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$: Darling River Water Saving Project Part B Final Report€¦ · Name of project: Darling River Water Saving - Part B Stage 1 Report Name of document: I:\ENVR\Projects\EN02513\Deliverables\Stage$

Darling River Water Saving Project Part B

Final Report

March 2010

In Association with GHD Hassall & Robert Learmonth

The SKM logo trade mark is a registered trade mark of Sinclair Knight Merz Pty Ltd.

Darling River Water Saving - Part B Final Report

� Final

� March 2010

Sinclair Knight Merz ABN 37 001 024 095 100 Christie Street PO Box 164 St Leonards NSW Australia 1590 Tel: +61 2 9928 2100 Fax: +61 2 9928 2500 Web: www.skmconsulting.com

Darling River Water Saving Project – Part B Final Report

SINCLAIR KNIGHT MERZ

PAGE ii

Contents

Executive Summary 1

1. Introduction 15

1.1. General 15

1.2. Structure of Report 17

2. Background 18

2.1. The NSW Darling Basin 18

2.2. Darling River Basin Policy, Planning and Management 22

2.2.1. Murray-Darling Basin Plan – Water Act 2007 22

2.2.2. Other Initiatives 23

2.3. Menindee Lakes 26

2.3.1. Environment of the Lakes 28

2.3.2. Water Quality in the Lakes 30

2.3.3. Cultural Heritage of the Lakes 30

2.3.4. Operation of the Lakes 31

2.3.5. Social – Uses of the Lakes 32

3. Development of Schemes 35

3.1. Overall approach 35

3.2. Development of Schemes 37

3.2.1. Summary 37

3.2.2. Part A Report 39

3.2.3. Part B Report 39

3.2.3.1. Stage 1 Approach 39

3.2.3.2. Stage 2 Approach 41

3.2.3.3. Summary of Stage 1 to Stage 2 refinement 48

3.2.3.4. Stage 2 - Menindee Lakes Water Savings Schemes 49

3.2.3.5. Stage 2 - Broken Hill Water Supply Schemes 49

3.2.3.6. Stage 2 Schemes - CBA Results 52

3.2.3.7. Stage 2 Evaluation Results – Identification of Final Schemes 52

3.2.3.8. Options Adopted for Final Report 55

4. Assessment of Schemes 56

4.1. Statement of Effects 56

4.2. Schemes and Broken Hill Options 57

4.3. Engineering Assessment 64

4.4. Hydrologic Outcomes 68

4.4.1. Hydrologic Modelling 68

4.4.2. Hydrologic Modelling Broad Findings 70



PAGE iii

4.5. Socio-economic Assessment 71

4.5.1. Introduction 71

4.5.2. Methodology 72

4.5.3. Summary of CBA Results for Integrated Menindee Lakes Schemes 73

4.5.4. Broken Hill Water Supply 77

4.5.5. Local tourism and recreation 78

4.5.6. Sunset Strip property values 80

4.5.7. Valuing Water Savings 81

4.5.8. Unquantified impacts 83

4.5.9. Socio-economic Results 84

4.5.10. Discussion 85

4.6. Effects 89

4.6.1. Changed Storage Regimes for Schemes 89

4.6.2. Cultural Heritage 90

4.6.3. Environmental Assessment 99

4.7. Specific issues 115

4.7.1. Impact of Climate Change 115

4.7.2. Copi Hollow 116

4.7.3. Lake Cawndilla Outlet 117

4.7.4. Assumed Environmental Filling 119

4.7.5. Broken Hill Water Supply Issues 121

4.7.5.1. Broken Hill - Impact of schemes on reliability and water quality 121

4.7.5.2. Water Treatment for Broken Hill 122

4.7.5.3. Costs associated with Water Supply Schemes 123

5. Menindee Lakes Water Saving Schemes 124

5.1. Summary of Statement of Effects Results 124

5.2. Summary of Schemes, Costs and CBA Results 124

5.3. Assessment Results 125

5.3.1. Scheme 1 125

5.3.2. Scheme 2 130

5.3.3. Scheme 3 133

5.3.4. Scheme 4 135

5.3.5. Scheme 5 138

5.3.6. Scheme 6 140

5.4. Comparison of Schemes 141



PAGE iv

6. Broken Hill Water Supply Schemes 146

6.1. Summary of Statement of Effects Results 146

6.2. Scheme BH1 – Managed Aquifer Recharge 146

6.3. Scheme BH2 – Use of Lake Tandure and Other Structures 147

6.4. Scheme BH3 – Storage at Texas Downs 150

6.5. Comparison of Schemes 153

7. Policy Issues 155

7.1.1. Environmental Planning Instruments and Legislation 155

7.1.1.1. Local Environmental Plans 155

7.1.1.2. Commonwealth Legislation 156

7.1.1.3. Other Relevant NSW Legislation 159

7.1.2. International Biodiversity Conservation Conventions 162

7.1.2.1. China-Australia Migratory Bird Agreement (CAMBA) 162

7.1.2.2. Japan-Australia Migratory Bird Agreement (JAMBA) 162

7.1.2.3. Republic of Korea-Australia Migratory Bird Agreement (ROKAMBA) 163

7.1.2.4. Bonn Convention 163

7.1.3. Other Relevant Strategies, Policies and Guidelines 163

7.1.3.1. The Murray–Darling Basin Agreement 163

7.1.3.2. NSW State Rivers and Estuaries Policy 164

7.1.3.3. NSW Biodiversity Strategy and Native Vegetation Conservation Strategy 164

8. Discussion and Actions 166

8.1. Coordination with other water saving initiatives 166

8.1.1. Realisation of Savings 166

8.1.1.1. Link between Flow Regime and Savings 166

8.1.1.2. Rules vs Entitlement 167

8.1.1.3. Upper Basin Water Savings 168

8.1.2. Savings – where to use? 169

8.1.3. Synergies between Menindee Lakes and other storages 170

8.1.4. Third Party Impacts 171

8.2. Issues for Consideration 171

8.2.1. Indicative timeframes 173

9. References 175

Appendices 178

Appendix A Hydrologic Modelling Results 179

Appendix B Socio-economic Assessment 185

Appendix C Broken Hill Water Treatment 187



PAGE v

List Of Tables

� Table 3-1 Summary of Parts A & B Development of Schemes 37

� Table 3-2: Part A Schemes and Potential Engineering Options 39

� Table 3-3 Stage 2 Menindee Lakes water savings schemes - CBA and MCA 51

� Table 3-4 Stage 2 Broken Hill water supply schemes MCA (no CBA required) 52

� Table 3-5 Showing Stage 2 CBA Results (GHD Hassall) ($M) 52

� Table 3-6 Final Stage 2 Schemes 54

� Table 4-1 Stage 3 Scheme Descriptions 57

� Table 4-2 Summary of Structural Options 65

� Table 4-3 Schemes and Engineering Costs 66

� Table 4-4 Options and Engineering Costs 67

� Table 4-5 Stage 3 Schemes & Hydrology 69

� Table 4-6: Summary of cost benefit analysis results ($ million) 73

� Table 4-7: Break-even entitlement price assumption ($ per share) 74

� Table 4-8: Sensitivity of results to water savings entitlement price 75

� Table 4-9: Component Lifecycle costs and their discounted values 75

� Table 4-10: Broken Hill security of supply options ($ million) 78

� Table 4-11: Valuation of water savings ($M) 82

� Table 4-12: Summary of benefits and costs ($ million) 84

� Table 4-13: Sensitivity to discount rates ($ million) 85

� Table 4-14: Investment Cost ($M) per ML of water savings entitlement 86

� Table 4-15: Break even entitlement price assumption ($/ML) 89

� Table 4-16: Summary of Scheme 1 for flora and fauna impacts 101

� Table 4-17: Summary of Scheme BH2 - flora and fauna 112

� Table 5-1 Schemes – Summary of Savings, Costs & CBA Outcomes 124

� Table 5-2 Comparison of Menindee Lakes Water Saving Schemes 143

� Table 6-1 Summary of Assessment of Broken Hill water supply schemes 154

� Table 7-1 Consideration of Relevant NSW Legislation 159

� Table 8-1: Average Surface Water Delivery Efficiencies 170



PAGE vi

List of Figures

� Figure 2-1 Darling River Basin 19

� Figure 2-2 Menindee Lakes 27

� Figure 3-1 Methodology Flow Chart 36

� Figure 4-1 Layout of Scheme 1 58




� Figure 4-5 Layout of Schemes 5 & 6 62

� Figure 4-6 Layout for all Broken Hill Waters Supply Schemes 63

� Figure 4-7 Map showing Key Cultural Heritage Sites 92

� Figure 4-8 – Proposed (a) New and (b) Alternative Lake Cawndilla Outlet Route 117

� Figure 4-9 – Proposed (c) Existing Lake Cawndilla outlet channel & Penellco Channel Route 118

� Figure 8-1 Indicative Program for Implementation of Scheme 174



PAGE vii

COPYRIGHT: The concepts and information contained in this

document are the property of Sinclair Knight Merz Pty Ltd. Use or

copying of this document in whole or in part without the written

permission of Sinclair Knight Merz constitutes an infringement of

copyright.

LIMITATION: The sole purpose of this report and the associated

services performed by Sinclair Knight Merz Pty Ltd (SKM) is to

identify water savings in the Darling Basin in accordance with the

scope of services set out in the contract between SKM and NSW

Office of Water. That scope of services, as described in this report,

was developed with NSW Office of Water.

In preparing this report, SKM has relied upon, and presumed

accurate, certain information (or absence thereof) provided by the

Client and other sources. Except as otherwise stated in the report,

SKM has not attempted to verify the accuracy or completeness of

any such information. If the information is subsequently determined

to be false, inaccurate or incomplete then it is possible that our

observations and conclusions as expressed in this report may

change.

SKM derived the data in this report from a variety of sources. The

sources are identified at the time or times outlined in this report.

The passage of time, manifestation of latent conditions or impacts

of future events may require further examination of the project and

subsequent data analysis, and re-evaluation of the data, findings,

observations and conclusions expressed in this report. SKM has

prepared this report in accordance with the usual care and

thoroughness of the consulting profession, for the sole purpose of

the project and by reference to applicable standards, procedures

and practices at the date of issue of this report. For the reasons

outlined above, however, no other warranty or guarantee, whether

expressed or implied, is made as to the data, observations and

findings expressed in this report.

This report should be read in full and no excerpts are to be taken

as representative of the findings. No responsibility is accepted by

SKM for use of any part of this report in any other context.

This report has been prepared on behalf of, and for the exclusive

use of, NSW Office of Water, and is subject to, and issued in

connection with, the provisions of the agreement between SKM and

NSW Office of Water. SKM accepts no liability or responsibility

whatsoever for, or in respect of, any use of, or reliance upon, this

report by any third party.



PAGE viii

Document history and status

Revision Date issued Reviewed by Approved by Date approved Revision type

Draft ToC 20 Jan10 J Wall

Draft Final 12 Feb 10 J Wall T Church 12 Feb 10

Draft Final 3 March 2010 J Wall T Church 3 March 10

Final 26 March 10 J Wall T Church 26 March 10

Distribution of copies

Revision Copy no Quantity Issued to

Final efile 1 Steve Raft, DECCW

Final draft efile 1 Steve Raft, NOW

Final efile 1 Steve Raft, NOW

Printed: 30 March 2010

Last saved: 30 March 2010 07:46 PM

File name: Document1

Author: John Wall

Project manager: John Wall

Name of organisation: NSW Office of Water

Name of project: Darling River Water Saving - Part B

Stage 1 Report

Name of document: I:\ENVR\Projects\EN02513\Deliverables\Stage 3 Report\Draft SOE and Report\Darling R Water Saving Stage 3 Draft TOC 20 Jan 10.doc

Document version: Stage 3 Draft A

Project number: EN02513



PAGE ix

Acknowledgements:

The project was undertaken under the general direction of the Project Steering Committee

comprising representatives of:

� NSW Office of Water, of the Department of Environment Climate Change and Water,

� Environmental Protection and Regulation Group, of the Department of Environment Climate

Change and Water,

� Australian Government Department of the Environment, Water Heritage and the Arts

� State Water Corporation

� Murray-Darling Basin Authority

� Country Energy trading as Country Water

� Broken Hill City Council

� Lower Murray-Darling Catchment Management Authority.

Hydrologic modelling for this project was undertaken by the NSW Office of Water with assistance

and review provided by the Murray-Darling Basin Authority.

Sinclair Knight Merz wishes to thank the members of the Steering Committee, and the staff in their

organisations, for their time and contributions to this study.



PAGE 1

Executive Summary

Sinclair Knight Merz (SKM), in association with GHD Hassall (Economics) and Rob

Learmonth (Cultural Heritage), has been engaged by the NSW Office of Water (NOW), with

joint funding from Department of Environment, Water, Heritage & the Arts (DEWHA), to

undertake the Darling River Water Saving Project (DRWSP) – Part B. Separately, Barma

Water Resources (BWR) was engaged to manage the hydrological inputs for the project,

which are referenced in this report.

The Darling River Water Saving Project (DRWSP, Part A) commenced in 2006, with the

objective of developing a Strategic Plan to secure further, substantial water savings in the

NSW Darling River system, and the following sub-objectives:

• to improve the operational flexibility of river and water storage management to better

meet the needs of water users and the environment;

• to protect the environment and riverine ecology;

• to protect water quality and water security for water users, particularly Broken Hill;

and

• to contribute to economic development of the region.

This report is the major technical report from the DRWSP, and provides an overview of

potential schemes for operational and infrastructure changes to the Menindee Lakes Storage

(MLS) and to augment, and thereby secure, the water supply of Broken Hill (Figure ES1).

The Strategic Plan is a separate document.

The DRWSP will be an important source of information for the Commonwealth and NSW

governments to base future actions to improve water management in the NSW Murray-

Darling Basin. However, there are a number of large government initiatives that have been

instigated since the DRWSP commenced, including Water for the Future policy of the

Commonwealth government, which includes the Sustaining the Basin program in NSW, and

the Basin Plan that is being prepared by the Murray-Darling Basin Authority (MDBA). As

the interactions between these larger initiatives and the DRWSP are being worked through, it

is not possible to recommend a preferred scheme for the MLS and Broken Hill water supply at

this time. However, there are a number of potential options, and several possible schemes are

presented and compared in this report.

This executive summary includes summaries of background; methodology; findings from

analysis of each scheme; and possible issues for the way forward. Much more detail is

provided in the balance of this report.

SINCLAIR KNIGHT MERZ PAGE 2

� Figure ES1 Map showing Menindee Lakes



PAGE 3

Summary of background

Environmental Context

The MLS resulted from the construction of infrastructure in the 1940s-1960s to modify a

natural system of lakes. The Menindee Lakes remains a significant environmental asset in the

semi-arid environment. The Menindee Lakes is an important breeding and refuge site for

migratory and threatened waterbirds, and provides habitat for a diverse and productive

community of organisms (including fish, mammals and reptiles) adapted to the unpredictable

and highly variable water regime characteristic of the Darling River system. Despite being a

storage, the Menindee Lakes are listed on the Directory of Important Wetlands. Further,

several waterbird species known to occupy habitats at Lake Menindee, Lake Cawndilla and

Morton Boolka are listed under the Commonwealth Environment Protection and Biodiversity

Conservation Act 1999, with six listed under the NSW Threatened Species Conservation Act

1995. Several migratory species subject to the Japan-Australia Migratory Bird Agreement and

China-Australia Migratory Bird Agreement have been observed at the lakes. However, more

than 99% of the wetlands that comprise the lakes and floodplain of the Menindee Lakes is

degraded by too much or too little flooding. The southern parts of the MLS are alongside

Kinchega National Park, and any increase in health of these lakes would complement the park.

Cultural Heritage Context

The Menindee Lakes are an element of the Aboriginal cultural landscape and, as such,

operating the MLS in any way impacts on cultural beliefs and traditional values. The

Aboriginal community have been consulted in the DRWSP, and requested an archaeological

survey of the lake beds of Menindee, Cawndilla and Pamamaroo. This survey was conducted

and completed in December 2009, and confirmed that there is a high density of culturally

significant artefacts in some locations in the MLS, protection of which, would be an important

consideration in any future actions.

Current Water Management

There is an existing water supply system for Broken Hill that relies heavily on the MLS,

particularly during dry years. Currently Broken Hill is guaranteed a 21 month supply to be

held at Menindee and when 18 months supply is reached extractions in the NSW Darling

Basin upstream of Menindee are managed to ensure sufficient water in the MLS to supply

Broken Hill for 21 months. If Broken Hill had a more efficient water supply system, less

water would need to be stored in the MLS for this purpose.

Also relevant to the current water management, is that there are rules in the intergovernmental

Murray-Darling Basin Agreement relating to current management of the MLS. The most

significant rule in context of the DRWSP is the 640/480 rule – under which NSW controls the

storage unilaterally for local needs (including water supply to Broken Hill) when the MLS is



PAGE 4

less than about a third full. When the storage is fuller than this, it is managed by the MDBA as

part of the River Murray System to meet demands in NSW, Victoria and South Australia. This

rule is about 50 years old, and alternative rules may be more appropriate for meeting

contemporary local needs. As discussed subsequently in the report, for five of the six

Menindee Lakes schemes, it would be necessary to change the current MLS operations so that

there is less water left in the Lakes to evaporate.

The model uses the 640/480 rules as a tool for adjusting MLS operations, however, this will

affect the existing agreed water sharing in the Lakes. The most appropriate method of

changing the MLS operation is still to be investigated. This is also a matter for consideration

in the MDB Agreement review.

Summary of methodology

The project methodology included community consultation, with a public meeting in each of

Wentworth, Menindee and Broken Hill. The project methodology also included technical

analyses, the four main elements are briefly described below.

1. Detailed hydrological modelling using the best practice computer model of over 90

potential schemes and associated rules using over a century of climatic data modified for

current conditions and climate change scenarios.

a. This modelling included alternatives to the 640/480 rule with the aim of ensuring that

the impacts on existing NSW, Victorian and South Australian entitlements are small.

b. This modelling also included an assumed indicative environmental fill strategy for

those lakes with reduced operational use (Lake Cawndilla in all schemes, and also

Lake Menindee in three schemes). The environmental fill strategy assumed was that,

after seven years, if the lake had not received a sufficient quantity of water for a

sufficient duration, water would be allowed into the lake until this was the case. It

may take several inflow events for the lake to have received a sufficient quantity of

water for a sufficient duration. After a successful watering event, water would be

excluded from that lake for seven years in the model.

2. Cost-benefit analysis in accordance with the Commonwealth Government’s Handbook of

Cost Benefit Analysis that included local tourism and recreation, the impact of value of

properties alongside Lake Menindee, and salinity benefits from more dilution of flows in

the Murray River.

3. Multi-criteria analysis, so that a number of factors that were not readily quantifiable were

also considered.

4. A desk-top Statement of Effects for each scheme that takes account of environmental,

hydrology, socio-economic and cultural heritage effects.



PAGE 5

Alongside the DRWSP, there has been an archaeological survey of the beds of three of the

Menindee Lakes, and an assessment of groundwater resources in the Broken Hill region is

being undertaken by Geoscience Australia.

Comparative Assessment of Schemes

A brief summary of the main findings of the assessment of the Schemes, both MLS and

Broken Hill water supply, is presented in Table ES2 and Table ES3, respectively. More

detail is provided in Sections 4 to 6 of the report with a detailed Schemes’ Statement of

Effects provided in a separate volume to this report.

This assessment demonstrates that it is possible to achieve substantial water savings at MLS.

There will be impacts on: the local lakes’ environment by limiting the times when water will

be stored in some lakes; the local community and Aboriginal culture that prefer water in the

Lakes; and the environment and archaeology at locations for proposed works.

Comparison of the assessment results indicates that MLS Schemes 2-5 best meet the overall

project objectives. While Scheme 1 achieves high water savings by keeping Lakes Menindee

and Cawndilla dry, it would result in unacceptable environment, social and heritage impacts

unless suitable offsets could be developed, which may include using some of the water saved

to increase the health of the lakes after taking account of the environmental water

requirements in the Basin Plan. Scheme 6 provides minor water savings at a relatively high

cost.

Further work will be required fully understand the impact of changed operation rules during

prolonged dry spells. For instance, changing the operating rules for the MLS to draw the

storages down more quickly following a filling event, may reduce the availability of water

during prolonged dry spells for local irrigators who source their supply from the MLS. As a

measure of risk, the percentage of time that the lakes volume would fall below 100GL has

been determined for each of the schemes and is shown in Table ES1.

� Table ES1 Time MLS volumes below 100GL for Schemes

MLS Scheme % of time MLS Volume less than 100GL

Scheme 1 18%

Schemes 2 - 5 7%

Scheme 6 2%

Current Operations 2%

Schemes where the storage volume falls below 100GL more often are inherently more risky.

The hydrologic modelling indicated that all the schemes would have been able to meet

demands under the historic climate sequence with only minor irrigation impacts. However, on

occasions during the simulation the MLS volume was critically low and system failure was

only just avoided by the occurrence of a timely inflow event. There is concern regarding the



PAGE 6

increased risk of the water supply failing to supply consumptive users in the Lower Darling

River. These users include permanent plantings (table grapes, stone fruit, wine grapes etc.),

that require water in every year otherwise these plantings will be lost. The risk to the system

will need to be explored fully, particularly under a climate change scenario before a preferred

scheme is selected.

Depending on cost effectiveness, additional works to facilitate water movement in the MLS is

desirable to achieve both operational and environmental outcomes. If limited environmental

filling events are used to maintain the health of the Lakes, then regulatory works are needed to

best manage targeted watering, periods of retention and draining times. Schemes 3 and 5

provide for additional works with Scheme 3 resulting in the higher water savings (125GL pa)

and an associated benefit:cost ratio (0.7:1).

Broken Hill water supply schemes will need further development, following the findings from

the regional groundwater investigations currently being undertaken for DEWHA. The MAR

scheme will only be developed further provided the groundwater investigations determine that

suitable aquifers exist in the region. The hydrologic modelling demonstrates that Broken Hill

can be supplied in droughts without heavy reliance on water stored in MLS.

The potential water supply schemes investigated offer a range of solutions, including MAR

and surface storage options to secure Broken Hill’s water supply through an investment of

between $31-$50.4M in terms of lifecycle costs ($26-$47.7M in terms of capital cost).



PAGE 7

� Table ES2 – Comparative Analysis for Potential Menindee Lakes (ML) Schemes

Menindee Lake Scheme

Savings

at the

Menindee

Lakes

(GL)

Increased

flow in

Murray

River at

Wentworth

(GL)

% of time1

ML

Volume

less than

100GL

Life-

cycle

cost

($M)

Environmental

Impacts

Cultural Heritage

Impacts

Impacts of

Structures

1. Never fill Lake Menindee

and Lake Cawndilla

(existing structures)

Rule change:

640/480GL to 150/100GL.

248 165 18% 2.9 Conversion of Lakes Menindee and

Cawndilla into dry land habitat (loss

of wetlands). Significant impacts on

Lakes. Improved riverine habitat

downstream of lakes

Significant impacts on

Aboriginal community,

particularly no water in

Lake Menindee.

Draining channel

impact (cultural

heritage and

environmental) on bed

of Lake Pamamaroo

2. Reduce use of

Lake Menindee and

Lake Cawndilla


Rule change:

640/480GL to 210/200GL.

125 71 7% 2.9 Return to more ephemeral regime in

Lake Menindee and Lake Cawndilla

utilising assumed environmental

filling. Changed ecosystem in Lake

Menindee and Lake Cawndilla.

Improved riverine habitat

downstream of lakes

Impacts on Aboriginal

community, particularly

less water in Lake

Menindee.

Same as Scheme 1

3. Reduced use of

Lake Menindee and

Lake Cawndilla

(new structures)

Rule change:

640/480GL to 210/200GL

125 2 71 7% 70.9 Same as Scheme 2 with increased

flexibility in managing water in Lake

Menindee and Lake Cawndilla for

environmental outcomes.

Same as Scheme 2 for

water regime but

increased impacts at new

sites

Increased impact of

structures on cultural

heritage and local

environment at each

site



PAGE 8

Table ES2 – Cont.

Menindee Lake Scheme

Savings

at the

Menindee

Lakes

(GL)

Increased

flow in

Murray

River at

Wentworth

(GL)

% of time1

ML

Volume

less than

100GL

Life-

cycle

cost

($M)

Environmental

Impacts

Cultural Heritage

Impacts

Impacts of

Structures

4. Reduced use of

Lake Cawndilla


Rule change:

640/480GL to 210/200GL

61 30 7% 18.6 Return to more ephemeral regime in

Lake Cawndilla utilising assumed

environmental filling with Lake

Menindee remaining relatively

unchanged. Changed ecosystem in

Lake Cawndilla. Improved riverine

habitat downstream of the Lakes.


Community, particularly

less water in Lake

Cawndilla. Impacts at

Morton Boolka site

Draining channel

impact (cultural

heritage and


of Lake Pamamaroo.

Regulator and

embankment impacts

at Morton Boolka site

5 Reduced use of

Lake Cawndilla

(new structures)

Rule change:

640/480GL to 210/200GL

74 27 7% 70.9 Same as Scheme 4 with increased

flexibility in managing water in Lake

Menindee and Lake Cawndilla for

environmental outcomes.

Same as Scheme 4 for

water regime but with

increased impacts at new

sites

Increased impact of


heritage and local

environment at each

site compared to

Scheme 4.

6. Reduced use of

Lake Cawndilla

(new structures)

Existing Rules:

640/480GL

34 2 2% 70.9 Same as Scheme 5 Same as Scheme 5 Same as Scheme 5

1 - Under the current operating regime the Menindee Lakes Storage volume would be expected to fall below 100GLfor 2% of the time on average.

2 - The increased outlet capacity included in Scheme 3 was not specifically modelled. The model run for Scheme 2 was adopted for the purposes of this analysis as this provided a

conservative estimate of water savings and downstream impacts. In actuality water savings for this option are likely up to 10GL greater (as indicated by comparison of Schemes 4 and 5)



PAGE 9

Table ES3- Summary of Statement of Effects – Potential Broken Hill Water Supply Schemes

Scheme Environmental Impacts Social Economic Impacts Cultural Heritage Impacts Impacts of Structures

BH1 – Managed Aquifer Recharge

Scheme not fully developed at this stage to assess impacts

Cost of $31M for bank filtration scheme. Greater cost for engineered water treatment plant.

Minor impact on Menindee community



BH2 – Lake Tandure (LT) and Upgraded Weir 32

LT and Lake Wetherell (LW) operated at current full operating levels for longer during drought sequences

Higher operating levels in Weir 32 during droughts

LT site impacts

Cost of $37M

Minor impacts on Menindee community

Benefit of water levels maintained longer in the Darling River and LT during droughts

LT impacts


Environmental and cultural heritage impacts of works at LT bed and banks

BH2 – LT, Upgraded Weir 32 and Copi Hollow (CH)

Same as BH2 above plus CH site impacts

Increased cost to $50M due to additional works for CH scheme

Benefits to regional community of maintained storage at CH with improved water quality

Same as BH2 above Same as BH2 above

BH2 – LT and 5GL Designated Storage (Texas Downs, TD)

LT and Lake Wetherell (LW) operated at current full operating levels for longer during drought sequences

TD site impacts

Cost similar to LT + Weir 32 Scheme.



LT and TD impacts


Environmental and cultural heritage impacts of works at LT bed and banks and Texas Downs site.

BH3 – Designated 18GL Storage (Texas Downs)

Substantial impacts at TD based on substantially larger site footprint

Costs similar to above.


Similar to above plus substantially increased impacts at TD




PAGE 10

Findings

Community Consultation

Key messages received from the regional community were:

� the importance of considering the MLS in the context of water scarcity in the whole Darling

Basin both in this current drought and subsequently, and associated equity considerations;

� that Copi Hollow is an important regional recreational feature;

� the distribution of any operational and maintenance costs associated with any changed water

supply system for Broken Hill is important;

� the cultural heritage significance of the Lakes; and

� the reliability of supply for water uses.

Technical Analysis

A brief summary of the main findings of the technical analysis of the potential MLS schemes are in

Table ES4, and of the potential Broken Hill water supply schemes are in Table ES5.

Environmental information on each scheme is provided in the Statement of Effects later in this

report. Other MLS schemes involving long banks to divide Lake Menindee into two cells had

previously been eliminated due to cost, engineering and environmental and cultural heritage

impacts compared to other schemes.

Other Broken Hill water supply schemes including covered storage basins near the Menindee

Lakes or at Kinalung, and a pipeline from the Murray River, had previously been eliminated on

cost grounds.

Darling River

Weir 32 pool

near Menindee



PAGE 11

� Table ES4 - Summary of Technical Analysis for Potential MLS Schemes MLS

Scheme

Main elements Savings

at the

MLS

(GL)

Capital

cost

($M)2

Operation &

Maintenance

Costs ($M)2

Lifecycle

cost2

($M)

1 Lakes Menindee and Lake

Cawndilla are kept permanently

dry, use of existing outlet

structures plus minor engineering

structures (set A3). 640/480 GL

rule changed to 150/100 GL rule.

248

2.7

0.2

2.9

2 Reduced operational use of Lake

Menindee and Lake Cawndilla,

environmental fill, use of existing

outlet structures plus minor

engineering structures (set A3).

640/480 GL rule changed to

210/200 GL rule.

125

2.7

0.2

2.9


Menindee and Lake Cawndilla,

environmental fill, considerable

engineering works (set B4).


210/200 GL rule.

125 6

59.2

11.7

70.9


Cawndilla. Some engineering

works (set C5). 640/480 GL rule

changed to 210/200 GL rule.

61

16.9

1.7

18.6


Cawndilla. Considerable



210/200 GL rule.

74

59.2

11.7

70.9


Cawndilla. Considerable


640/480 GL rule unchanged.

34

59.2

11.7

70.9

1 – Costs of Broken Hill water supply system are shown separately in Table ES2. 2 - The lifecycle cost ($2009) is not necessarily the cost to government, which would emerge from subsequent negotiations. 3 - Engineering structures set A - Lake Pamamaroo drainage channel. 4 - Engineering structures set B - Lake Pamamaroo drainage channel; Morton Boolka regulator / fishway; enlarged Lake

Menindee regulator, outlet channel and drainage channel; enlarged Lake Cawndilla outlet and drainage channel 5 - Engineering structures set C - Lake Pamamaroo drainage channel; Morton Boolka regulator / fishway. 6 - The increased outlet capacity included in Scheme 3 was not specifically modelled. The model run for Scheme 2 was

adopted for the purpose of this analysis as this provided a conservative estimate of water savings and downstream impacts. In actuality water savings for this option are likely up to 10GL greater (as indicated by comparison of Schemes 4 and 5).



PAGE 12

In Table ES4, the savings and increased flow, are long term averages that take account of dry

sequences where the savings may be minimal. The difference in savings at the MLS and the

increased flow in the Murray River at Wentworth, is the losses/environmental use of water in the

lower Darling, including the Anabranch of the Darling River. Much of these flows would be

unregulated flow in the Darling River past the MLS, rather being routed through the MLS.

It is very likely that there would be some requirement for environmental filling of any lakes with

reduced operational use (Lake Cawndilla in all schemes except Scheme 1, Lake Menindee in

Schemes 2 and 3). Whether the water required to do this is provided from the savings or from

another source (e.g. other water from Water for the Future or a NSW program) is yet to be

determined. Any of the savings used for environmental fill would reduce the flow in the Murray

River at Wentworth. All of these schemes protect other uses (including irrigation interests)

associated with the MLS in NSW, Victoria and South Australia, and the impact on regional

employment of implementing any scheme is expected to be marginal.

� Table ES5 - Summary of technical analysis of potential Broken Hill Water Supply Schemes

BH

Scheme

Main elements Capital

costs

($m)3

Operating and

maintenance

costs ($m)3

Lifecycle cost2

($m)#

BH1 Managed Aquifer Recharge1 – pumping

to and from a confined aquifer.

26.0 5.0 31.0

BH2 Use of Lake Tandure plus either:

• Upgraded Weir 32

• Upgraded Weir 32 + Copi Hollow

• Nearby designated 5 GL storage

34.8

47.7

33.1

2.1

2.7

2.5

36.9

50.4

35.6

BH3 Nearby designated 18 GL storage 35.0 1.4 36.4

1 - The Managed Aquifer Recharge option is currently being investigated in another project by Geoscience Australia 2 - The lifecycle cost ($2009) is not necessarily the cost to government, which would emerge from subsequent negotiations. 3 - Costs in 2009 $s

So as to secure the water supply for Broken Hill, changes to the Broken Hill water supply scheme

must be implemented with any MLS scheme. From Table ES5, there are several options that

secure the Broken Hill water supply and allow substantial savings from the MLS for less than

$50.4m. Additional water quality treatment for Broken Hill would increase operational flexibility

but be at additional cost. The Copi Hollow storage option would support the regional community

and tourism by maintaining a more persistent water level and also improving water quality.

However, if Copi Hollow had the dual purposes of being a recreational facility and part of a water

supply system at some times, any water quality issues may need to be monitored and managed.



PAGE 13

The economic analysis findings for the MLS Schemes, combined with the lowest cost of the

Broken Hill Schemes, are in Table ES6. There are a number of unquantified impacts, including:

the matters identified by the community consultation mentioned previously; the flow-on effects to

the regional community of any infrastructure construction program; and the benefits from the

downstream usage of the savings.

� Table ES6 - Summary of Net Social Benefit & Benefit Cost Ratio

MLS Scheme Net Social Benefit (Cost) ($M) Benefit: Cost Ratio

1 103 4.5:1

2 26 2.0:1

3 (25) 0.7:1

4 (4) 0.9:1

5 (50) 0.4:1

6 (61) 0.2:1

The Schemes in Table ES6 that reduce the operational use of both Lakes Menindee and Cawndilla,

result in the greatest net social benefit. However, the findings are indicative only, and would be

affected by:

� in regard to MLS Schemes 2-6, increasing the frequency of which an environmental fill

occurred and hence, reducing the quantity of water savings. (This does not apply to Scheme 1

as this scheme has been modelled with no environmental fill);

� incorporating the unquantified factors, including the benefits resulting from the use of the

savings for environmental purposes;

� the actual scheme selected for Broken Hill, which may be different to the assumed scheme for

populating Table ES6;

� any offset measures that governments decide to implement; and

� how climate change affects the availability and price of water.

The next step is for governments to decide whether to proceed, and if so, to agree on a proposal

that integrates a MLS scheme and a Broken Hill water supply scheme.



PAGE 14

Issues for consideration

Issues that may require attention in developing any plans to move forward with any specific

proposal are:

1. conformance with legislation:

� the NSW Environmental Planning & Assessment Act 1979, where the NSW Department

of Planning is the approval authority, which includes specific requirements about

environmental impact assessment and public consultation in regard to any proposal;

� the Commonwealth Environment Protection and Biodiversity Conservation Act 1999

(EPBC Act) because it would likely affect ‘matters of national environmental

significance’;

� the Commonwealth Water Act 2007 which includes the Murray-Darling Basin Agreement,

and requirements for a Basin Plan;

2. the Basin Plan will include an environmental watering plan and sustainable diversion limits

that could have implications for the way that the MLS is managed;

3. how the savings would be assigned and managed through operating rules and entitlement to

achieve environmental outcomes (and when and where) while avoiding third party impacts;

4. equity considerations, and linking of Upper Basin water saving and management initiatives

with those in the lower Darling Basin;

5. optimising arrangements to secure the water supply of Broken Hill, including the allocation of

operational and maintenance costs;

6. arrangements to protect the cultural heritage values of the lakes, particularly associated with

any works in the lakes;

7. management of Copi Hollow for a range of purposes;

8. the reliability of supply of water to users in NSW, Victoria and South Australia;

9. whether it is necessary to change the current Murray-Darling Basin Agreement, which would

involve the agreement of a Council of Commonwealth, NSW, Victorian, South Australian,

Queensland and the ACT Ministers;

10. planning for the adaptive environmental management for all or part of the MLS; and

11. implementation timeframes: it will take time to hone a specific proposal, and then the NSW

planning approval process would be expected to take around 18 months. Construction of any

works may take one or several additional years.



PAGE 15

1. Introduction

1.1. General

Sinclair Knight Merz (SKM) in association with GHD Hassall (Economics) and Rob Learmonth

(Cultural Heritage), have been engaged by the NSW Office of Water (NOW to undertake the

Darling River Water Saving project – Part B. The Department of Environment, Water, Heritage &

the Arts (DEWHA) jointly funds the project with NOW and the project is governed by a Steering

Committee comprising representatives from key stakeholders and a Government Officials’

Committee (GOC). Separately, Barma Water Resources (BWR) was engaged to manage the

hydrological inputs for the project, which are referenced in SKM’s study and this report.

Part of the scope of this study, as described in the project brief dated August 2008, is to review and

further develop, the six water savings schemes proposed in Part A. The concept designs and

schemes are described in the report by Maunsell (2007), Darling River Water Savings Project Part

A. The scope also includes a review of options for improving the security of supply for Broken Hill

and high security (HS) users.

The overall purpose of this project is to identify water savings based on reducing system losses

(evaporative, seepage, evapo-transpiration) and through using water more efficiently. This project

is not concerned with water recovery through purchasing entitlements, which is being pursued

through other Government programs. A range of measures that could be implemented to achieve

water savings was investigated, including:

� Reducing evaporative losses from large Government owned storages (e.g. Menindee Lakes)

and farm dams by measures such as:

� Changing operating rules to minimise surface areas as storages are drawn down. This may

require structural measures such as improved outlets.

� Constructing divider walls to produce cells so that surface areas can be reduced as storages

are drawn down.

� Using covers or mono-layers to reduce surface evaporation.

� Improved river operations to reduce flows surplus to the requirements at the time by measures

such as:

� Adopting real time data acquisition technology to provide more accurate information for

operators to assess required releases to meet irrigation orders and environmental flow

requirements.

� Implementing en-route storages to capture and re-use operational excess.

� Developing better tools to estimate all components of the water cycle in order to provide

more accurate information for operators to assess required releases.

� Improved on-farm water use efficiency through adoption of improved management measures

and adoption of modern water application methods.



PAGE 16

This report represents the final report for this project, being the culmination of a three staged

approach. SKM produced a Stage 1 report titled, “Darling River Water Saving – Part B Stage 1

Report” in August 2009 providing details on the refinement of the Part A Schemes and

recommendations for short listed “Schemes” or options that could comprise a Scheme. These

recommendations were adopted by the Steering Committee (SC) and became the basis for further

investigation and refinement as part of the Stage 2 work. SKM produced a Stage 2 report titled,

“Darling River Water Saving – Part B Stage 2 Report” in January 2010, which detailed the further

feasibility studies for potential schemes, including the hydrologic modelling outcomes. The

Steering Committee and the Government Officials’ Committee (GOC) considered the Stage 2

schemes and adopted the schemes that are the subject of this final report for further investigation.

These include six (6) schemes for water savings at Menindee Lakes and three (3) schemes for

reliable water supply to Broken Hill. Governments may use this report to determine a preferred

scheme for detailed design and implementation, subject to the necessary approval processes.

The hydrologic assessment of potential water savings was made using the NSW version of the

Murray Monthly Simulation Model (MSM) and the MDBA’s BIGMOD program. Enhancements

to the MDBA’s model undertaken for this project, now allow the model to quantify water savings

and potential third party impacts (irrigation, salinity, flows in the Anabranch and to SA, etc) for a

range of structural and non-structural options at the MLS, test mitigation measures, consider

climate change impacts and assist to optimise potential schemes.

Detailed accounts of the modelling process and outcomes are provided in a separate project report

by BWR Consulting “Hydrologic Assessment of Water Savings Strategies for the Menindee

Scheme and Upper Darling Basin, Darling River Water Saving Project – Part B, February 2010”.

A critical component of the project investigation, the hydrologic modelling, explored a

combination of:

� the implementation of structural (engineering) options in Menindee Lakes, such as, enlarged

outlet regulators and channels, designated water supply works for high security users (Broken

Hill and others), and

� operational rules that are guided by the Murray-Darling Basin Agreement (640/480 rule) that

defines control of the Lakes for different volume regimes and obligations to store and supply

water

� Impacts of water savings measures in the NSW Upper Darling Basin.

The hydrologic modelling identified that the major influence on water saving in Menindee Lakes

outcomes was the manipulation of the operational rules.

Separately, SKM will also produce a NSW Darling Basin Strategic Water Saving Plan. The

purpose of the Strategic Plan is to outline a range of measures that can be implemented over the

short to medium term to achieve substantial water savings in the NSW Darling River system. The

Strategic Plan complements NSW and national actions aimed at improving water management in



PAGE 17

the Murray-Darling Basin in order to increase environmental flow availability and achieve other

benefits, such as improving security of supply to Broken Hill and delivering sustainable water

management. The Strategic Plan will contribute to, and is required to be consistent with, the

objectives of the Murray-Darling “Basin Plan” currently being developed by the MDBA.

1.2. Structure of Report

This report is structured as follows:

� Executive Summary

� Section 1 Introduction

� Section 2 Background

� Section 3 Development of Schemes

� Section 4 Assessment of Schemes

� Section 5 Menindee Lakes Water Saving Schemes

� Section 6 Broken Hill Water Supply Schemes

� Section 7 Policy Issues

� Section 8 Discussion and Actions

� Appendices

� Appendix A - Hydrologic Modelling Results

� Appendix B - GHD Hassall Socio-economic Report

� Appendix C – Broken Hill Water Treatment

� Separate volume - Schemes’ Statement of Effects



PAGE 18

2. Background

2.1. The NSW Darling Basin

The entire Darling River Basin covers an area of 700,000 km2 with approximately one third of its

area in Queensland and two thirds in New South Wales. The main trunk of the river system rises in

the Great Dividing Range close to the New South Wales-Queensland border and travels in a south

westerly direction for 2,700km before emptying into the Murray River at Wentworth. Along the

way, it changes name from the Macintyre to the Barwon and finally to the Darling just below the

Culgoa Junction. The Basin is illustrated in Figure 2-1.

The headwaters have a maximum elevation of 1,500 metres above sea level, but the majority of the

Basin lies below 500 metres, with 60% of the Basin being below 300 metres. At Wentworth, the

Darling is just 50 metres above sea level.

The Darling and its major tributaries are low gradient, low energy rivers over the majority of their

length. A number of tributaries, including the Condamine-Balonne, Gwydir, Namoi, Macquarie and

Paroo have formed a series of channels that distribute their flows across large areas creating major

wetlands, notably the Gwydir Wetlands, the Macquarie Marshes, the Narran Lake and the Paroo

Overflow. As a result, much of the flow in the tributaries does not make it through to the Darling

River.

The upper portion of the Basin produces most of the runoff, with rainfall being summer dominated,

whilst rainfall in the lower portion of the Basin is winter dominated (WMA 2007A). Catchments

located on the eastern edge of the Basin, such as the Condamine/Balonne, Border, Gwydir, Namoi

and Macquarie produce most of the runoff. Whereas those located in the north-west, such as the

Warrego and Paroo, generate low rates of runoff.

Annual rainfall exhibits large variations between years. The highest annual rainfall observed over

the last 100 years along the eastern edge of the Basin was 1800mm (approx.) and the lowest was

600mm (approx.). Along the Basin’s western edge, the highest annual recorded rainfall was 700

mm and the lowest was less than 100mm (WMA 2007A).

Over the last 100 years, rainfall in the region has included wet and dry periods which have

persisted for periods of 20-35 years. The wet/dry cycles have a considerable impact on flow

variability. For example in the period 1922 to 1949 the average flow at Bourke was 5,900 ML/day,

whereas between 1950 and 2000 the average flow was 12,700 ML/day (WMA 2007A).


� Figure 2-1 Darling River Basin



PAGE 20

Runoff rates in the Darling system are relatively low with the Darling contributing just 30% of the

total runoff in the Murray-Darling Basin (approximately 7000 GL/yr), even though the Darling

accounts for 70% of the total Murray-Darling catchment area (WMA 2007A). Flows in the Darling

Basin are also highly variable. For example, the minimum annual discharges recorded in the

Namoi, Culgoa and Border Rivers were all below 10% of their annual discharge, and their

maximum flows were between 400% and 800% of their average annual flow (WMA 2007A).

Flows in the Darling have been significantly impacted by extraction for irrigation. The level of

extraction varies across the Basin. The Gwydir exhibits the highest proportion of extraction with

only one third of the natural flow remaining in the River. The Warrego and Namoi exhibit the

lowest level of extraction with approximately three quarters (75%) of the natural flow remaining in

the river. Overall, just under half (50%) of the mean annual natural flow, discharges into the

Murray River.

Flows often diminish in the downstream direction as losses due to evaporation and seepage exceed

contributions from rainfall, particularly for tributaries that include distributary channels and

wetlands. The end of system flows in the Gwydir, Macquarie, Condamine-Balonne, Paroo, and

Warrego tributaries are all lower than their mid river flows (WMA 2007A). However, the channel

systems in the lower reaches of the Namoi and Moonie are relatively “efficient”, meaning that a

greater proportion of their mid river flow discharges into the Darling. The Namoi in particular is a

significant contributor to Darling River flows, providing 23.1% of total inflows (WMA March

2007). It is also notable that the average annual flow discharging into the Murray River is only

59% of the average annual flow recorded in the Darling River at Bourke.

The total volume of major dams on the Darling River Basin is 5,129 Gigalitres, equivalent to about

70% of the average annual runoff. The Menindee Lakes Storage (MLS) is the largest water storage

in the Darling Basin at over 2,000 Gigalitres. The storages are located in the upper reaches of the

Darling River tributaries. (WMA 2007A).

Most irrigation water in the northern valleys is used for broad acre crop production, chiefly cotton.

Large on-farm storages provide additional flow regulation, particularly in the Condamine-Balonne,

Border Rivers, Gwydir and Namoi systems. The total volume of on farm storages in the upper

Darling Basin is now equivalent to 60% of the total volume of major dams (WMA 2007A). There

are also many “hillside dams” in the Basin, although numbers and volumes have never been

systematically assessed.

The average annual surface water use in the Darling Basin is estimated to be approximately 3,200

Gigalitres and is primarily used for irrigation, but a portion is also used for stock, domestic and

town water use. Irrigation extraction predominantly occurs during summer.



PAGE 21

Environmental Assets

The Upper Darling Basin contains of a multitude of riverine habitats including billabongs,

floodplains and wetlands that are vital for the maintenance of several different species of flora and

fauna. Groundwater plays an important role in maintaining these riverine habitats, especially

during periods of very low or no flow. The Basin includes thousands of wetlands of varying size

with significant wetlands including the Paroo Overflow Lakes, Narran Lakes, the Gwydir Wetlands

Lake Goran and Macquarie Marshes. These wetlands are home to a variety of native and

endangered waterbird and fish species, as well as an array of aquatic invertebrates, which provide

water quality services as well as food for predators.

Impacts on Flow Regulation

The abundance and diversity of aquatic invertebrates is dependent on the flow regime, although

knowledge of the exact driving mechanisms is lacking (Boulton 1999). Many fish and waterbirds

have their breeding cycles synched to the flow regime. Therefore, alterations to flow, particularly

in wetland areas, can adversely impact the abundance and diversity of these animals.

A reduction in minor flooding (1 in 2 year flood) reduces in-channel flows, which results in

reduced accessibility of fauna to ‘within channel habitat’ (WMA 2007B). Reductions in small to

medium floods (1 in 5 year flood), results in reduced nutrient and aquatic invertebrate transfer from

the floodplain to the river channel. This then means that the food supply (invertebrates and

nutrients) to fauna in the river channels is severely impaired.

Consideration of the natural flow regime, as well as groundwater inflows and climatic influences is

important when developing environmental watering strategies, especially for wetlands. Affected

wetlands in the Upper Darling Basin have been identified, based on the severity of alterations to the

natural flow regime, and are described below (adapted from WMA 2007B):

� Narran Lakes Nature Reserve: A 52% reduction in the average inflow volume and a 63%

reduction in the frequency of the 1 in 5 year flood

� Wetlands of the Macintyre and Weir Rivers: Approximately an 11% to 40% reduction in the

average inflow volume and a 26% to 40% reduction in the frequency of the 1 in 5 year flood.

� Gwydir wetlands: A 24% reduction in the average inflow volume and a 26% reduction in the

frequency of the 1 in 5 year flood.

