja A and B, which was, of course, during the period of the Labor
government. Members will remember that the Varanus Island explosion on 3 June
2008 showed the vulnerability of energy security to the loss of supply, in that
case, of gas. As a result, again still during the time of the Labor government,
the then Minister for Energy announced that Muja A and B would be returned to
service. That was the decision-making sequence, and the incoming Liberal–National
government continued with that.
Mr
M. McGowan : There is more than that.
Mr
C.J. BARNETT : We continued with it. Given that Muja A and B had been
retired in 2007, and I am no engineer, corrosion had presumably taken place
during the intervening period. Subsequently, as the work was being undertaken
in a joint venture between Verve and a private group to bring Muja A and B, 240
megawatts, back into service, severe corrosion was discovered—it was
initially thought not to be so severe—on the 66 feet high of tubing in
the boiler on units 1 and 2. Units 3 and 4 had some corrosion, but that was
able to be dealt with and I am advised units 3 and 4 are now operational—units
1 and 2 are not. That is a failing from an engineering perspective and maybe
from a maintenance perspective during the time those plants were idle. It will
certainly cost more if the government makes the decision to continue the
program; there is no doubt about that.
Mr
M. McGowan : More than $250 million?
Mr
C.J. BARNETT : The point is that at this stage we have not made a decision
either way, and we do not have final costings either way. That is yet to be
considered by cabinet.
Mr
M. McGowan : But you said more than $250 million.
Mr
C.J. BARNETT : No, the cost of restoration is likely to be less than that,
but there are also some issues with some guarantees and the like, so there is
some way to go on this issue.
is a sorry tale about Muja A and B, but I remind members of the sequence of
events. Muja A and B power station was commissioned in the 1960s, so it is an
old plant compared with more recent projects. In March 2007, Verve Energy
retired Muja A and B, which was, of course, during the period of the Labor
government. Members will remember that the Varanus Island explosion on 3 June
2008 showed the vulnerability of energy security to the loss of supply, in that
case, of gas. As a result, again still during the time of the Labor government,
the then Minister for Energy announced that Muja A and B would be returned to
service. That was the decision-making sequence, and the incoming Liberal–National
government continued with that.
Mr
M. McGowan : There is more than that.
Mr
C.J. BARNETT : We continued with it. Given that Muja A and B had been
retired in 2007, and I am no engineer, corrosion had presumably taken place
during the intervening period. Subsequently, as the work was being undertaken
in a joint venture between Verve and a private group to bring Muja A and B, 240
megawatts, back into service, severe corrosion was discovered—it was
initially thought not to be so severe—on the 66 feet high of tubing in
the boiler on units 1 and 2. Units 3 and 4 had some corrosion, but that was
able to be dealt with and I am advised units 3 and 4 are now operational—units
1 and 2 are not. That is a failing from an engineering perspective and maybe
from a maintenance perspective during the time those plants were idle. It will
certainly cost more if the government makes the decision to continue the
program; there is no doubt about that.
Mr
M. McGowan : More than $250 million?
Mr
C.J. BARNETT : The point is that at this stage we have not made a decision
either way, and we do not have final costings either way. That is yet to be
considered by cabinet.
Mr
M. McGowan : But you said more than $250 million.
Mr
C.J. BARNETT : No, the cost of restoration is likely to be less than that,
but there are also some issues with some guarantees and the like, so there is
some way to go on this issue.
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