� Macquarie and Castlereagh Marshes: A 22% reduction in average inflow volume and a 39%

reduction in the frequency of the 1 in 5 year flood.

� Namoi River Floodplain and Lake Goran : A 16% reduction in frequency with which flows

result in filling of all wetlands and 26% reduction in the frequency of floods which fill half of

the wetlands.



PAGE 22

2.2. Darling River Basin Policy, Planning and Management

2.2.1. Murray-Darling Basin Plan – Water Act 2007

The Water Act 2007 came into effect on 3rd March 2008 in order to enable the water resources of

the Murray-Darling Basin to be managed in the national interest, optimising environmental,

economic and social outcomes. The Water Act 2007 replaces the Murray-Darling Basin Act 1993

and the Murray-Darling Basin Agreement is an appendix to the Water Act 2007.

The objectives of the Water Act 2007 will be achieved through the development and

implementation of a Basin Plan, which is the responsibility of the Murray-Darling Basin

Authority.

Murray-Darling Basin Agreement

The Murray-Darling Basin Agreement 1993 was signed by the governments of the Commonwealth,

New South Wales, Victoria and South Australia in 1992 and given full legal status in 1993.

Subsequently Queensland became a signatory in 1996 and the Australian Capital Territory became

a signatory in 1998. The 1993 Agreement replaced the earlier River Murray Waters Agreement

1915 which was introduced primarily to ensure that the three signatory states (NSW, Victoria and

South Australia ), but particularly South Australia, would receive their agreed shares of the

Murray’s water. The 1993 agreement was introduced to provide a basis for integrated management

of the Murray-Darling Basin in response to emerging issues, such as rising groundwater levels and

salinisation, which were not being effectively managed under the previous agreement.

The Agreement introduced institutions at the political and bureaucratic levels to underpin its

implementation including:

� The Murray-Darling Ministerial Council;

� The Murray-Darling Basin Authority.

The current Murray-Darling Basin Agreement (now Schedule 1 to the Water Act 2007) specifies:

� The sharing of flow between NSW and Victoria including minimum monthly entitlements and

additional dilution flows to South Australia;

� Rules for the operation of the River Murray System including Menindee Lakes, Lake Victoria,

Hume Dam and Dartmouth Dam, which are managed by the MDBA.

The MDB Agreement is currently being reviewed by a Basin Officers Committee (BOC)

comprising senior officers from each jurisdiction, and will be more fully reviewed once the Basin

Plan is finished (as per the requirements of the Water Act, 2007).

The Basin Plan

The ecology of the Murray-Darling Basin is under enormous stress as a result of past water-

allocation decisions, prolonged drought, natural climate variability, and emerging climate change.

Furthermore, there is increasing competition amongst consumptive users for available water. The

sustainability of the existing water use and management arrangements is an ongoing issue. In order



PAGE 23

to address this, the Murray-Darling Basin Authority has been given the task of developing a

strategic plan for the integrated and sustainable management of water resources across the whole

Murray-Darling Basin. This “Basin Plan” will provide a fundamental framework for future water-

planning arrangements, and will be based on the best and latest scientific, social, cultural and

economic knowledge, evidence and analysis. The initial “Basin Plan” is expected to be released as

a draft in mid 2010 and concluded in 2011, but will be continuously reviewed and amended in

response to changing knowledge and information.

2.2.2. Other Initiatives

National Water Initiative

The National Water Initiative (NWI) aims to achieve more efficient, equitable and sustainable

management of Australia’s water resources. The NWI objectives are:

� Protect and enhance the natural environment.

� Ensure efficient use of water.

� Protect security of supply to existing licence holders.

� Provide allocations in a fair and equitable manner.

� Provide resource managers and users with flexible arrangements to adjust allocation of

entitlements in the future, should there be emerging environmental issues, declining

availability due to climate change, and changing market forces (including processes to

facilitate trading of entitlements).

� Ensure the most beneficial use of water.

� Ensure that all water sources are considered including recycled water.

� Ensure that surface water and ground water interactions are understood and accounted for.

Water Management in NSW

Water resources in NSW are managed under the Water Management Act 2000, which aims to

ensure adequate provisions for environmental water and secure access for consumptive users. The

Water Management Act 2000 consolidated water reforms in NSW, whilst continuing certain

provisions of pre-existing Acts (such as the Water Act 1912). Key principles of the Water

Management Act 2000 are:

� Water sources, floodplains and dependent ecosystems ( including groundwater and wetlands)

should be protected and restored and where possible, land should not be degraded;

� The water quality of all water sources should be protect and wherever possible enhanced;

� The sharing of water from a water source must protect the water source and its depended

ecosystems.

The provisions of the Water Management Act 2000 are gradually being implemented as Water

Sharing Plans are introduced progressively across the State. These Water Sharing Plans direct how

water is to be allocated, used and managed and how water resources are to be protected. Water

Sharing Plans have been implemented for the majority of the State’s major inland regulated rivers,



PAGE 24

various coastal and inland unregulated rivers, and selected groundwater systems. The Water

Sharing Plan for the NSW Murray & Lower Darling Regulated Rivers Water Sources was

instigated in 2003 and includes the MLS.

International Agreements

� Ramsar Convention The Australian Government is a contracting party to the Convention on

Wetlands of International Importance (Ramsar, 1971) an international treaty for the

conservation of listed wetland sites. Contracting parties are required to implement measures

that will protect the biodiversity, ecological, hydrologic, cultural and social values of these

wetlands. NSW contains 11 Ramsar sites, across a range of wetland types including the

Macquarie Marshes, Gwydir Wetlands and Narran Lakes.

� CAMBA, JAMBA, ROKCAMBA Agreements The Australian Government has also signed

agreements with China (CAMBA), Japan (JAMBA) and South Korea (ROKAMBA) to assist

in the conservation of migratory birds that travel between these countries. The major wetlands

in NSW, particularly the Ramsar listed sites, are critical habitats for these migratory birds and

the preservation of these wetlands supports the obligations under these agreements.

Existing Water Saving Initiatives

Recent water resource initiatives by both the State and Commonwealth governments have initiated

several water efficiency projects in the Darling Basin. A brief description of these projects is

provided in the following sections.

� Water for the Future In April 2008, the Australian Government announced $12.9 billion for

investment in ‘Water for the Future’, a ten year initiative to prepare Australia with a future

with less water. Water for the Future focuses on four national priorities: taking action on

climate change, using water wisely, securing our water supplies, and supporting healthy rivers.

A key focus of the Water for the Future is to acquire water through a $3.1 billion water

purchasing program and a $5.8 billion investment in the sustainable rural water use and

infrastructure program. Under this latter program, the Australian Government agreed in

principle to provide $3.7 billion for significant state-based water infrastructure reform projects

in Queensland, NSW, Victoria, South Australia and the ACT.

The Australian Government provided in-principle approval for five NSW projects, subject to

due diligence. The following four projects, fully funded by the Australian Government and

delivered by the NSW Government, form an integrated package called the NSW “Sustaining

the Basin” (STB) strategy.

� NSW Metering Project

� Healthy Floodplains Project

� Irrigated Farm Modernisation Project

� Basin Pipe Project



PAGE 25

The fifth project, the Private Irrigation Infrastructure Operators (PIIO) Program is a

$650 million program funded and delivered by the Australian Government. The Program aims

to acquire water entitlements resulting from water savings generated by the implementation of

eligible projects to improve the efficiency and productivity of water use and management, both

off and on-farm, by private irrigation infrastructure operators in NSW, and which also secure a

sustainable future for irrigation.

� NSW Rivers Environmental Restoration Program. The NSW Rivers and Environmental

Restoration Program (RERP) is a Commonwealth funded initiative being implemented by the

NSW Government to restore the environmental health of threatened rivers and wetlands in key

catchments across NSW. High value ecological sites include the Macquarie Marshes in the

Macquarie Valley, Gwydir wetlands in the lower Gwydir system, lower catchment wetlands in

the Lachlan Valley, and Yanga National Park in the Murrumbidgee Valley.

� The Living Murray. The Living Murray Initiative was established in 2002 by the Murray–

Darling Basin Ministerial Council in response to substantial evidence that the health of the

River Murray System was in decline and hence threatening the Basin’s industries,

communities, and natural and cultural values. On 25 June 2004, the Premiers of New South

Wales, Victoria and South Australia, the Chief Minister of the Australian Capital Territory,

and the Prime Minister signed the Intergovernmental Agreement on Addressing Water Over-

Allocation and Achieving Environmental Objectives in the Murray–Darling Basin. The

agreement commits $700 million (initially $500M with an additional $200M in 2006) over five

years to address water over-allocation in the Murray–Darling Basin. Investment in The Living

Murray has resulted in volumes of General Security Entitlement and Supplementary Water

Access Licence being purchased in the Lower Darling, the allocations from which are to be

used at icon sites along the Murray River.

� Water for Rivers. Water for Rivers was established by the NSW, Victorian and

Commonwealth governments in 2002 to acquire water for the Snowy and Murray Rivers to

enable additional environmental flows of 212 GL and 70 GL, respectively by June 2012.

Water for Rivers investigates, funds and commissions water efficiency projects, and if

necessary, purchases water entitlements from willing sellers in the Murray River upstream of

the South Australian border, the Murrumbidgee River system, and the Goulburn River system.

In common with the Living Murray Project this scheme will not provide water savings in the

Darling River but may provide valuable information on lessons learned from the

implementation of water saving schemes.

� RiverBank - NSW RiverBank is a $105 million environmental fund set up by the NSW

Government to buy water for our most stressed and valued inland rivers and wetlands for five

years up until 2011. The program is part of the broader City and Country Environment

Restoration Program, announced by the NSW Premier in November 2005. In 2007 the

Australian Government also announced that it will support investment in environmental water



PAGE 26

purchases through RiverBank, funded by the National Water Initiative Water Smart Australia

Program.

2.3. Menindee Lakes

The Menindee Lakes are both a significant environmental asset and the main water supply storage

in the lower Murray-Darling River system. They are located on the Darling River approximately

200 km upstream of the junction with the Murray River and 110 km east of Broken Hill. The

Lakes are the principal water supply storage for the City of Broken Hill and play a key role in

meeting South Australia’s monthly water requirements, as well providing water for local irrigators

and stock and domestic use. A layout of the Lakes is shown in Figure 2-2.

The principal lakes are Menindee, Cawndilla, Pamamaroo and Wetherell, smaller lakes including

Tandure, Speculation, Spectacle, Bijiljie, Balaka, Malta, Eurobili and Emu. Under natural

conditions the Lakes were a series of shallow depressions that would fill intermittently from floods

and then either drain to the Darling River or slowly evaporate, undergoing wetting and drying

sequences. The storage scheme was formed in the 1960’s by constructing a series of

embankments, channels and regulators to allow water to be held following floods and released as

required to meet town water supply and lower Darling and Murray system needs. The Lakes are

owned by the NSW Government, but are jointly managed by NSW government agencies (State

Water Corporation, NSW Office of Water) and the Murray-Darling Basin Authority. The lakes are

relatively shallow with a large surface area for the volume of storage. It has a combined storage

capacity at Full Supply Level (FSL) of 1,680 GL and a surface area of 460 km2. As a result, they

incur high evaporation losses with an average long term loss of approximately 426 GL/yr (Webb

McKeown WMA2007).

The Lakes are an important environmental asset providing habitat for a range of native water fowl,

fish, aquatic and riparian vegetation a number of which are threatened species, including migratory

birds covered under various international agreements.

The Lakes and surrounding areas include many sites of significance to Aboriginal heritage and

culture, including burial grounds. They also provide an important recreational function

underpinning the local tourism industry.

It should be noted that since the construction of the MLS, the focus of the Lakes has been for water

storage and supply. The filling and draining regimes adopted have been for water supply efficiency

and effectiveness, not necessarily for the health of the Lakes. Future environmental planning

processes may seek to change the rules associated with operation of the Lakes to achieve greater

environmental benefit.


� Figure 2-2 Menindee Lakes



PAGE 28

2.3.1. Environment of the Lakes

The Menindee Lakes are a significant environmental asset. The Lakes represent a unique

ecosystem in the semi-arid environment; are an important breeding and refuge site for migratory

and threatened waterbirds, and provide habitat for a diverse and productive community of

organisms adapted to the unpredictable and highly variable water regime characteristic of the

natural system. The Menindee Lakes are listed on the Directory of Important Wetlands, and as

such are considered nationally significant because:

� they provide habitat for animal taxa at a vulnerable stage in their lifecycle, or provide refuge

when adverse conditions such as drought prevail;

� they support 1% or more of the national populations of any native plant or animal taxa, and

� they support native plants or animal taxa or communities which are considered endangered or

vulnerable at the national level.

� they support a diverse array of habitats for flora and fauna, from open semi-arid plains with

shrublands and woodlands to ephemeral lakes and swamps (ARI 2001). The dominant

vegetation communities are Black Box Woodlands, which occupy much of the floodplains of

the Darling River and Great Darling Anabranch, and the less extensive, more localised River

Red Gum Eucalyptus camaldulensis Woodlands (ARI 2001). The floodplains also support

stands of Coolabah (Eucalyptus coolabah) on the billabongs and oxbows (NPWS 1999).

Black Box occurred extensively in the riparian zone of the lakes, however, these have been

largely destroyed by the permanent flooding of the lakes. Freshwater and littoral habitats

include herbfield, grassland and sedgeland depending on the water level in the lakes. Away

from the inundated areas the major communities are the Belah/Rosewood Woodlands which

occupy the extensive linear dunefields, and the Chenopod Shrublands which occur on the

sand-plains. These shrublands are usually dominated by Bluebush, Pearlbush and Atriplex

species (ARI 2001).

� faunal diversity in the area is high, with wetland, riparian and floodplain habitats providing

opportunities for large and small mammals, reptiles, amphibians, birds, fishes and

invertebrates. Lake Menindee, Lake Cawndilla and their associated drainage channels

constitute an important waterbird breeding and foraging area in the western region of NSW

and fish habitat (NPWS 1999). Several waterbird species known to occupy habitats at Lake

Menindee, Lake Cawndilla and Morton Boolka are listed under the Commonwealth

Environment Protection and Biodiversity Conservation Act (EPBCA) 1999, with six listed

under the State Threatened Species Conservation Act 1995. Several migratory species subject

to the Japan-Australia Migratory Bird Agreement (JAMBA) and China-Australia Migratory

Bird Agreement (CAMBA) agreements also occur at the lakes.



PAGE 29

� large rookeries of cormorants, egrets and pelicans along with extended breeding of spoonbills,

Australian darters and Australian White Ibis have been recorded at Lakes Menindee and

Cawndilla.

Fish occur in all of the major lakes in the Menindee Lakes when water is available. The

abundance and distribution, however, varies considerably between species (SKM 2002). A

total of 17 species of fish have been previously recorded from the Menindee Lakes project

area, with an additional seven species expected to occur within the project boundary but as yet

have not recorded. Carp Gudgeons (Hypseleotris spp.), Australian Smelt (Retropinna semoni)

and Bony Bream (Nematalosa erebi) historically have been recorded in high abundances,

particularly from Lake Pamamaroo.

The diversity and productivity of the Menindee Lakes fish community means that they

represent an important wetland complex. However, the development of the catchment and its

associated water resources, and invading species, have brought about changes in the natural

community with documented declines in the abundances of several native species (SKM

2002). One species recorded within the Menindee Lakes system, the Silver Perch (Bidyanus

bidyanus), has been accorded a vulnerable (Australian Society of Fish Biology) conservation

status.

Despite the declines in some species, several economically important species remain in the

Menindee Lakes system, including Golden Perch (Macquaria ambigua) and yabbies (Cherax

destructor) (SKM 2002).

However, water resource development within the lakes system has contributed to an apparent net

decline in ecosystem health. More than 99% of the wetlands that comprise the lakes and floodplain

of Menindee Lakes is degraded by too much or too little flooding (Kingsford et al. 2002).

Lake Pamamaroo foreshore



PAGE 30

2.3.2. Water Quality in the Lakes

The following section describes the water quality in the Darling River at Menindee and the

Menindee Lakes system.

The Darling River water at Menindee can be described as alkaline, but moderate to high in

hardness. For about 10% of the time (assumed occurring at low flows) salinity may increase above

500 mg/L TDS (830EC), and also be high in sulphates, chloride, sodium and hardness levels above

that generally recommended for potable consumption in the Australian Drinking Water Quality

Guidelines, 2004. The water is moderate in colour, as well as dissolved organic carbon levels that

have reached levels of 20mg/l in residual pools. This has caused challenges in the past as these

carbons demand chlorine as an oxidation agent thus reducing the chlorines efficiency against

Nagleri Fowleri in the above ground Broken Hill resulting in extra dosing of chlorine needed

resulting in high THM levels. Algae are present for much of the time and over recent years

significant blooms of blue green algae have occurred. For at about 30% of the time, levels of BGA

exceed 1000-2000 cells/ml. Blue Green Algae (BGA) contribute to taste and odour, and present

risk associated with potential toxin release on algal die off. Turbidity/ suspended solids typically

exceed 100, and dissolved organic carbon of 10mg/l for more than 50% of the time.

Under current conditions the Lakes are subject to relatively large inflows but small outflows. Large

inflows generally introduce turbid water to the system, with colloidal matter building up over time.

The turbidity of the Lakes is naturally high due to the system being dominated by wind mixing and

evaporation (D. Harriss et al. 1996 in URS 2005).

The water quality of Lake Cawndilla is distinct from other lakes in that the turbidity of the lake is

significantly lower (SKM 2002). Decreased turbidity is associated with increased lake salinity.

Evaporative losses also lead to a concentration of salts, which is reflected by high levels of

electrical conductivity, particularly during dry periods.

2.3.3. Cultural Heritage of the Lakes

The Menindee Lakes area is of major archaeological value and significance to Aboriginal people.

The cultural landscape is not only made up of burial sites, artefacts and scarred trees but the

landforms, rivers, creeks and vegetation are all essential and complementary components. Spiritual

values and beliefs are all linked to the landscape, the seasons and the native flora and fauna, which

make up this culturally diverse and fragile place. This concept and its importance are well

evidenced in Sarah Martin’s comprehensive paper Aboriginal Ties to the Land – A Report to the

MenindeeLakes ESD Steering Committee 2001. The area is also rich in material from the

Pleistocene Age containing the fossilised remains of large mammals and other species from this

era.

Over the past ten years or more intensive studies such as the Menindee Lakes ESD project (2002) ,

the Menindee Lakes Structural Works Program - Environmental Impact Statement Report (2005)



PAGE 31

and recent archaeological surveys conducted by Witter (Dec 2009), have all confirmed and well

documented, the ACH values of the Menindee Lakes area, including the Darling River. These

studies have, in the main, been initiated by government as part of a wider initiative to achieve

better operational efficiency of the man-made system in the delivery and conservation of the water

source.

2.3.4. Operation of the Lakes

The MLS contributes to the total available resources within the Lower Murray-Darling system.

Operation of the MLS mainly consists of movement of water between the interconnected lakes, and

supply of water to meet downstream demands whilst minimising evaporative losses. Evaporation in

the area is approximately 2.5 metres (average evaporation loss of 426 Gigalitres per annum) a year.

The preferred lake filling strategy is to:

� Fill Lake Wetherell to 59.8 metres AHD

� Fill Lake Pamamaroo to full supply level (60.45 m AHD) (filling Lakes Pamamaroo and

Wetherell simultaneously above 59.8 m AHD)

Scarred trees are found extensively

throughout the Menindee Lakes area



PAGE 32

� Fill Lake Menindee/Cawndilla to full supply level (59.84 m AHD)

� Fill Lake Wetherell to full supply level (61.67 m AHD)

� If required, fill Lake Pamamaroo (61.5 m AHD) and Lake Wetherell (62.3 m AHD) to full

operating level, and then Lakes Menindee and Cawndilla (60.45 m AHD).

In most instances the procedures for releasing water from the lakes are generally the reverse of this,

with all immediate consumptive demands being firstly met from Lake Menindee and Lake

Cawndilla and Lake Wetherell above 59.8 m AHD.

Under the current Murray-Darling Basin Agreement, when the combined volumes of the Lakes

exceed 480 Gigalitres during a draw down phase and 640 Gigalitres during a filling phase, the

Lakes are under the management control of the Murray-Darling Basin Authority (MDBA) and

water is released to the Lower Darling River as requested by the MDBA. When MDBA manages

releases from the MLS, releases from the Hume Reservoir are made only to the extent to meet flow

requirements at Euston on the Murray River that cannot be satisfied from the MLS.

The MDBA will generally specify releases from MLS when:

� total storage in the lakes is greater than 480 Gigalitres, and

� there is insufficient flow in the Murray River and storage in Lake Victoria to meet South

Australia’s flow requirement and/or to maintain storage in Lake Victoria at, or above, specified

target volumes.

As a result, more water is left in Dartmouth and Hume reservoirs for use by NSW and Victoria.

Throughout these periods of MDBA control, operation of the Lakes is still optimised in order to

minimise evaporative losses and maximise water available to supplement Murray River flows by

transferring water from the MLS to Lake Victoria.

2.3.5. Social – Uses of the Lakes

Menindee township is located in the far south west of New South Wales, approximately 100

kilometres from Broken Hill. It straddles the Darling River on the eastern side of Lake Menindee

and has a close relationship with the village of Sunset Strip, a private caravan park and the local

recreational centre at Copi Hollow.

An extensive profile of the township and the region it services, and their relationship with the

Lakes was prepared in 2001 (NSW Department of Land and Water Conservation, 2001, The Local

Values of the Menindee Lakes System). Following an extended period of very low storage levels

and little structural change within the town, much of the information provided in that profile

remains current. However, issues specific to the valuation of economic impacts for the Cost

Benefit Analysis have been updated to ensure quantitative currency.

Menindee township, and its immediate environ, has a resident population between 600 to 700

people. This does not include the many peripatetic seasonal workers that pick local horticultural

produce and tend broad-acre irrigated crops.



PAGE 33

The town includes buildings and spaces used for a wide range of government, community, social

and commercial activities. These include retail stores and hotels, three churches, a post office, a

community service centre and civic hall, a school, a police station, sport grounds (tennis courts,

golf course, sporting field and race course), and community health and family support centres. The

local community has a wide range of sporting and social clubs - shooting, tennis, field sports, golf,

swimming, speed boat and sailing clubs. This diversity of infrastructure and associations reflects

both the history of, and close associations within, the community of the town.

Menindee has basic services (electricity, some curbed and guttered roads, footpaths in the

commercial centre, and mobile phone coverage). It is fully serviced with electricity and water but

does not have any common waste water system. The nearby Sunset Strip, has a microfiltration

water treatment plant supplied with water from the Menindee to Broken Hill pipeline. This plant

has no chemical addition for pH or turbidity control and it is soon to be declared a potable water

supply. Sunset Strip is fully serviced with electricity and potable water but does not have any

common wastewater system. Country Water does not supply water to Copi Hollow residents

(Caravan Park and other users) who access their water from Copi Hollow directly. The caravan

park at Lake Menindee is supplied with a raw water service from the Menindee to Broken Hill

pipeline.

Since its establishment, the town has undergone a number of changes in character and economic

focus. In its early days the town was a service centre for regional grazing activities, a staging point

for a number of historically significant inland expeditions and a large centre for paddle steamers on

the Darling River.

With the development of rail and consequential decline in river transport, the town relied on

servicing local graziers and provided a source of fresh produce for the nearby mining city of

Broken Hill.

Following the regulation of the Lakes in the 1950s and structural changes in the regional economy

(including the shutting down of the local fishery), Menindee township is now:

� A regional service centre for primary industries (agriculture);

� A centre for irrigation at the Lakes (mainly horticulture and annual broad acre crops);

� A centre servicing tourists to the Lakes and the nearby Kinchega National Park; and

� A site of active and passive recreation by the local and Broken Hill populations (particularly

contact water sports at Copi Hollow).

Irrigation is the largest economic contributor to the local economy and is highly dependent on

water storage arrangements at the MLS.

Tourism and recreation has a substantive and growing role in the local economy. This includes

both passive, and active, recreational activities, including: fishing; graphic arts (painting and

photography); camping; bird watching; swimming; sailing; water skiing; jet skiing; and motor



PAGE 34

boating. Most contact water sports are undertaken at Copi Hollow. The Lakes are particularly

significant as a recreational location for residents of Broken Hill (with its extreme climatic

conditions) as unique, large bodies of accessible open water.

Closely related to Menindee, and drawing aesthetic value from the Lake Menindee, is the village of

Sunset Strip, located on the north-western shoreline. This is effectively a satellite village of

Menindee and includes permanent and holiday residences. Located on the foreshore of Lake

Menindee, the key features of this development are its ready access to the water in the Lake and the

visual amenity.

As a small community, Menindee township and its residents have close social and economic

linkages with the Lakes. Since the water saving schemes considered for the DRWSP involves

changes to the operations of the MLS that generally reduce the volume, frequency and duration of

Lake storage, a number of core local social and economic values are at risk. In particular, these

include the value of local irrigation production, the value of tourism and recreational benefits

provided by the Lakes, and the amenity value of Lake Menindee to Sunset Strip property values.

Copi Hollow foreshore



PAGE 35

3. Development of Schemes

3.1. Overall approach

This report represents the final report for this project, being the culmination of a three staged

approach. SKM produced a Stage 1 report titled, “Darling River Water Saving – Part B Stage 1

Report” in August 2009 providing details on the refinement of the Part A Schemes and

recommendations for short listed “Schemes” or options that could comprise a Scheme. SKM

produced a Stage 2 report titled, “Darling River Water Saving – Part B Stage 2 Report” in January

2010, which detailed the further feasibility studies for potential schemes, including the hydrologic

modelling outcomes. The Steering Committee and the Government Officials Committee (GOC)

considered the Stage 2 schemes and adopted the schemes that are the subject of this final report for

further investigation. These include six (6) schemes for water savings at the Menindee Lakes and

three (3) schemes for reliable water supply to Broken Hill. Government will use this report to

recommend schemes for detailed design and implementation, subject to the necessary approval

processes. The methodology is represented in Figure 3-1 and Table 3-1.

The hydrologic assessment of potential water savings was made using the NSW version of the

Murray Monthly Simulation Model (MSM) and the MDBA’s BIGMOD program. Detailed

accounts of the modelling process and outcomes are provided in a separate project report by BWR

Consulting “Hydrologic Assessment of Water Savings Strategies for the Menindee Scheme and

Upper Darling Basin, Darling River Water Saving Project – Part B,February 2010”.

A critical component of the project investigation, the hydrologic modelling, explored a

combination of:

� the implementation of structural (engineering) options at the MLS, such as, enlarged outlet

regulators and channels, designated water supply works for high security users (Broken Hill

and others), and


defines control of the MLS for different volume regimes and obligations to store and supply

water

� Impacts of water savings measures in the NSW Upper Darling Basin.

The hydrologic modelling identified that the major influence on water saving in the MLS outcomes

was the manipulation of the operational rules.

Separately, SKM will also produce a NSW Darling Basin Strategic Water Saving Plan. The

purpose of the Strategic Plan is to outline a range of measures that can be implemented over the

next twenty years to achieve substantial water savings in the NSW Darling River system. The

Strategic Plan complements NSW and national actions aimed at improving water management in

the Murray-Darling Basin in order to increase environmental flow availability and achieve other



PAGE 36

benefits, such as improving security of supply to Broken Hill and delivering sustainable water

management. The Strategic Plan will contribute to, and is required to be consistent with, the

objectives of the Murray-Darling “Basin Plan” currently being developed by the MDBA.

� Figure 3-1 Methodology Flow Chart

Part B

Final Report (2010)

Final Report to Government

Statement of Effects for 6

Menindee Lakes Water

Saving & 3 Broken Hill

Water Supply Schemes

Darling River Water Saving

Strategic Plan (2010)

Part A

Report 2007

Long list of Menindee Lakes water saving and Broken Hill water supply

options explored.

Identified six Integrated Schemes for further investigation

Stage 1 (2008)

Refinement of Part A Schemes

New Options explored

Technical studies and consultation to support evaluation of Schemes

Short listing of Schemes for further investigation

Stage 2 (2009)

Refinement of Stage 1 Schemes

Detailed technical studies and consultation

Evaluation to further Shortlist Schemes

Identification of final Schemes



PAGE 37

3.2. Development of Schemes

3.2.1. Summary

The key to reducing evaporative losses from the MLS is by modifying the operating rules to

minimise the surface area of the Lakes as they fill and empty. The current operation of the Lakes

takes account of:

� The need to supply Broken Hill and other high security users (irrigators with high security

entitlements and stock and domestic) from Lake Menindee;

� Riparian rights in the Lower Darling and Pooncarie township

� Hydraulic constraints in existing channels and outlet structures, which limit the rate that

certain lakes can be drawn down;

� Lack of drainage channels, which prevents individual lakes from being drawn down beyond

certain thresholds;

� The existing Murray-Darling Basin Agreement which contains some operating rules.

� The supply of replenishment flows to the Great Anabranch of the Darling River is no longer a

constraint due to the construction of the Darling Anabranch Pipeline.

In order to develop operating rules that will reduce evaporative losses it is therefore necessary to

remove these constraints. This requires alternative water supply arrangements to be developed for

Broken Hill and high security users; structural works to improve the capacity of existing channels

and outlets; construction of drainage channels; and revisions to the operating rules (which will

require amendments to the Murray-Darling Basin Agreement).

Details of the progress of the Schemes’ assessment are provided in the following sections. In

summary, the development of the schemes through the studies in Parts A and B is shown in Table

3-1.

� Table 3-1 Summary of Parts A & B Development of Schemes

Part A

(Maunsell

2007)

� Part A (Maunsell 2007) comprised a “long list” of works and options to deliver potential

water savings in the NSW Darling Basin. The study focussed on the MLS as it was the most

prospective source of significant water savings. Broken Hill water supply was also

considered. MLS schemes identified from this report, and hence the reference for the Part B

study, are identified in Table 3-2. In addition to these Schemes, the report identified Broken

Hill water supply schemes for further investigation. These included:

� Stephens Creek Reservoir

� Dedicated storages

� Pipeline from the Murray River

� Managed Aquifer Recharge.



PAGE 38

Table 3-1 cont.

Part B

(SKM

2008-10)

Part B (SKM 2008-10) is the subject of this report. The scope of this study was to: further

develop the Part A Schemes; explore new options; undertake additional assessments; and

evaluation in order to identify a Preferred Scheme for both Menindee Lakes water savings and

Broken Hill water supply. In parallel, a Strategy Plan for the NSW Darling Basin is being

developed. Part B was undertaken in three stages:

� Stage 1 – Further assessment of the Part A Schemes and additional options, was

undertaken in order to inform an evaluation process with a view to short-listing schemes. A

new benchmark model was established using agreed residual storage volumes, target

storage operation strategies for the MLS and updated regulator outlet capacity relationships.

The model was then used to confirm the water savings volumes for the Stage 1 – Part A

options. This modelling, plus environmental, cultural heritage and socio-economic analyses,

assisted an evaluation process to identify the preferred scheme(s) to take into the Stage 2

study. The result was that Schemes 1, 2 and 3 were considered to be more viable.

Schemes 4 and 5 (refer to Table 3-1), being Schemes that included the partitioning of Lake

Menindee, were considered to be least favourable, particularly due to:

� engineering concerns about the difficulties in design and construction using poor

earthwork materials and longer term risks of failure; and

� potential environmental and heritage impacts due to the substantial footprint of the work

on the Lake Menindee bed.

The Stage 1 study in relation to Broken Hill water supply indicated that covered designated

storages were problematic and not cost effective but all other schemes were worthy of

further investigation.

� Stage 2 – An important part of the Stage 2 assessment was the major influence on water

saving outcomes by the manipulation of the Lakes operational rules as defined by the

Murray-Darling Basin Agreement (adjustment of the 640/480 rule). In all, some 106 model

runs were undertaken to test the impacts of combinations of MLS operational rule changes

and structures measures at the Lakes. This resulted in the development of 45 integrated

Schemes which were the focus of the Stage 2 hydrologic modelling to identify water savings

and environmental, socio-economic, engineering and cultural heritage assessments. The

evaluation resulted in the Schemes identified in Table 4-1 as Preferred Schemes worthy of

further consideration by Government. Menindee Lakes Schemes 1 and 6 are included for

reference as they represent the upper and lower bounds of water savings possible.

� Scheme 1 (never filling Lakes Menindee and Cawndilla) provides for 248GL pa water

savings but would have significant and unacceptable impacts on the environment and

amenity of the Lakes.

� Scheme 6 maintains the current operation arrangements with minor water savings

(34GL pa) and additional works at a high cost relative to the savings.

Three Broken Hill water supply schemes are prospective with an evaluation pending the

outcomes of the current investigation of aquifer systems in the area by Geoscience Australia

for a potential Managed Aquifer Recharge scheme.

� Stage 3 – Development of the final Part B report and the Strategic Plan.



PAGE 39

3.2.2. Part A Report

Part A (Maunsell 2007) investigated a range of strategies for reducing evaporative losses from

MLS, which basically revolved around changing the operating rules to minimise the amount of

time that Lake Menindee and/or Lake Cawndilla were relatively full, as these lakes have the largest

surface areas. Part A developed six short listed schemes for further detailed investigations, which

are described in Table 3-2 below. Each of these schemes required alternative water supply

arrangements for Broken Hill and high security users, as well as engineering works to enhance

transfers of water between the MLS and the Darling River. The associated engineering options are

described in Table 3-2. Hydrologic modelling showed that these short listed schemes would

achieve average water savings of 60-180 ML/yr.

� Table 3-2: Part A Schemes and Potential Engineering Options

Part A Scheme

Description Potential Engineering Options for Scheme *

1 Reduced use of Lake Menindee

Low level bypass channel in Lake Menindee Enlarged Cawndilla outlet channel

2 Reduced use of Lake Cawndilla

Menindee Draining Channel Enlarged Menindee Outlet Regulator Morton Boolka regulator

3

Reduced use of both Lakes Menindee & Cawndilla

Incorporates Lake Menindee Draining Channel and Enlarged Menindee Outlet Regulator Enlarged Cawndilla outlet channel

4

Partition Lake Menindee and reduce the use of Lake Cawndilla

Includes: NW-SE Embankment and regulator within Lake Menindee and Enlarged Menindee Outlet Regulator

5

Partition Lake Menindee and reduce the use of the lower Lake Menindee cell

Includes: SW-NE Embankment and regulator within Lake Menindee (with and without embankment batter protection) Enlarged Cawndilla outlet channel

6

Storage Operation Management of Menindee Lakes

Enlarged Cawndilla outlet channel

Note: * All options include Pamamaroo Draining Channel

3.2.3. Part B Report

3.2.3.1. Stage 1 Approach

The Stage 1 report titled, “Darling River Water Saving – Part B Stage 1 Report” provided details

on the refinement of the Part A Schemes and recommendations for short listed Stage 2 “Schemes”

or options that could comprise a Scheme. This refinement included more detailed assessment of:

� the engineering designs for structural options such as enlarged outlet regulators and draining

channels

� Environmental assessment of the lakes system and potential impacts of changes to watering

regimes and construction activities



PAGE 40

� Cultural heritage impacts and Aboriginal consultation

� Hydrologic modelling to assess quantum of water savings and potential third party impacts

� Socio economic analyses, particularly Benefit Cost Analysis (BCA) of the potential schemes.

The Stage 1 economic assessment involved a review of the hydrology scoping options developed in

Part A and subsequently refined. It assessed 11 refined hydrology scoping options provided by

WMA Water and these are notionally assigned to the six (6) preliminary engineering options

combinations. The hydrology scoping options are components (not full representations) of the

preliminary engineering schemes as they do not include all the works identified in the engineering

schemes or their operational effects. The scoping option economic impacts were measured as the

change in economic values against a base case that reflects current water sharing policies,

storage/river operating rules and the existing adaptive environmental water portfolio. Those

changes in values are based on biophysical and value outputs from a hydrology model, cost

estimates of works, and estimates of indirect water related values. The hydrology outputs reflect

simulated outcomes based on the historical climate record for 118 years. Monetary values are

discounted over 30 years to their present value using a 7% discount rate.

The resultant evaluation of this data indicated options that were more favourable to meet the

objectives of the project. These recommended options were adopted by the Steering Committee

(SC) and became the basis for further investigation and refinement (the starting point) as part of the

Stage 2 work.

� Options associated with Part A Schemes 1, 2 and 3 to be further developed in Stage 2 of this

project.

� Modelling to identify impacts of options “bundled” into potential schemes, in concert with

target rules options (Scheme 6) and environmental requirements to support the Stage 2

evaluation analyses.

� In relation to the water supply options for Broken Hill and high security users, investigate the

following options:

� an uncovered natural storage at Lake Wetherell/Lake Tandure - Option 1A.

� a covered or uncovered storage at Texas Downs - Option 3.

� a covered storage at Kinalung - Option 5 including potential for an enlarged pipeline.

� Enhancements to storage arrangements at Stephens Creek Reservoir in association with

the preferred water supply option.

� Covered storages to meet Broken Hill and all HS water demand, including transmission

flows, are not considered to be feasible and hence should not be considered as part of the

Stage 2 investigations.



PAGE 41

� Managed Aquifer Recharge (MAR) (Option 7), has potential and a scoping study is to be

undertaken by SKM as part of the project. Geoscience Australia is currently investigating

MAR potential in the region and is due to report during 2010.

� Option 8, Pipeline from the Murray River, to be considered as a permanent water supply

option and to be considered in Stage 2 investigations.

3.2.3.2. Stage 2 Approach

The Schemes generated in the Stage 1 studies were composed of a number of fundamental options

or “building blocks” that where combined with an operational regime (operational rules) to create a

comprehensive Scheme. These Schemes were evaluated using Benefit Cost Analyses (BCA) and

Multiple Criteria Analyses (MCA) processes to guide in the decision making process to identify a

Preferred Scheme(s).

Stage 1 hydrologic modelling identified that the major influence on water saving outcomes was the

manipulation of the operational rules. Up to 248GL pa can be achieved with minimal works and

substantial rule changes but with consequential significant environmental impacts in Lakes

Menindee and Cawndilla by the exclusion of all water from these Lakes.

The implementation of high capacity outlet works at Lake Menindee (regulator capacity to

9,000ML/d) and Lake Cawndilla (regulator and downstream channel with capacity of 6,000ML/d)

to support operation of the MLS to deliver substantial water savings cost effectively was

demonstrated to be ineffective. For example, an enlarged Cawndilla Outlet through Kinchega

National Park would cost about $60M with a resultant 18GL pa water saving.

Although the high capacity outlet structures do not deliver substantial cost effective water saving

outcomes, they, plus other internal works, can provide additional operational flexibility for the

Lakes and also facilitate water management for environmental outcomes.

� Internal draining channels allow both the outlet structures to operate to design outflow

capacities and the draining of the residual pools, if required.

� Morton Boolka regulator is a fundamental component of Schemes 3 to 5 and will provide for

independent water use of Lake Menindee and Lake Cawndilla.

� A high capacity Lake Menindee outlet will provide flexibility for drainage rates to achieve

both operational and environmental objectives. At times, water stored in Lake Menindee may

be required to meet downstream demand and high capacity outflow rates can be of benefit.

Also, these outflow rates will enable a draining rate of the Lake consistent with environmental

and water saving objectives, i.e. draining of the Lake in about six months will permit a

comprehensive water cycle for fish and birds whilst minimising evaporation losses through the

shortened period for storage of the water.



PAGE 42

Similarly, for the Lake Cawndilla outlet, an enhanced capacity outlet (up to 2,000 ML/d) with a

channel to the Darling River and Darling Anabranch, would permit supply to these downstream

systems and also manage appropriate draining of the Lake to achieve environmental objectives

(draining of the Lake in about six months).

MLS Structural options. The Stage 1 structural options were further developed, particularly to be

consistent with the key components of the hydrologic modelling options. Certain works are

necessary to deliver the modelled combination of options or preliminary Schemes, e.g. Morton

Boolka regulator is necessary to deliver a “Reduced use of Lake Cawndilla” scheme. These

individual structural options are the “building blocks” that when combined with an operational

regime (operational rules) creates a comprehensive Scheme. The following structural options were

considered in the integrated schemes:

� Morton Boolka Regulator,

� Lake Menindee Outlet and internal draining channel,

� Lake Cawndilla Outlet channel (via Penellco Channel) and internal draining channel, and

� Lake Pamamaroo internal draining channel.

Water Supply options. The Stage 1 assessment explored options for new storages to supply the

Lower Darling River high security (HS) users and concept designs were developed. It is clear from

this work that it is only feasible to continue to meet Lower Darling River HS demand from the

MLS, although a Lake Tandure storage option may partially meet this requirement. Designated

storages separate to the MLS would need to be excessively large, and hence too expensive, to cost

effectively meet the demand of both the consumptive use of Lower Darling River water users and

the necessary conveyance flows in the Darling River.

Also, the Stage 1 assessment relied on the use of entitlement volumes for the concept design of

storage options. Current water demands for Broken Hill are a maximum of 5.7GL/annum, which is

a usage of 9.4GL over a weighted 18 month period (including two summers which is the required

reliability requirement). This could be achieved by a dedicated covered storage of 10GL or a

specially constructed uncovered storage of 18GL. However, the current water entitlement for

Broken Hill under their licensing arrangements is 10.1GL/a, which is a usage of 16GL over a

weighted 18 month period (including two summers). This could be achieved by a dedicated

covered storage of 16GL or a specially constructed uncovered storage of 28GL.

For the purposes of this Stage 2 study, it was considered prudent to use current usage

volumes for concept design of storage options. This was based on the principle that a water

supply scheme to manage drought events would more likely be required to meet current demand, or

lower demand to match critical human needs. Clearly, over time, water demand may increase from

the current usage to the entitlement volume or beyond and this would need to be accommodated by



PAGE 43

a commensurate water supply scheme. For concept purposes in this assessment, current usage has

been adopted for sizing and costing purposes.

Structural options associated with water supply included:

� Regulator, pump/pipeline and embankment in Lake Tandure

� Designated 5GL turkey nest storage at Texas Downs

� Designated 18GL turkey nest storage at Texas Downs

� Upgraded Weir 32

� Upgraded Copi Hollow storage

� MAR pump/pipeline and bore system

� Murray River to Broken Hill pipeline.

Hydrology approach

The Stage 1 and 2 assessments of potential water savings were made using the NSW version of the

Murray Monthly Simulation Model (MSM) and the MDBA’s BIGMOD program. Enhancements

to the MDBA’s model undertaken for this project, now allow the model to quantify water savings

and potential third party impacts (irrigation, salinity, flows in the Anabranch and to SA, etc) for a

range of structural and non-structural options at the MLS, test mitigation measures, consider

climate change impacts and assist to optimise potential Schemes.

Detailed accounts of the modelling process and outcomes are provided in a separate project report

by BWR Consulting “Hydrologic Assessment of Water Savings Strategies for the Menindee

Scheme and Upper Darling Basin, Darling River Water Saving Project – Part B, February 2010”.

The Stage 1 and 2 hydrologic modelling explored a combination of:

� the implementation of structural (engineering) options such as enlarged outlet regulators and

channels, designated water supply works for high security users (Broken Hill and others), and


defines control of the MLS for different volume regimes and obligations to store and supply

water.

The Stage 2 hydrologic modelling considered 45 combinations of options. From this list, a short

list of eight (8) combinations was considered appropriate to consider for the refinement process to

identify Schemes. The short list was developed by considerations from separate discussions

between the project’s Hydrology Working Group, the NOW modellers and the consultants, and

was based on considerations of:

� An appropriate range of options to enable comparisons of combinations of structures,

operational rules and water regimes within the MLS,

� Impacts on third parties – options that had no adverse impacts or manageable impacts were

considered more favourably,

� Maximum water savings,



PAGE 44

� Retaining sufficient options due to uncertainty about institutional agreements concerning

operational rules for the MLS, i.e. retention of options including the current 640/480 rules.

Engineering Approach

The engineering tasks included the review of earlier option designs and descriptions of the concept

designs in more detail and with greater degree of confidence by:

� Scoping innovative measures to address site specific challenges

� Refining cost estimates after taking site specific issues into account

� Incorporating local expertise, thereby facilitating a cost-effective and practical approach

� Integrating with other components in order to present a preferred scheme(s) that considers

multiple objectives.

Specifically, SKM undertook:

� A review existing designs from previous work

� A review of the structure aim and concept

� Modification of the design if necessary

� A review the existing cost estimate including consultation with local contractor(s) and adjust as

necessary.

For any new works identified as a result of the review, the following tasks were undertaken:

� Development of a feasibility design, and

� Preparation of a feasibility level cost estimate.

Relevant documents for the concept designs were:

� DPWS Report No DC98347 (1998).

� DPWS Report No DC02092 (2002).

� DIPNR Report No DC05012 (2005).

These documents plus information relating to the MLS and Broken Hill water supply and SKM’s

engineering experience provided the necessary inputs to develop the concept designs used in this

project.

Socio-economic approach

For Stage 2, a Cost Benefit Analysis (CBA) of the schemes was developed to assist in the

development, and selection, of preferred options. It provides an assessment of eight schemes and

draws on the methodology and information sources used in the Stage 1 re-evaluation of Part A

Schemes in May 2009. It used refined capital cost estimates by SKM, and third party and flow

impacts produced under new operating rules by the revised MSM-BigMod hydrology model.

Environmental approach

SKM refinement of environmental issues included assessment of the specific construction site and

Lakes, environmental objectives and impacts.



PAGE 45

As environmental health is a prerequisite for achieving social, cultural and economic objectives on

a regional and national scale, managers need to incorporate environmental information into their

management decision making framework (Scholz et al. 1999). The environmental assessments

provided general information relating to assumed environmental filling of the Menindee Lakes to

support key environmental assets and maintain or improve ecological condition of the lakes.

The natural versus current watering regime at the Menindee Lakes was described, as was the

current ecological condition of the Lakes. This information contributed to determining a concept

level regime for watering the lakes, establishing the environmental consequences of the current

regulated regime, and describing the potential ecological outcomes of assumed environmental

filling.

The watering requirements of key environmental assets occurring at the Menindee Lakes and

associated floodplain were then described to identify critical biotic and abiotic, temporal and spatial

components of the lake system ecology to inform thresholds for potential watering regimes.

Other related issues such as management options for residual pools, and potential impacts on

Tandou Farms, the Darling Anabranch and the lower Darling River were also described and

discussed. This information contributed to establishing a local context for watering options at the

Menindee Lakes, and discussion of potential issues arising from an assumed environmental filling

regime.

Lastly, an assessment of environmental risk and opportunities for each structural option for

managing assumed environmental filling was provided.

Menindee Lakes Main Weir



PAGE 46

Local Community Consultation approach

The Menindee Lakes area is of major archaeological value and significance to Aboriginal people.

The cultural landscape is not only made up of burial sites, artefacts and scarred trees but the

landforms, rivers, creeks and vegetation are all essential and complementary components. Spiritual

values and beliefs are all linked to the landscape, the operation of the seasons and the native flora

and fauna which make up this culturally diverse and fragile place. This concept and its importance

are well evidenced in Sarah Martin’s comprehensive paper Aboriginal Ties to the Land – A Report

to the MenindeeLakes ESD Steering Committee 2001. The area is also rich in material from the

Pleistocene Age containing the fossilised remains of large mammals and other species from this

era.

Over the past ten years or more intensive studies such as the Menindee Lakes ESD project (2002),

the Menindee Lakes Structural Works Program - Environmental Impact Statement Report (2005)

and recent archaeological surveys conducted by Witter (Dec 2009), have all confirmed and well

documented the archaeological cultural heritage (ACH) values of the Menindee Lakes area,

including the Darling River. These studies have, in the main, been initiated by government as part

of a wider initiative to achieve better operational efficiency of the man-made system in the delivery

and conservation of the water source.

In order to restore trust and confidence, to build on the past and to assure Aboriginal stakeholders

that progress is being made the following actions have been undertaken:

� Consultation and information sessions have been conducted over the past two years with

Aboriginal stakeholders throughout the region;

� a literature review of past reports and projects (ESD and EIS) was undertaken;

� an archaeological survey of the Lakes Menindee, Cawndilla and Pamamaroo lakebeds was

completed adding to the archaeological information of the area;

� community meetings were held in November and December 2009. This was to primarily

discuss the new findings and any impact this information may have on the proposed options

under the DRWSP.

It must be understood at the outset that the response to any proposed options must be qualified in

that no group on its own, such as the Menindee Elders, can, or will, make any decisions without the

involvement of the whole Aboriginal community. This includes Elders not only from the Barkindji

language group but Elders from the Ngiyampaa people, Aboriginal stakeholders in the LALCs

(Menindee and Broken Hill), the CMA Aboriginal support networks and communities further

afield in centres such as Dareton, Wilcannia, Pooncarrie and Murrin Bridge.

The Aboriginal Cultural Heritage survey of the Menindee, Cawndilla and Pamamaroo has provided

some very valuable information and will complement existing archaeological data when reviewing

the impact of options on ACH values.



PAGE 47

Necessary actions to ensure the protection, salvage and storage of Aboriginal artefacts,

management of burial sites including the establishment of a permanent “keeping place” such as a

cultural centre, regardless of whatever engineering or operational option is determined,, is seen as

a fundamental outcome of past projects. The drafting of the Rehabilitation and Cultural Heritage

Protection Plan for the Proposed Menindee Structural Works is an example in point.

The key objectives of the DRWSP consultation strategy were to:

� Ensure local Aboriginal communities including the Menindee Elders and other Aboriginal

community stakeholders were kept fully informed with regards to the project;

� The Aboriginal community was familiar with the submission process, and

� To build upon existing networks and to pass on any concerns to the DRWSP Steering

Committee the community may have. This also opened up the lines of communication with

other Aboriginal stakeholders along the Barwon Darling system including government

agencies and the Western and Lower Murray-Darling CMAs.

The consultant’s Indigenous liaison officer undertook five field trips to the region between

November 2008 and December 2009, which included community information sessions at

Wentworth, Menindee and Broken Hill.

Broad Community Consultation

The Community Update No 2 was released in September 2009 just prior to the Community

information sessions that were undertaken on the 29th and 30th September 2009. The community

meetings were held in Wentworth, Menindee and Broken Hill and provided the public with a

progress report on the project and an opportunity to provide feedback to the Steering Committee

and the consultants. These meeting were well attended and the key items conveyed by the

community were:

� Security to the Lower Darling irrigators and stock and domestic users need to be addressed.

Local concerns about changes to the operation of the MLS that would adversely impact on

reliability of supply.

� There is concern that changes in water supply will jeodardise the MLS as a safe source of

water supply.

� Water quality concerns and water losses associated with the MAR scheme for Broken Hill.

The MAR scheme was not well understood and there was apprehension that it would work.

� Interest in where water savings will be used in the Basin with explanations about the MDBA

Basin Plan relevant.

� Need to explore Upper Basin water savings opportunities to assist in getting more flows and

better quality to the Lower Darling. Generally locals believe that too much water is being

taken in the Upper Basin for irrigation.

� Impacts on Sunset Strip and Copi Hollow important to Menindee and Broken Hill

communities.



PAGE 48

� Local communities generally prefer water in the Lakes. The interaction with the water in the

Lakes and the associated amenity is of key importance to residents in the region.

� Other remote initiatives included: construction of Wilcannia Weir and diversion on coastal

waters inland to increase water supply to the Darling.

The website and the designated 1800 phone facility continued with few inquiries received.

3.2.3.3. Summary of Stage 1 to Stage 2 refinement

The Steering Committee considered that an evaluation framework comprising two criteria would

allow for early assessment of options. The two criteria were:

� Cost Benefit Analysis (CBA) – generated by the Economic analysis that takes into account the

value of the water saved and the impacts on third parties;

� Multi Criteria Analysis (MCA) – allows for the evaluation of qualitative non-financial criteria

associated with the options including environmental, social, engineering and heritage aspects.

It is a values-based decision support system and while MCA assists in the identification of a

preferred option from among a range of options, it is not the final decision as this remains with

key stakeholders. MCA is a process that enables a number of factors to be taken into account

that are not readily quantifiable and merely provides a flexible and transparent decision

support system based on key criteria associated with the project at hand. The Steering

Committee considered the MCA using three broad categories, being environment, social and

heritage.

The Stage 1 Report findings based on the CBA and MCA evaluations and the subsequent adopted

recommendations from the Steering Committee, were further considered and refined in Stage 2

based on the ongoing hydrologic modelling outputs coordinated by the Hydrology Working Group

(HWG), economic analyses, cultural heritage and environmental considerations associated with the

Lakes.

To facilitate the decision making for identification of a Preferred Scheme(s) by the Steering

Committee, an evaluation exercise was undertaken in Stage 2 (October 2009) with the consultants

and the Steering Committee. Subsequent evaluation assessments were also undertaken during the

course of the Stage 2 investigation.

Potential Schemes were generated by SKM based on:

� Hydrologic modelling outputs

� Maximising evaporation savings whilst mitigating adverse third party impacts

� Feasible combinations of operational rules and structures to support filling and draining

regimes for the MLS

� Delivering environmental objectives within the MLS

� Feasible combinations of MLS options with water supply options (recognising water supply

operation and water quality constraints)

� Heritage considerations.



PAGE 49

3.2.3.4. Stage 2 - Menindee Lakes Water Savings Schemes

The MLS schemes were intended to reflect a range of combinations of operational rules, structural

options and environmental watering regimes that had a minimal or positive impact on third parties

in the Basin. The MLS schemes considered are presented in Table 3-3.

Water Savings Estimates for Scheme 2 and Scheme 3

The increased outlet capacity included in Scheme 3 was not specifically modelled. The model run

for Scheme 2 (5386) was adopted for the purposes of this analysis as this provided a conservative

estimate of water savings and downstream impacts. In actuality water savings for this option are

likely up to 10GL greater (as indicated by comparison of Schemes 4 and 5)

Benefits of Additional Outlet Capacity

From Lake Cawndilla

It was considered that an enhancement to the existing outlet capacity from Lake Cawndilla (up to

2,000 ML/d) would facilitate operational and environmental outcomes for Schemes, e.g., a

Cawndilla outlet channel to the Darling River would permit supply to the Lower Darling River and

also manage appropriate draining of the Lake to achieve environmental objectives. Hence, the

outlet enhancement (up to 2,000 Ml/d) was assessed mainly for its value to facilitate environmental

outcomes within the Lake but also recognising that the enlarged works may have operational

benefits. An enlarged regulator capacity of 2,000ML/d, when Lake Cawndilla separates from Lake

Menindee (RL56m AHD approx, Cawndilla volume 210GL), will provide for draining of an

environmental fill in the lake within 5-6 months, which is consistent with environmental objectives.

The current capacity under these lake volumes (1,200ML/d) wouldn’t be capable of managing a

suitable draining regime. As discussed, the route along the existing Cawndilla outlet channel,

Tandou Creek and Penellco Channel is favoured. Further hydraulic modelling is required to

confirm the performance of an enlarged Cawndilla outlet regulator with releases via a modified

Tandou Creek and Penellco Channel. The results of this modelling would be used to refine the

extent of works required, particularly the works footprint along the existing Cawndilla outlet

channel and Tandou Creek.

From Lake Menindee

Enhanced outlet capacity from Lake Menindee will have the additional benefit of allowing Lake

Menindee to supply downstream demands without calling on the upper Lakes Pamamaroo,

Wetherell and Tandure. This will allow Lake Menindee to be emptied more efficiently after a

filling event, allow the dead storage in Lake Menindee to be better utilised and ensure that the

storage of water in the upper lakes is maximised.

3.2.3.5. Stage 2 - Broken Hill Water Supply Schemes

The study identified a total of 9 potential schemes to service Broken Hill water demands during

drought (Table 3-4). Stage 2 Schemes 1a, 1b and 1c, comprise the use of Lake Tandure or Lake



PAGE 50

Wetherell as primary water storages. While Schemes 1a and 1b both require Weir 32 to be raised

during drought to act as the primary water source, Scheme 1b also uses Copi Hollow for additional

storage and Scheme 1c incorporates a designated 5 GL ring tank to provide additional storage.

Stage 2 Schemes WS2 and 3 both comprise construction of a new covered (WS2) or uncovered

(WS3) water supply storage at Texas Downs near Menindee township. Similarly, Stage 2 Scheme 4

comprises construction of a new uncovered water supply storage at Kinalung adjacent to existing

water supply infrastructure approximately 60 km from Menindee township towards Broken Hill.

Stage 2 Scheme WS5 comprises Managed Aquifer Recharge (MAR) whereby water is extracted,

possibly through river bank filtration, from the River near Menindee and stored in a confined

aquifer for use during drought at a later date. Full details of this scheme have yet to be determined.

Stage 2 Schemes WS6 and 7 comprise the construction of a water supply pipeline from the River

Murray. WS6 has a larger capacity of 380L/s while WS7 has a capacity of 162L/s.

The water supply options were considered in Stage 2 based on:

� The designs taking into consideration current water usage (demand) for Broken Hill rather than

entitlement. It was considered prudent to design water supply options for realistic drought

conditions and hence current usage was adopted. Subsequent, more detailed studies, can

explore the appropriateness of this approach for the long term management of drought water

supply for Broken Hill.

� The Murray River pipeline option was considered to be a permanent water supply option and

therefore is not consistent in design objectives to the other water supply options. Option WS6

(380L/s) was considered more appropriate (rather than the smaller Option WS7) as it met

Country Water’s requirements. This option was not considered in the Stage 3 assessment due

to its high cost.

� Covered storages were not considered as feasible as uncovered storages due to their greater

lifecycle cost, difficulties with maintenance, durability in harsh environment and risk

associated with covering large areas (up to 180ha). Hence, only uncovered options were

considered in Stage 2 BCA, whilst they remained in the MCA considerations (for

completeness).

� No further structural improvements to Stephens Creek Reservoir could be indentified to

manage either water quality or quantity.



PAGE 51

� Table 3-3 Stage 2 Menindee Lakes water savings schemes - CBA and MCA

Stage 2 Scheme

Model Run

Pot Water Savings (GL/yr)

** MDB Agree’t

Threshold Description

1 5294 248 150/100 MDB Agt Rule change. Lakes Menindee and Cawndilla are kept permanently dry. Water savings achieved by bypassing the lower Lakes.

2 5380 107 150/100 MDB Agt Rule change. Bypass channel in Lake Menindee keeps Lake Menindee dry except under extreme events when Lake Menindee is flooded. Bypass channel delivers water to Lake Cawndilla which is used as a storage. Water savings made by bypassing Lake Menindee. Includes assumed environmental filling.

3 5386 125 210/200 MDB Agt Rule change. Assumed environmental filling of Lakes Menindee and Cawndilla with existing engineering structures but with draining channels in both lakes. Water savings made by implementation of the assumed environmental filling rules and by managed draining of the lakes.

4 5386 125 210/200 MDB Agt Rule change. Assumed environmental filling of Lakes Menindee and Cawndilla with enhanced engineering structures including draining channels in both lakes, enlarged Menindee and Cawndilla outlets, high level regulators for Morton Boolka plus enhanced Penellco channel capacity and associated works. Water savings made by implementation of the assumed environmental filling rules and by managed draining of the lakes.

5 5398 131 210/200 MDB Agt Rule change. Assumed environmental filling of Lakes Menindee and Cawndilla with existing engineering structures. Lake Tandure to be used for Broken Hill water supply in tandem with a 5GL storage possibly at Copi Hollow or Weir 32. Water savings made by implementation of the assumed environmental filling rules and by managed draining of the lakes.

6* 5398 131 210/200 MDB Agt Rule change. Assumed environmental filling of Lakes Menindee and Cawndilla with enhanced engineering structures including draining channels in both lakes, enlarged Menindee and Cawndilla outlets, plus enhanced Penellco channel capacity and associated works. Lake Tandure to be used for Broken Hill water supply in tandem with a 5GL storage possibly at Copi Hollow or Weir 32. Water savings made by implementation of the assumed environmental filling rules and by managed draining of the lakes.

7a 5403 61 210/200 MDB Agt Rule change. Lake Menindee used as water storage while Lake Cawndilla kept dry except during assumed environmental filling events. Existing engineering structures maintained except for the inclusion of a high level regulator for Morton Boolka. Water savings achieved by keeping Cawndilla dry except during assumed environmental filling events.

* MCA Scheme 6 was not carried forward to the BCA

**The MDB Agreement Threshold refers to the volume of water in storage in GL.



PAGE 52

� Table 3-4 Stage 2 Broken Hill water supply schemes MCA (no CBA required)

Water Supply

Scheme –

Stage 1 & 2

Description

WS1a Use of Lake Tandure or Lake Wetherell as primary water storage plus utilising Weir 32 as primary

water source

WS1b Use of Lake Tandure or Lake Wetherell as primary water storage with additional storage in Copi

Hollow plus utilising Weir 32 as primary water source

WS1c Use of Lake Tandure or Lake Wetherell as primary water storage with additional storage in an

undesignated 5 GL ring tank

WS2 - No Stage 2

equivalent

A new covered water storage constructed at Texas Downs near Menindee township

WS3 A new uncovered water storage constructed at Texas Downs near Menindee township

WS4 A new uncovered water storage constructed at Kinalung adjacent to the existing Broken Hill water

supply pipeline and pump station approximately 60 km from Menindee

WS5 Managed Aquifer Recharge – extraction of water possibly through river bank filtration from an aquifer

near Menindee and storage in a confined aquifer for use at a later date. Full details of this scheme

have yet to be determined.

WS6 Construction of a pipeline from the Murray River with a capacity of 380L/s (33ML/d) Current

WS7 - No Stage 2

equivalent

Construction of a pipeline from the Murray River with a capacity of 162L/s (14ML/d or 5GLpa)

3.2.3.6. Stage 2 Schemes - CBA Results

The following Table 3-5 summarise the Stage 2 CBA and Discounted Total Lifecycle cost results.

� Table 3-5 Showing Stage 2 CBA Results (GHD Hassall) ($M)

Scheme 1 2 3 4 5 7a 7b 7c

Hydrology Model Run 5294 5380ENV 5386 5386 5398 5403 5404 5405

Works related costs (27) (70) (27) (83) (31) (39) (55) (55)

Third party impacts 9 2 (0) 1 (3) (4) (2) (5)

Adaptive Environmental Water 132 77 55 55 60 35 43 3

NET BENEFIT COST 114 9 28 (27) 27 (7) (14) (57)

3.2.3.7. Stage 2 Evaluation Results – Identification of Final Schemes

The evaluation considered the CBA results with appreciation of the MCA findings. A comparison

of costs for the water supply schemes was necessary as a BCA analysis wasn’t appropriate given

the schemes had generally common benefits.

In order to undertake an evaluation of the MLS water savings schemes, the costs associated with a

common water supply scheme needs to be added to each MLS scheme. In the Stage 2 evaluation,

the Broken Hill’s MAR water supply scheme’s costs have been included with all MLS schemes.

This is a representative cost only and it doesn’t infer that the MAR scheme is a preferred scheme.



PAGE 53

It should be noted that Stage 2 Scheme 5 includes a Lakes’ scheme plus a Lake Tandure water

supply scheme, and is therefore, not directly comparable with the other schemes. For this reason,

Stage 2 Scheme 5 is listed for reference only. Scheme 5 was explored in the hydrologic modelling

to test the impacts of using one of the existing Lakes as a water supply mechanism. None of the

other water supply schemes utilise the Lakes but rather are structural options to create designation

water supply storages.

Based on the CBA and MCA evaluations, SKM presented the following recommendations for

Stage 3 schemes:

� Stage 2 Lakes Scheme 3 - Reduced use of Lake Menindee and Lake Cawndilla + assumed

environmental fill + existing outlet structures, and

� Stage 2 Lakes Scheme 4 - Scheme 3 + Morton Boolka regulator + Enlarged Menindee

Regulator /Draining channel + Enlarged Cawndilla Outlet / Draining Channel

� Lakes Scheme harmonised with the following Water Supply Schemes:

� MAR (to be further developed based on GA investigations)

� Lake Tandure with upgraded Weir 32 (plus potential option to include Copi Hollow)

� Kinalung storage and Texas Downs to be considered if other water supply schemes not

feasible.

� Stage 2 Scheme W5 Murray Pipeline continues to be considered by Govt as a separate

permanent water supply Scheme for Broken Hill. Directions by Steering Committee.

The Government considered the Stage 2 Schemes in total and adopted the schemes presented in

Table 3-6 and Section 4 (Table 4-1) for further investigation and these represent the subject of this

final report.

Lake Menindee inlet

regulator



PAGE 54

� Table 3-6 Final Stage 2 Schemes

Stage 2

Scheme ID Description

Lakes Schemes

1 Never Fill Lakes Menindee and Cawndilla

3 Reduced use of Lake Menindee and Lake Cawndilla + assumed environmental fill + existing outlet

structures

4 Reduced use of Lake Menindee and Lake Cawndilla + assumed environmental fill + Environmental

structures

7a Reduced use of Lake Cawndilla + assumed environmental fill + Morton Boolka High Level regulator

+ existing outlet structures

7b Reduced use of Lake Cawndilla + assumed environmental fill + Morton Boolka High Level regulator

+ Environmental structures

7c Reduced use of Lake Cawndilla + Morton Boolka High Level regulator + Environmental structures +

MDB Agt current rules + assumed environmental fill

Broken Hill Water Supply Schemes

WS1a Use of Lake Tandure and Upgraded Weir 32

WS1b Use of Lake Tandure and Upgraded Weir 32 + Copi Hollow

WS1c Use of Lake Tandure and designated BH Storage (uncovered)

WS3 Texas Downs Uncovered Storage

WS5 Managed Aquifer Recharge

Lake Menindee outlet regulator and channel to the Darling River



PAGE 55

3.2.3.8. Options Adopted for Final Report

The following set of options were adopted to be the basis for the Final Part B Report

� Table 3-7 Options Adopted for Final Report

Final

Scheme ID

Stage 2

Scheme ID Description

Lakes Schemes

1 1 Never Fill Lakes Menindee and Cawndilla

2 3 Reduced use of Lake Menindee and Lake Cawndilla + assumed environmental

fill + existing outlet structures

3 4 Reduced use of Lake Menindee and Lake Cawndilla + assumed environmental

fill + Environmental structures

4 7a Reduced use of Lake Cawndilla + assumed environmental fill + Morton Boolka

High Level regulator + existing outlet structures

5 7b Reduced use of Lake Cawndilla + assumed environmental fill + Morton Boolka

High Level regulator + Environmental structures

6 7c Reduced use of Lake Cawndilla + Morton Boolka High Level regulator +

Environmental structures + MDB Agt current rules + assumed environmental fill


BH1 WS5 Managed Aquifer Recharge

BH2

WS1a Use of Lake Tandure and 5GL Storage - Upgraded Weir 32

WS1b Use of Lake Tandure and 5GL Storage - Upgraded Weir 32 + Copi Hollow

WS1c Use of Lake Tandure and designated 5GL BH Storage (uncovered)

BH3 WS3 Texas Downs Uncovered Storage (18GL)

Broken Hill water supply options will require further refinement to develop a robust water supply

scheme that satisfies the requirements of Country Water.

Issues for further consideration include:-

� The potential to provide a covered storage for the 5GL storage (BH option WS1c)

� Further refinement of BH options WS1a and WS1b with respect operational constraints which

may affect;

� water quality,

� pumping requirements,

� timing issues related to the opportunity to surcharge Weir 32.to achieve additional storage

volume.



PAGE 56

4. Assessment of Schemes

For the Schemes identified by the Stage 2 process, and hence the final Schemes (refer to Table

4-1), a detailed Statement of Efforts was undertaken for each Scheme so as to inform decision

makers of the nature of the scheme and potential impacts. Section 4.1 describes the requirements

of the Statement of Effects with the subsequent sections including:

� A description of the Schemes

� the hydrologic, socio-economic, environmental and cultural heritage assessments

� Summaries of the salient aspects for the Schemes.

Detailed SoE for each Scheme are provided in a separate volume to this report. Details of the

hydrologic modelling results and the socio-economic analysis are presented in Appendix A and B,

respectively.

4.1. Statement of Effects

A detailed Statement of Effects (SoE) for each scheme is presented in a separate volume to this

report titled Schemes’ Statement of Effects. The Schemes are described in Table 4-1.

The aim of SoE is describe the assessment of the major local environmental, cultural and social

factors and issues, on each of the short listed integrated schemes. This recognises that whilst there

may be some short-term construction impacts, potentially the greatest impacts may arise from

operational changes.

The SoE includes:

� A list of all flora, fauna and cultural heritage assets that may be affected by the construction of

specific works or by changes in operating regimes at the MLS.

� Broad descriptions of the downstream environmental impacts in the Lower Darling River,

Darling Anabranch, and Lower Murray. Broad categories include in-stream ecosystem and

wider floodplain ecosystem.

� An assessment of the water quality issues focussed on local water quality concerns associated

with discharges to the Lower Darling, residual pools and management of dedicated storages.

� Socio-economic impacts: Sunset Strip, Tandou Farms, Anabranch, Lower Darling, Menindee

township, Broken Hill, Copi Hollow.

� Scheme descriptions

� Environmental assessments

� The downstream impacts in the Lower Darling River, Darling Anabranch, Tandou Farms and

Lower Murray.

� Impacts on Irrigation entitlements.

� Cultural impacts

� Potential flooding impacts



PAGE 57

� Potential Scheme impact mitigation measures

� Planning pathways and Legislative context

� Requirements for detailed studies.

4.2. Schemes and Broken Hill Options

The following Schemes (Table 4-1) were identified from the project’s evaluation process to be

further investigated and described in detail as a deliverable of Stage 3. Figure 4-1 to Figure 4-6,

illustrate the Schemes. A Statement of Effects for each Scheme is summarised in Section 5 & 6

and detailed in the Schemes’ Statement of Effects.

� Table 4-1 Stage 3 Scheme Descriptions

Stage 2 Scheme

ID

Stage 3 Scheme

ID Description Detailed Description

Lakes Schemes

1 1 Never Fill Lakes Menindee and Cawndilla

Includes MDB Agt rule change, existing structures,+ L Pamamaroo draining channel & BH separate drought supply

3 2

Reduced use of Lake Menindee and Lake Cawndilla + assumed environmental fill + existing outlet structures

Includes MDB Agt rule change and assumed environmental fill, existing outlet structures, + L Pamamaroo draining channel & BH separate drought supply

4 3

Reduced use of Lake Menindee and Lake Cawndilla + assumed environmental fill + Environmental structures

Includes MDB Agt rule change and assumed environmental fill, + L Pamamaroo draining channel & BH separate drought supply + Morton Boolka regulator/fishway + Enlarged Menindee Regulator + outlet channel/ Draining channel + Enlarged Cawndilla Outlet / Draining channel & BH separate drought supply

7a 4

Reduced use of Lake Cawndilla + assumed environmental fill + Morton Boolka High Level regulator + existing outlet structures

Includes MDB Agt rule change and assumed env fill, existing outlet structures, Morton Boolka HL Regulator + fishway, L Pamamaroo draining channel & BH separate drought supply

7b 5

Reduced use of Lake Cawndilla + assumed environmental fill + Morton Boolka High Level regulator + Environmental structures

Includes MDB Agt rule change and assumed env fill, Enlarged Menindee Outlet + outlet channel and draining channel, + Morton Boolka High Level Regulator + fishway + Enlarged Cawndilla Outlet / Draining channel + L Pamamaroo draining channel & BH separate drought supply

7c 6

Reduced use of Lake Cawndilla + Morton Boolka High Level regulator + Environmental structures + MDB Agt current rules + assumed environmental filling

Includes MDB Agt current rules and assumed env fill, Enlarged Menindee Outlet + outlet channel & draining channel, Morton Boolka HL Regulator, + Enlarged Cawndilla Outlet / Draining channel + L Pamamaroo draining channel & BH separate drought supply


WS1a BH2 Use of Lake Tandure and Upgraded Weir 32

Lake Tandure regulator/bank/pump + Upgraded Weir 32 (5GL)

WS1b BH2 Use of Lake Tandure and Upgraded Weir 32 + Copi Hollow

Lake Tandure regulator/bank/pump + Upgraded Weir 32 (2-3GL) + Copi Hollow (2-3GL)

WS1c BH2 Use of Lake Tandure and designated BH Storage (uncovered)

Lake Tandure regulator/bank/pump + designated 5GL Storage at Texas Downs, Menindee

WS3 BH3 Texas Downs Uncovered Storage Deep storage of 18 GL on Darling River floodplain close to

Weir 32 pool. Pumping to fill/drain

WS5 BH1 Managed Aquifer Recharge Bank Filtration with site 5.5kms from Injection Pump


� Figure 4-1 Layout of Scheme 1


Figure 4-3 Layout of Scheme 3


� Figure 4-5 Layout of Schemes 5 & 6


� Figure 4-6 Layout for all Broken Hill Waters Supply Schemes Note: MAR Scheme feasibility to be confirmed.



PAGE 64

4.3. Engineering Assessment

The final Structural Options and their costs are presented in Table 4-2 and Table 4-4, respectively,

and the final integrated Schemes and costs are presented in Table 4-3. Detailed descriptions of the

designs are provided in the SoE in the Schemes’ Statement of Effects.

Broken Hill water supply - Interconnecting channel pumping station with Lake Menindee inlet channel in background (dry)

Lake Wetherell outlet regulator – downstream channel



PAGE 65

� Table 4-2 Summary of Structural Options

Option Description

Lakes Structural Options

Lake Pamamaroo Draining Channel

� Channel from the northern residual storage area (bed level RL 55 m AHD) to the outlet regulator at the Darling River (sill 52.25 m AHD).

� Approximately 6 km long located NE of the existing Pamamaroo Creek.

� Channel width approximately 20-60 m.

Morton Boolka Regulator

� High level embankment and regulator to allow for independent water regimes in Lake Cawndilla and Lake Menindee.

� Maximum surcharge level of RL 60.45 m AHD (Crest 62.5 m AHD).

� Regulator capacity of 15 000 ML/day with Designed for reverse flow capability & Two way fishway

� It will facilitate the reduced use of Lake Cawndilla.

Lake Menindee Draining Channel

� Channel to enlarge the discharge capacity of Menindee outlet at low Lake levels and drain the residual pool in the NE portion of the Lake.

� 10 km channel with width 30-60 m

� Draining from RL 55 m AHD (residual pool bed) to 53.5 m AHD (bed of Menindee Creek near the outlet).

Outlet Enhancement – Enlarged Menindee Outlet Regulator

� To provide outflow capacity of 9 000 ML/day at headwater level of RL 58.0 m AHD.

� Two radial gate construction with bridge Located at Little Menindee Creek site

� Included enlarged Little Menindee Creek channel from proposed regulator to the Darling River.

� Existing outlet on Menindee Creek may be retained to facilitate drainage from the north western section of the Lake and also to utilise its low regulator sill level. Final decision on this retention will be based on O&M cost considerations and final designs for proposed regulator.

Enlarged Cawndilla Outlet Regulator (regulator + Penellco channel)

� To provide enlarged outflow capacity at RL 56.0 m AHD which is Lake level where Menindee and Cawndilla separate.

� Regulator would be about twice the size of the existing structure.

� Strengthening of Cawndilla outlet channel and Tandou Creek, construction of Tandou Creek Weir, Penellco channel regulators and channel plus a drop structure at the Darling River.

� Further hydraulic modelling is required to confirm the performance of an enlarged Cawndilla outlet regulator with releases via a modified Tandou Creek and Penellco Channel. The results of this modelling would be used to refine the extent of works required.

Lake Cawndilla Draining Channel

� Channel to enlarge the discharge capacity of Cawndilla outlet at low Lake levels and drain residual pool in SE of Lake

� 3 km channel draining from RL 53.5 m AHD (residual of 20 GL) to 51.34 m AHD (sill of regulator)

� Broken Hill Water Supply Structural Options

Managed Aquifer Recharge

� Use of local aquifer to store and supply water

� Bank filtration water treatment close to the River near Menindee

� 5.5kms from bank filtration site to borefield

� Costs based on filling the aquifer 4 times in 30 years for supply of current Broken Hill demand.

Lake Tandure plus Ancillary storages

� Lake Tandure

� 2km long and 4.5m high embankment

� Regulator and pump/pipeline for filling and draining of the Lake

� Ancillary structures:

� Upgraded Weir 32

� Raise weir by 3m to pond additional 5GL in Weir 32 (within River channel)

� Temporary trestle style weir constructed in drought sequences

� Upgraded Weir 32 plus Copi Hollow storage

� Upgrade Weir 32 up to 3m to impound additional 3 to 5GL

� Construct pipeline from existing Menindee to Broken Hill pipeline to supply Copi Hollow storage (about 3GL)

� Cycle water through storage and reintroduce water into BH pipeline via existing pumps at Lake Menindee inlet channel

� Construct an overshot weir/regulator in Copi Hollow inlet channel (Lake Pamamaroo outlet channel) to maintain water levels in Copi Hollow independent of Lake Pamamaroo levels

� Designated 5GL storage � Construct a 5GL turkey nest storage on the Darling River floodplain near Menindee (Texas Downs) � Channel and pump near the Darling River for filling and draining

Texas Downs Storage

� Construction of an 18GL turkey nest storage on the Darling River floodplain near Menindee (Texas Downs)

� Channel and pump near the Darling River for filling and draining



PAGE 66

� Table 4-3 Schemes and Engineering Costs

DARLING RIVER WATER SAVING PROJECT - LAKES & WATER SUPPLY SCHEMES - STAGE 3

Stage 3

Scheme IDDescription

Hydologic

Model Run

Evap

Savings

GLpa

Options

Included in

Scheme (Refer

Table 4-4)

Capital cost

($M)

O&M Cost

(NPV $M)

Lake Scheme

Total Lifecycle

Cost (2009) $M

## Integrated Scheme

including Lakes Scheme and

indicative BH Water Supply

Scheme Total

Lifecycle Cost (2009) $M

Lakes Schemes

1Never Fill Lakes Menindee and Cawndilla

5294 248 La 2.7 0.2 2.9 33.9

2Reduced use of Lake Menindee and Lake Cawndilla + environmental fill + existing outlet structures 5386 125 La, 2.7 0.2 2.9 33.9

3Reduced use of Lake Menindee and Lake Cawndilla + environmental fill + Environmental options 5386 125

La, Lb, Lc, Ld, Le,

Lf59.2 11.7 70.9 101.9

4

Reduced use of Lake Cawndilla + environmental fill +

Morton Boolka High Level regulator + existing outlet structures

5403 61 La, Lf 16.9 1.7 18.6 49.6

5

Reduced use of Lake Cawndilla + environmental fill +

Morton Boolka High Level regulator + Enlarged Menindee Outlet Regulator/draining channel + Enlarged

Cawndilla Outlet / Draining channel

5404 74La, Lb, Lc, Ld, Le,

Lf59.2 11.7 70.9 101.9

6

Reduced use of Lake Cawndilla + Enlarged Menindee

Outlet Regulator + Morton Boolka High Level regulator +

Enlarged Cawndilla Outlet / Draining channel + MDB Agt

current rules + environmental filling5405 34

La, Lb, Lc, Ld, Le,

Lf59.2 11.7 70.9 101.9

## Note- The integrated scheme is included in the CBA analysis to provide for both Menindee Lakes water saving and Broken Hill water supply

Water Supply Schemes - Current BH Usage

BH1 Managed Aquifer Recharge na na Wj 26 5 31.0 na

BH2 Use of Lake Tandure and Upgraded Weir 32 na na Wa, Wc 34.8 2.1 36.9 na

BH2Use of Lake Tandure and Upgraded Weir 32 + Copi

Hollowna na Wa, Wc, Wd 47.7 2.7 50.4 na

BH2Use of Lake Tandure and designated BH Storage

(uncovered) na na Wa, Wb 33.1 2.5 35.6 na

BH3Texas Downs Uncovered Storage

na na Wf 35 1.4 36.4 na



PAGE 67

� Table 4-4 Options and Engineering Costs

DARLING RIVER WATER SAVING PROJECT - OPTIONS SUMMARY - STAGE 3

Option Capital Cost $M # O&M NPV $M # Total Lifecycle Cost $M #

Lakes Options

Option La Lake Pamamaroo Drain 2.7 0.2 2.9

Option Lb L Menindee Drain 5.0 1.5 6.5

Option Lc Lake Cawndilla Drain 0.7 0.1 0.8

Option Ld Enlarged Lake Menindee Outlet + outlet channel 13.0 1.5 14.5

Option Le Enlarged Lake Cawndilla Outlet (Regulator + Penellco

Channel route 2,000Ml/d) 23.6 6.9 30.5

Option Lf High Level Morton Boolka Regulator and fishway 14.2 1.5 15.7

Option Lh Broken Hill Water Supply - Lake Tandure + 5GL Storage 33.1 2.5 35.6

Water Supply Options

Option Wa Lake Tandure Bank/Regulator 19.8 1.5 21.3

Option Wb Designated Broken Hill Storage 5GL 13.3 1.0 14.3

Option Wc Weir 32 Upgrade 15.0 0.6 15.6

Option Wd Copi Hollow Pipe & Weir 12.9 0.6 13.5

Option Wf Texas Downs Uncovered Storage 35.0 1.4 36.4

Option Wh Kinalung Uncovered Storage + Pipeline 79.0 18.0 97.0

Option Wi MAR with Engineering Water Treatment 37.0 9.0 46.0

Option Wj MAR with Bank Filtration Water Treatment and 5.5kms of

pipeline 26.0 5.0 31.0

Note: # Costs based on 2009 $s



PAGE 68

4.4. Hydrologic Outcomes

4.4.1. Hydrologic Modelling

All modelling undertaken in this project was undertaken by the NSW Office of Water (NOW),

under the direction of the Hydrology Working Group (HWG). Assessment was undertaken using

the MDBA MSM hydrologic model.

The HWG was made up of representatives from NSW State Water Corporation, the NSW

Department of Environment and Climate Change (DECC), the Murray-Darling Basin Authority

(MDBA), and the NSW Office of Water (NOW). The lead consultant (SKM) and the hydrology

consultant (Barma Water Resources Consulting) attended all meetings and contributed to

establishment of integrated schemes that are presented in this report.

Approximately ninety integrated schemes have been assessed using the MSM model in as part of

this study. They can be grouped into seven categories. These are:

• A range of schemes consisting of “Limited Use of Lake Menindee and Lake Cawndilla” with

various outlet configurations.

• A range of schemes consisting of “Low Level by-pass around Lake Menindee and use of Lake

Cawndilla as an Operational Storage” with various outlet configurations.

• A range of schemes consisting of “Use of Lake Menindee as an Operational Storage and

Limited Use of Lake Cawndilla” with various outlet configurations.

• A number of schemes that assess the “Rapid drawdown of all Lakes” with various outlet

configurations.

• A number of schemes consisting of “modifying current operational practices for various

outlet configurations and existing rules”.

• A number of schemes consisting of “modifying current operational practices for new rules

and various outlet configurations”.

Detailed results for these Schemes can be found in Schemes’ Statement of Effects (separate

volume to this report) with a summary in the following Table 4-5.



PAGE 69

� Table 4-5 Stage 3 Schemes & Hydrology

Stage 3 Scheme

IDDescription Detailed Description

Hydologic

Model Run

Evap

Savings

GLpa

Lakes Schemes

1Never Fill Lakes Menindee and Cawndilla Includes MDB Agt rule change, existing structures,+ L Pamamaroo draining channel & BH offline

5294 248

2Reduced use of Lake Menindee and Lake Cawndilla + environmental fill +

existing outlet structures

Includes MDB Agt rule change and environmental fill, existing outlet structures, + L Pamamaroo

draining channel & BH offline5386 125

3

Reduced use of Lake Menindee and Lake Cawndilla + environmental fill +

Environmental options

Includes MDB Agt rule change and environmental fill, + L Pamamaroo draining channel & BH

offline + Morton Boolka regulator/fishway + Enlarged Menindee Regulator + outlet channel/

Draining channel + Enlarged Cawndilla Outlet / Draining channel & BH offline5386 125

4Reduced use of Lake Cawndilla + environmental fill + Morton Boolka High

Level regulator + existing outlet structures

Includes MDB Agt rule change and env fill, existing outlet structures, Morton Boolka HL

Regulator + fishway, L Pamamaroo draining channel & BH offline5403 61

5

Reduced use of Lake Cawndilla + environmental fill + Morton Boolka High

Level regulator + Enlarged Menindee Outlet Regulator/draining channel +

Enlarged Cawndilla Outlet / Draining channel

Includes MDB Agt rule change and env fill, Enlarged Menindee Outlet + outlet channel and

draining channel, + Morton Boolka High Level Regulator + fishway + Enlarged Cawndilla Outlet /

Draining channel + L Pamamaroo draining channel & BH offline5404 74

6

Reduced use of Lake Cawndilla + Enlarged Menindee Outlet Regulator +

Morton Boolka High Level regulator + Enlarged Cawndilla Outlet / Draining

channel + MDB Agt current rules + environmental filling

Includes MDB Agt current rules and env fill, Enlarged Menindee Outlet + outlet channel &

draining channel, Morton Boolka HL Regulator, + Enlarged Cawndilla Outlet / Draining channel +

L Pamamaroo draining channel & BH offline5405 34

Water Supply Schemes - Current BH Usage

BH1 Managed Aquifer Recharge Bank Filtration with site 5.5kms from Injection Pump na na

BH2 Use of Lake Tandure and Upgraded Weir 32 Lake Tandure regulator/bank/pump + Upgraded Weir 32 (5GL) na na

BH2 Use of Lake Tandure and Upgraded Weir 32 + Copi Hollow Lake Tandure regulator/bank/pump + Upgraded Weir 32 (2-3GL) + Copi Hollow (2-3GL) na na

BH2Use of Lake Tandure and designated BH Storage (uncovered) Lake Tandure regulator/bank/pump + designated 5GL Storage near Darling River, Menindee

na na

BH3Texas Downs Uncovered Storage Deep storage of 18 GL on Darling River floodplain close to Weir 32 pool. Pumping to fill/drain

na na



PAGE 70

4.4.2. Hydrologic Modelling Broad Findings

Reconfiguration of Outlet Structures

During the assessment of the ninety Schemes, it was found that enlarged outlets at Lakes Menindee

and Cawndilla, when used as part of current operational practices, produced smaller benefits in

terms of water savings. However, enlarged structures were considered to remain important for

flexibility of operation within the Lakes and for environmental outcomes (managing draining times

to match environmental water regime requirements).

Increased Frequency of Supply to Murray River Users

Modelling also indicated that by allowing the Lakes to supply Murray valley users for longer

periods of time through alteration to the 640/480 rule that savings could be achieved whilst

reducing third party impacts to water users. Whilst the modelling used the 640/480 rule as the

lever to achieve this, in practice, this could be achieved by either changing the MDB Agreement

threshold or by NSW undertaking additional releases while the Lakes were under their control.

Altering the supply frequency to Murray valley users results in small alterations in the flow regime

between Hume Dam and Wentworth. However, these alterations did not result in increased

flooding or an increase in unseasonal flows.

Impacts on Victoria, South Australia and NSW Murray River

Barma Water Resources (Hydrology Report Darling Water Savings Project Final Part B

Hydrology Report Feb 2010), reports on the impacts of the Schemes on other stakeholders in the

Murray River and Lower Darling River systems. A table of impacts is presented in Appendix A as

well as plots of SA Diversion entitlement Allocations, Victorian Murray High Reliability

Allocations and NSW General Security Murray Allocations.

Broken Hill Water Supply

In an effort to increase water savings and water security for both Broken Hill and other users, a

number of alternative supply strategies, which lower the volume of reserves that have to be set

aside were included in many of the integrated schemes assessed. Three supply strategies were

explicitly modelled as part of the study.

The first assumes Broken Hill can access water from a 30GL covered offline ring tank. The second

assumes Broken Hill can access its water from a 25GL 10m deep uncovered ring tank. This

provided a range for comparison of performance of the ring tanks. For both these options, various

triggers (based on scheme total volume) for when the ring tank was utilised were trialled during

scheme formulation. The adopted trigger was based upon satisfying a “no failure” criteria for



PAGE 71

Broken Hill demand. It is important to note that this criterion deals only with water quantity and

not water quality.

A third option in which Broken Hill and High Security Water users receive their supply from Lake

Tandure in the MLS was also investigated. Earlier feasibility studies to explore schemes for supply

to High Security Water users (near Menindee and in the Lower Darling), demonstrated that the

existing use of the Menindee Lakes was the only practical mechanism. Large volumes of storage

are required for supply for usage and delivery to all high security users and this is not practical

from a constructed designated storage independent of the existing MLS.

It was found that the use of Lake Tandure on its own is unable to give Broken Hill a supply with no

shortfalls at any reserve setting, including settings greater than MDB Agreement rule 640/480. This

was overcome by the addition of a small 5GL uncovered ring tank with a surface area of 50Ha to

be used in harmony with Lake Tandure.

Supply strategies were modelled for two resource supply timeframes, the first ensuring sufficient

reserves are set aside to ensure supply reliability to the end of the water year (in effect ensuring

supply over a 12 month period). The second to ensure sufficient reserves are set aside to ensure

supply reliability for an 18month period.

In the modelled options of the Stage 1 work, Broken Hill’s water supply was sourced from the

MLS and its local storages. Large water reserves were required to be set aside within the scheme to

meet this demand due to the high evaporation rates associated with the MLS.

Shortlisting of Schemes

Of the ninety schemes assessed, seven were selected for detailed hydrologic analysis. Selection was

based on achievement of significant water savings, and minimal third party impacts in terms of

irrigation reliability and water quality. Schemes that fell into this category consisted of using Lake

Menindee and or Cawndilla the less frequently or in one case not at all in conjunction with

increased supply frequencies for Murray valley users.

A detailed assessment of shortlisted hydrology Schemes can be found in Barma Water Resources

(Hydrology Report Darling Water Savings Project Final Part B Hydrology Report Feb 2010).

4.5. Socio-economic Assessment

4.5.1. Introduction

The socio-economic assessment was undertaken by GHD Hassall for SKM. The following is a

summary of the findings of the assessment with full details provided at Appendix B.

In Stage 1 of this project the schemes that were developed by Maunsell (2007) in the Part A report

were reviewed using an improved hydrologic model, leading to revised capital works design and

costing, and refined operating rules to address third party impacts on water users. Stage 2 refined



PAGE 72

the schemes and identified six final schemes for assessment in Stage 3. This study assesses the six

final schemes using Cost Benefit Analysis. It includes a discussion on a number of potential risks.

The six schemes focus on reducing evaporation in the MLS, to provide river flows that would not

otherwise have been available. Options for on-farm water savings investments on the NSW

regulated rivers in the Northern MDB, and the potential transfer of essential storage requirements

at the MLS to upstream storages, were considered in earlier stages of the project.

4.5.2. Methodology

This assessment primarily uses a Cost-Benefit Analysis (CBA) methodology in accordance with

the Commonwealth Government’s guidance (Commonwealth of Australia, 2006, Handbook of Cost

Benefit Analysis – Financial Management Reference Material No. 6.)

CBA is used to aid decisions on the allocation of scarce resources. Costs and benefits are

expressed as far as possible in monetary terms and they are valued with respect to the community

as a whole, rather than any particular group. Costs and benefits are valued at the time they are

incurred. In order to make them comparable, future costs and benefits are discounted to present

values.

The Net Social Benefit of a project is the sum of the present value (the net present value) of all

future costs and benefits.

The CBA estimates future costs and benefits and discounts them to 2009 values. Estimated costs

and benefits are discounted over 50 years.

The discount rate reflects the assumed return on capital that is foregone (the opportunity cost) from

the alternative use of resources. Future costs and benefits are discounted to present values using a

7% per annum discount rate, with sensitivity analysis provided for 4% and 10% discount rates.

Cost and benefits are measured as changes under the scheme when compared with a base case –

comprising existing operating and water sharing arrangements.

The assessed scenarios involve significant changes to operational management arrangements and

works at MLS. The impacts of those changes are reflected in their effects on third parties and the

provision of water savings.

The impacts arising from the schemes are not of a sufficient size to materially affect prices within

the affected sectors, nor prices and outputs in other sectors of the economy. No secondary or

multiplier effects are recognised.

Significant unquantified costs or benefits include:

� Cultural and heritage impacts in and around the lakes; and



PAGE 73

� Local environmental values associated with changes in the frequency of inundation within the

Lakes and flows within the Anabranch.

4.5.3. Summary of CBA Results for Integrated Menindee Lakes Schemes

An integrated MLS was developed that included a water saving scheme and a representative

Broken Hill water supply scheme (MAR). This was to reflect the project’s objectives to achieve

water savings at the Lakes as well as providing for secure water supply to Broken Hill.

The base case, against which the schemes are assessed - is the continuation of current policies

regarding local, inter-valley and inter-state water sharing and management arrangements.

All of the schemes provide water savings. Changes in operations provide most of the water savings

– not investments in capital works.

Table 4-6 summarises the results of the Cost Benefit Analysis for the Integrated Menindee Lakes

Schemes. Note that the CBA result is also known as the Net Social Benefit if positive or Net Social

Cost if negative. Also, the costs used in the CBA are discounted to take into account the timing of

implementation and hence are lower than the capital and O&M costs stated based on 2009 prices.

� Scheme 1 has the highest net social benefit – with minimal capital works, significant water

savings, and net positive third party impacts.

� Scheme 2 has the second highest net social benefit – with minimal capital works, moderate

water savings and no significant net third party impacts.

� Scheme 4 results in a small net social loss – with few capital works, moderate water savings

and small net negative third party impacts.

� Schemes 3, 5 and 6 results in moderate to large net social losses – they have extensive capital

works the cost of which is not offset by the moderate to low water savings.

� Table 4-6: Summary of cost benefit analysis results ($ million)

Water savings are valued between $19 million and $125 million using a market (consumption

based) approach. A non-market valuation model was developed. However this was not used as

there was no basis of identifying the marginal additional environmental benefits associated with the

Stage 3 Schemes

Cost of works

Water savings

Net third party impacts

Net social benefit (cost)

BCA ratio Rank

1 (27) 125 5 103 4.5:1 1

2 (27) 53 (0) 26 1.9:1 2

3 (77) 53 (0) (25) 0.7:1 4

4 (39) 38 (3) (4) 0.9:1 3

5 (77) 28 (0) (50) 0.4:1 5

6 (77) 19 (2) (61) 0.2:1 6



PAGE 74

use of the savings (either in isolation or as part of a more general portfolio of environmental water,

the priorities of which have yet to be fully established (through the Basin Plan).

The savings are valued as a hypothetical entitlement providing increases in average annual flows at

Burtundy on the Lower Darling, outflows from the Anabranch to the Murray River, and excess

modelled diversions. These are then valued with reference to water market prices.

The estimated entitlement volume assumes that the water savings have a notional long term cap

equivalent reliability of 10%. Savings entitlement volumes range from 1,800GL to 267GL.

There is an inherently high level of uncertainty in the valuation of water savings. However, in the

context of current market prices, the assumed entitlement price of $100 per share for increase flows

is reasonably conservative.

Table 4-7 shows the break-even entitlement price requirement for schemes 1, 2, 3 and 4 are below

$150 per share. Schemes 5 and 6 have a break-event entitlement price above $240 per share.

� Table 4-7: Break-even entitlement price assumption ($ per share)

Scheme 1 2 3 4 5 6

Required entitlement price $14 $44 $127 $97 $242 $371

These break-even prices compare with recent volume weighted average prices for other forms of

access licence in the December Quarter of 2009 - $1,800 to 3,100 per share for Murray valley high

reliability/security, $1,200 per share for NSW Murray General Security, and $180/ to $1,000 per

share for Supplementary Access on the Macquarie and Gwydir Rivers, respectively.

Trade in the Lower Darling is so thin that there are no useful market prices for High or General

Security entitlements. The only Supplementary Access entitlement was owned by Tandou Farms

and recently sold to government for a price understood to be in the order of $150 per share.

The sensitivity of the CBA results to changes in either the water savings proxy entitlement

reliability or market price is illustrated in Table 4-8. It shows that schemes 5 and 6 are not positive

under any of the tested reliabilities or prices, and that schemes 1 and 2 are positive to break-even

across the full range of tested reliabilities and prices.



PAGE 75

� Table 4-8: Sensitivity of results to water savings entitlement price

Scheme 1 2 3 4 5 6

20% reliability or $200/share 228 79 29 34 (22) (42)


10% reliability or $100/share 103 26 (25) (4) (50) (61)

5% reliability or $50/share 41 (1) (51) (23) (64) (70)

Note: Bolded figures represent the positive to break-even Net Social Benefits

An environmental valuation (using transfer benefits) has not been undertaken due to the absence of

any clear direction, on when and where savings might be used.

Works related costs have a significant effect on the total net social benefits of the schemes.

Sinclair Knight Mertz (SKM) provided estimated capital, and lifecycle operations and

maintenance, costs for each of the major component water savings works at the MLS.

The net present value of those costs is reduced due to the following factors:

� Construction costs are assumed to be incurred over three years with 25% incurred in 2011,

50% in 2012 and 25% in year 2013. The SKM costs were distributed and discounted

accordingly.

� Recurrent costs (operating and maintenance) will be incurred in the years following the

construction of works. The SKM estimates of the lifestyle NPV costs are discounted, to

commence 2014 and continue to 2060.

Each of the schemes involve at least one operational work (the Lake Pamamaroo drain), and

generally combinations of several works, to facilitate the required operational efficiency and

flexibility. Table 4-9 shows the SKM cost estimates, their discounted values (at 7%) and the total

capital costs used in the CBA results.

� Table 4-9: Component Lifecycle costs and their discounted values

SKM Estimates ($M 2009) Discounted Cost Benefit Inputs ($M)

Ref Menindee Works Capital Cost

O&M Total Life

Cycle Capital Costs O&M

Total Cost #

La Lake Pamamaroo Drain 2.7 0.2 2.2 0.2 2.4

Lb Lake Menindee Drain 5.0 1.5 4.0 1.1 5.1

Lc Lake Cawndilla Drain 0.7 0.1 0.6 0.1 0.6 Ld Enlarged Menindee

Regulator 13.0 1.5 10.5 1.0 11.5

Le Enlarged Cawndilla Outlet 23.6 6.9 19.0 4.8 23.8 Lf High Level Morton Boolka

Regulator 14.2 1.5 11.5 1.0 12.5 � # Discounted CB inputs are rounded to one decimal point � All schemes include the La � For schemes 1 and 2, La is the only scheme work. � Scheme 4 is restricted to La and Lf. � Schemes 3, 5 and 6 involve all of the works identified above (La, Lb, Lc, Ld, Le, and Lf).



PAGE 76

The two schemes with positive net benefits and costs (schemes 1 and 2) have minimal works -

costed at $34 million and comprising water supply security offsets for Broken Hill ($31 million)

and a drain for Lake Pamamaroo ($2 million).

Works associated with the Morton Boolka high level regulator, a Lake Menindee drain and

enlarged outlet, and a Lake Cawndilla drain with enlarged regulator. These schemes have the

lowest total net social benefits.

Net third party impacts are small when compared with water savings and works, and historical

results for the schemes.

The largest third party values at risk are irrigation earnings. The hydrology simulation indicates

that there are no tangible impacts on long term average irrigation earnings across the southern

Murray-Darling Basin.

With respect to the timing and sequencing of announced allocations (based on the historical climate

record), the schemes generally only affect early to mid season allocations and have little if any

impact beyond that time. The absence of any significant or extended period of allocation impacts

indicates that there are unlikely to be any farm level impacts (not identified in the hydrology

model) and there are unlikely to be any significant impacts on the ability of irrigation enterprises to

achieve their current rates of return. A close inspection of the timing and sequencing of simulated

water allocations (and Tandou Farms’ diversions) shows that the schemes may affect opening

season allocations. Most of those impacts are eliminated within two to three months, and end of

year allocations are generally unaffected. Arche Consulting developed case study farm models in

consultation with the irrigation community. This work is duplicative as a close analysis of

modelled announced allocations used as an input to those models, do not show any impacts

sufficient to affect farm financial viability.

There are two tangible net third party impacts – salinity and local impacts at Menindee.

� Salinity costs generally range from a $3 million cost to a $2 million benefit with the exception

of scheme 1 which provides a notable $9 million benefit.

� Local third party impacts include reductions in the value of Sunset Strip property values and

reductions in the value of local recreation and tourism. Sunset Strip properties are estimated to

fall in total value by a maximum of 15% (under scheme 1). Tourism and recreational values

also fall, by up to $90,000 per annum (based on transfer values from the Lake Hume study

underlying the hydrology model). These estimates assume a high, direct correlation in their

values with the volume of water held in the MLS – which is contrary to their appreciation and

growth in recent years despite the absence of any significant volumes of water in storage.

Unquantified impacts are changes in local environmental values (within and around the lakes, and

within the Anabranch), local cultural and heritage values, local water quality and local grazing.

Nevertheless, the first two of these are considered in the projects multi-criteria analysis.



PAGE 77

Climate records over the past 106 years underwrite the hydrology modelling results. Climate

change scenarios were assessed also assessed in the hydrology assessment.

4.5.4. Broken Hill Water Supply

Broken Hill currently relies heavily on MLS for its town water supplies.

The community has a high dependence on secure water access. A relatively large proportion of

residents are over 70 years of age (14%) and susceptible to heat stress so that many households

(~90%) use evaporative air conditioners to manage extreme climatic conditions. Furthermore, due

to the historically high intensity of mining in and around Broken Hill there is a need to actively

suppress heavy metal contaminants (particularly lead) in dust.

Broken Hill holds a High Security licence of around 10,000 shares (10GL). Its usage in recent

years has been around 5GL pa. The hydrology model, conservatively assumes that the full 10GL

of access is required and it is noted that the hydrology modelling of existing supply arrangements

shows no period of insufficient supply for current needs for the entire climatic record. By

assuming that the full entitlement is provided for, future supplies can support a constant annual

growth in use of 3.5% over the 20 years of the DRWSP, and will provide additional security of

supply for the town until that time.

Water quality, in terms of salinity and water hardness (calcium and magnesium), is also a major

issue for town water supplies. Elevated levels of these minerals increase soap usage and the

formation of scale in water using appliances reducing their effective life.

The assessed schemes, as part of their changes in storage operating regimes, do not provide the

current rules relating to minimum storage of water for Broken Hill’s to maintain its existing

security of supply.

Nine works options were assessed on a cost effectiveness basis for inclusion in the assessed

schemes that would mitigate any impacts on Broken Hill’s modelled full licensed development

supply security. Table 4-10 shows the NPV of the ten options costs for achieving this. The O&M

estimates are based on usage of the scheme for drought sequences and not for permanent water

supply. It was assumed that the schemes would be required in four years over a 30 year assessment

period. Operation costs include provision for ongoing maintenance activities when the works are

not in active use, as well as the running costs of the works when in use (ie in 4 years over a 30 year

period). The schemes’ design requirement was to meet Broken Hill’s current demand during a

drought event as this was considered an appropriate level of supply to the city in such an event.

As is the case for works at the Lakes, construction is assumed to occur over three years commence

in 2011 and with costs weighted to year 2, and total lifecycle costs for operations and maintenance

in 2009 are discounted to commencing following the completion of construction.



PAGE 78

The combined supply options include one or more of the component works. Most have a cost

between $28 million and $31 million and the average of all of the combined schemes is $32

million. For the purposes of the CBA, a cost of $31 million has been used, equivalent to the cost of

the MAR (managed aquifer recharge with bank filtration) option.

� Table 4-10: Broken Hill security of supply options ($ million)

SKM Estimates

(NPV) Discounted CBA Inputs

Ref. Broken Hill Supply Works Capital Cost

O&M Total Life Cycle

Capital Costs

O&M Total

Cost #

Component works

Wa Lake Tandure Bank/Regulator 19.8 1.5 16.0 1.0 17.0

Wb Designated BH storage 5GL 13.3 1.0 10.7 0.7 11.4

Wc Weir 32 upgrade 15.0 0.6 12.1 0.4 12.5

Wd Copi Hollow pipe & weir 12.9 0.6 10.4 0.4 10.8

Wf Texas Downs uncovered storage + pipeline 35.0 1.4 28.2 1.0 29.2

Wi MAR - engineering treatment 37.0 9.0 29.8 6.3 36.1

Wj MAR - bank filtration (5.5km) 26.0 5.0 20.9 3.5 24.4

Final Combined Broken Hill supply works

BH1 MAR - bank filtration (5.5km) 26.0 5.0 20.9 3.5 24.4

BH2 Lake Tandure & Upgrade Weir 32 34.8 2.1 28.0 1.5 29.5

BH2 Lake Tandure & Weir 32 + Copi Hollow 47.7 2.7 38.4 1.9 40.3

BH2 Lake Tandure & designated storage 33.1 2.5 26.7 1.7 28.4

BH3 Texas Downs uncovered storage + pipeline 35.0 1.4 28.2 1.0 29.2

Note: # Total costs are rounded to one decimal point.

4.5.5. Local tourism and recreation

The Lakes, and the very large Kinchega National Park adjacent to them, support a wide range of

tourism and recreational activities. They are between one and two hours drive from Broken Hill.

Recreation at the Lakes includes water sports - including swimming, power boating, water skiing,

sailing, kayaking, angling, camping, bush walking, bird watching, and the visual arts (painting and

photography).

All of these activities are pursued at Lakes Menindee and Pamamaroo. Water sports and passive

activities (camping and picnicking) are undertaken at Copi Hollow. Recreation at Lake Cawndilla

generally involves only non-contact activities. Lake Wetherell they are limited to fishing (Mandis



PAGE 79

Roberst, 1996, The Menindee Lakes Recreation Study) and commercial boat tours (State Water

advice).

An estimate of the economic value of local tourism and recreation at risk from changes in the

frequency and volume of water held in Lake Menindee is used in the CBA. It is estimated using a

bottom up approach wherein the expenditure of predicted numbers of visitors provides a basis for

calculating the economic surplus of those activities. This provides a high estimate of potential

impacts when cross-checked against reported outputs from the Menindee local statistical area.

The value of local tourism and recreation is estimated as the number of visitors to the Lakes and

their average expenditure per visit.

Regional tourism is significant on a state scale. The Broken Hill region has around 147,000

overnight visitors per annum (Tourism Research Australia, 2008). This equates to a third of

domestic overnight visitors to outback NSW (Tourism NSW, 2009).

The annual number of visitors (day or stay) who undertake tourism and recreational activities at the

Lakes is in the order of 55,000 per annum (Jim Parkinson and Associates, 2002, Economic Values

of the Menindee Lakes System). This includes both visitors to region and residents of, Broken Hill.

Tourism and recreational expenditure is estimated using a transferred value for “willingness to

pay” from a study undertaken of the recreational at Hume Dam (Crase & Gillespie, 2005, The

impact of water quality and water level on the recreation values of Lake Hume). This study

contributed to the estimates of recreational impacts in the broader hydrology model.

Each person is assumed to be willing to pay $37 per visit. On a bottom up basis the base case has

an imputed expenditure associated with tourism and recreation of $2 million

(55,000 x $37) under the Base Case. From a top down perspective, $2 million represents 20% of

the total economic output ($10 million) at Menindee (Australian Bureau of Statistics).

With regard to the expenditure on tourism and recreation at the Lakes, a margin of 20% is assumed.

Under the base case the Lakes provide $400,000 per annum to the local economy.

Under each of the assessed schemes, visitation of the Lakes is assumed to decline linearly with the

reduction in time that the total Menindee volume in storage is below the volume that occurs at least

50% of the time under the base case.

It is noted that this methodology may over estimate tourism and recreation impacts as it:

� assumes that there are no substitutes - wherein alternative activities are undertaken, such as

alternative recreational activities by Broken Hill residents or alternative tourism destinations

for visitors to the region;

� assumes that all tourism and recreation relates to the volume of storage, whereas recent

visitation has increased despite the absence of water in Lake Menindee since 2002; and



PAGE 80

� Estimates total tourism and recreation expenditure represents almost twice the reported output

of the forestry, fishing and agriculture sectors in the area.

4.5.6. Sunset Strip property values

Sunset Strip comprises 145 properties located on the northwest shore of Lake Menindee, adjacent

to a deep section of the Lake. The value of these properties is assumed to be related to the

frequency and duration of water frontage and, therefore, the volume of water held in the Lake.

Local real estate agents were interviewed in 2006. The average value of the Sunset Strip properties

was $65,000 for developed lake frontage, $45,000 for developed back row properties, and $13,000

for an undeveloped lot. The total value of residential properties and lots at Sunset Strip was

estimated at around $9 million.

Local real estate agents were re-interviewed in 2009 and the property prices at Menindee had

increased by between 10% and 20% since 2006. The total value of Sunset Strip properties is

estimated to have increased by 20% to $11 million.

One third of the value of the Sunset Strip properties is assumed to relate to the amenity value

associated with water stored in Lake Menindee. The remaining value is attributed to rental income

(from both residents and workers on irrigated properties) and the benefits of a having access to a

relatively isolated retreat. This means that the correlation between the value of property at Sunset

Strip and water in the MLS is not strong determinant in property values. There are other reasons

for using accommodation at Sunset Strip than those associated with a water frontage. It is noted

that this assumption may over estimate the impact on Sunset Strip properties given that they have

consistently appreciated in value over the past ten years despite the absence of any water held in

Lake Menindee. Nevertheless, if the price appreciation only relates to the non-lake based values

then the underlying increase is in the order of 35% per annum. While this is high, it is not

impossible, particularly if there have been any shortages of accommodation elsewhere in the

region.

The base case assumes that the current amenity value provided by the lakes occurs in 75% of years.

Under each of the assessed schemes, the value of the properties relating to the Lakes is assumed to

change in proportion to the time over which Lake Menindee storage volumes are reduced from

base case level.

Property values are asset values. They incorporate the sum of all future benefits. Their valuation is

forward looking. Any expected impact arising from the schemes should be quickly reflected in

property prices, prior to the completion of works and the commencement of new operating rules.

The impact on property values is therefore not discounted.



PAGE 81

Sunset Strip – Lake Menindee foreshore

4.5.7. Valuing Water Savings

The schemes reduce evaporation from the MLS. Reduced evaporation from the MLS has little or

no economic or environmental utility in its own right. However, reduced evaporation can provide

additional, previously unavailable, downstream river flows.

In this CBA, values are ascribed to changes in modelled annual average changes in:

� flows at Burtundy on the Lower Darling;

� anabranch outflows to the Murray River; and

� excess modelled diversions.

Within the southern MDB, environmental water is managed as part of a larger portfolio comprising

planned (or rules based flows) and codified entitlements (adaptive environmental water).

The nature of the modelled flows may be amenable to codification as ‘rules based’ environmental

water as they could accommodate years of both increased and decreased flows. However, there is

no market for such flows, and the specific environmental outcomes of these changes in flows have

not been identified, precluding the use of a non-market based valuation methodology.

The flows provide periods of both increased and decreased flows, outflows and/or diversions.

The periods of reduced flows are inconsistent with existing tradeable entitlements. Nevertheless, in

the absence of non-market values, flows are valued as proxy water allocations.



PAGE 82

The estimation of changes in average annual allocations uses the mid-point between the hydrology

model summary average annual flow outputs and an average annualised long term simulated

monthly flow data.

The change in flows represents additional unregulated flows, and in this very broad context, is

similar in nature to NSW Supplementary Water Access Licences.

The proxy allocations are converted to a hypothetical entitlement volume by dividing them by an

assumed long term reliability factor of 10%. This factor is below the Long Term Cap Equivalent

factor implied in the price paid for Supplementary Access licences on the Lower Darling and

Murray River by governments for environmental watering.

The hypothetical entitlement volume is then multiplied by a notional price ($100 per share) for this

type of unregulated flows within a regulated river. The notional price is around half the prices

declared for SWAL transactions in the Macquarie Regulated River and a tenth of the price declared

for transactions in the Gwydir Regulated River.

This results in an effective price of $1,000 per ML of average annual flow. This proxy entitlement

is only available following the completion of works and commencement of new operational

arrangements, so the discounted value used in the CBA is $695 per ML of annual flow. Table 4-11

shows the results for the water savings valuations.

� Table 4-11: Valuation of water savings ($M)

1 2 & 3 4 5 6

Burtundy

Summary output 143 50 50 19 29

Average annualised monthly flows 168 69 29 38 1

Anabranch outflows



Assumed Burtundy flows 155 60 40 29 15

Assumed Anabranch outflows 23 15 13 10 10

Excess modelled diversions 1 1 1 1 1

Total water savings as flows (GL/year) 179 76 54 40 27

Effective entitlement estimate (10% reliability) 1,792 765 543 399 267

Value of entitlements (at $100/share) 179 76 54 40 27

Discounted value of entitlements ($’million) 125 53 38 28 19

There are several alternative market based valuation methods (such as valuing the increase in flows

and the decreases in flows as two distinct entitlements, or assigning allocation prices to annual

flows and averaging the series).

However, the simpler approach described above, is used in the CBA on the basis that it relies on

fewer assumptions and that the second method is not possible at this time due to limited availability



PAGE 83

and time series of allocation prices under different allocation levels (particularly in the Lower

Darling).

It is noted that, assuming agreement can be reached on any required changes to inter-state

agreements to give effect to the changed operating rules underlying the schemes, the water savings

might be achieved through their codification as planned environmental water. The timing of this

could coincide with the required the remaking of the Water Sharing Plan in 2014, which is the first

year of anticipated water saving flows (following the completion of relevant capital works).

4.5.8. Unquantified impacts

Cultural heritage impacts

Cultural heritage impacts are discussed and assessed in a distinct report commissioned by

Government and as unpriced costs or benefits have not been included in the CBA, but are

recognised in the MCA.

Local environmental impacts

The Menindee Lakes have environmental significance in their own right. The environmental

savings valuations focuses on flows and do not take into account on-site impacts. Local impacts of

schemes within the Menindee Lakes are unpriced and have not been included in the CBA, but are

recognised in the MCA.

Marginal changes in local water quality

The modelling of the schemes does not provide quantified estimates of marginal changes in local

water quality (specifically salinity). With respect to Broken Hill’s water supply there are potential

impacts on water quality. These need to be investigated further. Where there is an impact, the

leasing cost of water treatment such as reverse osmosis facilities will need to be managed. The

alternative is to construct a permanent reverse osmosis plant. The relative cost effectiveness of

these options will depend on the frequency with which the schemes result in unacceptable increases

in salinity. No quantified costs for managing marginal changes in salinity have been included in

the CBA.

Impacts on local stock feed and water access

There are a number of grazing enterprises operating adjacent to the MLS. The extent to which they

are dependent on the Lakes for stock water supplies and the benefits of any change in local

flooding (providing additional feed following inundation) is unclear, although the absence of water

in the Lakes over recent years would suggest that alternative, contingency water supply options

will already be in place.

Regional employment

All of the schemes protect other uses (including irrigation interests) associated with the MLS in

NSW, Victoria and South Australia, and the impact on regional employment of implementing any

scheme is expected to be marginal.



PAGE 84

4.5.9. Socio-economic Results

Table 4-12 shows quantified costs and benefits for each scheme. Total benefits and costs represent

the change in community well being (the Net Social Benefit or CBA result). The Benefit Cost

Ratio (BCR) is the proportion of benefits to costs. A positive net social benefit has a BCR greater

than 1 and represents a net improvement in the distribution of resources.

� Table 4-12: Summary of benefits and costs ($ million)

Stage 3 Schemes

Scheme 1 2 3 4 5 6

Hydrology Model Run 5294 5386 5386 5403 5404 5405

Lake Pamamaroo Drain (2.4) (2.4) (2.4) (2.4) (2.4) (2.4)

Lake Menindee Drain (5.1) (5.1) (5.1)

Lake Cawndilla Drain (0.6) (0.6) (0.6)

Enlarged Menindee Regulator (8.6) (8.6) (8.6)

Enlarged Cawndilla Outlet (23.8) (23.8) (23.8)

High Level Morton Boolka Regulator (12.5) (12.5) (12.5) (12.5)

Broken Hill security offset - MAR (24.4) (24.4) (24.4) (24.4) (24.4) (24.4)

Total works related costs (27) (27) (77) (39) (77) (77)

Irrigation Earnings 0.0 0.0 0.0 0.0 0.0 0.0

Value of Hydro Electricity 0.9 (0.3) (0.3) (0.0) 0.2 (0.0)

Hume Recreation Value 0.1 (0.1) (0.1) 0.1 0.1 0.0

Flooding Benefit 0.2 0.1 0.1 (0.2) (0.2) 0.0

Salinity Benefit 7.4 1.6 1.6 (2.3) 0.2 (2.1)

Broken Hill water security 0.0 0.0 0.0 0.0 0.0 0.0

Local tourism and recreation (1.5) (0.9) (0.9) (0.1) (0.3) (0.1)

Local property values - Sunset Strip (1.3) (0.9) (0.9) (0.4) (0.4) (0.0)

Total third party impacts 5 (0) (0) (3) (0) (2)

Flows at Burtundy 108.0 41.5 41.5 27.5 19.9 10.5

Anabranch Outflows 19.4 10.7 10.7 9.2 6.9 7.1

Diversions above cap 0.8 1.0 1.0 1.0 1.0 1.0

Water Savings 125 53 53 38 28 19

NET SOCIAL BENEFIT 103 26 (25) (4) (50) (61)

BENEFIT COST RATIO 4.5:1 1.9:1 0.7:1 0.9:1 0.4:1 0.2:1

RANK 1 2 5 3 4 6



PAGE 85

4.5.10. Discussion

Sensitivity to the discount rate

The results of a CBA can be highly sensitive to the discount rate applied to future costs and

benefits. Table 4-13 shows the sensitivity of the core scenario results (using a 7% discount rate) to

a spread of discount rates (4%, 7% and 10%).

The sensitivity of each scheme is dependent on the ratio of water savings to capital works costs.

The higher the ratio (such as scheme 1) the more sensitive the scheme is to the discount rate. This

relationship is clearly illustrated by comparing scheme 2 with scheme 3. The first has minimal

capital works while the latter has extensive capital works. Both use the same operating rules and

provide the same value of water savings. Scheme 2, with its fewer capital costs, is clearly more

sensitive to the discount rate than Scheme 3.

All schemes are more sensitive to a reduction in the discount rate than an increase.

� Table 4-13: Sensitivity to discount rates ($ million)

Discount

Rate 4% 7% 10%

Scheme Net Social

Benefit

Benefit Cost

Ratio

Net Social

Benefit BCR

Net Social

Benefit

Benefit Cost

Ratio

1 126 4.8:1 103 4.5:1 85 4.2:1

2 32 2.0:1 26 1.9:1 20 1.8:1

3 (24) 0.7:1 (25) 0.7:1 (25) 0.6:1

4 (3) 0.9:1 (4) 0.9:1 (5) 0.9:1

5 (54) 0.4:1 (50) 0.4:1 (46) 0.3:1

6 (67) 0.2:1 (61) 0.2:1 (55) 0.2:1

Discount rates can be used as a general risk factor. In the context of the uncertainty over the value

of water savings and their use in environmental watering activities, and other factors (such as the

lumpy but unpredictable nature of future hydrologic conditions, or possible climate change

scenarios) a higher discount rate may be appropriate.

Investment cost of savings

The capital works (including Broken Hill’s alternative water supply option) are the most significant

cost associated with all of the schemes. They represent direct investment by government in

securing the water savings.



PAGE 86

Investments in water savings are assessed on a cost effectiveness basis. Results for the Schemes

are shown in Table 4-14.

� Table 4-14: Investment Cost ($M) per ML of water savings entitlement

Scheme 1 2 3 4 5 6


Local impacts on the Menindee community

There are three factors assessed that have the potential to affect the local Menindee economy and

community:

� Property values at Sunset Strip;

� Visitation for tourism and recreational purposes; and

� Local irrigation of table grapes and other horticulture around the township and broad acre

irrigated cropping (at Tandou Farms).

The impacts on property values and tourism and recreation expenditure represent challenges to the

local Menindee community. The assessed impacts are negative for all schemes as they generally

reduce the resident time of water in Lake Menindee.

Scheme 1 results in the most significant impacts for these two values. The estimated $1.5 million

reduction in property values represents a 16% fall. The $1.3 million fall in tourism and recreation

value represents an annual impact of $90,000. Scheme 6 results in virtually no impacts on these

two factors.

As previously noted this assessment assumes that both property values and tourism and recreational

visitation are highly correlated with the volume and resident time of water in Lake Menindee.

However, they have increased in recent years despite the absence of water in Lake Menindee, to

support the amenity and visitation levels, since 2001.

Irrigation impacts – sequencing and timing of allocations

The hydrology model simulation indicates no tangible change in the long-term average irrigation

earnings. The capitalised value of these average annual earnings is, in turn, negligible and has no

impact on the overall results of the CBA.

However, it may not fully account for opening and pre-season announced allocations, and their

potential effect on irrigator behaviour (specifically planting decisions) and within season watering

ability (as NSW licences do not allow for diversions above account levels at any time).

Consideration of potential impacts on behaviour and watering activities is provided through a

review of simulated announced allocations at various times in the year - opening (July) allocations,



PAGE 87

pre summer planting (August to October), within season (January) allocations, and end of year

(June) allocations - for each scheme.

Preliminary case study farm models for rice, pasture, and viticulture on the Murray River, and table

grapes, citrus and cotton at Menindee and on the Lower Darling were developed in early 2009.

However, these have not been finalised. The methodology requires the refinement of the models

(to account for adaptation and other farm management responses) in consultation with water user

focus groups, using hydrology outputs for the assessed schemes. This has not been possible, as the

assessed schemes were not publicly released during their development and refinement.

Irrigation allocations – Murray River High Security

There are small, and generally compensating, impacts on the timing or sequencing of opening

(July) announced allocations for Murray River High Security entitlements. However, all opening

season impacts are eliminated by August.

Changes in opening announced allocations are similar for most schemes.

All schemes reduce opening allocations in 1986 and schemes 2 & 3, 4 and 5 have an additional

year of reduced opening allocations in 1905.

Most schemes (with the exception of scheme 6) ameliorate or eliminate the reduced opening

allocations that occur under the base case in 1913, 1930 and 1941.

Irrigation allocations – Murray General Security

NSW General Security access licences are more likely to be affected by the schemes than High

Security licences due to the way storages are operated and water allocated to them.

Opening and pre summer season allocations are particularly important for irrigators of annual crops

who need to make planting decisions in Spring.

Schemes 1 and 6 have no substantive negative impacts on opening, pre-summer season or full year

allocations. Schemes 2, 3, 4 and 5 have similar, small impacts, and a notable reduction in opening

allocations between 1907 and 1908 pre-summer season, extending through to year-end. By

October and November most negative impacts have been negated and announced allocations are

notably higher in a number of years. At year end, announced allocations continue to be reduced in

1909 but increase in 2006.

Irrigation allocations – Menindee and Lower Darling High Security

Opening High Security announced allocations are generally higher than the base case under

Schemes 1 and 6. Scheme 5 has a number of years of depressed opening allocations. However, as

with Scheme 1 these are generally eliminated by September and fully eliminated by year end.

Schemes 2, 3 and 4 also have a number of years of depressed opening allocations. By September



PAGE 88

these are reduced to three years for Schemes 2 & 3 (1933, 1936 and 1961), and for the latter two

years under Scheme 4. None of the schemes affect end of year allocations.

Irrigation allocations – Menindee and Lower Darling General Security

Most General Security shares in the Menindee and the broader Lower Darling River region are held

and used by Tandou Farms.

However, there are a number of permanent plantings that rely in part on General Security access.

This is a result of the very high level of reliability for General Security allocation levels since the

completion of storage works at the Lakes (particularly compared with any other regulated river in

NSW).

Opening allocations for all schemes are depressed in some years, particularly Schemes 1, 2 & 3, 4

and 5. Scheme 6 shows both improvements and reductions.

By September most of these reductions fall in frequency and intensity. By October, impacts on

announced allocations are negligible and by January they are generally eliminated.

Full year allocation levels across all schemes are generally unaffected for all schemes. There is a

reduction in year end allocations under schemes 2 & 3, 4 and 5 in 2007. However this is generally

compensated with the mitigation or elimination of reduced allocations at all other times.

Simulated monthly diversions for Tandou Farms provide additional perspective on the combined

impacts of each scheme on local General Security allocations, capacity of existing works and the

frequency and timing of allowable inter-valley trade.

The net impact of scheme 1 is notably positive. Diversions are significantly reduced in 1920.

However, the scheme eliminates all reductions in diversions from 1922 to 1986 (with one

exception – 1945) providing an extended period of increased financial stability for these operations.

Schemes 2 & 3, 4 and 5 have similar pattern of impacts on diversions, with scheme 2 & 3 being the

most significant. Unlike scheme 1 there is no exaggerated reduction in diversions in 1920 and

there is a similar, but less absolute, amelioration of reductions in diversions.

Scheme 6 has the only net negative impact on Tandou Farms’ diversions. It increases the

frequency of reduced diversion years, increases one reduction in diversions, and only eliminates a

single reduction in diversions.

Water Savings

Significance of water savings

Water savings represent the most significant benefit in this analysis. The valuation of these savings

is therefore a key determinant of the CBA results.



PAGE 89

The schemes provide increases in average flows at Burtundy ranging from 15 up to 155GL per

annum and increases in outflows from the Anabranch ranging from 10GL up to 23GL per annum.

The combined value of these flows is significant in the context of current diversions and the

augmentation of environmental water availability. However, annual averages do not take full

account of the pattern of water savings.

Pattern of water savings – as flows

The nature of the water savings as changes in annual flows may be considered in terms of their

ranked annual change from the base case.

All the Schemes reflect the following in relation to changes in annual Anabranch outflows:

� increases in outflows in around 35% of years of up to 400GL;

� decreases in outflows in around 30% of years of down to minus 80GL; and

� the frequency and volume of changes in flows is relatively similar under all schemes.

Ranked changes in flows at Burtundy vary significantly between schemes and there are virtually no

years of nil change in flows.

Required entitlement price for a break even

Schemes with a positive net social benefit require a lower entitlement price assumption to provide a

break even outcome. Equally, schemes resulting in a net social loss require a higher value.

Table 4-15 shows the required entitlement price for each scheme, to produce a neutral outcome.

This is similar to the direct investment estimate of cost effectiveness (see Table 4-14). However, it

represents the social cost per ML of water savings entitlement.

� Table 4-15: Break even entitlement price assumption ($/ML)

1 2 3 4 5 6


4.6. Effects

More detail is provided in the Schemes’ Statement of Efforts report, which is a separate volume

to this report.

4.6.1. Changed Storage Regimes for Schemes

An impact of the potential Schemes is changed storage behaviour resulting from increased storage

in Lakes Wetherell, Pamamaroo and Menindee when Lakes Cawndilla and Menindee are filled less

frequently. That is, the modelling compensates for the reduced storage in Lakes Cawndilla and

Menindee for the different schemes by providing additional storage in Lakes Wetherell,



PAGE 90

Pamamaroo and Menindee above the FSL. The hydrologic modelling shows that Lakes Wetherell,

Pamamaroo and Menindee will be filled to the current maximum storage level, which ranges from

0.6m to 1m above the current Full Supply Level (FSL), for about 20-30% of the time compared to

the current 5%. This will have an impact on the foreshore environment and cultural heritage,

particularly due to the increased risk of erosion. Further refinement in the storage behaviour for the

Schemes will be necessary if this impact, when better undertood by more detailed assessment, is

unacceptable.

4.6.2. Cultural Heritage

The cultural heritage assessment and Aboriginal consultation was undertaken by consultant, Robert

Learmonth. The following is a summary of the findings of the assessment.

The Aboriginal community have been extensively consulted with, both in the past (Menindee

Lakes ESD (2002) and Menindee Lakes EIS (2005) and throughout the review of the six options as

outlined in the DRWSP Parts A and B project. Throughout this period, and indeed in the 1990s,

archaeological surveys were conducted culminating in the survey of the lake beds of Menindee,

Cawndilla and Pamamaroo in December 2009 (Witter).

This has resulted in a collective knowledge as to the main issues/concerns expressed by the

Aboriginal community to any scheme and related options impacting on the Aboriginal cultural

heritage landscape. Similarly the growing body of archaeological knowledge of the Menindee

Lakes area has supplied valuable information as to the probability of archaeological material and

values for specific sites. This has resulted in the development of a predictive model (Sarah Martin

2002), a GIS data base which provides a comprehensive and integrated data base of sites in the

Menindee area. The predictive model will allow land managers and developers to assess cultural

impacts of alternative operational practices, new infrastructure development both now and in the

future.

It is recognised that this predictive model would need to be qualified by further site specific

surveys. It has however enabled engineering options to be explored which will, wherever possible,

minimise impact on these sites.

The surveys and assessment undertaken (refer to Figure 4-7 for locations) have identified a range

of values in the area of the proposed works, and both direct and indirect impacts may occur. Both

construction works and indirect impacts could have an adverse impact on the cultural heritage in

the surrounding area. However, if this option were to proceed, mitigating measures would need to

be put in place to protect and conserve Aboriginal and non indigenous cultural heritage values. The

potential for heritage impacts to occur during construction of the works would be minimised

through the implementation of a Cultural Heritage Management Plan prepared for the project and

would apply to all sites.



PAGE 91

Through meetings conducted with Aboriginal community representatives to discuss the six

proposed Lakes schemes and the Broken Hill water supply options in the DRWSP Part B Stage 2

(2008/2009) consultation phase it was expressed that any engineering option which may receive

consideration would need to build upon existing works or areas previously destroyed by

development. The proviso would be provided the conditions of the Rehabilitation and Cultural

Heritage Protection Plan for the Proposed Menindee Structural Works (2005) were immediately

activated, (monitoring, salvage and storage of archaeological material) during construction and post

construction. This would include a preference for the establishment of a keeping place such as an

Aboriginal cultural centre in Menindee township.

In meetings conducted with the Menindee Elders and other members of the Aboriginal community

throughout DRWSP Stages 1 and 2, keeping the Lakes full wherever operationally possible was

seen as a highly desirable outcome. It is recognised that factors such as extremely dry periods

including drought and the fact that the system is much modified from its natural state may make

this difficult to achieve.

The lakes are an element of the Aboriginal cultural landscape and, as such, any change, natural or

unnatural, impacts on this landscape and associated cultural beliefs, environmental and traditional

values.

Aboriginal oven showing “terclay” artefacts


� Figure 4-7 Map showing Key Cultural Heritage Sites



PAGE 93

Scheme 1

Leaving Menindee and Cawndilla Lakes largely empty will result in the further unearthing and

destruction of archaeological material through wind erosion. This was a concern expressed in the

initial Menindee Lakes EIS (2005) by Sarah Martin consultant archaeologist. The discovery of

further archaeological material, especially around the outlets and stream banks within the Lakes

Cawndilla and Menindee area (Witter 2009), are a cause for concern and merit further

investigation.

At earlier meetings with Aboriginal representatives in 2008, the impact of less water in Lake

Menindee and the resultant loss of visual amenity, recreational values, reduced land and property

values for those living in Sunset Strip, was an issue.

At a meeting held at Menindee 18 December 2009 with the Menindee Elders and other members of

the Aboriginal community, it was expressed that keeping Lakes Pamamaroo and Lake Tandure full

is a basic requirement, indeed a priority, when adopting any future option. Both of these lakes,

especially Pamamaroo, besides being rich in Aboriginal cultural values, were major tourist

attractions and provided venues for fishing, boating, swimming and other recreational pursuits.

Tourism is a major element in the economic viability of Menindee, the National Park and

surrounding area.

Leaving Lakes Menindee and Cawndilla largely operationally empty will result in the further

unearthing and destruction of archaeological material through wind erosion. Mitigating factors

would need to be put in place to protect and conserve these sites and materials for this option to

receive any consideration by the Aboriginal community. This would include a preference for the

establishment of a cultural centre in Menindee and that conditions set out in the previously

negotiated in the Rehabilitation and Cultural Heritage Protection Plan for the Proposed Menindee

Structural Works be adhered to.

Pamamaroo Drainage Channel

This option also proposes the construction of a draining channel in the bed of Lake Pamamaroo

from the northern residual pool area to the existing regulator, being a distance of approximately

6kms. Currently, the Pamamaroo Creek is incapable of effectively conveying the required flows

due to siltation in the channel and is also an area rich in archaeological material.

The draining channel would be constructed to the north east of Pamamaroo Creek to avoid

disturbance of the natural creek and also likely cultural heritage features. The cutting of a drainage

channel through the lake bed of Lake Pamamaroo could potentially destroy and threaten

archaeological sites, those currently identified, and those possible sites beneath the current surface

level of the lake bed (Witter 2009). This would include during the construction phase and post

construction with the increased volumes of water down the channel and the likelihood of

uncovering and destroying further sites through erosion. Mitigating factors would need to be put in



PAGE 94

place including the routing of the drainage channel to minimise impacts on known and potential

sites as well as operationally controlling drainage flows to reduce erosion and infilling of the

channel through bank collapse and subsequent destruction of archaeological sites.

At a meeting on 18 December 2009 at the Menindee Local Aboriginal Land Council (LALC)

offices, Aboriginal interests were shown a map for a hypothetical Pamamaroo drainage channel,

which demonstrated a possible route minimising the impact on known ACH values. Comment was

made that this looked like a possible viable alternative provided mitigating factors for the

preservation and protection of archaeological sites and materials were met. An acceptable route

would need to be negotiated with the proviso that the conditions of the Rehabilitation and Cultural

Heritage Protection Plan for the Proposed Menindee Structural Works would be immediately

activated.

Spoil from the sites would also need to be carefully monitored in terms of containing

archaeological material, where it is to be deposited and any possible impact on the Aboriginal

cultural landscape.

Using existing outlet structures

Witter, 2009 has identified archaeological material, especially around the outlets and stream banks

within the Lakes Cawndilla and Menindee. A site near the Lake Menindee outlet regulator is of

particular significance, and may be affected by changes to lake operations. These issues are a cause

for concern and merit further investigation. Mitigating factors would need to be put in place to

protect and conserve these sites and materials for this option to receive any consideration by the

Aboriginal community.

The same applies to other lakes in the system including Pamamaroo, Lake Tandure and the lake

deltas and feeder streams within the lake system itself. Any increased flows through these outlets

if operationally mismanaged will further destroy archaeological sites in the vicinity of the outlet

through erosion as well as impact on those sites downstream.

Scheme 2

This has a similar impact to Scheme 1. At earlier meetings with Aboriginal representatives in

2008, the impact of less water in Lake Menindee and the resultant loss of visual amenity,

recreational values, reduced land and property values for those living in Sunset Strip was an issue.

Besides being rich in Aboriginal cultural values, the Lakes are a major tourist attraction and

provided venues for fishing, boating, swimming and other recreational pursuits. Tourism is a major

element in the economic viability of Menindee, the National Park and surrounding area. This all

relies on full lakes. In meetings conducted with the Menindee Elders and other members of the

Aboriginal community throughout DRWSP Part B Stage 2 consultation phase, keeping the lakes

full wherever operationally possible was seen as a highly desirable outcome. It is recognised that



PAGE 95

factors such as extremely dry periods including drought and the fact that the system is much

modified from its natural state may make this difficult to achieve.

Lake Pamamaroo draining channel.

This is discussed in Scheme 1.



Scheme 3

As discussed, leaving Lakes Menindee and Cawndilla largely empty will result in the further

unearthing and destruction of archaeological material through wind erosion. At earlier meetings

with Aboriginal representatives in 2008, the impact of less water in the Menindee Lakes and the

resultant loss of visual amenity, recreational values, reduced land and property values for those

living in Sunset Strip, was an issue.


Morton Boolka, the area including Cawndilla Creek, Eurobilli Lake and the channels entering into

Lake Cawndilla are of extremely high archaeological significance. Any proposed embankment

would be better located at Cawndilla Creek within Lake Menindee. This area has less

archaeological significance (Witter, 2009) and is more appropriate than a site in the middle of the

Cawndilla Creek system.

Lake Menindee outlet and draining channel.

Much on the archaeology of this site has already been destroyed; however, the area still has

significant remaining archaeological material. An enlarged outlet also has the capacity to threaten

or destroy important sites downstream on the Darling River through increased flows. Any further

development of the Menindee outlet regulator has a high probability of further damaging cultural

material in this area.

The discovery of further archaeological material, especially around the outlets and stream banks

within the Lake Menindee (Witter 2009) area, are a cause for concern and merit further

investigation. Mitigating factors would need to be put in place to protect and conserve these sites

and materials for this option to receive any consideration by the Aboriginal community.

There is dense cultural material along the main creek lines, and also scarred trees on the lake bed

away from the main creek lines. This option would require a salvage operation and establishment

of a permanent “keeping place” in the Menindee area.

The current proposal to locate the proposed Menindee outlet channel at Little Menindee Creek

rather than Menindee Creek has merit as it substantially avoids known cultural heritage sites.



PAGE 96

When introduced to the local Aboriginal elders, this concept was recognised as an attempt to

mitigate impacts on the “ceremonial delta” area of Lake Menindee.

Cawndilla outlet and draining channel

Any proposed channel, which will cross the southern Lake Cawndilla lunette and the Darling River

floodplain will cut across an area known to have significant cultural heritage material. The channel

may also enter the Darling River in the vicinity of the Pleistocene channels related to the

Talyawalka –Anabranch system and these are likely to have significant Pleistocene age sites.

This option would also further degrade the cultural landscape as well as limit the mobility of native

animals and destroy the habitat of fauna significant to the Aboriginal people. This option was not

acceptable to the Barkindji Elders both in feedback to the Menindee ESD project 2002 and the

DRWSP Part B, Stage 2. The Penellco channel option may receive further consideration and was

indeed supported conditionally by the Menindee Local Aboriginal Land Council (LALC) in 2002.

Cultural heritage is known along the Penellco Channel and management measures will be

necessary if this option is implemented.

Lake Pamamaroo draining channel


Scheme 4

Reducing the operational use of Lake Cawndilla will result in the further unearthing and



further archaeological material, especially around the outlets and stream banks within the Lakes of

the Cawndilla and Menindee (Witter 2009) area, are a cause for concern and merit further

investigation and protection.

Morton Boolka Regulator and Pamamaroo draining channel

These options have been discussed in earlier Scheme descriptions.

Scheme 5

This Scheme is similar to Scheme 3 regarding structures but is similar the Scheme 4 in relation to

proposed water regime.

Scheme 6

From a cultural heritage perspective, this Scheme is the same as Scheme 5.

Scheme BH1



PAGE 97

This option, as one of a suite of options to address water supply to Broken Hill, was not raised

directly with any members of the Menindee Aboriginal community or other Aboriginal interests

within the scope of the DWRSP community consultation brief. The scheme was not developed

sufficiently to describe in a consultation forum. It was, however, the subject of public meetings

held in Menindee and Broken Hill.

As within any proposal considering new works, a specific archaeological survey would need to be

conducted to enable the Aboriginal stakeholders to assess the impact of such works on Aboriginal

cultural heritage values. These values, besides identifying specific sites and archaeological

material, would also include a total impact assessment of such works on the Aboriginal cultural

landscape.

Scheme BH2

As with all other lakes in the Menindee system, Lake Tandure is an element of the Aboriginal

cultural landscape. It is one of the smaller lakes in the MLS, however, it is rich in archaeological

sites as well as being a haven for native flora and fauna. Being very close to the Darling River has

made it a favourite area for fishing, hunting, the preparation of meals and some ceremonial

activities. Feeder creeks, associated deltas and outlets, are rich in archaeological material. The

incidence of burial sites appears less around the lake edges as evidenced at Lakes Menindee,

Pamamaroo and Cawndilla. As with any water saving option, if adopted, a specific archaeological

survey would need to be undertaken.

It was noted in the Menindee Lakes ESD project report ( The Nature and Distribution of

Archaeology of the Menindee Lakes – Pardoe and Martin, 2002 ), that the foreshore areas of Lake

Tandure was being eroded and scoured by water, being a combination of lake levels and wave and

wind dynamics. This also included erosion of the sand spit between Lakes Wetherell and Tandure

exposing archaeological material.

Lake Tandure is a popular fishing spot and remains relatively secluded. There is concern by the

Aboriginal community living in Menindee that if Lake Tandure was to undergo any construction

activity, that the creation of new roads and infrastructure would pose a threat to Aboriginal cultural

heritage values through, not only construction machinery, but from an increase in tourists accessing

the Lake.

Scheme BH3

This option Scheme 3 at Texas Downs, is one of a suite of options to address water supply to

Broken Hill, was not raised directly with any members of the Menindee Aboriginal community or

other Aboriginal interests within the scope of the DWRSP community consultation brief. It was,

however, the subject of a public meeting held in Menindee.

As within any proposal considering new works, a specific archaeological survey would need to be

conducted the Aboriginal stakeholders to assess the impact of such works on Aboriginal cultural



PAGE 98

heritage values. These values besides identifying specific sites and archaeological material would

also include a total impact assessment of such works on the Aboriginal cultural landscape.



PAGE 99

Aboriginal artefacts are protected from wind erosion by native bush

4.6.3. Environmental Assessment

SKM refinement of environmental issues including site specific and Lakes environmental

objectives are detailed in the following sections.

Environmental Considerations for Project Schemes

As environmental health is a prerequisite for achieving social, cultural and economic objectives on

a regional and national scale, managers need to incorporate environmental information into their

management decision making framework (Scholz et al. 1999). This section provides results from

the final assessment.

Scheme 1

Major Environmental Benefits and Impacts

The environmental benefit arising from Scheme 1 is the potential for delivery of water saved by

permanently drying Lakes Menindee and Cawndilla, to other habitats in the Murray-Darling Basin.

These changes may contribute to overall improved ecosystem structure and function, and improved

water quality conditions in critical habitats elsewhere in the Basin. The savings generated via

Scheme 1 may also result in increased flows in the Darling Anabranch, lower Darling River and

River Murray downstream of Wentworth.

The key environmental impacts arising from Scheme 1 include permanently drying Lakes

Menindee and Cawndilla and the resultant loss of habitat within and adjacent to these lakes

including Lake Eurobilli and Lake Speculation. The environmental values associated with Morton



PAGE 100

Boolka would also be permanently lost along with opportunities to provide water to the Darling

Anabranch via Lake Cawndilla. Permanently drying lakes would also likely lead to increased wind

erosion of lakebed and littoral habitats and exposure of Indigenous cultural heritage artefacts.

Potential environmental impacts on flora and fauna are short- and long-term, direct and indirect,

and cumulative. The loss and disturbance of woodland and lakebed habitats during construction of

Lake Pamamaroo draining channel would create short- and long-term impacts for flora and fauna at

the lakes. For example, the loss of hollow-bearing woodland trees has an immediate effect on

competition for hollows for refuge and breeding. Increased road traffic during construction also

poses a direct risk to a suite of fauna including birds, reptiles, amphibians and mammals.

Construction in the lakebed may also compromise the viability of zooplankton and plant

propagules stored in the lakebed sediment.

The shift from a lake habitat to a permanently dry woodland habitat is the key operational impact.

This change has consequences for biodiversity at the local, state and national levels, as it

constitutes a net loss of refuge, foraging and breeding habitat for suite of resident and migratory

wetland and lake species. Never allowing Lakes Menindee and Cawndilla to fill would also render

Morton Boolka, Lake Eurobilli, Lake Spectacle and Lake Speculation permanently dry. These

areas are of high conservation value and this Scheme would constitute significant impacts on

environmental and cultural heritage values.

Preliminary Environmental Constraints and Impacts

Watering Regime

Under Scheme 1 the watering regime at the upper lakes would remain largely unchanged from

post-regulation, but conditions at Lakes Menindee and Cawndilla would be significantly different

to that which occurred naturally, and the post-regulation regime.

Although predicting ecosystem response to a changed watering regime is not a prescriptive task,

given the natural regime was ephemeral, and the post-regulation regime (which imposed

unnaturally long wetted phases) has contributed to a decline in ecosystem condition in the MLS, it

is reasonable to assume the swing from a predominantly wet regime to a permanently dry regime at

Lakes Menindee and Cawndilla (and consequently Lakes Eurobilli, Spectacle and Speculation)

presents a potentially significant environmental impact. The potential for impact is exacerbated by

the current condition of the lakes through reduced resilience and capacity to respond to the changed

watering regime.

In all likelihood the response will be mixed, with some elements of the ecosystem able to respond

to or withstand the potential changes, and others becoming altered or eliminated. In the long-term

the resulting environment will be terrestrial and hence different to that which occurred naturally

and currently. Clearly, local freshwater and ephemeral habitats for threatened and migratory



PAGE 101

species, and waterbird breeding will be eliminated. Potential impacts on cultural heritage values

associated with Scheme 1 are also significant.

Flora and Fauna

The proposal has the potential to create construction and operation, direct and indirect and

beneficial and adverse impacts on fauna and flora at the Menindee Lakes. The Schemes’

Statement of Effects (separate document) provides a broad comparison of the potential

environmental risks and opportunities between the potential structures and management actions.

General impacts on flora and fauna are summarised in Table 4-16.

� Table 4-16: Summary of Scheme 1 for flora and fauna impacts

Ecosystem Component Potential Impacts and Opportunities

Flora � Impacts occur throughout the area and are direct, indirect, short- and long-term and cumulative.

� Greatest changes will occur in Lakes Menindee, Cawndilla, Morton Boolka, Eurobilli, Spectacle and Speculation with local freshwater and ephemeral habitats for threatened and migratory species, and waterbird breeding lost.

� Freshwater habitats will transition to terrestrial in response to prolonged drying.

� Aquatic and littoral vegetation would be affected by the creation of the Lake Pamamaroo drainage channel.

Invertebrates � Are long-term and cumulative as a result of the changed watering regime.

� Permanent dry phase would cause the loss of freshwater invertebrate propagules.

� Permanent dry phase would constitute a significant loss of habitat for all freshwater and riparian invertebrates.

� Invertebrates with poor dispersal abilities would become locally extinct. � Direct and short-term impacts on invertebrates would occur during creating

of the Lake Pamamaroo drainage channel. Impacts include changed water quality conditions and the loss of lakebed habitats as a consequence of dredging or land clearing.

Lake habitat



PAGE 102

Ecosystem Component Potential Impacts and Opportunities

Fish � A key impact is the loss of freshwater habitats at Lakes Menindee and Cawndilla.

� Increasing the departure from the natural watering regime reduces the reproductive success and subsequent recruitment of native species.

� Completely drying Lakes Menindee and Cawndilla would reduce overall fish productivity in the Menindee Lakes system.

Amphibians � Impacts arise from the changed watering regime at Lakes Menindee and Cawndilla.

� Amphibians occurring in semi-arid habitats have developed a range of behavioural and physiological adaptations to cope with extended dry periods. These include burrowing, opportunistic breeding after flooding and the ability to create an impermeable waterproof cocoon to prevent dessication. However these measures may protect frog for months or years, but not permanently.

� Like fish, the loss of water in the lower Menindee Lakes would reduce overall frog productivity and constitutes a significant loss of foraging, refuge and breeding opportunities.

Reptiles � Impacts on reptiles will depend on the life history preferences of the species. � Terrestrial species could benefit from the provision of further woodland

habitat. � Aquatic species would experience the loss of freshwater habitats in the

lakes thereby reducing their productivity, as they may rely on the wetted phase of their lake habitat for breeding, refuge and foraging opportunities.

� A permanently dry Lakes Menindee and Cawndilla will require these species move to other aquatic habitats in the system, or perish as the Lakes dry.

� Potential direct impacts on reptiles result from construction activities in woodland and lakebed habitats.

� Terrestrial and aquatic species will be affected by the loss of foraging, refuge and breeding opportunities as their woodland and lakebed habitats are cleared for construction and modification of drainage channels and regulators.

Birds � Birds will be influenced in the short-term by vegetation loss and other construction works throughout the study area.

� Long-term, cumulative impacts arising from Scheme 1 will have the greatest effect on birds through the loss of local freshwater and ephemeral habitats.

� Woodland birds may benefit from the increased area of woodland habitats. � Waterbirds would suffer a significant loss of breeding, refuge and foraging

habitat.

Mammals � Impacts on mammals are similar to reptiles, in that they will likely suffer some short-term and direct impacts resulting from loss of vegetation and construction activities in woodland and lakebed habitats, and long-term, indirect impacts arising from the potential changed watering regime.

� Both large and small mammals may exploit foraging, refuge and breeding habitats at drying and dry lakebeds. In particular, small mammals will inhabit cracks and holes in the soil, and live under shrubs and grasses in dry lakebeds (Briggs 1996).

� Long-term changes to lake habitats arising from a changed watering regime may include both beneficial and adverse impacts such as an increase in woodland area for terrestrial species, or the loss of productive littoral and riparian habitats for foraging, breeding and refuge.

� Both small and large mammals are capable of undertaking long-range movements to exploit habitats nearby.



PAGE 103

The description above, of possible effects on flora and fauna, assumes Lakes Menindee and

Cawndilla are managed for conservation purposes, not cropped, grazed or otherwise cultivated.

There is a current grazing lease in Lake Menindee which will need to be considered in future

environmental planning for the Lake. Other related key issues for consideration when

manipulating water levels in the Lakes for water management purposes, is the potential for

unnatural rates of rise and fall, residual pool management, supporting fish movement and bird

breeding events, the duration, timing and frequency of antecedent wetting and drying events, and

water quality relative to the receiving waters (in the Darling River or Darling Anabranch). This

will require adaptive and informed management to ensure the current condition of the Menindee

Lakes is maintained or improved.

Works in close proximity to already disturbed sites, such as existing water infrastructure, would

generally have less impact than structural options at previously undisturbed sites (i.e. sites which

have not been directly modified for the purposes of water supply management).

Scheme 2


Potential environmental benefits arise from the changed watering regime and will most likely

contribute to overall improved ecosystem structure and function, and improved water quality

conditions in residual pools through adaptive management of the watering regime.

A return to an ephemeral regime could improve the diversity and abundance of freshwater, littoral

and riparian vegetation at the lakes, and lake system productivity, creating improved trophic

linkages, a mosaic of habitats for fauna and an overall biologically diverse community. However,

the potential to improve overall ecosystem condition depends on current ecosystem resilience and

thresholds, combined with the timing, duration, magnitude and frequency of wetted phases of the

watering regime. Implementation of a watering regime, which results in maintenance or

improvement in condition of the MLS, will require careful adaptive management and monitoring of

the trajectories of responses of biological indicators.

The loss and disturbance of woodland and lakebed habitats during construction would create short-

and long-term impacts for flora and fauna at the lakes. Increased road traffic during construction

also poses a direct risk to a suite of fauna including birds, reptiles, amphibians and mammals.



The risk of a decline in ecosystem condition arising from the proposed watering regime is the key

operational impact. This risk is related to the current ecosystem condition, its resilience and

thresholds, and the capacity of the proposed watering regime to maintain or improve conditions in

the lakes. If the proposed regime incorporates drying periods beyond that which occurred

naturally, the potential for altered (likely compromised) ecosystem function is high. The most



PAGE 104

vulnerable flora and fauna under these circumstances are those with preferences for lake and open

water habitats. The utility of habitats at the Lakes under the Scheme 2 regime for ephemeral

species will depend on their various strategies for withstanding an extended drying phase. The

potential for adverse impacts on threatened flora and fauna arising from the Scheme 2 regime will

require further investigation to inform the adaptive management of the wetting and drying regime

for the lakes.


Watering Regime

Under Scheme 2 the watering regime in Lakes Wetherell and Pamamaroo would remain largely

unchanged from post-regulation, but Lakes Menindee and Cawndilla would experience a longer

dry phase. Most lakes would also experience a longer period of half full supply level than occurred

naturally (Lake Cawndilla is the exception). Given the post-regulation regime imposed unnaturally

long wetted phases and contributed to a decline in ecosystem condition in the MLS, the swing to a

predominantly dry regime at Lakes Menindee and Cawndilla (and consequently, Lakes Eurobilli,

Spectacle and Speculation) presents an environmental impact. Adaptive management of the wetting

and drying cycles can, however, mitigate this impact.

In the long-term, the resulting environment will be different to that which occurred naturally and

currently. This is not necessarily an undesirable alternative state, so long as the resulting

environment achieves a structure and function capable of supporting and protecting conservation

and socio-economic values of the Lakes. A key consideration will be the protection of habitat for

threatened species most sensitive to a change from mostly wet to periodically dry conditions in the

Lakes. General impacts on flora and fauna are summarised in Table 4-16.

Flora and Fauna

The proposal has the potential to create construction and operation, direct and indirect and

beneficial and adverse impacts on fauna and flora at the Menindee Lakes. The Schemes’

Statement of Effects provides a broad comparison of the potential environmental risks and

opportunities between the potential structures and management actions.

Other related key issues for consideration when manipulating water levels in the lakes for water

management purposes, are the potential for unnatural rates of rise and fall, residual pool

management, supporting fish movement and bird breeding events, the duration, timing and

frequency of antecedent wetting and drying events, and water quality relative to the receiving

waters (in the Darling River or Darling Anabranch). Many of the structures will provide enhanced

flexibility in managing the exchange of water between Morton Boolka, Lakes Menindee and

Cawndilla and downstream habitats (i.e. the Darling Anabranch and lower Darling River), but will

also require adaptive and informed management to ensure improvement in condition of the

Menindee Lakes is achieved.



PAGE 105




Typical lakebed habitat

Scheme 3


Benefits and impacts are similar to Scheme 2, although this Scheme includes many additional

structural works. Hence, the impacts at these sites will be greater than Scheme 2 which only

includes the Lake Pamamaroo draining channel.

Potential environmental impacts on flora and fauna occur largely at the construction phase of the

scheme. The loss and disturbance of woodland and lakebed habitats during construction would

create short- and long-term impacts for flora and fauna at the lakes. Increased road traffic during

construction also poses a direct risk to a suite of fauna including birds, reptiles, amphibians and

mammals. Construction in the lakebed may also compromise biota associated with lakebed

sediments.



PAGE 106


Watering Regime

Under Scheme 3, the watering regime in Lakes Wetherell and Pamamaroo would remain largely

unchanged from post-regulation, but Lakes Menindee and Cawndilla would experience a longer

dry phase.

Impacts are similar to Scheme 2.

Flora and Fauna

The proposal will create construction and operation, direct and indirect and beneficial and adverse

impacts on fauna and flora at the Menindee Lakes. This scheme includes numerous works that will

have an impact. The Schemes’ Statement of Effects (separate document) provides a broad

comparison of the potential environmental risks and opportunities between the potential structures

and management actions. General impacts on flora and fauna are summarised in Table 4-16.

Lake Cawndilla regulator and outlet channel



PAGE 107

Scheme 4


Environmental benefits from the Scheme, arise from the changed watering regime and works

including Lake Pamamaroo draining channel and Morton Boolka regulator. These changes will

contribute to improved movement opportunities of water within the Lakes and hence assist aquatic

species and improved water quality conditions in residual pools.

A return to an ephemeral regime will improve the diversity and abundance of freshwater, littoral

and riparian vegetation at the Lakes, and lake system productivity, creating improved trophic

linkages and levels, a mosaic of habitats for fauna and an overall biologically diverse community.

However, the ability to improve overall ecosystem condition depends on current ecosystem

resilience and thresholds, combined with the timing, duration, magnitude and frequency of wetted

phases of the watering regime. Implementation of a watering regime, which results in maintenance

or improvement in condition of the Menindee Lakes, will require careful adaptive management and

monitoring of the trajectories of responses of biological indicators.

Environmental impacts on flora and fauna occur largely at the construction phase of the proposal,

although an extended dry phase in Lake Cawndilla could have significant environmental and

Indigenous cultural heritage impacts. The loss and disturbance of woodland and lakebed habitats

during construction would create short- and long-term impacts for flora and fauna at the lakes.

Increased road traffic during construction also poses a direct risk to a suite of fauna including birds,

reptiles, amphibians and mammals. Construction in the lakebed can also compromise biota

associated with lakebed sediments.

The risk of a decline in ecosystem condition arising from the Scheme 4 watering regime is the key

operational impact. The most vulnerable flora and fauna are those with preferences for lake and

open water habitats. The utility of habitats for ephemeral species particularly in Lake Cawndilla

under the Scheme 4 regime will depend on their various strategies for withstanding the extended

drying phase. The potential for adverse impacts on threatened flora and fauna arising from the

Scheme 4 regime will require further investigation.


Watering Regime

Under Scheme 4, the watering regime at Lakes Wetherell and Pamamaroo and Lake Menindee

would remain largely unchanged from post-regulation, but Lake Cawndilla would experience a

substantially longer dry phase. Most lakes would also experience a longer period of half full

supply level than occurred naturally (Lake Cawndilla is the exception). Change from a

predominantly wet regime to a predominantly dry regime at Lake Cawndilla (and consequently

Lakes Eurobilli and Spectacle) presents a significant environmental impact. There is a risk that an

unnaturally long period of drying could further degrade conditions. The potential for degradation



PAGE 108

is exacerbated by the current condition of the lakes, and hence reduced resilience and capacity to

respond to the changed watering regime.

Flora and Fauna

The proposal has the potential for adverse impacts on fauna and flora at the Menindee Lakes and

particularly Lake Cawndilla. The Schemes’ Statement of Effects report (separate document)

provides a broad comparison of the potential environmental risks and opportunities between the

potential structures and management actions. Many of the structures will provide enhanced

flexibility in managing the exchange of water between Morton Boolka, Lakes Menindee and

Cawndilla and downstream habitats (i.e. the Darling Anabranch and lower Darling River), but will

also require adaptive and informed management to ensure potential impacts in Lake Cawndilla are

minimised through the management regime.




Scheme 5


This is Scheme 4 but with additional works to facilitate water movement at the Lakes. Under

Scheme 5, return to an ephemeral regime will improve the diversity and abundance of freshwater,

littoral and riparian vegetation at the lakes, and lake system productivity, creating improved trophic


However, the ability to improve overall ecosystem condition depends on the implementation of a

watering regime, which minimises impacts on Lake Cawndilla and will require careful adaptive

management and monitoring of the trajectories of responses of biological indicators.

The risk of a decline in ecosystem condition arising from the Scheme 5 watering regime, relates

primarily to drying periods beyond that which occurred naturally. The most vulnerable flora and

fauna are those with preferences for lake and open water habitats. The utility of habitats at the

Lakes under the Scheme 5 regime for ephemeral species will depend on their various strategies for

withstanding the extended drying phase. The potential for adverse impacts on threatened flora and

fauna arising from the Scheme 5 regime will require further investigation.


Watering Regime

This is similar to Scheme 4.



PAGE 109

Kinchega National Park habitat

Flora and Fauna

The Schemes’ Statement of Effects report (separate document) provides a broad comparison of

the potential environmental risks and opportunities between the potential structures and

management actions.

Other related key issues for consideration when manipulating water levels in the lakes for water

management purposes, are the potential for unnatural rates of rise and fall, residual pool

management, supporting fish movement and bird breeding events, the duration, timing and

frequency of antecedent wetting and drying events including water dependent recruitment

requirements of flora, and water quality relative to the receiving waters. Many of the structures

will provide enhanced flexibility in managing the exchange of water between Morton Boolka,

Lakes Menindee and Cawndilla and downstream habitats (i.e. the Darling Anabranch and lower

Darling River), but will also require adaptive and informed management to ensure improvement in

condition of the Menindee Lakes is achieved.

Environmental impacts on flora and fauna occur largely at the construction phase of the proposal

although an extended dry phase in Lake Cawndilla could have significant environmental and

Indigenous cultural heritage impacts. The loss and disturbance of woodland and lakebed habitats

during construction would create short- and long-term impacts for flora and fauna at the lakes.


reptiles, amphibians and mammals. Construction in the lakebed may also compromise biota

associated with lakebed sediments.

Works in close proximity to already disturbed sites would generally have less impact than

structural options at previously undisturbed sites.



PAGE 110

Scheme 6

Major environmental Benefits and Impacts

From an environmental perspective Scheme 6 is similar to Schemes 4 and 5, whereby a return to an

ephemeral regime will improve the diversity and abundance of freshwater, littoral and riparian

vegetation at the lakes, and improve biological diversity. However, the potential to improve

overall ecosystem condition will depend largely on the implementation of a watering regime, which

does not result in extended dry periods (particularly in Lake Cawndilla) beyond which the tolerance

of water dependent biota is compromised. As with Schemes 4 and 5, this will require careful

adaptive management and monitoring of the trajectories of responses of biological systems.


Watering Regime

Under Scheme 6, the watering regime at the Lakes Wetherell, Pamamaroo and Menindee would

remain largely unchanged from post-regulation, but Lake Cawndilla would experience a

substantially longer dry phase. Adaptive management of the watering regime will be paramount to

maintaining the ecological integrity particularly in Lake Cawndilla.

Flora and Fauna

The Schemes’ Statement of Effects report (separate document) provides a broad comparison of

the potential environmental risks and opportunities between the potential structures and

management actions. General impacts on flora and fauna are summarised in Table 4-16.

Many of the structures will provide enhanced flexibility in managing the exchange of water

between Morton Boolka, Lakes Menindee and Cawndilla and downstream habitats but will require

adaptive and informed management to mitigate potential impacts.

Penellco Channel at Darling River



PAGE 111

Scheme BH1

No environmental assessment has been undertaken for this Scheme due to uncertainty regarding

location of the Scheme’s structural features. Following the release of the Geoscience Australia

investigation of aquifers in the region, a decision will be made by Government on the direction of

this potential Managed Aquifer Recharge water supply scheme.

Scheme BH2

Major environmental Benefits and Impacts

Potential environmental benefits are arising from Scheme BH2 are limited. Each alternative

involves construction, disturbance, changed local conditions and changed long-term conditions for

flora and fauna. Some fauna and flora may benefit from the surcharged weir pool, and the

infrastructure at Copi Hollow will contribute to improved water cycling in the storage.

Potential environmental impacts on flora and fauna are short- and long-term, direct and indirect and

cumulative and occur largely at the construction phase of Scheme BH2. The loss and disturbance

of floodplain, woodland and lakebed habitats during construction would create short- and long-

term impacts for flora and fauna. For example, the loss of hollow-bearing woodland trees has an

immediate effect on competition for hollows for refuge and breeding with a time-lag of many

decades. Increased road traffic during construction also poses a direct risk to a suite of fauna

including birds, reptiles, amphibians and mammals. Construction in the lakebed of Lake Tandure

will also compromise the viability of zooplankton and plant propagules stored in the lakebed

sediment. Construction activities would also need to be carefully managed to limit impacts on

associated habitats such as Lake Wetherell, the Darling River and the Darling River floodplain at

Texas Downs.

Operational impacts include changed fish passage in Lake Tandure and Copi Hollow; the

permanent loss of floodplain woodland at Texas Downs, and the potential for cumulative loss of

fish diversity and abundance in the Darling River due to pumping at Texas Downs. The severity of

some impacts could be mitigated (e.g. via the use of pumping screens and fishways), however, the

loss of woodland would be significant.

The risk of decline in general ecosystem condition arising from operation of Scheme BH2 would

also need to be monitored, especially at Lake Wetherell. Lake Wetherell acts as a local refuge for

both native and introduced biota when the other lakes are dry, and as source of colonisers during

lake inundation. Hence, the consequences of adverse impacts on the condition of Lake Wetherell

would cascade throughout the entire lake system.



PAGE 112


The Scheme will create construction and operation, direct and indirect and beneficial and adverse

impacts on fauna and flora at the Menindee Lakes. In general, the most severe impacts on flora and

fauna at the various locations affected are related to construction (except at the Texas Downs

Storage). Operational impacts are largely related to permanent loss of riparian woodland and

lignum habitats, potential consequences of accelerated filling and drawdown, and changed water

movement. Key impacts at each location affected are described further in Table 4-17.

� Table 4-17: Summary of Scheme BH2 - flora and fauna

Location Potential Impacts and Opportunities

Lake Tandure � The creation of an embankment and regulator presents a significant construction impact, resulting in disturbance to open lake and lakebed habitats used by waterbirds, fish, invertebrates and aquatic flora.

� Short-term impacts include changed water quality conditions while the construction area is de-watered (e.g. increased turbidity, sediment loads), loss of dead trees in the lake, and in-direct disturbance to fauna.

� Long-term impacts are the changed movement options for fish where previously there was no impediment, and the partitioning of water in the lake.

� The watering regime would remain largely unchanged from the current post-regulation regime, although storage at maximum storage levels (above FSL) will occur up to 20% of the time compared with the current 5% of time.

Texas Downs � The 5GL storage at Texas Downs would involve significant construction and operational impacts.

� The permanent loss of approximately 60-100 ha of Black Box, River Red Gum woodland and Lignum on the Darling River would affect a suite of terrestrial and riparian fauna and flora, increasing competition for resources and potentially decreasing species abundance and diversity.

� Operational impacts include entrainment of fishes from the Darling River in the pumps, causing a decline in abundance and likely diversity in the fish community in the locality.

� Fish may also colonise the storage during its wetted period, and become stranded when a drawdown is completed.

Darling River at Weir 32

� The creation of a new weir presents a significant construction impact, resulting in disturbance to in-stream, littoral and riparian habitats used by a suite of fauna and flora. The site is already disturbed. Western riverine area is located in Kinchega National Park.

� Construction and long term site disturbance by access road and depot. � Short-term impacts include changed water quality conditions while the construction

area is de-watered (e.g. increased turbidity, sediment loads), loss of riparian vegetation, and indirect disturbance to fauna.

� Long-term impacts are the changed movement options for fish, and a larger weir pool.

� Given a weir pool already exists at the site, and it would remain within the channel when it is surcharged, and it would only be surcharged during drought conditions, the potential operational impacts for flora and fauna are likely insignificant compared to those experienced during construction.

Copi Hollow � Impacts at Copi Hollow would be largely related to construction. The creation of a new regulator in the inlet channel presents a moderate construction impact, resulting in disturbance to riparian habitats used by a suite of fauna and flora.

� Short-term impacts include changed water quality conditions while the construction area is de-watered (e.g. increased turbidity, sediment loads), loss of riparian vegetation, and indirect disturbance to fauna.

� The key long-term impact is the changed fish passage, and general loss of connectivity between the two water bodies.



PAGE 113

Other related key issues for consideration are the potential for unnatural rates of rise and fall,

residual pool management, supporting fish movement and bird breeding events, the duration,

timing and frequency of antecedent wetting and drying events, and water quality relative to the

receiving waters. Works in close proximity to already disturbed sites, such as existing water

infrastructure, would generally have less impact than structural options at previously undisturbed

sites (i.e. sites which have not been directly modified for the purposes of water supply

management).

Lake Wetherell and Lake Tandure habitat

Scheme BH3


Creation of a storage dam at Texas Downs, would result in a suite of changes to habitats in the

locality, including clearing of woodland and lignum vegetation and disturbance to the Darling

River and its floodplain.

Environmental benefits arising from Scheme BH3 are limited. Creation of the storage involves

construction, disturbance, changed local conditions and changed long-term conditions for flora and

fauna. It is assumed the Texas Downs storage would be constructed and managed purely for water

storage, and as such, offers little conservation value to local flora and fauna. Terrestrial fauna

could use the dam as a water source, and fish and aquatic reptiles may colonise it.



PAGE 114



of woodland and lignum habitats during construction would create short- and long-term impacts for

flora and fauna. Increased road traffic during construction also poses a direct risk to a suite of

fauna including birds, reptiles, amphibians and mammals. Construction on the floodplain would

also remove plant propagules stored in the soil, thereby depleting the local seed bank. Construction

activities would also need to be carefully managed to limit impacts on associated habitats such as

the Darling River.

Operational impacts include the permanent loss of floodplain woodland and lignum at Texas

Downs, and the potential for cumulative loss of fish diversity and abundance in the Darling River

due to pumping at Texas Downs and loss of breeding habitat. The severity of some impacts could

be mitigated (e.g. via the use of pumping screens and fishways), however, the loss of woodland

would be significant.

Texas Downs habitat



PAGE 115


The Scheme will create construction and operation, direct and indirect impacts on fauna and flora

at Texas Downs and the Darling River. Key impacts are:

� the permanent loss of approximately 200-250 ha of Black Box, River Red Gum woodland and

Lignum on the Darling River floodplain. This would affect a suite of terrestrial and riparian

fauna and flora, increasing competition for resources and potentially decreasing species

abundance and diversity.

� entrainment of fish from the Darling River in the pumps, causing a decline in abundance and

likely diversity in the fish community in the locality.

� fish may colonise the storage during its wetted period, and become stranded when a drawdown

is completed.

4.7. Specific issues

4.7.1. Impact of Climate Change

A climate change assessment for each Scheme presented in this report has been undertaken using

the Murray-Darling Basin CSIRO Sustainable Yields Project future climate and current

development inflow sequence. The inflow sequence is representative of likely climate conditions

around the year 2030.

The inflows sequence has been based upon a global warming scenario which has been derived from

15 global climate models (GCM) to provide a spectrum of 45 climate variants for the 2030. The

scenario variants are derived from the latest modelling for the fourth assessment report of the

Intergovernmental Panel on Climate Change (IPCC, 2007).

A ‘‘mid’ (best estimate – median) has been selected from the 45 variants to produce desired

scheme inflow sequence. Alterations in savings, diversions and flows relative to the benchmark

under this ‘mid’ climate scenario were assessed for each scheme.

In general, water savings, changes in diversions and alterations in flows for each of the

schemes under climate change are altered by only small amounts when compared to the

regime under current climatic conditions. The order of schemes in terms of largest to smallest

evaporative savings does not change under differing climate regime.

Salinity changes for the schemes are generally bigger under the climate change than for current

climate. This is especially the case for Morgan and is most probably due to less flows under both

the benchmark and option. A more detailed explanation of the impacts on Schemes as a result of

Climate Change can be found in Barma Water Resources (Hydrology Report Darling Water

Savings Project Final Part B Hydrology Report Feb 2010).



PAGE 116

4.7.2. Copi Hollow

The area known locally as Copi Hollow is a natural depression located between Lake Pamamaroo

and Lake Menindee. As part of the MLS, Copi Hollow was linked to Lake Menindee and Lake

Pamamaroo by constructing connecting channel works to the east and to south-west to link to the

Lakes. When the MLS is fully operational, water flows from Lake Pamamaroo through Copi

Hollow to Lake Menindee via the Menindee Inlet Regulator. When the lower lakes (Menindee and

Cawndilla) are full or not operational, the Menindee Inlet Regulator is closed and Copi Hollow fills

naturally from Lake Pamamaroo. When the Menindee Inlet Regulator is closed the water level in

Copi Hollow rises and falls with the water level in Lake Pamamaroo.

In the past Copi Hollow has generally provided a relatively permanent water frontage even when

the lower two lakes were dry. As a result it has developed into an important recreational facility

with a caravan park, sailing club and water ski club. Activities include swimming, power boating,

water skiing, sailing, kayaking, camping and picnicking. Copi Hollow is particularly significant as

a recreational location for residents of Broken Hill, Menindee and surrounding communities (with

their extreme climatic conditions) as a unique large body of accessible open water with facilities

for active water sports. Tourism and recreation has a substantive and growing role in the local

economy and Copi Hollow is an important attraction for the town of Menindee. The maintenance

of Copi Hollow as a recreational facility has been a significant issue raised at community meetings

at both Menindee and Broken Hill.

All of the proposed schemes place more emphasis on storing water in the upper lakes, Lake

Wetherell, Lake Pamamaroo and Lake Tandure, however, some of the operating regimes

considered may see the water level in Copi Hollow become more variable.

One of the options to secure the Broken Hill water supply involves the use of Lake Tandure and a

supplementary storage at Weir 32 and Copi Hollow. This proposal would require a permanent

fixed crest weir to isolate Copi Hollow from Lake Pamamaroo at low lake levels. In drought

situations water would be circulated through Copi Hollow and drawn out at the existing pump

station adjacent to the Broken Hill Road. This option is described in more detail in Table 4.2 and

Fig 4.6. This option will require further development before it would be acceptable to Counrty

Water, however a Copi Hollow storage option would support the regional community and tourism

by maintaining a more persistent water level and also improving water quality. The issue of potable

water quality would need careful consideration if Copi Hollow had the dual purposes of being a

recreational facility and part of a water supply system at some times.



PAGE 117

4.7.3. Lake Cawndilla Outlet

The Stage 1 and 2 hydrologic modelling explored a combination of:

� the implementation of structural (engineering) options, such as enlarged outlet regulators and

channels, and designated water supply works for high security users (Broken Hill and others),

and

� operational rules that are guided by the MDB Agreement (640/480 rule) that defines control of

the MLS for different volume regimes and obligations to store and supply water.

A new high capacity outlet channel (capacity of 6,000ML/d) was initially considered as an option

to increase the possible rate of drawdown of Lake Cawndilla and thus reduce evaporation losses

when emptying the storage. Flows could be conveyed directly to the Darling River. There were

three route options for the outlet channel:

a) A new outlet channel from Lake Cawndilla through the southern lunette and to the east through

Kinchega National Park (from Part A, 2007), Figure 4.8.

b) Alternative to option (a) using the existing Cawndilla outlet channel then a new channel east

through Kinchega National Park, Figure 4.8.

c) Using the existing Lake Cawndilla outlet channel, Tandou Creek and Penellco Channel, Figure

4.9.

Option c) would allow flows to be conveyed to the Darling River or Darling Anabranch.

The location of the outlet routes are shown in the following Figure 4-8 and Figure 4-9.

� Figure 4-8 – Proposed (a) New and (b) Alternative Lake Cawndilla Outlet Route

Darl

ing

Riv

er

Lake Cawndilla

Alternative Channel

alignment

New Kinchega

Channel



PAGE 118

� Figure 4-9 – Proposed (c) Existing Lake Cawndilla outlet + Penellco Channel Route

All three options for a high capacity outlet channel had a construction cost of about $60M. A high

capacity Penellco Channel is located on the Darling River floodplain and enhanced flood protection

measures, if required, may substantially add to this option’s cost. The route for a new high

capacity channel through the Kinchega National Park (KNP) had significant environmental and

cultural heritage impacts. The route via Tandou Creek is located adjacent to KNP but has long

been used as a channel to supply water to the Darling Anabranch from Lake Cawndilla and has

already been disturbed. Significant impacts would exist for this option but not to the same extent

as the proposed new channel through the Kinchega National Park. Therefore, if a high capacity

Cawndilla outlet channel option were to be pursued, using the existing outlet channel, Tandou

Creek and Penellco Channel route is considered more prudent as it is the least disruptive to the

existing environment and heritage within Kinchega National Park.

However, the hydrologic modelling indicated that the implementation of high capacity outlet works

at Lake Cawndilla to support operation of the MLS to deliver substantial water savings was not

effective. A high capacity (6,000 ML/d) outlet from Lake Cawndilla only realised a maximum of

18GL in additional savings on average, and hence, was considered not to be a cost effective

solution. In general enlarged outlet structures do not deliver substantial cost effective water saving

outcomes. The high capacity (6,000 ML/d) Cawndilla outlet option, therefore, was not taken

further in the investigation.

It was considered that an enhancement to the existing outlet capacity from Lake Cawndilla (up to

2,000 ML/d) would facilitate operational and environmental outcomes for Schemes, e.g., a

Cawndilla outlet channel to the Darling River would permit supply to the Lower Darling River and

Penellco Channel

Darli

ng R

iver

Lake Cawndilla

Cawndilla outlet channel

Tandou Creek



PAGE 119

also manage appropriate draining of the Lake to achieve environmental objectives. Hence, the

outlet enhancement (up to 2,000 Ml/d) was assessed mainly for its value to facilitate environmental

outcomes within the Lake but also recognising that the enlarged works may have operational

benefits. An enlarged regulator capacity of 2,000ML/d, when Lake Cawndilla separates from Lake

Menindee (RL56m AHD approx, Cawndilla volume 210GL), will provide for draining of an

environmental fill in the lake within 5-6 months, which is consistent with environmental objectives.

The current capacity under these lake volumes (1,200ML/d) wouldn’t be capable of managing a

suitable draining regime. As discussed, the route along the existing Cawndilla outlet channel,

Tandou Creek and Penellco Channel is favoured.

The Penellco Channel is owned by Tandou Farms and approvals will be required from it to access

this land for construction and ongoing maintenance.

4.7.4. Assumed Environmental Filling

An assumed environmental filling of the Lakes was considered in the modelling.

The basis for the assumed environmental water regime was on a basic understanding of the

vegetation and habitat needs of the Lakes. Sustaining the ecology of the Lakes and associated fish

and bird dependencies, is reliant upon a water regime that mimics, as far as practical, an ephemeral

wetting and drying cycle. Based on the environmental studies of the Lakes (ESD 2002), a seven (7)

year watering cycle would create a desirable ephemeral ecosystem on the lakebeds. Also, once a

fill occurs, it needs to be retained and slowly drained to encourage and sustain a full fish and bird

breeding cycle. Historically, the Lakes have experienced periods of no water beyond seven (7)

years, mainly prior to the creation of the MLS, and the ecosystem has adapted to this. The creation

of the MLS has altered the environment of the Lakes, which has adapted to persistent inundation.

However, a managed environmental filling of the Lakes has the potential to recreate a healthy

ephemeral ecosystem.

The modelled environmental filling option provides a representative guide to the impact on

evaporation savings and information on an appropriate style of water regime that could be created

to deliver an improved environmental outcome for the Lakes.

Barma Water Resources (Hydrology Report Darling Water Savings Project Final Part B Feb 2010),

describes the environmental filling modelling as follows:

� The hydrologic modelling has made allowances for periodic filling of lakes based upon a

number of filling criteria. These criteria were developed as an initial exploration of water

regimes that will assist in the sustainability of the health of the lakes. These are:

� The number of months to wait before trying to harvest water (84 months)

� The minimum length of a useful watering event. (5 months)

� Starting threshold lake volume for an event (450GL, approximate natural full volume)



PAGE 120

� Ending threshold lake volume for an event (350GL).

Lake Cawndilla and Lake Menindee are subject to environmental filling in Schemes 2 and 3.

Lake Cawndilla is subject to environmental filling in schemes 4, 5 and 6.

Under this simulation;

i. The target lake(s) would not receive water for at least 84 months starting from the completion

of the previous environmental fill.

ii. For the next filling opportunities the model aims to divert at least 450GL into each target lake

and then still have at least 350GL in each target lake after 5 months (a successful fill), at which

point the 84 month count starts.

iii. If a successful fill is not achieved, the filling process continues as described in (ii) until it is

successful, at which point the 84 month count starts.

iv. Once a successful environmental filling event is achieved the target lake(s) empty in

accordance with downstream demands.

v. The target lake(s) would not receive water for at least another 84 months (7 years) before

another fill of the lakes was attempted. With this approach in the modelling the actual

average period between fills is significantly longer than 7 years.

During filling events the model assumes that the lakes operate under the current Agreement (either

NSW or MDBA control) and all water is available to supply downstream requirements. The target

lakes are therefore emptied in accordance with downstream demands, which results in an increase

in lake evaporation and consequent decrease in water savings volume compared to emptying the

lakes at the fastest possible rate.

It is important to note that putting water back into the Lakes in order to meet environmental

requirements, results in a significant increase in lake evaporation and hence a large decrease in

savings volumes. Also any operating strategy that would hold the environmental water in the lakes

for a longer period to satisfy a later environmental purpose would increase evaporation losses and

cause a decrease in the savings volumes, potentially by large amounts if the storage period was

long.

In relation to the management of the water regime for the Lakes, a more detailed study is required

to select a suitable local environmental outcome that is also balanced with environmental outcomes

that could be delivered by the saved volumes in other locations. Governments could give

consideration to the formation of a Menindee Lakes Environmental Reference Group (or similar), if

a scheme is implemented, to provide advice on future best operational management of the Lakes to

ensure its future health.



PAGE 121

4.7.5. Broken Hill Water Supply Issues

4.7.5.1. Broken Hill - Impact of schemes on reliability and water quality

SKM investigated the issues associated with water supply reliability and water quality arising from

the hydrologic modelling, utilising advice sourced from NOW.

The recommended options for Broken Hill water supply schemes include:-

1. Managed Aquifer Recharge

2. An 18GL uncovered storage at Texas Downs

3. Enhanced Lake Tandure plus an additional 5GL uncovered storage.

Options for the 5GL uncovered storage include:-

a) A dedicated 5GL storage at Texas Downs.

b) An enlarged Weir 32 to provide 5GL above the existing weir pool.

c) An enlarged Weir 32 and enhancements to Copi Hollow to provide

an additional 5GL in total.

The capacity of the surface storage options (2) and (3) were determined so as to achieve an

unfailing water supply to Broken Hill based on the modelling of the historic climate sequence and

assuming Broken Hill utilises its full allocation of 10GL per annum..

The impact of the surface storage options (2) & (3) on Broken Hill water quality was also

examined. Key points were:

� For the Lake Tandure plus 5GL storage option; Water quality performance of this option

depends upon the quality of the water from Weir 32. Real time management of this option will

need to consider both quantity and quality of water to ensure Broken Hill is provided with a

successful drought water supply. The only modelled event that failed to provide water of less

than 1,000EC during the drought cycle was in 2003/04 when Weir 32 peaked at 2,200EC. This

event would have been difficult to manage as water in Weir 32 was above 1,000EC for nearly

two years from March 2002 to January 2004.

� An 18 GL uncovered storage option mitigates EC impacts with all scenarios modelled

resulting in reduced number of events over 1,000 EC over the 117 years modelled. This will

be the case if the water diverted to the storage from Weir 32 is of good quality (EC less than

600EC).

None of the surface storage options resulted in water quality (EC) any worse than the current

baseline conditions. In specific conditions, similar to the drought cycle in 2003/04, water quality

for both options would have exceeded the nominal target (1000EC) requested by Country Water

(CW). As none of the options results in modelled water quality (EC) which is worse than under

current conditions, no allowance has been made in the project costing for additional treatment

facilities such as reverse osmosis. Country Water currently owns a 6ML/d Reverse Osmosis (RO)



PAGE 122

plant that can be run to convert poor source water quality into potable water. This RO plant still

needs a final solution for its brine disposal that CW has on their works programme as an “as needed

project” due to the large capital needed. Any further reduction in water quality from the Darling

River will increase the need for the brine solution and any further RO capacity. Additional RO

capacity may be considered as a potential mitigation measure as it would give Broken Hill more

flexibility to deal with poor quality water in general.

4.7.5.2. Water Treatment for Broken Hill

No decision has been made as to the necessity for additional water treatment capability for Broken

Hill as a result of the possible water supply options identified. Further understanding of the water

supply options and water quality impacts, plus Broken Hill’s capacity to manage the resultant water

quality, is required to scope the necessary future studies to support the decision making process.

Broken Hill

Discussion on Broken Hill’s water treatment options.

Country Water, which is a trading entity of Country Energy, has a stated desirable water quality for

raw water of less than 1,000EC. By comparison, the Australian Drinking Water Guidelines

indicate that for potable water supply, 125EC is excellent, 800EC is good, 1,250EC is fair and

1,550EC is unacceptable. Other water quality parameters such as taste and hardness also influence

the acceptability of raw water.

Broken Hill currently has capacity to treat 6ML/d through its Reverse Osmosis (RO) modules (4 x

1.5ML modules in total). This can manage low winter demand. Peak winter demand is current

10ML/d and average peak summer demand is about 25ML/d. Country Water is currently building

a new 31ML/d + 10% supernatant return Water Treatment Plant to be commissioned by June 2010,

and it will provide pre-treatment with potassium permanganate and/or powder activated carbon.



PAGE 123

The process is:

� Alum and polymer assisted coagulation and flocculation.

� Tube settlers clarification

� Dual media filtration

� UV disinfection

� Fluoride addition

� Chlorine addition for residual disinfection.

RO has been allowed for between the UV disinfection and the fluoride addition, if needed, and

therefore, any future RO should be designed to take into account the new water treatment facility.

A detailed discussion on issues associated with water treatment for Broken Hill is presented in

Appendix C.

4.7.5.3. Costs associated with Water Supply Schemes

Both Broken Hill City Council and Country Water have concerns about the potential to increase

operation and maintenance costs, and who is responsible to cover these costs associated with a

changed water supply and treatment scheme. This matter will need to be resolved to the

satisfaction of stakeholders before approval and ownership of the preferred scheme can occur. This

issue is outside of the scope of this project.



PAGE 124

5. Menindee Lakes Storage Water Saving Schemes

5.1. Summary of Statement of Effects Results

Following is a summary of the key results from the Statement of Effects, which are presented in a

separate volume to this report. For each Scheme, the CBA results are presented and key

assessment results for:

� Environment

� Hydrology

� Socio Economic

� Cultural heritage.

5.2. Summary of Schemes, Costs and CBA Results

Table 5-1 presents the CBA results for the final Schemes.

� Table 5-1 Schemes – Summary of Savings, Costs & CBA Outcomes

Scheme ID

Description

Water Savings

(GL)

Lifecycle Cost of Scheme

(NPV $M)

Integrated Scheme Total Lifecycle Cost

(2009) $M #

Discounted Integrated Scheme

Total Lifecycle Cost $M #

CBA Result for Integrated

Scheme ($M) #

Lakes Schemes

1 Never Fill Lakes Menindee and Cawndilla

248 2.9 33.9 27 103

2

Reduced use of Lake Menindee and Lake Cawndilla + existing outlet structures

125 2.9 33.9 27 26

3

Reduced use of Lake Menindee and Lake Cawndilla + Environmental structures

125 70.9 101.9 77 (25)

4

Reduced use of Lake Cawndilla + existing outlet structures

61 18.6 49.6 39 (4)

5

Reduced use of Lake Cawndilla + Environmental 77structures

74 70.9 101.9 77 (50)

6

Reduced use of Lake Cawndilla + Environmental structures + MDB Agt current rules

34 70.9 101.9 77 (61)

Note # Integrated Scheme includes a Lakes’ Scheme and an indicative BH Water Supply Scheme



PAGE 125

Table 5-1 cont.

Scheme ID

Description

Water Savings

(GL)

Lifecycle Cost of Scheme

(NPV $M)

Integrated Scheme Total Lifecycle Cost

(2009) $M #

Discounted Integrated Scheme

Total Lifecycle Cost $M #

CBA Result for Integrated

Scheme ($M) #


BH1 Managed Aquifer Recharge

na 31.0 na na na

BH2 Use of Lake Tandure and Upgraded Weir 32

na 36.9 na na na

BH2

Use of Lake Tandure and Upgraded Weir 32 + Copi Hollow

na 50.4 na na na

BH2

Use of Lake Tandure and designated BH Storage

na 35.6 na na na

BH3 Texas Downs Storage

na 36.4 na na na

Note # Integrated Scheme includes Lakes Scheme and indicative BH Water Supply Scheme

5.3. Assessment Results

5.3.1. Scheme 1

Snapshot

Maximum Water Savings with No assumed environmental fill Provision

� Lakes Menindee and Cawndilla not used as operational lakes

� No assumed environmental fill provision

� Maximum MDB Agreement change to 150/100 GL

� Model Run 5294

� Water savings 248GL average annual

� Use existing outlet structures

� Provide Lake Pamamaroo draining channel

� Separate Broken Hill drought security supply

� Refer to Figure 4-1 Layout of Scheme 1

Environment

The key environmental impacts arising from Scheme 1 include permanently drying Lakes

Menindee and Cawndilla and the resultant loss of habitat within and adjacent to these lakes

including Lake Eurobilli, Lake Spectacle and Lake Speculation. The environmental values

associated with Morton Boolka would also be permanently lost along with opportunities to provide

water to the Darling Anabranch via Lake Cawndilla. Permanently drying lakes would also likely



PAGE 126

lead to increased wind erosion of lakebed and littoral habitats and exposure of Indigenous cultural

heritage artefacts.

The shift from a lake habitat to a permanently dry woodland habitat is the key operational impact.

This change has consequences for biodiversity at the local, state and national levels, as it

constitutes a net loss of refuge, foraging and breeding habitat for suite of resident and migratory

wetland and lake species. The lakes and wetlands are areas of high conservation value and this

Scheme would constitute significant impacts on environmental and cultural heritage values.

Potential environmental impacts on flora and fauna are short- and long-term, direct and indirect,

and cumulative. The loss and disturbance of woodland and lakebed habitats during construction of

Lake Pamamaroo draining channel would create short- and long-term impacts for flora and fauna at

the lakes. For example, the loss of hollow-bearing woodland trees has an immediate effect on

competition for hollows for refuge and breeding. Increased road traffic during construction also

poses a direct risk to a suite of fauna including birds, reptiles, amphibians and mammals.



The environmental benefit arising from Scheme 1 is the potential for delivery of water saved by

permanently drying Lakes Menindee and Cawndilla, to other habitats in the Murray-Darling Basin.

These changes may contribute to overall improved ecosystem structure and function, and improved

water quality conditions in critical habitats elsewhere in the Basin. The savings generated via

Scheme 1 may also result in increased flows in the Darling Anabranch, lower Darling River and

River Murray downstream of Wentworth.

Hydrology

This Scheme has considerably greater evaporation savings (248 GL per annum) when compared to

other schemes. The large saving associated with this Scheme is due to two reasons, firstly both

Lake Menindee and Lake Cawndilla not being filled at all, and secondly the rapid drawn down of

the Scheme as a result of the lakes supplying water to Murray users for longer periods of time

(approximately 15% more frequently than at present).

All Schemes assessed in this study result in increased diversions. In the case of this scheme the

diversion increases was 20GL per annum in total. It should be noted, however, the diversion

increases observed in the model would not occur in practice, as they would be limited to existing

statutory plan limits in NSW and Cap limits in Victoria in and South Australia. Consequently, in

practice the diversion increases observed in the modelling of schemes would manifest themselves

as increased flow volumes in the Lower Darling and the Murray River, Allocations for the Scheme

appear to be improved for all years for the Lower Darling, and NSW Murray (4% and 1% on

average), whilst allocations for Victorian and South Australian Murray users are largely

unchanged.



PAGE 127

The savings generated through this Scheme result in increased flows in the Darling Anabranch

(17GL per annum), the Lower Darling River (170 GL per annum) and the Murray River

downstream of Wentworth (165 GL per annum). A small decrease in flow occurs in the Murray

River upstream of Wentworth (16 GL per annum) as a result of reduced releases from Hume Dam.

This Scheme has the greatest changes in flows as a result of having the largest water saving.

Increased flows, and the decision to not use Lakes Cawndilla and Menindee, result in decreases in

the median salinity levels in Lake Wetherell (8EC) and an increase in salinity for Lake Pamamaroo

(80EC). Downstream median salinity levels in the Lower Darling River at Burtundy are reduced

by over 80EC and there is also a small reduction of less than 1EC at Morgan on the Murray River.

This is despite additional dilution flows to South Australia no longer being triggered under this

Scheme.

Socio Economic

Scheme 1 has the highest net social benefit – with minimal capital works, significant water savings,

and net positive third party impacts.

The net third party impacts reflect positive salinity (and to a lesser extent Hume recreation,

flooding and hydro-electricity) benefits, which are only partially offset by the largest impacts on

the Menindee community (with regards to property values and local tourism and recreation) of any

scheme. Sunset Strip properties are estimated to fall by around 15% and local tourism and

recreational benefits are reduced by an estimated $150,000 per annum. These impacts are expected

as the Scheme involves never filling Lakes Menindee or Cawndilla.

Interestingly, this scheme has no tangible impacts on Murray River allocations. Such impacts

might be anticipated as the reduction in storage at the Lakes could increase commitments on the

upper Murray River storages when the MLS cannot contribute to cross border flow commitments.

This Scheme improves opening allocations for Lower Darling High Security, and there is no

tangible change in allocations by September of each year. While it reduces opening allocations for

Lower Darling General Security in some years, there are notable improvements in others. By

October, most of the differences are ameliorated and improvements in some years offset declines in

others, and by January there are few, if any, tangible differences with the base case.

Cultural Heritage

Leaving Menindee and Cawndilla Lakes largely empty will result in the further unearthing and



further archaeological material, especially around the outlets and stream banks within the Lakes

Cawndilla and Menindee area (Witter 2009), are a cause for concern and merit further

investigation.



PAGE 128

At earlier meetings with Aboriginal representatives in 2008, the impact of less water in Lake

Menindee and the resultant loss of visual amenity, recreational values, reduced land and property

values for those living in Sunset Strip, was an issue.


the Aboriginal community, it was expressed that keeping Lakes Pamamaroo and Tandure full is a

basic requirement, indeed a priority, when adopting any future option. Both of these lakes,

especially Pamamaroo, besides being rich in Aboriginal cultural values, were major tourist



surrounding area.

Leaving Menindee and Cawndilla Lakes largely operationally empty will result in the further

unearthing and destruction of archaeological material through wind erosion. In addition, Lake

Pamamaroo is likely to operate at maximum storage level for longer periods under all of the

proposed schemes compared to current conditions. There are concerns that this could lead to

greater shoreline erosion leading to exposure to sites of cultural heritage significance. Mitigating

measures would need to be put in place to protect and conserve these sites and materials for this

option to receive any consideration by the Aboriginal community. This would include a preference

for the establishment of a cultural centre in Menindee and that conditions set out in the previously

negotiated in the Rehabilitation and Cultural Heritage Protection Plan for the Proposed Menindee

Structural Works, be adhered to.

Pamamaroo Drainage Channel

This option also proposes the construction of a draining channel in the bed of Lake Pamamaroo

from the northern residual pool area to the existing regulator, being a distance of approximately six

(6) kms. Currently, the Pamamaroo Creek is incapable of effectively conveying the required flows

due to siltation in the channel and is also an area rich in archaeological material.

The draining channel would be constructed to the north east of Pamamaroo Creek to avoid

disturbance of the natural creek and also likely cultural heritage features .The cutting of a drainage

channel through the lakebed of Lake Pamamaroo could potentially destroy and threaten

archaeological sites, those currently identified and those possible sites beneath the current surface

level of the lake bed (Witter 2009). This would include during the construction phase and post

construction with the increased volumes of water down the channel and the likelihood of

uncovering and destroying further sites through erosion. Mitigating factors would need to be put in

place including the routing of the drainage channel to minimise impacts on known and potential

sites as well as operationally controlling drainage flows to reduce erosion and infilling of the

channel through bank collapse and subsequent destruction of archaeological sites.



PAGE 129

At a meeting on 18 December 2009 at Menindee, LALC Aboriginal interests were shown a map for

a hypothetical Pamamaroo drainage channel which demonstrated a possible route minimising the

impact on known ACH values. Comment was made that this looked like a possible viable

alternative provided mitigating factors for the preservation and protection of archaeological sites

and materials were met. An acceptable route would need to be negotiated with the proviso that the

conditions of the Rehabilitation and Cultural Heritage Protection Plan for the Proposed Menindee

Structural Works would be immediately activated

Spoil from the sites would also need to be carefully monitored in terms of containing

archaeological material, where it is to be deposited and any possible impact on the Aboriginal

cultural landscape.



within the Lakes Cawndilla and Menindee (Witter 2009) area, are a cause for concern and merit

further investigation. Mitigating factors would need to be put in place to protect and conserve these

sites and materials for this option to receive any consideration by the Aboriginal community.

The same applies to other lakes in the system including Lakes Cawndilla, Pamamaroo and Tandure,

including the lake deltas and feeder streams within the lake system itself. Any increased flows

through these outlets, if operationally mismanaged, will further destroy archaeological sites in the

vicinity of the outlet through erosion as well as impact on those sites downstream.



PAGE 130

5.3.2. Scheme 2

Snapshot

Maximum Water Savings with Existing Structures and Assumed Environmental Fill

Provision

� Reduced operational use of Lakes Menindee and Cawndilla

� Use existing outlet structures

� Assumed environmental fill provision

� MDB Agreement change to 210/200GL

� Model Run 5386


� Provide Lake Pamamaroo draining channel

� Separate Broken Hill drought security supply .


Environment

Potential environmental benefits arising from the proposal are largely long-term and cumulative,

arising from the changed watering regime and modified regulators. These changes may contribute

to overall improved ecosystem structure and function, and improved water quality conditions in

residual pools.

A return to an ephemeral regime could improve the diversity and abundance of freshwater, littoral

and riparian vegetation at the lakes, and lake system productivity, creating improved trophic


However, the potential to improve overall ecosystem condition depends on current ecosystem

resilience and thresholds, combined with the timing, duration, magnitude and frequency of wetted

phases of the watering regime. Implementation of a watering regime which results in maintenance

or improvement in condition of the Menindee Lakes will require careful adaptive management and

monitoring of the trajectories of responses of biological indicators.

Environmental impacts on flora and fauna are short- and long-term, direct and indirect, and

cumulative and occur largely at the construction phase of the proposal. The loss and disturbance of

woodland and lakebed habitats during construction would create short- and long-term impacts for

flora and fauna at the lakes. For example, the loss of hollow-bearing woodland trees has an

immediate effect on competition for hollows for refuge and breeding with a time-lag of many

decades. Increased road traffic during construction also poses a direct risk to a suite of fauna

including birds, reptiles, amphibians and mammals. Construction in the lakebed may also

compromise the viability of zooplankton and plant propagules stored in the lakebed sediment.

The risk of a decline in ecosystem condition arising from the proposed watering regime is the key

operational impact. This risk is related to the current ecosystem condition, its resilience and



PAGE 131

thresholds, and the capacity of the proposed watering regime to maintain or improve conditions in

the lakes. Given the proposed regime incorporates drying periods beyond that which occurred

naturally, the potential for altered (likely compromised) ecosystem function is high. The most

vulnerable flora and fauna are those with preferences for lake and open water habitats. The utility

of habitats at the Lakes under the Scheme 2 regime for ephemeral species will depend on their

various strategies for withstanding the extended drying phase. The potential for adverse impacts on

threatened flora and fauna arising from the Scheme 2 regime will require further investigation.

Hydrology

This Scheme has half the evaporation savings of Scheme 1 (125GL per annum). The reduction in

the savings from Scheme 1 is due to water being put into Lakes Menindee and Cawndilla for

environmental purposes. The Scheme still supplies Murray River users more frequently than under

current arrangements (approximately 10% more frequently than present).

In the case of this scheme, the diversion increase for downstream water users was 8GL per annum

and occurred predominantly in the NSW Murray River and Lower Darling River. As noted

beforehand, State based extraction limits would result in these increases not occurring in practice.

The pattern of allocations for the Scheme appear to be very similar to that which is occurring under

current operational practices for New South Wales, Victoria and South Australia Murray Users,

whilst allocations reduced by 3% on average in the Lower Darling River.

The savings generated through this Scheme result in approximately half the increase in flows that

are evident in Scheme 1. This is 11GL per annum in the Darling Anabranch, 69GL per annum in

the Lower Darling River and 71GL per annum in the Murray River downstream of Wentworth. A

small decrease in flow occurs in the Murray River upstream of Wentworth (5GL per annum).

Increased flows, and the decision to use Lakes Cawndilla and Menindee at times when assumed

environmental filling is required, result in decreases in median salinity levels in Lake Wetherell

(7EC) and Lake Cawndilla (71EC) and an increase in salinity for Lake Pamamaroo (71EC) and

Lake Menindee (288EC). Downstream salinity levels in the Lower Darling River at Burtundy are

reduced by over 40EC and there is also a small reduction of approximately 2EC at Morgan on the

Murray River. Dilution flows to South Australia still occur under this Scheme but are occur 25%

of the time less often.

Socio Economic

Scheme 2 has the second highest net social benefit – with minimal capital works, moderate water

savings and no significant net third party impacts.

There is a small salinity benefit. This is wholly offset by a 10% reduction in Sunset Strip property

values and a $60,000 reduction in local tourism and recreation values.



PAGE 132

Scheme 2 reduces opening allocations for NSW Murray entitlements. By August these differences

have been eliminated with regards to High Security licences. By year-end Murray General security

allocations are relatively unchanged with the exception of a reduced allocation in 1908 (simulated

output from the modelling), albeit this is offset by small improvements in several years including

2004 and 2006.

Lower Darling High Security opening allocations are reduced in four or five percent of years.

These reductions are generally eliminated by October and are totally eliminated by year end.

Lower Darling General Security shows decreases in opening allocations. Those reductions are

generally eliminated by October and almost wholly eliminated by January. Year end allocations

show some improvements in the very limited number of reduced allocation years with the one

exception of 2007.

Cultural Heritage

Cultural heritage impacts are similar to Scheme 1 although assumed environmental filling of Lakes

Menindee and Cawndilla will have a lesser impact. Prolonged filling of Lakes Wetherell and

Tandure are considered by the local Aboriginal community to be a favourable impact for this

Scheme.

Lake Pamamaroo drainage channel.






PAGE 133

5.3.3. Scheme 3

Snapshot

Maximum Water Savings with Enhanced Structures and Assumed Environmental Fill

Provision

� Reduced operational use of Lakes Menindee and Cawndilla

� Provision for enhanced structures: Morton Boolka Regulator, Menindee Outlet and

draining channel, Cawndilla Outlet and draining channel, and Lake Pamamaroo draining

channel



� Model Run 5386




Environment

Scheme 3 has similar water regime related impacts to the Menindee Lakes as Scheme 2.

There are significant site and construction impacts associated with the numerous works associated

with this Scheme. Environmental impacts on flora and fauna are short- and long-term, direct and

indirect and cumulative and occur largely at the construction phase of the proposal. Habitats in the

lakebeds of Lakes Pamamaroo, Menindee and Cawndilla, Little Menindee Creek, Morton Boolka

and the Lake Cawndilla outlet channel, will be impacted by the construction of the potential works.


and long-term impacts for flora and fauna at the lakes. Increased road traffic during construction




Hydrology

This Scheme is hydrologically similar to Scheme 2 and results in evaporation savings of 125GL per

annum.

Socio Economic

Scheme 3 results in a moderate net social loss. It has identical impacts to Scheme 2, but is

burdened by extensive capital works costs resulting in a significant net loss (of $33 million).

Cultural Heritage



PAGE 134

As discussed, leaving Menindee and Cawndilla Lakes largely empty will result in the further

unearthing and destruction of archaeological material through wind erosion. At earlier meetings

with Aboriginal representatives in 2008, the impact of less water in Menindee Lake and the

resultant loss of visual amenity, recreational values, reduced land and property values for those

living in Sunset Strip was an issue.

In addition, Lake Pamamaroo is likely to operate at maximum storage level for longer periods

under all of the proposed schemes compared to current conditions. There are concerns that this

could lead to greater shoreline erosion leading to exposure to sites of cultural heritage significance.

Mitigation measures would need to be put in place to minimise any impacts.


Morton Boolka, the area including Cawndilla Creek, Eurobilli Lake and the channels entering into

Lakes Cawndilla and Menindee are of extremely high archaeological significance. Any proposed

block dam would be better located at the junction of Cawndilla Creek and Lake Menindee. This

area has less archaeological significance (Witter, 2009) and is more appropriate than a site in the

middle of the Cawndilla Creek system.

Lake Menindee outlet and draining channel.

Much on the archaeology in the Lake at this site (Little Menindee Creek) has already been

destroyed, however, the area still has significant remaining archaeological material. It is

anticipated that archaeological material with be present in the Little Menindee Creek channel

downstream of the MLS levee, although predominantly on the banks. An enlarged outlet also has

the capacity to threaten or destroy important sites downstream on the Darling River through

increased flows. Any further development of the Menindee outlet regulator has a high probability

of further damaging cultural material in this area.


within the Lakes Cawndilla and Menindee (Witter 2009) area, are a cause for concern and merit

further investigation. Mitigating factors would need to be put in place to protect and conserve these

sites and materials for this option to receive any consideration by the Aboriginal community.

There is dense cultural material along the main creek lines, and also scarred trees on the lake bed

away from the main creek lines. This option would require a salvage operation and establishment

of a permanent “keeping place” in the Menindee area.

The current proposal to locate the proposed Menindee outlet channel at Little Menindee Creek

rather than Menindee Creek has merit as it substantially avoids known cultural heritage sites.

When introduced to the local Aboriginal elders, this concept was recognised as an attempt to

mitigate impacts on the “ceremonial delta” area of Lake Menindee.

Lake Cawndilla outlet and draining channel



PAGE 135

Any proposed channel, which will cross the Lake Cawndilla lunette and the Kinchega National

Park (KNP), will cut across an area known to have significant cultural heritage material. The

channel may also enter the Darling River in the vicinity of the Pleistocene channels related to the

Talyawalka –Anabranch system and these are likely to have significant Pleistocene age sites.

This option would also further degrade the cultural landscape as well as limit the mobility of native

animals and destroy the habitat of fauna significant to the Aboriginal people. This option was not

acceptable to the Barkindji Elders both in feedback to the Menindee ESD project 2002 and the

DRWSP Part B, Stage 2. The Penellco channel option may receive further consideration and was

indeed supported conditionally by the Menindee LALC in 2002. Cultural heritage is known along

the Penellco Channel and management measures will be necessary if this option is implemented.

Lake Pamamaroo draining channel


5.3.4. Scheme 4

Snapshot

Water Savings with Reduced Operational use of Lake Cawndilla, Existing Outlet Structures

and assumed Environmental Fill Provision

� Reduced operational use of Lake Cawndilla

� Provision for Morton Boolka Regulator and Lake Pamamaroo draining channel



� Model Run 5403


� Separate Broken Hill drought security supply .


Environment

Scheme 4 differs from Schemes 2 and 3 in relation to the water regime related impacts in that Lake

Cawndilla will not be used as an operational lake and hence will be drier than present more

frequently. An assumed environmental filling regime has been included to provide for the

sustainable health of the Lake. Other Menindee Lakes’ benefits and impacts are generally the same

as Schemes 2 and 3.

There are significant site and construction impacts associated with the works associated with this

Scheme. Environmental impacts on flora and fauna are short- and long-term, direct and indirect

and cumulative and occur largely at the construction phase of the proposal. Habitats in the lakebed

of Lakes Pamamaroo and at Morton Boolka, will be impacted by the construction of the potential

works. The loss and disturbance of woodland and lakebed habitats during construction would



PAGE 136

create short- and long-term impacts for flora and fauna at the lakes. Increased road traffic during

construction also poses a direct risk to a suite of fauna including birds, reptiles, amphibians and

mammals. Construction in the lakebed may also compromise the viability of zooplankton and

plant propagules stored in the lakebed sediment.

Hydrology

This Scheme has half the evaporation savings of Scheme 2 and 3 (61 GL per annum) and a quarter

of the saving of Scheme 1. The reduction in the savings from earlier Schemes is due to all Lakes

being utilised, albeit with Lake Cawndilla only being used at times when environmental filling is

required. The Scheme still supplies Murray users more frequently than under current supply

arrangements (approximately 20% more frequently than present).

Diversion increases for downstream were similar to Scheme 1 and totalled 20GL per annum. This

increase occurred predominantly in the NSW Murray and Lower Darling Rivers. There is also a

small improvement in allocation in all years in the NSW Murray and Lower Darling (less than 1%

on average). Negligible changes in allocations are apparent for South Australia and Victorian

Murray users.

The savings generated through this Scheme result in the second lowest increase in flows of all

Schemes assessed. This is 7GL per annum in the Darling Anabranch, 30 GL per annum in the

Lower Darling River and 19GL per annum in the Murray River downstream of Wentworth. As

with other Schemes, a decrease in flow occurs in the Murray upstream of Wentworth occurs (15

GL per annum).

Increased flows, and the decision to use Lakes Cawndilla only for assumed environmental filling,

results in reductions in median salinity levels in all Lakes. Median salinity levels in Lake Wetherell

decrease by 4EC, Lake Cawndilla decreases by 20EC, whilst Lake Pamamaroo and Lake Menindee

salinity levels decrease by 9EC and 22 EC respectively.

Downstream median salinity levels in the Lower Darling at Burtundy are reduced by over 30EC,

however there is a small salinity increase at Morgan of approximately 2EC. Additional dilution

flows to South Australia still occur under this Scheme but occur 5% less often.

Socio Economic

Scheme 4 results is break even – with few capital works, moderate water savings and net negative

third party impacts. Capital works are limited to the minimum set of works and a High Level

Regulator at Morton Boolka. Net third party losses are high relative to other schemes (but still

small in the context of the overall project) due to a salinity loss.

Local impacts on property values, and tourism and recreation are small with a 4% reduction in

property values and a $10,000 per annum reduction in tourism and recreation.

Impacts on allocations are very similar to schemes 2 and 3, but reduced in intensity.



PAGE 137

Cultural Heritage

Reducing the operational use of Lake Cawndilla will result in the further unearthing and




the Cawndilla and Menindee (Witter 2009) area, are a cause for concern and merit further

investigation and protection.


the Aboriginal community, it was expressed that keeping Lake Pamamaroo and Lake Tandure full

is a basic requirement, indeed a priority, when adopting any future option. This would be especially

so if Lakes Cawndilla and Menindee were to be operationally used less. Both of these lakes,

especially Pamamaroo, besides being rich in Aboriginal cultural values were major tourist



surrounding area and relies on full lakes.







Morton Boolka – Cawndilla Creek (Area of High Archaeological Significance)



PAGE 138

Scheme 5

Snapshot

Water Savings with Reduced Operational use of Lake Cawndilla, Enhanced Structures

and assumed environmental fill Provision



draining channel, Cawndilla Outlet and draining channel, and Lake Pamamaroo

draining channel



� Model Run 5404



� Refer to Figure 4-5 Layout of Schemes 5 & 6

Environment

Scheme 5 has similar water regime related impacts to the Menindee Lakes as Scheme 4.

There are significant site and construction impacts associated with the numerous works associated

with this Scheme. Environmental impacts on flora and fauna are short- and long-term, direct and

indirect and cumulative and occur largely at the construction phase of the proposal. Habitats in the

lakebeds of Lakes Pamamaroo, Menindee and Cawndilla, Little Menindee Creek, Morton Boolka

and the Lake Cawndilla outlet channel, will be impacted by the construction of the potential works.


and long-term impacts for flora and fauna at the Lakes. Increased road traffic during construction




Hydrology

From a hydrology perspective this Scheme is similar to Scheme 4, with the only difference being a

greater discharge capacity for the Lake Menindee outlet regulator. A consequence the hydrology

impacts are similar to that of Scheme 4. This Scheme has a slightly higher evaporation savings than

Scheme 4 and (74 GL per annum), with the slightly higher saving a result of the increased outlet

regulator Capacity for Lake Menindee. The Scheme still supplies Murray users more frequently

than under current supply arrangements (approximately 20% more frequently than present).

Diversion increases for downstream were similar to Scheme 4 and also totalled 20GL per annum.

As before, this increase occurred predominantly in the NSW Murray and Lower Darling Rivers.



PAGE 139

There is also a small improvement in allocation in all years in the Lower Darling River (less than

2% on average). Negligible changes in allocations are apparent for NSW Murray, Victorian Murray

and South Australian users.

The savings generated through this Scheme result in slightly greater increases in flows compared to

Scheme 4. There is an 8GL per annum in the Darling Anabranch, 39 GL per annum increase in the

Lower Darling River and 27GL per annum in the Murray River downstream of Wentworth. As

with other Schemes, a decrease in flow occurs in the Murray upstream of Wentworth occurs (17

GL per annum).

Compared to Scheme 4, median salinity reductions are greater for all Lakes with the exception of

Lake Wetherell. Lake Wetherell median salinity levels decrease by 3EC, Lake Cawndilla decreases

by 73EC, whilst Lake Pamamaroo and Lake Menindee salinity levels decrease by 12EC and 64 EC

respectively. Downstream median salinity levels in the Lower Darling at Burtundy are reduced by

similar amount to Scheme 4 at over 30EC, however as before there is a small salinity increase at

Morgan of approximately 2EC. Dilution flows to South Australia still occur under this Scheme but

occur 5% less often.

Socio Economic

Scheme 5 results in a moderate to high net social loss – it has extensive capital works the cost of

which is not offset by the value of their moderate to low water savings. As with schemes 2 and 3,

net third party impacts are minimal, and local impacts are substantially reduced – with a 3% fall in

property values and a $20,000 reduction in tourism and recreation. As with scheme 4, impacts on

allocations are similar to schemes 2 and 3, but reduced in intensity. The scheme results in a

substantial, $60 million, net social loss.

Cultural Heritage

Reducing the use of Lake Cawndilla will result in the further unearthing and destruction of

archaeological material through wind erosion. This was a concern expressed in the initial Menindee

Lakes EIS (Martin and Pardoe -2002) by Sarah Martin consultant archaeologist. The discovery of


Cawndilla and Menindee (Witter 2009) area, are a cause for concern and merit further

investigation.









PAGE 140

5.3.5. Scheme 6

Snapshot

Provision of Enhanced Structures and Assumed environmental fill, and Use of Current

MDB Agreement Water Savings with Reduced Operational use of Lake Cawndilla



draining channel, Cawndilla Outlet and draining channel, and Lake Pamamaroo

draining channel


� MDB Agreement change to allow reduced use of Lake Cawndilla

� Model Run 5405



� Refer to Figure 4-5 Layout of Schemes 5 & 6

Environment

Scheme 6 essentially retains the current operational rules in the Lakes, although, Lake Cawndilla

will have a drier environment. Impacts will occur in Lake Cawndilla although there is provision

for assumed environmental fill of this Lake to encourage its sustainable health.

Other benefits and impact are as described for Scheme5.

Hydrology

This Scheme has approximately half the evaporation savings of Schemes 4 and 5 due to

maintaining the current operating rules with respect to when the MLS reverts to MDBA control.

Savings are 34 GL per annum. As a result of maintaining the Agreement the Scheme supplies

Murray users with a similar frequency to that under current supply arrangements.

Diversion increases for downstream were minor. There are also small impacts upon allocations for

NSW and Victorian Murray Users. These are in the order of a 2% reduction. Improvement in

allocation in all years occurred in the Lower Darling whilst negligible changes in allocations were

apparent for South Australian users.

The savings generated through this Scheme result in the smallest increase in flows of any Scheme

assessed. There is an 8GL per annum in the Darling Anabranch, no increase in the Lower Darling

River and 4GL per annum in the Murray River downstream of Wentworth. As with other Schemes,

a decrease in flow occurs in the Murray upstream of Wentworth occurs (2GL per annum).

Salinity reductions are apparent for all Lakes with the exception of Lake Cawndilla. Lake

Wetherell median salinity levels decrease by 5EC, Lake Menindee decreases by 15EC, whilst Lake



PAGE 141

Pamamaroo salinity levels decrease by 6EC. Lake Cawndilla median salinity levels increase by

51EC.

Downstream median salinity levels and increased in the Lower Darling at Burtundy and the Murray

at Morgan by approximately 1.5EC. Additional dilution flows to South Australia occur with a

similar frequency to that which currently occurs.

Socio Economic

Scheme 6 results in high net social losses – it has extensive capital works the cost of which is not

offset by the value of their moderate to low water savings and exacerbated by third party losses

comparable with Scheme 4.

As with schemes 3 and 5, this scheme has an extensive set of capital works.

Water savings are the lowest of all schemes and represent less than 15% of the additional average

annual flow volumes obtained under scheme 1.

Third party impacts are significant, driven by a loss in salinity. However, there are virtually no

local impacts on property values or tourism and recreation.

This absence of local third party impacts is understandable, as the scheme has the least impact on

reducing storage volumes (and therefore evaporation and water savings).

The scheme has no significant impacts on allocations on the Murray or on Lower Darling High

Security and provides marginal improvements to Lower Darling General Security allocations.

However, it is the one scheme that marginally affects Tandou Farms diversions.

Cultural Heritage

From a cultural heritage perspective, this Scheme is the same as Scheme 5.

5.4. Comparison of Schemes

A brief summary of the main findings of the assessment of the MLS Schemes is presented in Table

5-2. More detail is provided in Sections 4 to 6 of the report, with a detailed Statement of Effects

provided in the Schemes’ Statement of Effects (separate document).

This assessment demonstrates that it is possible to achieve substantial water savings at MLS. There

will be impacts on: the local lakes’ environment by limiting the times when water will be stored in

some lakes; the local community and Aboriginal culture that prefer water in the Lakes; and the

environment and archaeology at locations for proposed works.

Comparison of the assessment results indicates that MLS Schemes 2-5 best meet the overall project

objectives. While Scheme 1 achieves high water savings by keeping Lakes Menindee and

Cawndilla dry, this is an extreme measure, and would result in unacceptable environment, social



PAGE 142

and heritage impacts. Scheme 6 provides minor water savings at a relatively high cost, although no

amendments are required to the Murray-Darling Basin Agreement for it to proceed.

New works to facilitate water movement in the MLS is desirable to achieve both operational and

environmental outcomes. If limited environmental filling events are used to maintain the health of

the Lakes, then regulatory works are needed to best manage targeted watering, periods of retention

and draining times. Schemes 3 and 5 provide for new works with Scheme 3 resulting in the higher

water savings (125GL pa) and benefit:cost ratio (0.7:1).

Little Menindee Creek channel between Lake Menindee and Darling River



PAGE 143

� Table 5-2 Comparison of Menindee Lakes Water Saving Schemes

Scheme Environmental

Impacts Hydrologic Impacts

Social Economic

Impacts

Cultural Heritage

Impacts

Impacts of

Structures

Impacts on MDB

Agreement

1 - Never fill Lakes

Menindee & Cawndilla

Conversion of Lakes

Menindee (LM) and

Cawndilla (LC) into dry

land habitat (loss of

wetlands). Significant

impacts on Lakes.

Improved riverine

habitat downstream of

lakes

Large reduction in

evaporation losses in

MLS (248 GL/year)

Increased flow in

Lower Darling River

and Anabranch

Reduced salinity

downstream

Minimal cost

Significant impact on

Menindee community

with LM and LC dry.

Minimal impact on

irrigation industry.

Significant impacts on

Aboriginal community,

particularly no water

in LM.

Draining channel

impact (cultural

heritage and


of Lake Pamamaroo

Significant change to

lake operation and water

sharing.

2 - Reduce use of Lake

Menindee & Lake

Cawndilla (existing

structures)

Return to more

ephemeral regime in

LM & LC utilising

assumed

environmental filling

Changed ecosystem in

LM & LC

Improved riverine


lakes

Reduction in

evaporation from the

lakes (125 GL/year)

Increased flow in

Lower Darling River

and Anabranch

Reduced salinity

downstream

Minimal cost

Impact on Menindee

community with

increase in times LM

and LC dry

Minimal impact on

irrigation industry


community

particularly less water

in LM.

Same as Scheme 1 Same as Scheme 1



PAGE 144



Social Economic

Impacts

Cultural Heritage

Impacts

Impacts of

Structures

Impacts on MDB

Agreement

3 - Reduced use of Lake

Menindee & Lake

Cawndilla (new

structures)

Same as Scheme 2

with increased flexibility

in managing water in

LM & LC for

environmental

outcomes.

Same as Scheme 2 Same as Scheme 2

but with increased

costs to about $70M

(2009)

Same as Scheme 2

for water regime but

increased impacts at

new sites

Increased impact of


heritage and local

environment at each

site

Same as Scheme 1


Cawndilla (existing

structures)

Return to more

ephemeral regime in

LC utilising assumed

environmental filling

with LM remaining

relatively unchanged

Changed ecosystem in

LC

Improved riverine


lakes

Reduction in


lakes (61 GL/year)

Increased flow in

Lower Darling River

and Anabranch

Reduced salinity

downstream

Minimal cost

Minor impact on

Menindee community

with increase in times

LC dry

Minimal impact on

irrigation industry


community

particularly less water

in LC.

Impacts at Morton

Boolka site

Draining channel

impact (cultural

heritage and


of Lake Pamamaroo.

Regulator and

embankment impacts

at Morton Boolka site

Reduced changes to

lake operation and water

sharing compared with

Schemes 1-3.



PAGE 145



Social Economic

Impacts

Cultural Heritage

Impacts

Impacts of

Structures

Impacts on MDB

Agreement


Cawndilla (new

structures)

Same as Scheme 4

with increased flexibility

in managing water in

LM & LC for

environmental

outcomes.

Reduction in


lakes (74 GL/year).

Slightly more than

Scheme 4 due to

increased flexibility of

new structures

Increased flow in

Lower Darling River

and Anabranch

Reduced salinity

downstream

Same as Scheme 4

but with increased

costs to about $70M

(2009)

Same as Scheme 4

for water regime but

with increased

impacts at new sites

Increased impact of


heritage and local

environment at each

site compared to

Scheme 4.

Same as Scheme 4


Cawndilla (new

structures)

Same as Scheme 5 Minor reduction in


lakes (34 GL/year).

due to use of current

MDB Agreement rules

Current flows in Lower

Darling River and

Anabranch

Same as Scheme 5 Same as Scheme 5 Same as Scheme 5 Changes to lake

operation in relation to

LC and no change to

water sharing.



PAGE 146

6. Broken Hill Water Supply Schemes

6.1. Summary of Statement of Effects Results

Following is a summary of the key results from the Statement of Effects. For each Scheme the key

assessment results are presented for:

� Environment

� Hydrology (where appropriate)

� Socio Economic

� Cultural heritage.

Not all of these will be valid for each Scheme. The hydrologic modelling adopted the Broken Hill

water supply schemes as off line from the MLS. The Broken Hill schemes assessed are all

consistent with the integrated Schemes that were the subject of the hydrologic modelling.

6.2. Scheme BH1 – Managed Aquifer Recharge

Snapshot

Scheme BH1 - Managed Aquifer Recharge.

Bank Filtration with site 5.5kms from Injection Pump + Bore field.

Refer to Figure 4-6 for layout of Scheme.

The MAR scheme’s concepts, including a suitable aquifer site and design, aren’t sufficiently

developed to provide a meaningful Statement of Effects. The Geoscience Australia investigation of

groundwater in the region, commissioned by DEWHA, will inform and guide the next stages of the

feasibility of MAR for Broken Hill’s water supply.

The BH1 Scheme’s costs are as follows:

SKM Estimates Discounted CBA Inputs



Capital Costs

O&M Total Cost

Part 3 Combined Broken Hill supply works

BH1 MAR - bank filtration (5.5km pipeline) & current Broken Hill demand

26.0 5.0 20.9 3.5 24.4



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6.3. Scheme BH2 – Use of Lake Tandure and Other Structures

Snapshot

� Scheme BH2 - Use of Lake Tandure and Upgraded Weir 32. Lake Tandure

regulator/bank/pump + Upgraded Weir 32 (5GL)

� Scheme BH2 - Use of Lake Tandure and Upgraded Weir 32 + Copi Hollow. Lake Tandure

regulator/bank/pump + Upgraded Weir 32 (2-3GL) + Copi Hollow (2-3GL)

� Scheme BH2 - Use of Lake Tandure and designated BH Storage. Lake Tandure

regulator/bank/pump + designated 5GL Storage at Texas Downs, Menindee.

Refer to Figure 4-6 for the layout of the Schemes.

Environment

Potential environmental benefits are arising from Scheme BH2 are limited. Each alternative


flora and fauna. Some fauna and flora may benefit from the weir pool, and the infrastructure at

Copi Hollow could contribute to improved water cycling in the lake.



of woodland and lakebed habitats during construction would create short- and long-term impacts

for flora and fauna. For example, the loss of hollow-bearing woodland trees has an immediate

effect on competition for hollows for refuge and breeding with a time-lag of many decades.


reptiles, amphibians and mammals. Construction in the lakebed may also compromise the viability

of zooplankton and plant propagules stored in the lakebed sediment. Construction activities would

also need to be carefully managed to limit impacts on associated habitats such as Lake Wetherell

and the Darling River (Texas Downs and Weir 32).

Operational impacts include changed fish passage in Lake Tandure, Weir 32 and Copi Hollow; the

permanent loss of floodplain woodland at Texas Downs, disturbance at Weir 32 including activity

within the Kinchega National Park (western bank) and the potential for cumulative loss of fish

diversity and abundance in the Darling River due to pumping at Texas Downs. The severity of

some impacts could be mitigated (e.g. via the use of pumping screens and fishways), however, the

loss of woodland would be significant.

There is a risk that the works will adversely impact on flood behaviour on the Darling River

floodplain and this will need to be investigated in subsequent studies.



PAGE 148

Hydrology

For this hydrology analysis, the Scheme 2 modelling (Run 5386) was modified to investigate

provision of Broken Hill and High Security water supply from Lake Tandure. It was found that this

modification resulted in only minor alterations to savings volumes (an increase of 5GL to 130GL

per annum).

Downstream water users diversions increased by 2GL to 10GL per annum and the pattern of

allocations remained very similar to that which is occurring under current operational practices for

New South Wales, Victoria and South Australia Murray users. The use of Lake Tandure to supply

Broken Hill and some of the High security demands has resulted in the allocation impacts to Lower

Darling becoming negligible.

Flow and salinity alterations are largely unchanged from the previous version of Scheme 2.

Dilution flows to South Australia still occur with the same frequency.

Socio Economic

Recreation at the Lakes includes water sports - including swimming, power boating, water skiing,

sailing, kayaking, angling, camping, bush walking, bird watching, and the visual arts (painting and

photography).

All of these activities are pursued at Lakes Menindee and Pamamaroo. Water sports and passive

activities (camping and picnicking) are undertaken at Copi Hollow. The Copi Hollow storage

option will support its use for the local community (including Broken Hill) and tourists by

maintaining a more persistent water level and also improving water quality. The viability of the

local businesses will be improved by the changed management of Copi Hollow for water supply to

Broken Hill.

The BH2 Schemes’ costs are as follows:


Ref. Broken Hill Supply Works Capital

Cost

O&M Total

Life Cycle

Capital

Costs O&M

Total

Cost




BH2 Lake Tandure & designated storage (5GL) 33.1 2.5 26.7 1.7 28.4

Cultural Heritage

As with all other lakes in the Menindee system, Lake Tandure is an element of the Aboriginal

cultural landscape. It is one of the smaller lakes in the system however it is rich in archaeological

sites as well as being a haven for native flora fauna. Being very close to the Darling River has made

it a favourite area for fishing, hunting, the preparation of meals and some ceremonial activities.

Feeder creeks, associated deltas and outlets are rich in archaeological material. The incidence of



PAGE 149

burial sites appears less around the lake edges as evidenced at Lakes Menindee, Pamamaroo and

Cawndilla. As with any water saving option if adopted a specific archaeological survey would need

to be undertaken.

It was noted in the Menindee Lakes ESD project report ( The Nature and Distribution of

Archaeology of the Menindee Lakes – Pardoe and Martin, 2002 ) that the foreshore areas of

Tandure Lake was being eroded and scoured by water, being a combination of lake levels wave and

wind dynamics. This also included erosion of the sand spit between Lakes Wetherell and Lake

Tandure exposing archaeological material.

Lake Tandure is a popular fishing spot and remains relatively secluded. There is concern by the

Aboriginal community living in Menindee that if the Lake Tandure was to undergo any

construction activity that the creation of new roads and infrastructure would pose a threat to

Aboriginal cultural heritage values through not only construction machinery but from an increase

in tourists accessing the Lake.

Scheme BH2 Key issues

� Potential environmental benefits are arising from Scheme BH2 are limited. Each alternative

involves construction, disturbance, changed local conditions and changed long-term conditions

for flora and fauna. Some fauna and flora may benefit from the weir pool, and the

infrastructure at Copi Hollow could contribute to improved water cycling in the lake.

� The loss and disturbance of woodland and lakebed habitats during construction would create

short- and long-term impacts for flora and fauna.

� Increased road traffic during construction also poses a direct risk to a suite of fauna including

birds, reptiles, amphibians and mammals and also cultural heritage.

� Construction in the lakebed may also compromise the viability of zooplankton and plant

propagules stored in the lakebed sediment. Construction activities would also need to be

carefully managed to limit impacts on associated habitats such as Lake Wetherell and the

Darling River.

� Construction impacts at Weir 32 including works in the Darling River, access road and site

depot. Works on the western bank of the River will impact on the Kinchega National Park.

� Operational impacts include changed fish passage in Lake Tandure, Weir 32 and Copi Hollow;

and the permanent loss of floodplain woodland at Texas Downs. The severity of some impacts

could be mitigated (e.g. via the use of pumping screens and fishways), however the loss of

woodland would be significant.

� There is a risk that the works will adversely impact on flood behaviour on the Darling River




PAGE 150

� Recreation at the Lakes includes water sports - including swimming, power boating, water

skiing, sailing, kayaking, angling, camping, bush walking, bird watching, and the visual arts

(painting and photography). All of these activities are pursued at Lakes Menindee and

Pamamaroo. Water sports and passive activities (camping and picnicking) are undertaken at

Copi Hollow.

� The Copi Hollow storage option will support its use for the local community (including

Broken Hill) and tourists by maintaining a more persistent water level and also improving

water quality. The viability of the local businesses will be improved by the changed

management of Copi Hollow for water supply to Broken Hill.

� As with all other lakes in the Menindee system Lake Tandure is an element of the Aboriginal

cultural landscape. It is one of the smaller lakes in the system however it is rich in

archaeological sites as well as being a haven for native flora fauna. Being very close to the

Darling River has made it a favourite area for fishing, hunting, the preparation of meals and

some ceremonial activities. Cultural heritage will be impacted at Texas Downs.

6.4. Scheme BH3 – Storage at Texas Downs

Snapshot

Scheme BH3

� Construction of a deep storage of 18 GL on the Darling River

floodplain close to Weir 32 pool at Texas Downs.

� A pump system will provide for filling and draining of the storage.

� Refer to Figure 4-6 for layout of Scheme.

Environment

Creation of a storage dam would result in a suite of changes to habitats in the locality, including

clearing of woodland and Lignum vegetation, disturbance to the Darling River, and changed weir

pool conditions.

Potential environmental benefits are arising from Scheme BH3 are limited. Creation of the storage


flora and fauna. It is assumed the Texas Downs storage would be constructed and managed purely

for water storage, and as such offers little conservation value to local flora and fauna. Terrestrial

fauna could use the dam as a water source, and fish and aquatic reptiles may colonise it.



of woodland and lakebed habitats during construction would create short- and long-term impacts

for flora and fauna. For example, the loss of hollow-bearing woodland trees has an immediate



PAGE 151

effect on competition for hollows for refuge and breeding with a time-lag of many decades.


reptiles, amphibians and mammals. Construction in the floodplain would also remove plant

propagules stored in the soil, thereby depleting the local seed bank. Construction activities would

also need to be carefully managed to limit impacts on associated habitats such as Lake Wetherell

and the Darling River.

Operational impacts include the permanent loss of floodplain woodland at Texas Downs, and the

potential for cumulative loss of fish diversity and abundance in the Darling River due to pumping

at Texas Downs. The severity of some impacts could be mitigated (e.g. via the use of pumping

screens and fishways), however the loss of woodland would be significant.

The risk of decline in general ecosystem condition arising from operation of Scheme BH3 would

also need to be monitored, especially at Lake Wetherell. Lake Wetherell acts as a local refuge for

both native and introduced biota when the lakes are dry, and as source of colonisers during lake

inundation. Hence the consequences of adverse impacts on the condition of Lake Wetherell would

cascade throughout the entire lake system.

There is a risk that the works will adversely impact on flood behaviour on the Darling River


Socio Economic

There are no significance social impacts in relation to this Scheme. The loss of floodplain habitat

may be an issue for some parts of the community although this parcel of land is in private

ownership.

The BH3 Schemes’ costs are as follows:


Ref. Broken Hill Supply Works Capital

Cost

O&M Total

Life Cycle

Capital

Costs O&M

Total

Cost





PAGE 152

Cultural Heritage

This Scheme 3 (Texas Downs), is one of a suite of options to address water supply to Broken Hill,

was not raised with any members of the Menindee Aboriginal community or other Aboriginal

interests within the scope of the DWRSP community consultation brief.

As within any proposal considering new works a specific archaeological survey would need to be

conducted the Aboriginal stakeholders to assess the impact of such works on Aboriginal cultural

heritage values. These values besides identifying specific sites and archaeological material would

also include a total impact assessment of such works on the Aboriginal cultural landscape.

Key Issues:

� Beneficial aspects include providing more secure water supply for Broken Hill without use of

the Menindee Lakes.

� Creation of a storage dam would result in a suite of changes to habitats in the locality,

including clearing of woodland and Lignum vegetation, disturbance to the Darling River, and

changed weir pool conditions.

� Potential environmental benefits arising from Scheme BH3 are limited.

� Creation of the storage involves construction, disturbance, changed local conditions and

changed long-term conditions for flora and fauna.

� The loss and disturbance of woodland and lakebed habitats during construction would create

short- and long-term impacts for flora and fauna.

� The severity of some impacts could be mitigated (e.g. via the use of pumping screens and

fishways), however the loss of woodland would be significant.

� There is a risk that the works will adversely impact on flood behaviour on the Darling River


� The storage will impact on cultural heritage on the floodplain, the extent of which in unknown

at this time. New works will require a specific archaeological survey to be conducted so the

Aboriginal stakeholders can assess the impact of such works on Aboriginal cultural heritage

values.

� There are no significance social impacts in relation to this Scheme. The loss of floodplain

habitat may be an issue for some parts of the community although this parcel of land is in

private ownership. Negotiation with the owners will be required to gain access to the site for

development.



PAGE 153

6.5. Comparison of Schemes

Broken Hill water supply schemes will be further developed in the near future, particularly the

Managed Aquifer Recharge (MAR), following the findings from the current regional groundwater

investigations currently being undertaken for DEWHA. The hydrologic modelling demonstrates

that Broken Hill can be supplied in droughts without heavy reliance on water stored in MLS.

The potential water supply schemes investigated offer a solution to secure Broken Hill’s water

supply through an investment of between $31-$50m. Table 6-1 provides a summary of

assessments of the Broken Hill water supply schemes.

Weir 32 on the Darling River (Fishway constructed 2009)



PAGE 154

� Table 6-1 Summary of Assessment of Broken Hill water supply schemes

Scheme Environmental Impacts Social Economic Impacts Cultural Heritage Impacts Impacts of Structures

BH1 – Managed Aquifer

Recharge

Scheme not fully developed at this stage to

assess impacts

Cost of $31M for bank filtration scheme.

Greater cost for engineered water

treatment plant.

Minor impact on Menindee community

Scheme not fully developed at

this stage to assess impacts

Scheme not fully developed at

this stage to assess impacts

BH2 – Lake Tandure (LT)

and Upgraded Weir 32

LT and Lake Wetherell (LW) operated at

current full operating levels for longer

during drought sequences

Higher operating levels in Weir 32 during

droughts

LT & Weir 32 site impacts

Cost of $37M


Benefit of water levels maintained longer in

the Darling River and LT during droughts

LT impacts

Benefit of water levels

maintained longer in the

Darling River and LT during

droughts

Environmental and cultural

heritage impacts of works at

LT bed and banks

BH2 – LT, Upgraded Weir

32 and Copi Hollow (CH)

Same as BH2 above plus CH site impacts Increased cost to $50M due to additional

works for CH scheme

Benefits to regional community of

maintained storage at CH with improved

water quality

Same as BH2 above Same as BH2 above

BH2 – LT and 5GL

Designated Storage

(Texas Downs, TD)

LT and Lake Wetherell (LW) operated at

current full operating levels for longer

during drought sequences

TD site impacts

Cost similar to LT + Weir 32 Scheme.


Benefit of water levels maintained longer in

the Darling River and LT during droughts

LT and TD impacts

Benefit of water levels

maintained longer in the

Darling River and LT during

droughts

Environmental and cultural

heritage impacts of works at

LT bed and banks and Texas

Downs site.

BH3 – Designated 18GL

Storage (Texas Downs)

Substantial impacts at TD based on

substantially larger site footprint

Costs similar to above.






PAGE 155

7. Policy Issues

7.1.1. Environmental Planning Instruments and Legislation

The NSW Environmental Planning & Assessment Act 1979 (EP&A Act) provides the statutory

context for the assessment of the Proposal. The EP&A Act provides for assessment and approval

under the following sections:

� Part 3 provides for the process of forward planning, which involves the development of plans

to regulate competing land uses. This is achieved through Environmental Planning

Instruments (EPIs), of which there are 3 types: Local Environmental Plans (LEPs), Regional

Environmental Plans (REPs) and State Environmental Planning Policies (SEPPs).

� Part 3A is where the Minister for Infrastructure and Planning is the approval authority for

Major infrastructure and other projects;

� Part 4 provides Local or State Government Authorities with approval authority for

developments; and

� Part 5 is where a State Government Authority is the determining authority for certain projects

such as water, rail and road infrastructure.

The proponent is likely to be the NSW Office of Water; therefore, the preferred option will be

assessed under Part 5 or Part 3A of the EP&A Act. Due to the potential for significant

environmental impacts and the likely cost of the Proposal (greater than $30 million), the most

likely route for assessment will be following the Part 3A process, where the Department of

Planning is the approval authority.

7.1.1.1. Local Environmental Plans

Lakes Menindee, Cawndilla, Pamamaroo and Wetherell are located within the Central Darling

Shire Council (CDSC) Area on the border with the Broken Hill City Council (BHCC). Under the

Central Darling Local Environmental Plan (LEP) 2004 the Lakes and surrounding area are zoned:

� Zone No 1 (a) (Rural Zone)

� Zone No 8 (a) (National Parks Zone).

Proposed works will need to comply with the provisions of the LEP.

In 1949, the Menindee Water Conservation Act was passed in the NSW Parliament to enable the

use of the Lakes for water conservation purposes. Works started in 1949, with major works being

completed in 1960 and completion in 1968.

Under the Menindee Lakes Storage Agreement Act 1964, the NSW government agreed to lease the

storage in perpetuity to the Commission to be managed in harmony with the Murray River.



PAGE 156

7.1.1.2. Commonwealth Legislation

The Water Act 2007 was implemented in order to enable the water resources of the Murray-Darling

Basin to be managed in the national interest, optimising environmental, economic and social

outcomes. The Water Act 2007 replaces the Murray-Darling Basin Act 1993 and the Murray-

Darling Basin Agreement is an appendix to the Water Act 2007.

The objectives of the Water Act 2007 will be achieved through the development and

implementation of a Basin Plan, which is the responsibility of the Murray-Darling Basin

Authority. The Basin Plan, which is currently under development, is due for implementation in the

year 2011 and has the following long term objectives:

� improved water security for all water uses;

� enable more natural flow regimes in the rivers of the Basin;

� restore the health of key forests, floodplains, rivers, streams and wetlands with improved

conditions for populations of native fish, birds and other fauna;

� improve water quality for users and the environment.

The Basin Plan will also provide a framework that can contribute to other positive outcomes, such

as improved water use efficiency, sustainable industries, and strengthened regional economies.

The Basin Plan will achieve the above objectives by:

� Setting and enforcing environmentally sustainable limits on the quantities of surface water and

groundwater that may be taken from Basin water resources (which will improve water security

for all uses).

� Setting Basin-wide environmental objectives, water quality and salinity objectives.

� Identifying key environmental assets and ecosystem functions and developing an

environmental watering plan to protect and restore these environmental assets.

� Setting requirements that must be met by state water resource plans.

� Identifying risks to the condition or continued availability of the Basin’s water resources, and

identify mitigation measures to manage these risks. These risks include the effects of climate

change, changes to land use, and lack of knowledge. Risks to water quality such as salinity and

acid sulphate soils will also be taken into account.

� Develop efficient water trading regimes across the Basin.

The Act includes the establishment of an Environmental Water Holder who will manage the

Australian Government’s water holdings that are recovered through programs of the national water

plan, Water for the Future. Protocols are to be established to allow environmental water held by

the states to be managed in a coordinated manner with the water managed by the Environmental

Water Holder.



PAGE 157

Environmentally Sustainable Limits for Water Diversions

A central element of the Basin Plan is the setting of “Sustainable Diversion Limits” (SDL’s) on the

quantities of surface water and groundwater that can be taken for consumptive use. The SDL’s will

be set for each individual water source and for the Basin as a whole. The SDL’s will replace ‘the

Cap’ (Schedule E of the Murray-Darling Basin Agreement), which currently sets a limit on the

amount of surface water that can be extracted for consumptive use.

Risks to Basin Water Resources

The Basin Plan will identify risks and continue to identify new and emerging risks to the condition

of the Basin and the availability of water resources and provide strategies for managing those risks.

Typical risks include: climate change, changes to landuse and salinity.

Environmental Watering Plan

The plan will seek to protect and restore key environmental assets (rivers, streams, wetlands,

forests, floodplains and billabongs) and key ecosystem functions primarily through the

development and implementation of an Environmental Watering Plan (EWP). The EWP will

safeguard existing environmental water, direct the recovery of additional environmental water and

coordinate the use of environmental water across the Basin.

Water Quality & Salinity Management Plan

The Basin Plan aims to improve water quality and salinity management across the Basin through

implementation of a Water Quality and Salinity Management Plan. The Plan will identify the main

causes of poor water quality and set water quality and salinity objectives and targets.

Economic, social and environmental outcomes

The MDBA will carry out detailed analysis to assess the economic, social and environmental

impacts of the various proposed measures in the Basin Plan to inform how best to achieve

environmental objectives, whilst minimising or enhancing economic and social impacts.

Water Trading

Water rights and trading rules are currently determined by the states and irrigation authorities

although they are also influenced by the Murray-Darling Basin Agreement. The Basin Plan will

develop a consistent set of water trading rules for application across the entire Basin.

Link to Darling River water savings initiatives

A draft of the Basin Plan is scheduled for release in the middle of 2010, and the first Basin Plan is

planned to have effect from 2011. Water Resource Plans (Water Sharing Plans in NSW) will be

revised and accredited from 2014 onwards. How specific the first Basin Plan is in regard to the

Menindee Lakes and the Lower Darling is yet to be determined. Any watering requirements may

differ from those assumed for the purposes of progressing the DRWSP Part B study.

Environmental priorities may be adjusted in successive versions of the Basin Plan. How any



PAGE 158

savings from the DRWSP relate to the Sustainable Diversion Limits in the Basin Plan will also be

resolved in the future.

The Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) contains an

assessment and approval system for actions:

� that have a significant impact on matters of national environmental significance;

� that have a significant impact on the environment of Commonwealth land; and

� carried out by the Commonwealth Government.

As the project is not likely to be undertaken by the Commonwealth, and the proposal doesn’t affect

Commonwealth owned land, these provisions are not triggered by the project. However, the

triggers contained in the EPBC Act, which relate to matters of national environmental significance,

were considered in the preparation of the options. The matters of national environmental

significance identified in the Act, which were considered in this proposal include:

� World Heritage properties;

� Ramsar wetlands;

� Nationally threatened species and ecological communities;

� Migratory species;

� Commonwealth marine areas;

� Nuclear actions (including uranium mining).

The proposal would not impact on any World heritage properties, Commonwealth marine areas or

involve any nuclear actions and no further assessment was required for these triggers. It is likely

that the preferred scheme will impact on nationally threatened species/ecological communities and

migratory species, and therefore, will trigger further assessment under the Act.

The EPBC Act includes important provisions for the protection and conservation of migratory

species and recognises Australia’s obligation imposed by the international environmental

agreements:

� China-Australia Migratory Bird Agreement (CAMBA)

� Japan-Australia Migratory Bird Agreement (JAMBA)

� Republic of Korea-Australia Migratory Bird Agreement (ROKAMBA)

� The Convention on the Conservation of Migratory Species of Wild Animals (the “Bonn Convention”.

All migratory bird species listed under the bilateral agreements between Australia and China

(CAMBA), Japan (JAMBA) and the Republic of Korea (ROKAMBA) are protected in Australia as

matters of national environmental significance under the EPBC Act. All of the schemes are likely

to require referral to the EPBC Act

The Murray-Darling Basin contains a number of wetlands recognised as internationally important

for their biodiversity and ecosystem values under the Ramsar Convention. Whilst not a Ramsar

site, Menindee Lakes in particular provides highly important breeding grounds and food supply



PAGE 159

areas for many migratory bird species and as such is also protected under various international

agreements such as the JAMBA, CAMBA and ROKAMBA.

7.1.1.3. Other Relevant NSW Legislation

Table 7-1 provides details the legislation, the purpose of the legislation and relevance to the

proposal.

� Table 7-1 Consideration of Relevant NSW Legislation

Legislation (Responsible Agency)

Purposes of Legislation Relevance to the Proposal and Approvals Requirements

Protection of the Operations (POEO) Act 1997 (DECCW NSW)

The POEO Act is the key piece of environment protection legislation administered by Department of Environment Climate Change and Water (DECCW).

The following sections of the PEO Act may be of relevance to the Proposal as they define offences that could be committed in the absence of good environmental management practices during construction or operation:

• Section 120 (causing or permitting pollution of waters);

• Section 148 (DECC must be notified of any pollution incidents that cause or threaten material harm to the environment).

Road Act 1993

(RTA and CDSC)

This Act sets out rights of members of the public to pass along public roads, establishes procedures for opening and closing a public road, and provides for the classification of roads. It also provides for declaration of the Roads and Traffic Authority (RTA) and other public authorities such as Council as roads authorities for both classified and unclassified roads, and confers certain functions (in particular, the function of carrying out roadwork) on the RTA and other roads authorities.

Under Section 138 of the Roads Act, work on a public road requires consent of the relevant road authority.

There are numerous roads running throughout the study area including Menindee Road, the main road running between Lake Menindee and Lake Pamamaroo.

RTA’s concurrence is required for the proposed works within the classified road reserve under Section 138 of the Act.

Fisheries Management Act 1994 (Department of Industry and Investment (DII))

The Act applies to all waters within the limits of the State, except where Commonwealth legislation applies. Part 7A Division 4 of the Act prohibits the carrying out, without a licence, of activities that damage habitats or harm threatened species, populations or ecological communities. In determining the significance of impacts, the determining authority must consider the matters listed in Section 5A of the EP&A Act.

Aspects of the schemes will impact on fish passage. Approval from the NSW DII is required this and for any work with the potential to harm threatened species, populations, ecological communities (as listed in Schedules 4 and 5 of this Act) or critical habitat. In the event that significant impacts are likely a species impact statement must be prepared.

Soil Conservation Act 1938 Department of Environment, Climate Change and Water (DECCW)

The purpose of the Act is to conserve soil and water resources and mitigate soil erosion.

Section 15A of the Act provides for Notices that would allow DECCW to prescribe measures for erosion and

Notices can be issued before construction begins or can be issued to halt an offending activity until proper erosion and sediment controls are instituted. The DECCW can also undertake the specific works if it finds



PAGE 160



sediment control that must be adopted.

that the Section 15A Notice is not complied with. Mitigation measures would need to be developed, implemented and monitored to ensure that there were no significant impacts during construction and operation.

Water Management Act 2001 (NSW Office of Water)

The Water Management Act incorporates the provisions of

various Acts relating to the management of surface and groundwater in NSW and repeals the licensing and approvals provisions of the Water Act 1912 and the Rivers and Foreshores Improvement Act 1948 (RFI Act).

Water access licences are managed under the WM Act which entitles licence holders to a share of available water within the catchment covered by a particular Water Sharing Plan. Separate licences are required for operation of pumps, dams or bores and water for irrigation and other water uses.

The MLS are currently covered by a Water Sharing Plan. As such any works would need approval under the WMA.

In addition, there are environmental water allocations for the MLS system that are part of interstate water sharing plans under the terms of the Murray-Darling Basin Agreement. Various water accounting rules are in place to determine the shares of water in storage or transit at any time. Any construction or operational works would need to ensure that they facilitated these releases for environmental purposes and cannot impact the interstate agreement flows.

Native Vegetation Act 2003 (DECCW)

The Act aims to prevent broad-scale clearing, to protect native vegetation of high conservation value and to improve the conditions of existing native vegetation.

Clearing will be required as part of the construction for the proposed works. Under the NV Act, all clearing requires approval through either a Property Vegetation Plan (PVP) or a Development Consent, unless it is: (I) on land that is excluded from the NV Act; (ii) categorised as excluded clearing; or (iii) a permitted clearing activity.

National Parks and Wildlife Act 1974 (DECCW)

This Act aims to prevent the unnecessary or unwarranted destruction of relics and the active protection and conservation of relics with high cultural significance. This Act covers relics of both ‘Aboriginal and Non-indigenous’ habitation in NSW.

Approval is required from DECCW to knowingly destroy, deface or damage; or knowingly cause or permit the destruction of or damage to an Aboriginal object or Aboriginal place.

There are items or places of heritage listed under the Act within the proposed construction areas.

Approval may need to be obtained from the Director-General of DECCW for a permit to excavate those sites or relics under Section 87(1) of the Act. Similarly, Section 90(2) of the Act would also apply where approval may be granted by the Director-General for a ‘Consent to Destroy’ archaeological sites or relics.

Heritage Act 1977

(NSW Department of Planning (DoP))

This Act is administered by the Heritage Office within the NSW Department of Planning (DoP) and is concerned with all aspects of conservation ranging from the most basic protection against damage and

Should the proposal impact on any items of heritage significance further cultural heritage assessment would be required.



PAGE 161



demolition to restoration and enhancement. The Act only applies if non-Indigenous items of heritage significance are affected or where non-Indigenous relics are uncovered during construction.

The relevant provisions of the Act are Section 139, which prohibits disturbance of a ‘relic’ unless an excavation permit is obtained from the Heritage Office, and Section 148, which requires notification to the Heritage Office of any discovery of ‘relics’.

Threatened Species Conservation Act 1995 (DECCW)

This Act identifies threatened species, populations, endangered ecological communities, critical habitats and key threatening processes.

Approval is required to:

� Harm any animal that is, or is part of, a threatened species, population or ecological community;

� Pick any plant that is of, or is part of, a threatened species, population or ecological community;

� Damage critical habitat; or � damage habitat of threatened

species, population or ecological community.

Should the proposal significantly impact any listed species, populations or ecological communities a Species Impact Statement and referral to the Director General will be required.

Noxious Weeds Act 1993 (DII)

This Act emphasises community cooperation to ensure a coordinated and uniform approach to the control of noxious weeds throughout the State.

There are no approvals or permit requirements under the Act. However, the Act stipulates that as occupiers of land must control noxious weeds on the land under their management.

Construction will include implementation of relevant weed management processes as part of a Construction Environmental Management Plan.

Waste Avoidance and Resource Recovery Act 2001 (DECCW)

This Act aims to minimise the consumption of natural resources and the final disposal of waste by encouraging the avoidance of waste, and the reuse and recycling of waste in accordance with the principals of ecologically sustainable development.

The Proposal would generate waste and as such, is required to consider the hierarchy of resource management referred to in this Act.

Environmentally Hazardous Chemicals Act 1985 (DECCW)

This Act regulates the use and storage of environmentally hazardous chemicals. It provides the DECCW with assessment and control mechanisms for chemicals and chemical wastes.

The Act will only apply if environmentally hazardous chemicals are used during construction of the proposal. Any such chemicals will be identified in the Construction Environmental Management Plan.



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7.1.2. International Biodiversity Conservation Conventions

International conventions relating to the protection and conservation of species and habitats with

relevance to the Menindee Lakes region include the China-Australia Migratory Bird Agreement

(CAMBA), The Japan-Australia Migratory Bird Agreement (JAMBA), Republic of Korea-

Australia Migratory Bird Agreement (ROKAMBA), and Bonn Convention. The CAMBA,

JAMBA and ROKAMBA agreements relate to the protection of migratory bird species which visit

Australia. The agreements list terrestrial, water and shorebird species that migrate annually

between Australia and the respective other countries using the East Asian-Australian Flyway. (The

East Asian-Australian Flyway is a term used to describe the migration routes and the network of

sites along it that are used by migrating birds where they can replenish their fat reserves before

continuing on their migration.)

7.1.2.1. China-Australia Migratory Bird Agreement (CAMBA)

The China-Australia Migratory Bird Agreement (CAMBA) was formed between Australia and the

People’s Republic of China in October 1986 and aims to minimise harm to the major areas used by

migratory birds that migrate between China and Australia. It provides protection of migratory

birds so that circumstances under which migratory birds and/or their eggs are taken or traded, is

limited (with the exception of scientific, educational or propagative purposes) and their habitats are

protected and conserved, whereby sanctuaries and/or other facilities are established.

The Agreement also allows for the exchanging of data, information and publications and the

formulation of joint research programs between Australia and China. The Agreement does not

include migratory birds known to have been willingly introduced to either country but migratory

shorebirds that are known to migrate from their breeding areas to visit inland wetlands, and

feeding grounds for the southern hemisphere summer.

7.1.2.2. Japan-Australia Migratory Bird Agreement (JAMBA)

The Japan-Australia Migratory Bird Agreement (JAMBA) is an agreement between the

Government of Australia and the Government of Japan made in February 1974 for the protection of

migratory birds in danger of extinction and their environment. Similarly to the CAMBA the

agreement requires that migratory birds are protected by protecting and conserving important

habitats and prohibiting taking of migratory birds where possible. The JAMBA agreement also

includes provisions for cooperation on the conservation of threatened birds. Protective measures

should be taken as appropriate for the preservation of species or subspecies of birds which are in

danger of extinction and each Government is responsible for the control of exportation or

importation of such species, and the introduction of animals and plants which may be hazardous to

or disturb the ecosystems of birds listed under this agreement.



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7.1.2.3. Republic of Korea-Australia Migratory Bird Agreement (ROKAMBA)

The Republic of Korea-Australia Migratory Bird Agreement (ROKAMBA) is an agreement made 6

December 2006 between the Government of Australia and the Government of the Republic of

Korea that obliges Parties to protect bird species which regularly migrate between Australia and the

Republic of Korea. Australia’s obligation under this agreement is to protect listed species of

migratory birds and their habitats; encourage exchange of data and publications, and formulation of

joint research programs and conservation of migratory birds; and endeavour to manage and

conserve habitats through conservation areas and the environment of birds protected under the

ROKAMBA.

7.1.2.4. Bonn Convention

The Convention on the Conservation of Migratory Species of Wild Animals (1979) (known as

CMS or the Bonn Convention) is an intergovernmental treaty that aims to conserve terrestrial,

marine and avian migratory species on a global scale. All parties must endeavour to protect these

animals, conserve or restore their habitat, mitigate obstacles to their migration and control other

factors which might endanger them. The Convention documents migratory species which are at

risk of extinction and imposes strict conservation obligations on parties to the convention. It also

documents species which have unfavourable conservation status and as such require international

agreements for their successful conservation and protection.

7.1.3. Other Relevant Strategies, Policies and Guidelines

7.1.3.1. The Murray–Darling Basin Agreement

The purpose of the Murray–Darling Basin Agreement (Clause 1) is to ‘promote and co-ordinate

effective planning and management for the equitable, efficient and sustainable use of the water and

other natural resources of the Murray-Darling Basin, including by implementing arrangements

agreed between the Contracting Governments to give effect to the Basin Plan, the Water Act and

State water entitlements.’ Under the terms of the Murray-Darling Basin Agreement water sharing

rules were developed to determine water sharing within and between the states and also control of

the MLS by NSW and MDBA. This includes releases for environmental purposes.

As stated in the current Murray-Darling Basin Agreement (MDB Agreement) [now Schedule 1,

Water Act 2007], when the combined volumes of the MLS exceed 480 Gigalitres during a draw

down phase and 640 Gigalitres during a filling phase, the MLS are under the management control

of the Murray-Darling Basin Authority (MDBA) and water is released to the Lower Darling River

as requested by the MDBA. When MDBA manages releases from the MLS, releases from the

Hume Reservoir are made only to the extent to meet flow requirements at Euston on the Murray

River that cannot be satisfied from the MLS.

The MDBA will generally specify releases from MLS when:



PAGE 164

� total storage in the MLS is greater than 480 Gigalitres, and

� there is insufficient flow in the Murray River and storage in Lake Victoria to meet South

Australia’s flow requirement and/or to maintain storage in Lake Victoria at, or above, specified

target volumes.

Construction and operational works would take the Agreement into consideration to ensure that

releases for environmental purposes were not disrupted.

7.1.3.2. NSW State Rivers and Estuaries Policy

The NSW State Rivers and Estuaries Policy was approved by the NSW Government in 1991. The

policy establishes a framework for the management of rivers and estuaries of NSW and related

ecosystems such as wetlands. The policy is based on the Total Catchment Management (TCM)

philosophy defined in the Catchment Management Act 1989 as “the coordinated and sustainable

use and management of land, water, vegetation and other natural resources on a catchment basis so

as to balance resource utilisation and conservation”.

Developed for the improved management of rivers and estuaries and their floodplains, the policy

objectives are to:

� Slow, halt or reverse the overall rate of degradation in river and estuarine systems;

� Ensure the long-term sustainability of the essential biophysical functions of river and estuaries;

and

� Maintain the beneficial uses of these resources.

The policy framework has been given a legislative basis in the NSW Water Management Act, 2000.

The proposal would consider impacts to the river and estuary system and these would be mitigated

through the CEMP/OEMP.

7.1.3.3. NSW Biodiversity Strategy and Native Vegetation Conservation Strategy

The impetus for the development of the NSW Biodiversity Strategy is the continuing decline and

loss of the State’s biodiversity. The Strategy proposes a framework for the coordination and

integration of the many policies and programs addressing issues relevant to biodiversity

conservation put in place by various NSW government agencies. In addition, the Strategy

illustrates the Government’s commitment to the National Strategy for the Conservation of

Australia’s Biological Diversity, the agreed national approach on ecologically sustainable

development, and the TSC Act 1995.

The strategic goal of the Strategy is “to protect the native biological diversity of NSW and maintain

ecological processes and systems.” In addition to the strategic goal, the Strategy identifies six core

objectives for the protection of biodiversity in NSW, these being:

� Ensuring the survival and evolutionary development of species, populations and communities

of plants, animals and micro-organisms native to NSW.



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� Strengthening the management of biodiversity on a bioregional basis while using existing

catchment level networks to focus on specific actions, including the integration of biodiversity

conservation and natural resource management, consistent with the principles of ESD.

� Identify, prevent or attach at-source the threats to biodiversity through timely implementation

of targeted actions. Build on the success of existing initiatives to develop a coordinated and

cost-effective biodiversity conservation program involving the community, industry and all

levels of government and ensure that the rights knowledge and values of local and Aboriginal

communities are recognised and reflected.

� Strengthen actions to inform, motivate and achieve the support of the community including

local and Aboriginal communities, industry, State Government agencies and Local

Government, in conserving biodiversity.

� Increase our understanding of the ecological systems and processes required to conserve

biodiversity through scientific research, survey and monitoring, taking into account the

knowledge and values of Aboriginal and local communities.

In addition to the above core objectives, the Strategy identifies a series of guiding principles for the

implementation of the Strategy. The document is comprised of six sections, with Sections 1-5

containing a series of objectives and performance targets and detailing specific actions in relation

to each objective. These actions detail a balanced response for the integration of ecological, social

and economic objectives, while Section 6 details the framework for implementation.

The proposed development will result in the disturbance of native vegetation and threatened

species habitats for access and construction of various drainage channels, regulators and weirs.

The Strategy could be applied to guide sustainable construction and operation practices.

Lake Wetherell and Lake Tandure habitat



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8. Discussion and Actions

The following presents a discussion of issues that have a fundamental impact on the

implementation of water savings in the NSW Darling Basin and also recommended actions in

moving forward.

8.1. Coordination with other water saving initiatives

The Commonwealth and NSW Government are pursuing a range of water recovery and water

savings initiatives which are aimed at improving water use efficiency, improving reliability of

supply to irrigators and urban water users and returning water to the environment (note that water

recovery schemes rely on purchasing entitlements from willing sellers on the water trading market).

A criticism of current water recovery and water saving schemes is that they are not strategic and

they are not coordinated. In the pursuit of cost effectiveness, currently water purchase schemes

occur wherever willing sellers have offered water at rates acceptable to the purchasing entity and

water savings schemes are being implemented where recovery costs are less than, or similar to

current water trading values.

It is important to link the water saving initiatives for both Menindee Lakes and the upper Darling

Basin. It is desirable to deliver a strategic approach that develops a Basin wide prioritisation

strategy that aims to:

� target valleys with high levels of hydrologic stress and low supply reliability due to high levels

of extraction;

� prioritise recovery or savings schemes which deliver water to high priority environmental

assets;

� give priority to the most cost effective recovery and savings schemes.

8.1.1. Realisation of Savings

8.1.1.1. Link between Flow Regime and Savings

The Menindee Lakes are relatively shallow and incur high evaporation losses. It is important to

appreciate that the evaporation losses increase, the longer water is held in storage between flood

events. The key to achieving water savings at MLS is to modify the operation rules to minimise

evaporation, which relies on the following key strategies:

� Preferentially drawing on the MLS to meet South Australia’s water requirements when they

are relatively full, in preference to taking water from more efficient storages such as Hume and

Dartmouth Dams i.e. drawing MLS down quickly after a flood event.

� Operating the MLS to minimise surface area by preferentially drawing water from the lake

with the least efficient storage (at the time) and preferentially filling the lake with the most

efficient storage.



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It needs to be appreciated that the operating rules employed to achieve water savings are

inexplicably linked to the downstream flow regime and the delivery of environmental flows. Water

savings can be maximised by drawing MLS down as quick as possible after a lake filling event.

This strategy will give the highest downstream flows, but the flows would predominantly occur

immediately after natural flooding events. If it is determined that the best environmental outcomes

can be achieved by holding back some water for release at a later time, then this would lead to

increased evaporation losses and reduced savings. That is, the potential water savings are

influenced by the adopted environmental flow regime and vice versa. The development of

operating rules to achieve water savings therefore needs to be carried out in conjunction with the

development of environmental flow rules.

8.1.1.2. Rules vs Entitlement

A key issue is whether the water savings from MLS should be delivered as “rules based”

environmental flows, or as an “environmental entitlement”. Under a “rules based” approach, water

would be released from MLS following a set of rules which correspond to the operating rules

associated with the adopted water savings strategy and there would be no need for creation of an

environmental entitlement. The rules would need to be agreed with the Commonwealth and would

likely to be codified in the Murray and Lower Darling Regulated Rivers Water Sharing Plan and

the Murray-Darling Basin Agreement. The potential water savings from a “rules based”

environmental flow scenario would likely be considerably larger than the water savings assigned to

an “environmental entitlement” scenario.

If an entitlement is created for managing the water savings, then the Commonwealth

Environmental Water Holder would be able to exercise discretion over the timing of environmental

releases, which could impact on losses and the available savings. Existing water entitlements

would not be suitable for this use and it would be necessary to create new entitlements that

exhibited the following characteristics:

� Option 1: A new product that imposes rules around the use of the environmental water to

prevent it from being held too long and generating unacceptable losses. Under this option the

volume of the environmental water entitlement could be assessed on the basis of these rules.

� Option 2: A new product where the available volume varies according to losses. It would be

necessary for the river operator to keep monthly accounts that adjust volume of available

environmental water to account for evaporation and other losses.

Option 2 provides the user with flexibility around the use of environmental water that then needs to

weigh up the relative merits of storing water for later use against the cost in losses.



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8.1.1.3. Upper Basin Water Savings

There is great potential to achieve water savings in the Upper Basin through a variety of measures

associated with:

� Improved river operations to reduce operational surplus;

� Improved on-farm water application methods to improve water use efficiency;

� Measures to reduced evaporation losses from farm dams;

� Measures to reduce water supply transmission losses, such as lining channels and piping

supplies;

� Installation of accurate meters.

A more detailed explanation of the potential water savings associated with Upper Basin initiatives

can be found in Barma Water Resources. Hydrology Report Darling Water Savings Project Final

Part B Hydrology Report Feb 2010 (BWR 2010). Salient outcomes from the modelling to date are

discussed below (BWR 2010).

In addition to savings at the Menindee Lakes, longer term strategic plan initiatives, which aim to

secure water savings from the upper Darling River Basin have been assessed for two scenarios:

� The first scenario is where users introduce greater irrigation efficiency. This has been

represented through hydrologic modelling for each of the Darling tributaries for which New

South Wales has control. Within each model, the efficiency factor at each modelling node has

been increased by ten percent. Irrigator behaviour was assumed to remain unchanged in this

run. The aspect of improved efficiency represented in this run does not represent an

improvement in on farm storage operation. This was assessed in the following scenario.

� The second scenario evaluated improvements in on farm storage operation. Many of the

existing off river storages in the Darling Basin are single cell structures. Altering these

storages to multiple cells will reduce the surface area exposed to evaporation for the same

storage volume, thus creating potential water savings. At present in all models, except the

Barwon-Darling, these relationships assume all storages are of single cell construction. Water

savings were calculated using this change filling arrangement.

Upper Basin savings through improved metering and river operation are not assessed in this report.

A separate study is being undertaken by SKM in relation to these potential water saving initiatives.

Results of the investigations aren’t available for inclusion in this report.

The IQQM modelling indicated relatively small savings with the savings and subsequent increased

river flows resulting from improved on farm efficiency being greater than those associated with

improved on farm storage operation. Improved on farm efficiency generated the greatest increase

in flows in the Namoi and Border Rivers tributary catchments (5 to 7 GL/Yr). These catchments

also produced the biggest increase in flows from improved on farm storage operation (1 to 2

GL/Yr).



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Examination of the IQQM model results showed that in their current configurations the IQQM

models redistribute the savings from both on farm efficiency improvements and farm storage

operation to the consumptive pool resulting in relatively small changes in river flows. However,

the reductions in evaporation are considerably greater, especially in the case of the Gwydir. This

leads to the conclusion that if suitable policy mechanisms were in place to prevent users utilising

these savings on farm then substantially greater flows than those produced through the hydrology

model would be observed for both scenerios.

Therefore, whilst water savings from the modelling undertaken in Barma Water Resources.

Hydrology Report Darling Water Savings Project Final Part B Hydrology Report Feb 2010 (BWR

2010) indicate small savings volumes, potentially greater volumes exist which cannot be quantified

explicitly using hydrologic models at this stage. Whilst these savings may be still of limited value

to the MLS (due to being located so far upstream), they would be of considerable value to key

assets with the Upper Basin tributary catchments.

The analysis of the potential Upper Basin savings indicates that the resultant increased flows that

are generated as a result of the two Upper Basin savings strategies assessed, when high

transmission losses are accounted for, are small when considered at Menindee.

The resultant change in mean annual flow at Menindee is less than 1%. Hence, these savings are

considerably smaller than those that would be potentially generated by the Menindee Lakes water

saving schemes being considered. In terms of the benefit of Upper Basin savings to the MLS and as

an offset to impacts from the MLS schemes, the small volumes mean that any benefit is likely to be

minimal. Furthermore, the amount of investment in works associated with either Upper Basin

strategy to generate the observed flow increases in the Darling will be far greater than if the same

additional Darling River flows were generated through local water purchase.

8.1.2. Savings – where to use?

A particular feature of the tributaries of the Darling Basin is that the majority of inflows are

generated in the headwaters, with relatively small inflows and high losses in the downstream

reaches. In the case of the Gwydir Valley only 48% of the total inflows to the valley make it to the

end of system (downstream limit of the Gwydir) with a large proportion of flows taken up by the

Gwydir Wetland. Continuing losses as the Gwydir flows travel down the Barwon/Darling River

mean that only 33% of the total Gwydir valley inflows reach Menindee. Similarly only 48% of

Macquarie inflows reach the end of the Macquarie system with a large proportion of flows taken up

by the Macquarie Marshes and 35% of Macquarie inflows reach Menindee. Furthermore, the

majority of inflows from the Gwydir and Macquarie valleys that reach Menindee are generated by

rare floods with only a very small percentage of other flows reaching Menindee. Further details are

provided in Table 8-1.



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� Table 8-1: Average Surface Water Delivery Efficiencies

Valley

Maximum

Inflow

(GL/yr)

Efficiency at:

End of Valley

System

Bourke Menindee (U/S

of Lakes)

Border Rivers (Qld & NSW) 905 0.92 0.77 0.62

Gwydir 782 0.48 0.41 0.33

Namoi 888 1.00 0.92 0.76

Macquarie 1,460 0.48 0.43 0.35

Castlereagh 107 0.68 0.61 0.50

Barwon Darling - Bourke 3,484 0.84 1.00 0.84

Barwon Darling - Menindee 2,944 1.00 0.84 0.54

Source: BWR 2010

The high transmission losses mean that it is very inefficient to transfer flows from the upper

Darling Basin to the Lower Basin. Furthermore, the Upper Basin contains a significant number of

key environmental assets including wetlands such as Narran Lakes, Macquarie Wetlands, Gwydir

Wetlands and Lake Goran where water savings could be utilised. While it is recognised that future

environmental watering priorities will be in accordance with the Basin Plan, consideration should

be given to the use of water savings achieved in the Upper Basin to water environmental assets in

the local valley from which the savings are derived, rather than to attempt to transfer these savings

to the Lower Basin.

8.1.3. Synergies between Menindee Lakes and other storages

The MLS are operated by the MDBA until the total water storage volume drops below 480GL. At

this point, control is passed to the NSW Government who retain control until the total lake storage

increases to 640 GL (this is referred to as the 640/480 Rule). The MDBA operate the MLS in

conjunction with Dartmouth Dam, Hume Dam and Lake Victoria to meet monthly flow and

dilution obligations to South Australia. Changes to the operation of the MLS to achieve water

savings will impact on the operation of the other three storages and may affect their storage

efficiency. Hence, when assessing the potential water savings from changed operations at the MLS

it is necessary to include the effect on the other storages and assess the overall water savings.

It is proposed to modify the operating rules for the MLS to reduce evaporation losses by drawing

the Lakes down quicker after a flood event. This means drawing preferentially on the MLS when

they are relatively full instead of the other storages, which will then be drawn on to meet South

Australia’s needs when the MLS is low.

The operation of the MLS is controlled by the Murray-Darling Basin Agreement, which is

prescriptive in regards to certain operational arrangements. Therefore, it will be necessary to amend

the Agreement to allow for changes to the operational rules. Amendments may include changes to

the rules that prescribe interactions with Hume and Dartmouth Dams and trigger points associated

with dilution flows to South Australia.



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8.1.4. Third Party Impacts

Each of the water savings measures investigated for this study needs to be considered in relation to

potential third party impacts. For instance, changing the operating rules for the MLS to draw the

storages down more quickly following a filling event, may reduce the availability of water during

prolonged dry spells for local irrigators who source their supply from the MLS. Assessment of

third party impacts needs to take into account what happens during critical periods, as well as long

term averages. For example, the long term average diversions from the MLS may not change

appreciably, but the distribution of water availability may change, with more water being available

immediately following floods and less water during extended dry periods. This could have an

economic impact, with the value of water (and produce) being significantly higher during dry

periods. The current study indicated minor impacts but this will need to be explored fully for a

preferred scheme.

8.2. Issues for Consideration

Issues that will need to be considered by Government to achieve MDB water savings via the MLS

are outlined as follows:

� The information provided in this report provides the basis for Government to identify a

preferred scheme.

� The operation of the MLS as governed by the current Murray-Darling Basin Agreement is a

critical factor in achieving water savings. The behaviour of the MLS at lower storage volumes

is fundamental to achieving the water savings identified in this report.

� Mechanisms for optimising the future operational management of the MLS to ensure its future

health will require consideration.

� The Basin Plan will include an environmental watering plan and sustainable diversion limits

that could have implications for the way that the MLS is managed.

� Further development of the hydrologic model for the MLS and the Murray-Darling Basin to

provide the flexibility of accurately modelling more detailed operational rules, water quality

and third party impacts. Noting that the MDBA and NOW are key stakeholders.

� Further feasibility studies for the Broken Hill water supply option of Managed Aquifer

Recharge (MAR) once the Geoscience Australia (GA) assessments are better understood. This

is expected in the latter part of 2010. It is anticipated that scheme development for the MLS

water saving can proceed irrespective with the Broken Hill water supply considerations delayed

to coincided with the GA reporting.

� The approval process studies for the preferred MLS scheme will require further studies

including:

� Identification of legislation and policies that need to be satisfied for implementation.

� Ecological (flora and fauna), particularly fish passage and appropriate structural designs.

� Engineering design and costings



PAGE 172

� Cultural heritage assessment including development of a Cultural Heritage Management

Plan

� Geotechnical assessment of existing embankments

� Social studies particularly for impacts on Menindee, Copi Hollow, Sunset Strip, local

Aboriginal communities, Broken Hill.

� Specific Environmental Studies required for the preferred scheme include:

� Environmental impact assessment, incorporating fieldwork and research to determine the

extent of threatened species populations and their habitat, and endangered ecological

communities at each of the sites affected by the work and operational changes. This should

include consideration of the likely short-term, long-term and cumulative impacts on

biodiversity, and ecosystem structure and function at the local, regional, state and national

scales.

� Consideration of climate change and its potential to affect outcomes for the ecology of the

Lakes.

� Creation of an adaptive monitoring and management plan which clearly describes

acceptable alternative states for rehabilitation and response pathways, triggers for

intervention, and rehabilitation activities and their nature and timing.

� Options for creation or rehabilitation and management of compensatory habitat for

adversely affected flora and fauna.

� Agreements with Country Water and Broken Hill City Council in relation to Broken Hill’s

water supply security, water quality requirements and financial responsibility and identification

of the potential modelling thereof.

� Specific consideration of impacts within Kinchega National Park including channel works on

the Cawndilla outlet channel, Tandou Creek and Little Menindee Creek outlet channel. It is

expected that DECCW and the local communities will be key stakeholders.

� Design of an appropriate community consultation plan to gather input and feedback and also

facilitate community ownership of the outcomes.

� Negotiations with Tandou Farms regarding ownership or easements for possible schemes at

Penellco Channel and Texas Downs.

� Options involving reduced use of Cawndilla will impact on Tandou Farm’s operations which

will involve additional pumping costs to bring irrigation supply water from the Darling River.

� Other issues that may require attention in developing any plans to move forward with any

specific proposal are:

� conformance with legislation:

� the NSW Environmental Planning & Assessment Act 1979, where the NSW

Department of Planning is the approval authority, which includes specific requirements

about environmental impact assessment and public consultation in regard to any

proposal;



PAGE 173

� the Commonwealth Environment Protection and Biodiversity Conservation Act 1999

(EPBC Act) because it would likely affect ‘matters of national environmental

significance’;

� the Commonwealth Water Act 2007 which includes the Murray-Darling Basin

Agreement, and requirements for a Basin Plan;

� how the savings would be allocated to achieve environmental outcomes (and where and

when)?;

� equity considerations, and linking of Upper Basin water saving and management initiatives

with those in the lower Darling Basin;

� optimising arrangements to secure the water supply of Broken Hill, including the allocation

of operational and maintenance costs;

� arrangements to protect the cultural heritage values of the lakes, particularly associated

with any works in the lakes;

� management of Copi Hollow for a range of purposes;

� the reliability of supply of water to users in NSW, Victoria and South Australia;

� whether it is necessary to change the current Murray-Darling Basin Agreement, which

would involve the agreement of a Council of Commonwealth, NSW, Victorian, South

Australian, Queensland and the ACT Ministers;

� planning for the adaptive environmental management for all or part of the MLS; and

� implementation timeframes: it will take time to hone a specific proposal, and then the

NSW planning approval process would be expected to take around 18 months.

Construction of any works may take up to two additional years.

8.2.1. Indicative timeframes

Figure 8-1 Indicative Program for Implementation of Scheme, illustrates the estimated

implementation program, including timeframes, to complete the construction of a scheme and

Upper Basin initiatives.



PAGE 174

� Figure 8-1 Indicative Program for Implementation of Scheme

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

Menindee Lakes Works **

NSW Basin Initiatives **

** All timeframes are indicative and subject to change

1. The processes involved include an environmental watering plan (part of the draft Basin Plan), review of the MDB Agreement and the MDBA Operations Review.

2. Existing Water Sharing Plans expire in 2014.

3. Business cases for NSW Priority Projects will be submitted in June 2010. Subject to approval from the Australian Government, works are likely to commence in 2011.

NSW STB Basin Pipe Program 3

2016

Inter-jurisdictional Processes 1

NSW STB Metering Project 3

NSW STB Healthy Floodplains Project 3

Environmental watering plan

Refine Broken Hill water supply options

Update Water Savings Estimates

20152010

NSW STB Irrigated Farm Modernisation Project 3

Environmental Assessment

Tender and Works

Basin Plan 1

Water Sharing Plan Review 2

Design and Documentation

2012 2013 2014Task

Managed Aquifer Recharge Investigations

Stakeholder communication

2011



PAGE 175

9. References

Australian Drinking Water Quality Guidelines (2004).

Australian Natural Resources Atlas (ANRA) (2009).

http://www.anra.gov.au/topics/water/availability/nsw/swma-darling-river-regulated.html#flow

Arthur Rylah Institute for Environmental Research (2001). Terrestrial Flora and Fauna of the Menindee

Lakes System, NSW - Interpretation and Assessment. A report for the NSW Department of Land and

Water Conservation Menindee Lakes ESD Project.

Baillie, J., Baillie, C., Heinrich, N., and Murray, A. (2007). On-Farm Water Use Efficiency in the

Northern Murray-Darling Basin.

Barma Water Resources (BWR) (Feb 2010). Hydrology Report Darling Water Savings Project Part B,

Final Part B Hydrology Report Feb 2010.

Bewsher Consulting Pty Ltd (1994). Menindee Lakes Natural Conditions Study, Stage 1: Preliminary

Report. Department of Water Resources, NSW.

Biosis Research (2001). Vegetation/Habitat Mapping of Inundated Areas of Menindee Lakes. Report for

the Menindee Lakes Ecologically Sustainable Development Project Steering Committee.

Boulton A.J. and Jenkins K.M. (1998). Flood regimes and invertebrate communities in floodplain

wetlands. In Williams W.D. (ed.). Wetlands in a Dry Land: Understanding for Management. Environment

Australia, Biodiversity Group. Canberra, pp:137-146.

Briggs, S.V. (1990). Waterbirds in N. Mackay and D. Eastburn (eds.). The Murray. Murray-Darling Basin

Commission, Canberra, pp 337-344.

Commonwealth of Australia (2006). Handbook of Cost Benefit Analysis – Financial Management

Reference Material No. 6.

Crase & Gillespie (2005). The impact of water quality and water level on the recreation values of Lake

Hume.

Craig, I., Green, A., et al. (2005). Controlling evaporation loss from water storages. National Centre for

Engineering in Agriculture, University of Southern Qld.

CSIRO (2008). Murray-Darling Basin Sustainably Yields Project.

Department of Public Works & Services Report No. DC98347 (1998).

Department of Public Works & Services Report No DC02092 (2002).

Department of Planning, Planning & Natural Resources Report No DC05012 (2005).

Earth Tech (2004). Darling Anabranch Environmental Impact Statement for: Stock and Domestic Pipeline

and Reinstatement of Environmental Flows.

http://www.lmd.cma.nsw.gov.au/pdf/DA_ET_MainReport.pdfEnviornment Australia 2001.



PAGE 176

Gehrke, P. C., Brown, P., Schiller, C. B., Moffatt, D. B., and Bruce, A. M. (1995). River regulation and

fish communities in the Murray-Darling River System, Australia. Regulated Rivers: Research and

Management 11: 363-375.

Gippel, C. and Blackham, D. (2002). Review of environmental Impacts of Flow regulation and Other

Water Resource Developments in the River Murray and Lower Darling River System. Final Report to

Murray-Darling Basin Commission, Canberra, ACT.

Green, D. Shaikh, M., Maini, N., Cross, H. and Slaven, J. (1998). Assessment of Environmental Flow

Needs for the Lower Darling River. Murray-Darling Basin Commission and Department of Land and

Water Conservation.

Harrington, R. (2004). Darling Anabranch Environmental Flows Species Impact Statement: the Proposed

Release of Environmental Flows from Lake Cawndilla into the Darling Anabranch and Removal of

Instream Blockbanks. Biosis Research Pty Ltd, Melbourne.

Harris, John H. and Gehrke, Peter C. (eds) (1997) Fish and Rivers in Stress: The NSW Rivers Survey.

NSW Fisheries, Cooperative Research Centre for Freshwater Ecology and NSW Resource and

Conservation Assessment Council, Canberra.

Jim Parkinson and Associates (2002). Economic Values of the Menindee Lakes System

Kingsford, R. T., Jenkins, K. M. and Porter, J. L. (2002) Waterbirds and Effects of Regulation on

Menindee Lakes of the Darling River. Unpublished report to Biosis Research and NSW Department Land

& Water Conservation.

Mandis Roberst (1996). The Menindee Lakes Recreation Study

McDowall, R. M. (ed.) (1996). Freshwater Fishes of South-Eastern Australia. Reed Books, Chatswood,

NSW.

Nicol, J. M. (2004). Vegetation Dynamics of the Menindee Lakes with Reference to the Seed Bank. PhD

Thesis, University of Adelaide.

NSW National Parks and Wildlife Service (NPWS) (1992). Kinchega National Park Management Plan.

NSW National Parks and Wildlife Service (NPWS) (1999). Kinchega National Park Plan of Management.

NSW National Parks and Wildlife Service (NPWS) (2002). Kinchega National Park Conservation

Management and Cultural Tourism Plan Volume 1–The Plan. Report prepared by Peter Freeman Pty Ltd.

NSW Government (2003). The Water Sharing Plan for the NSW Murray & Lower Darling Regulated

Rivers Water Sources.

Pardoe., Martin, S,.(2002) The Nature and Distribution of Archaeology of the Menindee Lakes.

Scholz, O., Gawne, B., Ebner, B., Ellis, I., Betts, F and Meredith, S. (1999). The impact of frying on the

ecology of the Menindee Lakes. Cooperative Research Centre for Freshwater Ecology Technical Report.

Mildura, VIC.



PAGE 177

Scott, A. (1997). Relationships between Waterbird Ecology and River Flows in the Murray-Darling

Basin. CSIRO Land and Water Technical Report 5/97. Canberra, ACT.

Sinclair Knight Merz SKM (2002). Menindee Lakes Aquatic Fauna Integration Report. Technical Report

for the NSW Department of Water and Energy.

Sinclair Knight Merz (SKM) (2009). Darling River Water Savings Project - Part B, Stage 1 - Preliminary

Environmental Issues of Part A Schemes. Technical Report for the NSW Department of Water and

Energy.

Tourism Research Australia (2008).

Tourism NSW (2009).

URS (2005). Menindee Lakes Structural Works Project – Environmental Impact Statement. Prepared for

the NSW Department of Infrastructure, Planning and Natural Resources.

Wallace, T., McGuffie, P., Scholz, O., Nielsen, D.L., Bowen, T., Sharpe, C., Baldwin, D., Reid, J.,

McCarthy, B. (2007). The Darling Anabranch Adaptive Management Monitoring Plan: Condition and

Intervention Monitoring Program. Murray-Darling Freshwater Research Centre Lower Basin Laboratory,

Mildura, VIC.

Walker K.F., Sheldon F. and Puckridge J.T. (1995). A perspective on dryland river ecosystems.

Regulated Rivers: Research and Management. 11:85-104.

Webb, Mckeown & Associates (WMA) (March 2007). State of the Darling, Interim Hydrology. Report

for Murray-Darling Basin Commission.

Webb, Mckeown & Associates (WMA) (2007A). Hydrology Assessment. Darling River Water Savings –

Part A.

Webb, Mckeown & Associates (WMA) (2007B). Hydrology Assessment. Darling River Water Savings –

Part B.

Witter, Dan (Dec 2009). Lake Bed Archaelogical Survey for Menindee, Cawndilla and Pamamaroo

Lakes.



PAGE 178

Appendices



Appendix A Hydrologic Modelling Results



NSW

Lower

Darling

NSW

Murray

Vic

MurraySA Total

Weir

32

Cawn-

dilla

Outlet

Cawn-

dilla to

Darling

Losses

Lower

Darling

Bur-

tundy

Ana

Branch

Outflow

Flow

to

SA

Salinity

at

Morgan

(GL/Yr) (GL/Yr) (GL/Yr) (GL/Yr) (GL/Yr) (GL/Yr) (GL/Yr) (GL/Yr) (GL/Yr) (GL/Yr) (GL/Yr) (GL/Yr) (GL/Yr) (EC)

5290 420 56 1,791 1,644 626 4,117 1,478 982 188 6,765 516

Menindee Operations

Lake

outlets

MDBA

Threshold Broken Hill

[output data row reference] (75) (21) (18) (19) (20) (22) (125) (126) (127) (81) (49) (50) (51) (65)

5291 NoM NoC Never fill M or C Existing 640/480 Exist. Arrangments 199.0 -15.0 -25.2 -8.1 -0.2 -48.6 246.6 -52.6 - 66.6 99.5 29.9 159.8 -0.0

5292 NoM NoC + BH Offline (18 mth) Never fill M or C Existing 640/480 Storage (18mths) 199.8 -14.7 -23.9 -8.2 -0.2 -46.9 247.2 -52.6 - 66.6 100.2 29.8 159.0 0.4

5293 NoM NoC + BH Offline (EOY) Never fill M or C Existing 640/480 Storage (12mths) 199.8 -14.6 -23.9 -8.2 -0.2 -46.9 247.2 -52.6 - 66.6 100.2 29.8 159.0 0.4

5294 NoM NoC + BH Offline (EOY) + 640/480 --> 150/100 Never fill M or C Existing 150/100 Storage (12mths) 248.3 1.8 12.9 4.0 0.9 19.6 298.3 -52.6 - 64.0 142.5 28.0 149.6 -0.1

5415 5294 with 2030 Mid Climate Sequence 235.0 3.4 10.8 7.2 1.9 23.4 284.0 -51.0 - 58.3 139.6 22.2 143.7 -2.4

5374 NoMC using inlet controls with 150/100 Never fill M or C Existing 150/100 Exist. Arrangments 235.1 0.1 11.4 4.2 0.9 16.6 288.2 -49.7 - 63.1 142.0 23.2 145.8 0.3

5381 5294 with 84 months env filling Env fill M & C Existing 150/100 Storage (12mths) 149.8 2.1 15.3 3.6 0.7 21.8 173.7 -26.5 - 46.1 75.4 19.8 70.0 0.7

5383 5294 with 84 months env filling with 510-500 Env fill M & C Existing 510/500 Storage (12mths) 110.9 1.3 -13.0 -3.9 0.4 -15.3 129.7 -23.3 - 47.8 31.0 20.8 66.0 4.7

5384 5294 with 84 months env filling with 410-400 Env fill M & C Existing 410/400 Storage (12mths) 124.3 2.1 -3.2 -1.8 0.6 -2.3 145.0 -24.6 - 48.8 44.3 20.2 66.0 4.7

5385 5294 with 84 months env filling with 310-300 Env fill M & C Existing 310/300 Storage (12mths) 129.2 2.1 6.7 0.1 0.6 9.5 151.2 -25.0 - 45.3 54.2 20.4 61.1 -1.7

5386 5294 with 84 months env filling with 210-200 Env fill M & C Existing 210/200 Storage (12mths) 124.8 2.1 5.6 1.7 0.7 10.0 143.7 -21.9 - 46.9 49.8 19.0 55.8 -1.8

5417 5386 with 2030 Mid Climate Sequence 116.6 4.5 10.2 6.0 2.0 22.7 133.2 -19.4 - 40.3 51.9 13.0 48.4 4.6

5387 5294 with 84 months env filling with 110-100 Env fill M & C Existing 110/100 Storage (12mths) 150.5 2.7 15.6 3.7 0.7 22.7 174.3 -26.5 - 46.0 75.7 19.8 70.0 0.1

5388 5294 with 84 months env filling with 85-80 Env fill M & C Existing 85/80 Storage (12mths) 149.6 2.7 17.3 4.4 0.8 25.2 173.5 -26.4 - 45.7 74.9 19.8 68.1 0.6

5393 5294 with 84 months env filling with 85-80 Env fill M & C M10+K6 85/80 Storage (12mths) 158.8 2.7 19.0 5.2 1.0 27.8 124.5 -34.9 66.8 39.7 93.0 16.1 82.6 1.5

5394 5294 with 84 months env filling with 85-80 Env fill M & C M10 85/80 Storage (12mths) 149.2 2.7 17.8 4.5 0.8 25.8 171.3 -24.5 - 45.6 74.7 19.8 68.6 1.0

5389 5388 with bigger pennellco pumps (from Darling) Env fill M & C Existing 85/80 Storage (12mths) 149.6 3.0 17.1 4.3 0.8 25.1 173.5 -26.5 - 45.7 74.6 19.9 68.4 0.3

5398 Tandure + 5GL Ring Tank 130.7 2.1 7.2 2.2 0.7 12.1 150.5 -22.5 - 47.0 56.1 18.7 59.7 -0.3


5350 NoC (inlet controls) Use M /No C Existing 640/480 Exist. Arrangments 64.8 -0.4 5.8 0.2 0.3 5.9 112.0 -49.7 - 32.0 13.1 13.6 19.8 4.2

5351 NoC (inlet controls)+EnMO Use M /No C M10 640/480 Exist. Arrangments 71.1 0.1 7.5 0.1 0.5 8.2 118.3 -49.7 - 32.6 18.2 13.6 23.4 4.4

5352 NoC (inlet controls)+EnMO+No BH (BH Offline 18mths) Use M /No C M10 640/480 Storage (18mths) 73.9 0.8 9.6 -0.2 0.4 10.7 120.6 -49.7 - 32.4 20.4 13.7 23.8 4.6

5405 5352 + Env Filling Use M /Env fill C M10 640/480 Storage (18mths) 34.0 0.9 2.0 -0.5 0.3 2.7 50.4 -18.9 - 27.7 -10.3 12.1 -1.7 1.4

5421 5405 with 2030 Mid Climate Sequence 30.2 1.8 1.9 0.3 0.3 4.2 46.8 -19.4 - 20.7 -6.2 9.7 3.3 -0.7

5406 5352 + Env Filling + K6 Use M /Env fill C M10+K6 640/480 Storage (18mths) 41.6 0.8 6.2 -0.4 0.3 7.0 -14.1 -26.8 79.6 26.8 -1.8 11.3 1.9 2.5

5407 5352 + Env Filling + P1 Use M /Env fill C M10+P1 640/480 Storage (18mths) 37.8 0.9 4.0 -0.4 0.3 4.7 28.1 -19.8 27.0 29.0 -9.0 12.9 -1.2 1.7

5353 NoC (inlet controls)+EnMO+No BH (BH Offline 18mths)+640/480 --> 50/40 Use M /No C M10 50/40 Storage (18mths) 113.8 4.1 34.5 5.6 1.3 45.5 163.9 -49.7 - 31.0 63.1 13.0 37.2 5.0

5403 NoC (Inlet Controls) with 84 mths env filling 210-200 Use M /No C Existing 200/210 Storage (12mths) 61.2 2.9 12.8 3.8 0.8 20.3 81.0 -19.7 - 27.2 18.7 11.8 11.7 1.7


5404 NoC (Inlet Controls) with 84 mths env filling 210-200+EnMO Use M /No C M10 200/210 Storage (12mths) 74.3 2.4 13.6 4.4 0.8 21.2 94.7 -20.5 - 29.2 29.2 12.0 20.8 1.6


5355 base case + EnMO Use M & C M10 640/480 Exist. Arrangments 8.3 0.1 1.3 -0.1 0.1 1.4 7.2 1.1 - 0.1 7.0 0.4 7.1 -0.2

5356 base case + K6 Use M & C K6 640/480 Exist. Arrangments 8.1 0.5 -1.1 -0.0 0.2 -0.4 -265.9 -3.5 277.6 -2.8 10.4 -1.0 11.4 1.2

5357 base case + K6 + EnMO Use M & C M10+K6 640/480 Exist. Arrangments 10.9 0.6 0.2 0.1 0.2 1.1 -254.2 -3.8 269.2 -2.4 12.8 -1.0 12.5 1.2

5358 base case + gravity P1 Use M & C P1 640/480 Exist. Arrangments 4.2 -0.2 -1.0 -0.1 0.1 -1.2 -85.4 3.1 86.5 1.0 1.3 1.7 4.8 -0.5

5359 NoBH+K6+EnMO+Morton Boolka Reg+draw down M before C. Use M & C & separate M10+K6 640/480 Storage (18mths) 23.6 1.3 4.3 -0.0 0.4 6.0 -149.7 1.9 171.1 0.2 19.9 1.1 18.1 -0.4

5360 NoBH+K6+EnMO+Morton Boolka Reg+draw down M then P then C Use M & C & separate M10+K6 640/480 Storage (18mths) 14.3 0.6 4.9 -0.4 0.2 5.4 -121.7 0.8 134.9 -1.7 14.5 -0.1 11.5 0.0

5361 NoBH+P1+EnMO+Morton Boolka Reg+draw down M before C. Use M & C & separate M10+P1 640/480 Storage (18mths) 22.1 1.5 6.3 -0.3 0.2 7.7 -43.3 1.3 64.3 1.6 18.3 0.6 13.3 -0.8

5362 NoBH+P1+EnMO+Morton Boolka Reg+draw down M then P then C. Use M & C & separate M10+P1 640/480 Storage (18mths) 11.3 0.9 4.7 -0.6 0.3 5.2 -42.1 0.8 52.4 -0.3 10.1 0.2 7.2 0.7

5371 NoM + ExCO Menindee Bypass Existing 640/480 Exist. Arrangments 115.0 -1.6 -16.1 -6.8 -0.1 -24.5 104.2 8.0 - 54.3 27.8 26.7 76.5 3.3

5372 NoM + K6 Menindee Bypass K6 640/480 Exist. Arrangments 116.0 -0.0 -17.1 -6.4 -0.1 -23.6 67.6 -3.2 48.7 48.7 36.8 22.8 81.6 4.6

5372Env 5372 with estimated affect of env fill + Env Fill K6 640/480 Exist. Arrangments 67.2

5373 NoM+K6+BH Offline (EOY)+640/480 --> 400/300 Menindee Bypass K6 400/300 Storage (12mths) 148.2 2.2 -1.5 -0.4 0.7 1.1 95.8 -16.7 68.0 43.2 76.2 20.3 96.2 4.2

5373Env 5373 with estimated affect of env fill + Env Fill K6 400/300 Storage (12mths) 99.4

5379 NoM +K6+BHOffline+EOY+150to100 Menindee Bypass K6 150/100 Storage (12mths) 174.1 2.3 10.8 4.2 0.9 18.2 131.5 -20.1 62.6 42.4 105.1 18.9 106.4 4.4

5380 NoM +ExCO+BHOffline+EOY+150to100 Menindee Bypass Existing 150/100 Storage (12mths) 155.9 2.7 5.7 3.3 0.8 12.6 154.3 1.7 - 51.4 73.0 24.4 85.7 3.1

5380Env 5380 with estimated affect of env fill +Env Fill Existing 150/100 Storage (12mths) 107.1

5416 5380 with 2030 Mid Climate Sequence 197.3 3.6 9.0 6.0 1.8 20.5 247.8 -50.1 - 48.1 121.7 17.5 126.3 -2.0

Evap.

Output not available

Model

Run

Irrigation Diversions (GL/Yr)

No

Me

nin

de

e

(by

pa

ss c

hn

l)

Basecase

No

Ca

wn

dil

la

Flows (GL/Yr)



Use

bo

th M

en

ind

ee

& C

aw

nd

illa

Key Indicators (Av Annual)

Description

Me

nin

de

e &

Ca

wn

dil

la N

ot

Use

d

as

pe

rma

ne

nt

sto

rag

es

Change in Key Indicators Compared to Basecase (Av Annual)



Table showing Impacts of Schemes on Victoria, South Australia and NSW Murray Valley

Scheme Base 1 2 3 4 5 6

Model Run 5290 5294 5386 5398 5403 5404 5405

NSW Allocations 1

Percentage of years NSW Murray HS allocations < 1% (Jun) % 26% 26% 25% 25% 23% 23% 26% Table 58

Mean NSW Murray HS allocation (Jun) % 99% 99% 99% 99% 99% 99% 99% Table 56

Mean NSW Murray GS allocation (Nov) % 77% 78% 77% 77% 78% 78% 77% Table 52

Mean NSW Lower Darling GS allocation (Nov) % 86% 92% 88% 88% 89% 91% 93% Table 52

Vic Allocations 1

Percentage of years Vic high reliability water share < 1% (Feb) % 1% 1% 1% 1% 1% 1% 1% Table 58

Mean Vic Feb high reliability water share (Feb) % 99% 99% 99% 99% 99% 99% 99% Table 56

Min Vic Feb high reliability water share (Feb) % 29% 33% 35% 35% 37% 38% 32% Table 60

Percentage of years Vic low reliability water share < 1% (Feb) % 21% 18% 18% 18% 17% 16% 21% Table 54

Mean Vic Feb low reliability water share (Feb) % 85% 86% 86% 86% 86% 86% 85% Table 52

SA’s Entitlement Flows 1

Percentage of years SA entitlement flow restricted (all months) % 4% 3% 4% 4% 3% 3% 4% Table 54

Maximum annual SA Entitlement Flow restriction (all months) GL/yr 882 702 715 747 727 720 841

Mean annual SA Entitlement Flow restriction (all months) GL/yr 16 13 13 14 14 13 16

Minimum annual SA flow (all months) GL/yr 1,557 1,638 1,605 1,605 1,607 1,614 1,567 Table 66

General Flow Indicators 1

Mean annual flow downstream of Yarrawonga (all months) GL/yr 5,199 5,192 5,195 5,195 5,192 5,193 5,201 Table 62

Mean Darling Anabranch outflow (all months) GL/yr 172 190 184 184 180 180 181 Table 62

% of months Weir 32 is > 279 GL/month (equiv to 9000 ML/day) 10% 12% 11% 11% 9% 9% 10%

% of months Weir 32 is > 446 GL/month (equiv to 16000 ML/day) 8% 9% 8% 8% 7% 7% 7%

Mean Annual Flow at Wentworth (all months) GL/yr 7,347 7,500 7,412 7,415 7,362 7,370 7,345

Mean Annual Flow at Euston (all months) GL/yr 6,921 6,907 6,917 6,914 6,908 6,906 6,919

Mean Annual flow to SA (all months) GL/yr 6,886 7,050 6,957 6,957 6,905 6,913 6,890 Table 62

Mean Annual Volume in Lake Victoria (GL) 534 556 547 547 541 544 540

Mean annual flow over Barrages (all months) GL/yr 5,089 5,251 5,159 5,159 5,108 5,115 5,094 Table 62

General Salinity Indicators 1

Mean daily Morgan Salinity (all months) EC 516 516 514 514 518 518 518 Table 69

95 percentile daily Morgan Salinity (all months) EC 792 803 827 795 799 798 804

Mean daily Murray Bridge Salinity (all months) EC 534 549 550 550 554 553 554 Table 69

Additional Dilution Flow into South Australia

Frequency with which there is Additional Dilution Flow into South Australia 33% 0% 11% 11% 28% 28% 29% Fig 183

Menindee Lakes Storage is a shared resource

% of months the volume of Menindee Lakes Storage is < 100 GL 1% 17% 7% 9% 7% 6% 1%

% of months the volume of Menindee Lakes Storage is < 200 GL 7% 32% 23% 26% 18% 18% 7%

% of time that it is under NSW control 38% 22% 25% 25% 15% 15% 40% Table 71

Footnotes:

2. There is little change to the frequency of flows at channel capacity through the Barmah Choke with any scheme.

3. Refer to Barma Water Resources (Hydrologic Assessment, Darling Water Savings Project - Final Part B Report, Feb 2010)

Reference 3

1. Some of the statistics are determined over parts of the result period only. (all months) means that all available months were used, (Feb) means that only the values from Febuary each year

were considered.



Appendix B Socio-economic Assessment

Darling River Water Savings Project Part B

Cost Benefit Analysis Final

February 2010 For Sinclair Knight Merz

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Darling River Water Savings Project – Part B Final – Cost Benefit Analysis 2118692

Executive Summary

The Darling River Water Savings Project (DRWSP) commenced in 2006 with the objective of providing significant water savings in the Darling River in the Murray-Darling Basin (MDB).

Part A of the DRWSP was completed in 2007. Part B (this report) which commenced in 2008 with Stage 1 (of a three stage process), task to review the developed schemes using an improved hydrology model; revised capital works design and costing, and refined operating rules to address third party impacts on water users. Stage 2 refined the schemes and identified six final schemes for assessment in Stage 3. This study assesses the six Stage 3 schemes using Cost Benefit Analysis. It includes a discussion on a number of potential risks.

The six schemes focus on reducing evaporation in the Menindee Lakes, to provide river flows that would not otherwise have been available. Options for on-farm water savings investments on the NSW regulated rivers in the Northern MDB, and the potential transfer of essential storage requirements at the Lakes to upstream storages, were considered in earlier stages of the project.

The base case, against which the schemes are assessed - is the continuation of current policies regarding local, inter-valley and inter-state water sharing and management arrangements.

All of the schemes provide water savings. Changes in operations provide most of the water savings – not investments in capital works.

Figure 1 summarises the results of the Cost Benefit Analysis.

• Scheme 1 has the highest net social benefit – with minimal capital works, significant water savings, and net positive third party impacts.

• Scheme 2 has the second highest net social benefit – with minimal capital works, moderate water savings and no significant net third party impacts.

• Scheme 4 results in a small net social loss – with few capital works, moderate water savings and small net negative third party impacts.

• Schemes 3, 5 and 6 result in moderate to large net social losses – they have extensive capital works the cost of which is not offset by the moderate to low water savings.

Figure 1: Summary of cost benefit analysis results ($ million)

Water savings are valued between $19 million and $125 million using a market (consumption based) approach. A non-market valuation model was developed. However this was not used as there was no basis of identifying the marginal additional environmental benefits associated with the use of the savings (either in isolation or as part of a more general portfolio of environmental water, the priorities of which have yet to be fully established (through the MDB Plan).

The savings are valued as a hypothetical entitlement providing increases in average annual flows at Burtundy on the Lower Darling, outflows from the Anabranch to the Murray River, and excess modelled diversions. These are then valued with reference to water market prices.

Stage 3 Schemes

Cost of works

Water savings

Net third party impacts

Net social benefit (cost) BCR Rank

1 (27) 125 5 103 4.5:1 1 2 (27) 53 (0) 26 1.9:1 2 3 (77) 53 (0) (25) 0.7:1 4 4 (39) 38 (3) (4) 0.9:1 3 5 (77) 28 (0) (50) 0.4:1 5 6 (77) 19 (2) (61) 0.2:1 6

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The estimated entitlement volume assumes that the water savings have a notional long term cap equivalent reliability of 10%. Savings entitlement volumes range from 1,800GL to 267GL.

There is an inherently high level of uncertainty in the valuation of water savings. However, in the context of current market prices, the assumed entitlement price of $100 per share for increase flows is reasonably conservative.

Figure 2 shows the break-even entitlement price requirement for schemes 1, 2, 3 and 4 are below $150 per share. Schemes 5 and 6 have a break-event entitlement price above $240 per share.

Figure 2: Break-even entitlement price assumption ($ per share)

1 2 3 4 5 6 Required entitlement price $14 $44 $127 $97 $242 $371

These break-even prices compare with recent volume weighted average prices for other forms of access licence in the December Quarter of 2009 - $1,800 to 3,100 per share for Murray high reliability/security, $1,200 per share for NSW Murray General Security, and $180/ to $1,000 per share for Supplementary Access on the Macquarie and Gwydir Rivers, respectively.

Trade in the Lower Darling is so thin that there are no useful market prices for High or General Security entitlements. The only Supplementary Access entitlement was owned by Tandou Ltd and recently sold to government for a price understood to be in the order of $150 per share.

The sensitivity of the CBA results to changes in either the water savings proxy entitlement reliability or market price is illustrated in Figure 3. It shows that schemes 5 and 6 are not positive under any of the tested reliabilities or prices, and that schemes 1 and 2 are positive to break-even across the full range of tested reliabilities and prices.

Figure 3: Sensitivity of results to water savings entitlement price

1 2 3 4 5 6



10% reliability or $100/share 103 26 (25) (4) (50) (61)

5% reliability or $50/share 41 (1) (51) (23) (64) (70)

Note: Bolded figures represent the positive to break-even Net Social Benefits

An environmental valuation (using transfer benefits) has not been undertaken due to the absence of any clear direction on how the water savings may be used and the marginal additional environmental benefit they provide (in the context of other environmental water use).

In the absence of a non-market (environmental) valuation of the water savings it is not possible to consider the various savings distributions of water savings identified in the brief (such as half for consumptive use and half environmental use).

Works related costs have a significant effect on the total net social benefits of the schemes.

The two schemes with positive net benefits and costs (schemes 1 and 3) have minimal works - costed at $34 million and comprising water supply security offsets for Broken Hill ($31 million) and a drain for Lake Pamamaroo ($2 million).

Works associated with the Morton Boolka high level regulator, a Lake Menindee drain and enlarged outlet, and a Lake Cawndilla drain with enlarged regulator. These schemes have the lowest total net social benefits.

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The sensitivity of results to different levels of works is best illustrated by comparing schemes 2 and 3. Both have the same operating rules but the former has minimal capital works while the latter has all of the identified capital works. Scheme 2 provides a $26m benefit, scheme 3 a $25 million loss. Other comparisons are precluded by the use of differing operating rules.

Net third party impacts are small when compared with water savings, works, and historical results for the schemes.

The largest third party values at risk are irrigation earnings. The hydrology simulation indicates that there are no tangible impacts on long-term average irrigation earnings across the southern Murray-Darling Basin.

With respect to the timing and sequencing of announced allocations (based on the historical climate record), the schemes generally only affect early to mid season allocations and have little if any impact beyond that time. The absence of any significant or extended period of allocation impacts indicates that there are unlikely to be any farm level impacts (not identified in the hydrology model) and there are unlikely to be any significant impacts on the ability of irrigation enterprises to achieve their current rates of return. A close inspection of the timing and sequencing of simulated water allocations (and Tandou Farm’s diversions) shows that the schemes may affect opening season allocations. Most of those impacts are eliminated within two to three months, and end of year allocations are generally unaffected. Arche Consulting developed case study farm models in consultation with the irrigation community. This work is duplicative as a close analysis of modelled announced allocations used as an input to those models do not show any impacts sufficient to affect farm financial viability.

There are two tangible net third party impacts – salinity and local impacts at Menindee.

Salinity costs generally range from a $3 million cost to a $2 million benefit with the exception of scheme 1 which provides a notable $9 million benefit.

Local third party impacts include reductions in the value of Sunset Strip property values and reductions in the value of local recreation and tourism. Sunset Strip properties are estimated to fall in total value by a maximum of 15% (under scheme 1). Tourism and recreational values also fall, by up to $90,000 per annum (based on transfer values from the Lake Hume study underlying the hydrology model). These estimates assume a high, direct correlation in their values with the volume of water held in the Lakes – which is contrary to their appreciation and growth in recent years despite the absence of any significant volumes of water in storage.

Unquantified impacts are changes in local environmental values (within and around the lakes, and within the Anabranch), local cultural and heritage values, local water quality and local grazing. Nevertheless, the first two of these are considered in the projects multi-criteria analysis.

Climate records over the past 106 years underwrite the hydrology modelling results. Climate change scenarios were assessed also assessed in the hydrology assessment.

Acknowledgements

Thanks are extended to all of the local irrigators, businesses and government agency staff that made time to share information that contributed to this economic analysis.

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Contents

Executive Summary i

1 Introduction 1

1.1 Background 1 1.2 Stage 3 schemes 3 1.3 Context 3

2 Methodology 5

2.1 Overview of Methodology 5 2.2 Cost of works 6 2.3 Third party impacts 7 2.4 Irrigation impacts at the farm scale 12 2.5 Valuing water savings 16 2.6 Unquantified impacts 19

3 Results 20

4 Discussion 21

4.1 Sensitivity to the discount rate 21 4.2 Cost effectiveness of savings 22 4.3 Local impacts on the Menindee community 22 4.4 Irrigation impacts – sequencing and timing of allocations 23 4.5 Water savings 37

5 Conclusions 39

5.1 Scheme 1 39 5.2 Scheme 2 39 5.3 Scheme 3 39 5.4 Scheme 4 40 5.5 Scheme 5 40 5.6 Scheme 6 40

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Figures

Figure 1: Summary of cost benefit analysis results ($ million) i Figure 2: Break-even entitlement price assumption ($ per share) ii Figure 3: Sensitivity of results to water savings entitlement price ii Figure 4: Map of the Menindee Lakes 1 Figure 5: Water saving schemes for the Menindee Lakes 3 Figure 6: Component capital costs and their discounted value 6 Figure 7: Component third party impacts by scheme ($ million) 7 Figure 8: Gross margin and water use for irrigated rice 8 Figure 9: Citrus gross margins and water use 10 Figure 10: Local works and access licences (numbers and shares) 11 Figure 11: Estimates of developed irrigation areas at Menindee Lakes (ha) 11 Figure 12: Broken Hill security of supply options ($ million) 14 Figure 13: Ranked change in annual flows at Burtundy 17 Figure 14: Ranked change in annual Anabranch outflows 18 Figure 15: Valuation of water savings 18 Figure 16: Summary of benefits and costs ($ million) 20 Figure 17: Sensitivity to discount rates ($ million) 21 Figure 18: Investment cost per ML of water savings entitlement 22 Figure 19: Schemes 2 & 3 – Murray High Security opening allocations 24 Figure 20: All schemes - Murray High Security allocations - August 24 Figure 21: Schemes 2 & 3 – NSW Murray General Security opening allocations 25 Figure 22: Schemes 2 & 3 – NSW Murray General Security end of year allocations 26 Figure 23: Scheme 1 – Lower Darling High Security opening allocations 27 Figure 24: Scheme 1 – Lower Darling High Security allocation – September 27 Figure 25: Schemes 2 & 3 – Lower Darling High Security opening allocations 28 Figure 26: Schemes 2 & 3 – Lower Darling High Security allocations - October 28 Figure 27: All schemes – Lower Darling High Security allocations – June 29 Figure 28: Scheme 1 – Lower Darling General Security opening allocations 30 Figure 29: Scheme 1 – Lower Darling General Security allocations – October 30 Figure 30: Scheme 1 – Lower Darling General Security allocations – January 31 Figure 31: Schemes 2 & 3 – Lower Darling General Security opening allocations 31 Figure 32: Schemes 2 & 3– Lower Darling General Security allocations – October 32 Figure 33: Schemes 2 & 3– Lower Darling General Security allocations – January 32 Figure 34: Scheme 6 – Lower Darling General Security opening allocations 33 Figure 35: Scheme 6 – Lower Darling General Security allocations – October 33 Figure 36: Scheme 6 – Lower Darling General Security allocations – January 34 Figure 37: All schemes – Lower Darling General Security year-end allocations 34 Figure 38: Scheme 1 – Tandou Farm annual diversions 35 Figure 39: Schemes 2 & 3 – Tandou Farm annual diversions 36 Figure 40: Scheme 6 – Tandou Farm annual diversions 36 Figure 41: Sensitivity of results to water savings entitlement price 37 Figure 42: Break even entitlement price assumption ($ per share) 38

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1 Introduction

1.1 Background GHD (as Hassall and Associates) was commissioned by Maunsell/Aecom and subsequently Sinclair Knight Mertz (SKM) to provide various economic assessments to support the development of a twenty year plan for the Darling River Water Savings Project (DRWSP).

Whilst the DRWSP considered a number of catchment wide options for water savings (on farm and in storages), the most productive options involve the Menindee Lakes system (the Lakes) on the Darling River in western NSW.

The Lakes comprises a series of ephemeral lakes that are regulated by works completed in the 1950s and 1960s. They initially secured water supplies for Broken Hill and down stream water users. They continue to supply Broken Hill and local irrigators, but now they also play a pivotal role in managing flows in the broader southern connected rivers of the Murray-Darling Basin (the Basin).

As a consequence of their location, operation and structure, the Menindee Lakes suffer significant evaporative losses. Changes in their operation can generate large reductions in evaporative losses and, in the absence of careful design, can have significant system wide consequences.

Figure 4: Map of the Menindee Lakes1


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The DRWSP follows a series of studies into potential water savings from Menindee Lakes over the past ten to fifteen years. However, the schemes provide much larger evaporation reductions than those previous schemes, due to aggressive and extensive changes in operational management.

Phase A of the DRWSP was completed in 2007. A preliminary Cost Benefit Analysis (CBA) and a Regional Economic Assessment were undertaken of seven schemes involving modifications to the works and the operations of the Menindee Lakes system.

These schemes were designed to test the limits of operational changes and their impacts on other water users across the southern Murray-Daring Basin (MDB). The assessment of the schemes relied to a large extent on a hydrology model (MSM).

Phase B of the DRWSP:

• Stage 1 reassessed the Phase A schemes using an integrated hydrology model (MSM-BigMod) and refined operating rules that mitigated most of the previously identified third party impacts;

• Stage 2 used the previous schemes as a basis for identifying eight refined schemes. These included the removed the current arrangements for securing Broken Hill’s water supply from the model operating rules, and the provision of impact mitigating works; and

• Stage 3 considered a more limited set of six schemes, revised capital costs and a shortlist of five options for Broken Hill water supply.

The outputs of the CBA results from earlier Parts were used as a core input to the multi a criteria analysis which was used to identify preferred schemes.

The CBA:

• Uses the Commonwealth Handbook of Cost Benefit Analysis methodology;

• Quantifies twenty economic impacts for each scheme;

• Provides a detailed description of the methodology used in the assessment of each impact;

• Provides discussion on two core risks – in particular, irrigation allocation timing and sequencing, and the valuation of water savings.

The CBA does not quantify potential cultural heritage impacts, local environmental impacts, or water quality issues with the exception of the economic cost of changes in salinity in the Murray (produced by the hydrology model).


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1.2 Stage 3 schemes The hydrology and engineering reports indicate that the bulk of any ‘new’ water (evaporation savings) available in the Darling River catchment involves operating rule changes in the Menindee Lakes storages, with possible complementary enabling or impact mitigating structures. Figure 5 identifies SKM’s eight core schemes for this CBA assessment.

Figure 5: Water saving schemes for the Menindee Lakes

Description

All schemes Lake Pamamaroo draining channel to improve operational flexibility. Contingency works for Broken Hill water supply – Managed Aquifer Recharge.

Stage 3 schemes

1 Never fill Lake Menindee and Lake Cawndilla Changed operating rules. Existing structures.

2 Reduced use of Lakes Menindee and Cawndilla Changed operating rules with environmental filling.

3 Reduced use of Lakes Menindee and Cawndilla Scheme 3 with a new high level Morton Boolka regulator and enlarged outlets and drainage channels for Lakes Menindee and Cawndilla.

4 Reduced use of Lake Cawndilla Changed operating rules with environmental filling with a high level Morton Boolka regulator.

5 Reduced use of Lake Cawndilla Scheme 4 with enlarged Lake Menindee outlet and drainage channel.

6 Reduced use of Lake Cawndilla Current operating rules (but reduced use of Lake Cawndilla) with environmental filling. Enlarged Menindee outlet and drainage channel, with high level Morton Boolka regulator.

1.3 Context The Lakes play a pivotal role in regulating flows in the Lower Darling and, below its confluence, the lower Murray. The schemes have consequences for the operation of upper Murray storages. Third party impacts therefore include potential changes in water management throughout the southern Murray-Darling Basin.

Menindee is located in the far south west of New South Wales, approximately 100 kilometres from Broken Hill. It straddles the Darling River on the eastern side of Lake Menindee and has a close relationship with the village of Sunset Strip, a private caravan park and the local recreational centre at Copi Hollow. It is a small community in a relatively disadvantaged region.


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Menindee and its immediate environ has a resident population of around 700 people. This does not include the many peripatetic seasonal workers that pick local horticultural produce and tend broad-acre irrigated crops.

The town has buildings and spaces used for a wide range of government, community, social and commercial activities. These include retail stores and hotels, three churches, a post office, a community service centre and civic hall, a school, a police station, sport grounds (tennis courts, golf course, sporting field and race course), and community health and family support centres. The local community also has a wide range of sporting and social clubs - shooting, tennis, field sports, golf, swimming, speed boat and sailing clubs. This diversity of infrastructure and associations reflects both the history of, and close associations within, the community of the town.

Since its establishment the town has undergone a number of changes in its character and economic focus. In its early days the town was a service centre for regional grazing activities, a staging point for a number of historically significant inland expeditions and a large centre for paddle steamers on the Darling River. With the development of rail and consequential decline in river transport, the town relied on servicing local graziers and provided a source of fresh produce for the nearby mining city of Broken Hill. Following the regulation of the Lakes in the 1950s and structural changes in the regional economy (including the extension of irrigation activities during the 1980s and 1990s and the shutting down of the local fishery) Menindee is now:

• A regional service centre for primary industries (agriculture and mining);

• A centre for irrigation at the Lakes (mainly horticulture and annual broad acre crops);

• A centre servicing tourists to the lakes and the nearby Kinchega National Park; and

• A site of active and passive recreation by the local and Broken Hill residents (particularly contact water sports at Copi Hollow).

The water saving schemes considered for the DRWSP involve changes to the operations of the Lakes that generally reduce the volume, frequency and duration of Lake storage. A number of these core local social and economic values are at risk.

• Irrigation is the largest economic contributor to the local economy and is highly dependant on water storage arrangements at the Lakes.

• Tourism and recreation has a substantive and growing role in the local economy. This includes both passive and active recreational activities. Most contact water sports are undertaken at Copi Hollow. The Lakes are particularly significant as a recreational location for residents of Broken Hill (with its extreme climatic conditions) as the only large bodies of accessible open water in the region.

• Closely related to Menindee, and drawing aesthetic value from the Lake Menindee, is the village of Sunset Strip, located on the north-western shoreline.

In 2001 the NSW government prepared and published an extensive profile of the township and the region it services, and their relationship with the Lakes for the Menindee Lakes Environmental Sustainable Development project. Following an extended period of very low storage levels and little structural change within the town, much of the information provided in that profile remains current. However, those issues specific to the valuation of economic impacts for the Cost Benefit Analysis have been updated to ensure quantitative currency.


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2 Methodology

2.1 Overview of Methodology This assessment primarily uses a Cost-Benefit Analysis (CBA) methodology in accordance with the Commonwealth Government’s guidance.2

CBA is used to aid decisions on the allocation of scarce resources.

Costs and benefits are expressed as far as possible in monetary terms and they are valued with respect to the community as a whole, rather than any particular group.

Costs and benefits are valued at the time they are incurred. In order to make them comparable, future costs and benefits be discounted to present values.

The Net Social Benefit of a project is the sum of the present value (the net present value) of all future costs and benefits.

The CBA estimates future costs and benefits and discounts them to 2009 values. Estimated costs and benefits are discounted over 30 years.

The discount rate reflects the assumed return on capital that is foregone (the opportunity cost) from the alternative use of resources. Future costs and benefits are discounted to present values using a 7% per annum discount rate, with sensitivity analysis provided discount rates of 4% and 10%.

Cost and benefits are measured as changes under the scheme when compared with a base case – comprising existing operating and water sharing arrangements.

The assessed scenarios involve significant changes to operational management arrangements and works at Menindee Lakes. The impacts of those changes are reflected in their effects on third parties and the provision of water savings.

The intent of this assessment is to identify and quantify those net social costs and benefits that relate to the changes associated with the schemes. Only those impacts arising from the schemes themselves are valued. Other changes will occur regardless of whether any of the schemes are progressed. These are not directly relevant to this assessment.

The impacts arising from the schemes are not of a sufficient size to materially affect prices within the affected sectors, nor prices and outputs in other sectors of the economy. No secondary or multiplier effects are recognised.

Significant unquantified costs or benefits include:

• Cultural and heritage impacts in and around the lakes; and

• Local environmental values associated with changes in the frequency of inundation within the Lakes and flows within the Anabranch.


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2.2 Cost of works SKM provided estimated capital, and lifecycle operations and maintenance, costs for each of the major component water savings works at the Lakes.

The net present value of those costs is reduced due to the following factors.

• Construction costs are assumed to be incurred over three years with 25% incurred in 2011, 50% in 2012 and 25% in year 2013. The SKM costs were distributed and discounted accordingly; and

• Recurrent costs (operating and maintenance) will be incurred in the years following the construction of works. The SKM estimates of the lifestyle NPV costs are discounted, to commence 2014 and continue to 2060.

Each of the schemes involve at least one operational work (the Lake Pamamaroo drain), and generally combinations of several works, to facilitate the required operational efficiency and flexibility.

Figure 6 shows the SKM cost estimates, their discounted values (at 7%) and the total capital costs used in the CBA results.

Figure 6: Component capital costs and their discounted value

SKM Estimates Cost Benefit Inputs

Ref Menindee Works Capital

Cost O&M Total Life Cycle

Capital Costs O&M

Total Cost

La Lake Pamamaroo Drain 2.7 0.2 2.2 0.1 2.4

Lb Lake Menindee Drain 5.0 1.5 4.0 1.0 5.1

Lc Lake Cawndilla Drain 0.7 0.1 0.6 0.1 0.6

Ld Enlarged Menindee Regulator 9.4 1.5 7.6 1.0 8.6

Le Enlarged Cawndilla Outlet 23.6 6.9 19.0 4.8 23.8

Lf High Level Morton Boolka Regulator 14.2 1.5 11.4 1.0 12.5

Note: Total Costs include subordinate rounding errors

All schemes include the La (and mitigating works for Broken Hill security of supply – see 2.4.1).

For schemes 1 and 2, La is the only scheme work.

Scheme 4 is restricted to La and Lf.

Schemes 3, 5 and 6 involve all of the works identified above (La, Lb, Lc, Ld, Le, and Lf).


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2.3 Third party impacts The Menindee Lakes system is one of the major storages used to regulate flows in the Lower Darling and Murray Rivers, providing supplies to irrigators on the Lower Darling and regulating flows to meet inter-state water sharing arrangements.

Changing the operations of the Lakes can affect water users across the southern MDB and local values derived from the Lakes.

The hydrology model provides simulated estimates of changes in the average annual:

• Earnings from irrigation activities;

• The value of hydro-electricity generation;

• Recreation values at Lake Hume;

• Flooding benefits; and

• Salinity costs.

These values are inflated to 2009 prices using the Consumer Price Index and capitalised from 2014 to 2060, for the purposes of the CBA impact valuations.

Local third party impacts are, changes in:

• Earnings from irrigation activities at Menindee and on the Lower Darling;

• The security of water supplies for Broken Hill;

• The value of Sunset Strip residences; and

• Recreation and tourism earnings attributable to water volumes within the Lakes.

Figure 7 shows the net value of the third party impacts recognised in the Cost Benefit Analysis.

Figure 7: Component third party impacts by scheme ($ million)

Scheme 1 2 3 4 5 6

Irrigation earnings 0.0 0.0 0.0 0.0 0.0 0.0

Value of hydro electricity 0.8 (0.3) (0.3) (0.0) 0.2 (0.0)

Hume recreation Value 0.1 (0.1) (0.1) 0.1 0.1 0.0

Flooding benefit 0.2 0.1 0.1 (0.2) (0.2) 0.0

Salinity benefit 6.8 1.5 1.5 (2.3) 0.2 (2.1)

Broken Hill water supply 0.0 0.0 0.0 0.0 0.0 0.0

Local tourism/recreation (1.4) (0.8) (0.8) (0.1) (0.3) (0.1)

Sunset Strip property (1.3) (0.9) (0.9) (0.4) (0.4) 0.0

Total third party impacts 5.2 (0.5) (0.5) (2.7) (0.4) (2.1)

Note: Totals may reflect rounding issues


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2.3.1 Irrigation earnings – Murray River

The hydrology model simulates annual gross margins for a range of crops across the southern MDB.

The assumptions that underlie the hydrology simulation were initially developed in 1996,3 and the Lower Darling assumptions were updated in 1999.

There have been concerns raised over the current relevance of those estimates.

On the Murray River the most vulnerable water entitlements to changes in Menindee Lakes operations are NSW General Security Water Access Licences. These support annual irrigation crops such as rice, cereal grains and summer crops such as maize.

The schemes do not result in any impacts on South Australian and Victorian High Reliability earnings. If they did, the production impacts would ultimately be reflected in rice or grains as crops that place a higher value on water would likely purchase allocations from the rice or grains sectors. High reliability licences are still used to support many dairy operations and in some instances the may provide marginal allocations into the market.

The 1996 gross margin for rice used in the hydrology model remains relevant and comparable with current gross margin estimates and water application rates.

Figure 8 compares the model inputs (Hall 1996) with farm handbook gross margin budgets for medium and long grain rice in 2001/02 and also in 2007/08.

Figure 8: Gross margin and water use for irrigated rice


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2.3.2 Irrigation earnings – Menindee and Lower Darling

Irrigation on, and around, the Menindee Lakes has a relatively long history of small blocks growing fresh produce for Broken Hill. With improved transport and the completion of the Menindee Lakes storage works in the 1960’s, many of these small blocks consolidated into two large corporate farms, and four medium sized family businesses.

There remain around 25 small family farms. Many of these are probably below the minimum operating scale to provide a commercial return on investment, but may be used to augment other household income (including seasonal picking for larger local producers) and provide other, less tangible benefits.

The two large corporate farms are - the publicly listed Tandou Ltd and privately owned Table Grape Growers of Australia. Combined, they account for around 90% of the permanent plantings irrigated areas around the Lakes, and Tandou Ltd accounts for all of the annual cropping in the area.

Most enterprises have permanent plantings of horticulture crops and rely on both High and General Security licences. Lower Darling General Security has a very high reliability compared with any other NSW General Security licence. Many are now recognising the risk posed by such a strategy.

Irrigation diversions around Menindee and on the Lower Darling represent only a very small proportion (less than 1%) of total diversions in the southern MDB.

Changes in irrigation earnings within this region are unlikely to affect the CBA results, but are highly significant with respect to the local community.

There are four main crop types around Menindee and on the Lower Darling. These are:

• Table grapes;

• Other horticulture (apricots and citrus); and

• Annual crops at Tandou Farm (such as cotton, wheat and other grains).

The hydrology model simulates annual gross margins for crops grown at Menindee and on the Lower Darling. The assumptions that underlie the simulation for the Lower Darling were updated in 1999.

Figure 9 compares the model assumptions (Hall Regions 7 and 13) with gross margin budget mid-range results from the citrus handbook.

The water application rate estimates for irrigated citrus in the Lower Darling and Sunraysia regions are higher than those published in the citrus handbook budgets. Therefore, the model may underestimate impacts on citrus earnings.


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Figure 9: Citrus gross margins and water use

In NSW, Water Access Licences in active use are assigned to diversion and/or storage works.

Figure 10 shows the number of licensed works and the total assigned number of Water Access Licence shares for each type of licence.

The number of works are indicative of the maximum number of discrete irrigation entities and the spatial distribution of water access. There are actually fewer numbers of enterprises as many of them have more than one licensed work. The number of Domestic and Stock licences may be more indicative of the number of homesteads, with the exception of Menindee Main Weir to Weir 32, where non irrigation (household) supplies may be of greater relevance.

Irrigation properties on the Lower Darling, to the south of Menindee, hold around 25% of the High and General Security shares and most irrigate citrus. Geographically, these properties are more likely to be serviced by Wentworth and Mildura on the Murray River, rather than Menindee Township.

Licence shares at Menindee and around the Lakes account for around 75% of total issued Lower Darling General Security and High Security entitlement, and are focused on table grapes.

Some specific licences are identifiable and can be assigned to particular enterprises. For instance the 1,548 High Security shares at Copi Hollow are used by Table Grape Growers in one of their operations while the 10,389 General Security shares at Redbank Creek are held by Tandou Ltd and used on Tandou Farm for annual cropping.


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Figure 10: Local works and access licences (numbers and shares)

Domestic & Stock High Security General Security

Location of Works Number Shares Number Shares Number Shares

Menindee Lakes

Lake Tandure 1 4 - - -

Lake Pamamaroo - - 2 147 -

Copi Hollow 1 22 1 1,548 -

Lake Menindee 1 3 1 20 1

Lake Speculation 3 25 - - -

Lake Cawndilla 1 8 - - -

Great Darling Anabranch Redbank Creek - - - 1 10,389

Menindee and Lower Darling River

Billilla Homestead to - 2 15 - - 4 1,962

Menindee Main Weir to - 83 314 42 3,882 50 9,949

Menindee Weir 32 to - - - 1 5 1 5

Great Darling Anabranch off-take to - 6 107 3 463 15 4,041

Pooncarie to - 7 109 2 707 14 3,139

Burtundy to Wentworth Weir Pool 1 8 3 580 4 945

TOTAL 106 615 55 7,352 90 30,430

The main permanent plantings are table grapes. There are also a number of horticultural plantings (such as apricots, citrus, apples and vegetables).

Some of these plantings have enjoyed an early to market status in recent years and relatively few pest problems. Areas have changed over time depending on prevailing or trending market conditions and availability of water.

Figure 11: Estimates of developed irrigation areas at Menindee Lakes (hectares)

Crop Tandou Ltd Australian Table Grapes

Others (approximate)

Table Grapes 300 40

Citrus 14 5

Apples 6 5

Apricots 36

Other Horticulture 5

Permanent Plantings 166 300 55

% of Total Area 32% 58% 10%

Annual Plantings Up to 6,000


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Tandou Ltd’s activities in the region include Tandou Orchard (for permanent plantings – located to the north east of Lake Menindee) and Tandou Farm (for annual plantings – in Lake Tandou to the south-south east of Lake Cawndilla).

Tandou Farm obtains water from Tandou Creek, through the Pennalco Channel from the Darling River, and directly from Lake Cawndilla. Water is taken under General Security licences on the Lakes, the Anabranch and the Lower Darling, and (when allowed) inter-valley allocation transfers from licences held on the Murray and Murrumbidgee rivers.

Of 6,000 developed hectares (ha) of annual cropping, around 4,000 ha can be irrigated in a year with full General Security allocations, access to diversions from Lake Cawndilla, and through allocation transfers from the Murray and Murrumbidgee. The relative areas able to be supported are:

• 1,200 ha with 100% General Security allocations in the Lower Darling;

• 600 ha using access from Lake Cawndilla; and

• 2,100 ha with inter valley transfers from the Murrumbidgee and other allocation trades.

In 2008 Tandou Farm sold its large (250 GL) Supplementary Access licence to government as adaptive environmental water.

2.4 Irrigation impacts at the farm scale

While not strictly an impact on the broader economy, changes in the financial viability of existing (financially viable) irrigation activities has broad social ramifications.

As part of this economic assessment Arche Consulting developed a set of case study farm models – for rice, pasture and grapes on the Murray River, and for citrus and broad-acre irrigation at Menindee and on the Lower Darling.

The model shells were developed in consultation with reference groups of irrigators.

The underlying methodology of this type of analysis requires, as an essential step, secondary consultation with irrigators to explore their potential adaptation strategies for any significant changes in water access.

The results of these models knot reported here as are the preliminary review of allocation impacts none of the modelled enterprises’ showed a tangible reduction in their financial viability. The hydrology outputs do indicate any substantial impact on irrigation licence allocations sufficient to negatively affect long term enterprise viability.

It is also noted that this form of analysis must be undertaken in close collaboration with irrigators – so that their responses to any change in allocations (volume, timing and sequencing). This could not be done not publicly released any of the assessed scenarios or modelling results during the development of the Plan.


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2.4.1 Broken Hill Water Supply

Broken Hill relies on Menindee Lakes for its town water supplies.

The community has a high dependence on secure water access. A relatively large proportion of residents are over 70 years of age and susceptible to heat stress so that many households (~90%) use evaporative air conditioners to manage extreme climatic conditions. Furthermore, due to the historically high intensity of mining in and around Broken Hill there is a need to actively suppress heavy metal contaminants (particularly lead) in dust.

Broken Hill holds a town water licence of around twice its usage in recent years. Existing supply security, conservatively assumes full development of the licence and the hydrology model shows no period of insufficient supply for the historical climatic record. By assuming that the full entitlement is provided for, future supplies can support a constant annual growth in use of around 3.5% over the 20 years of the DRWSP, and will provide additional security of supply for the town until that time.

The assessed schemes, as part of their changes in storage operating regimes, do not provide the current rules relating to minimum storage of water for Broken Hill, to maintain its existing security of supply.

Nine works options were assessed on a cost effectiveness basis for inclusion in the assessed schemes that would mitigate any impacts on Broken Hill’s modelled full licensed development supply security. Figure 12 shows the NPV of the ten options costs for achieving this.

As is the case for works at the Lakes, construction is assumed to occur over three years commencing in 2011. Costs are weighted to year 2, and total lifecycle costs for operations and maintenance in 2009 are discounted to commence following the completion of construction.

The combined supply options include one or more of the component works. Most have a cost of between $28 million and $31 million, the average of all of the combined schemes is $32 million. For the purposes of the CBA, a cost of $31 million has been used, equivalent to the cost of the MAR (managed aquifer recharge with bank filtration) option.

A pipeline from the Murray River to Broken Hill was considered in Part 2. Part of the capital costs of the pipeline would be defrayed through the necessary avoidance of the cost of refurbishing the existing pipeline from Menindee, between 2012 and 2020. However, the net cost remains prohibitively expensive.

Water quality, in terms of salinity and water hardness (calcium and magnesium), is a major issue for town water supplies. Elevated levels of these minerals increase soap usage and the formation of scale in water using appliances reducing their effective life. While most of these contaminants are derived during periods of low storage extractions, they also arise from aging deposits in aging infrastructure (such as the supply pipeline).


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Figure 12: Broken Hill security of supply options ($ million)




Capital Costs O&M Total

Cost

Component works

Wa Lake Tandure Bank/Regulator 19.8 1.5 15.9 1.0 17.4

Wb Designated BH storage 5GL 13.3 1.0 10.7 0.7 11.4

Wc Weir 32 upgrade 15.0 0.6 12.1 0.4 12.5

Wd Copi Hollow pipe & weir 12.9 0.6 10.4 0.4 10.8

Wf Texas Downs uncovered storage + pipeline 35.0 1.4 28.2 1.0 29.2

Wh Kinalung uncovered storage 79.0 18.0 63.6 12.5 76.2

Wi MAR - engineering treatment 37.0 9.0 29.8 6.3 36.1

Wj MAR - bank filtration (5.5km) 26.0 5.0 20.9 3.5 24.4

Final Combined Broken Hill supply works

BH1 MAR - bank filtration (5.5km) 26.0 5.0 20.9 3.5 24.4



BH2 Lake Tandure & 5GL designated storage 33.1 2.5 26.7 1.7 28.4


Note: Totals may reflect subordinate rounding issues

2.4.2 Local tourism and recreation

The Lakes, and the very large Kinchega National Park adjacent to them, support a wide range of tourism and recreational activities. They are between one and two hours drive from Broken Hill.

Recreation at the Lakes includes water sports - including swimming, power boating, water skiing, sailing, kayaking, angling, camping, bush walking, bird watching, and the visual arts (painting and photography).

All of these activities are pursued at Lakes Menindee and Pamamaroo. Water sports and passive activities (camping and picnicking) are undertaken at Copi Hollow. Recreation at Lake Cawndilla generally involves only non-contact activities and is limited to fishing at Lake Wetherell.

An estimate of the economic value of local tourism and recreation at risk from changes in the frequency and volume of water held in Lake Menindee is used in the CBA. It is estimated using a bottom up approach wherein the expenditure of predicted numbers of visitors provides a basis for calculating the economic surplus of those activities. This provides a high estimate of potential impacts when cross-checked against reported outputs from the Menindee local statistical area.


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The value of local tourism and recreation is estimated as the number of visitors to the Lakes and their average expenditure per visit.

Regional tourism is significant on a state scale. The Broken Hill region has around 147,000 overnight visitors per annum. This equates to a third of domestic overnight visitors to outback NSW. The annual number of visitors (day or stay) who undertake tourism and recreational activities at the Lakes is in the order of 55,000 per annum. This includes both visitors to region and residents of, Broken Hill.

Tourism and recreational expenditure is estimated using a transferred value for “willingness to pay” from a study undertaken of the recreational at Hume Dam. This study contributed to the estimates of recreational impacts in the broader hydrology model. Each person is assumed to be willing to pay $37 per visit. On a bottom up basis the base case has an imputed expenditure associated with tourism and recreation of $2 million (55,000 x $37) under the Base Case. With regard to the economic surplus produced by tourism and recreation at the Lakes, a margin of 20% is assumed. Under the base case the Lakes provide $400,000 per annum to the local economy.

Under each of the assessed schemes, visitation of the Lakes is assumed to decline linearly with the reduction in time that the total Menindee volume in storage is below the volume that occurs at least 50% of the time under the base case.

It is noted that this methodology may over estimate tourism and recreation impacts as it:

• Assumes that there are no substitutes - wherein alternative activities are undertaken, such as alternative recreational activities by Broken Hill residents or visitors to the region;

• Assumes that all tourism and recreation relates to the volume of storage, whereas recent visitation has increased despite the absence of water in Menindee Lake since 2002; and

• Estimates total tourism and recreation expenditure represents almost twice the reported output of the forestry, fishing and agriculture sectors in the area.

2.4.3 Sunset Strip property values

Sunset Strip comprises 145 properties located on the northwest shore of Lake Menindee, adjacent to a deep section of the Lake. The value of these properties is assumed to be related to the frequency and duration of water frontage and, therefore, the volume of water held in the Lake.

Local real estate agents were interviewed in 2006. They suggested the average value of the Sunset Strip properties was $65,000 for developed lake frontage, $45,000 for developed back row properties, and $13,000 for an undeveloped lot. The total value of residential properties and lots at Sunset Strip was estimated at around $9 million.

Local real estate agents were reinterviewed in 2009 and suggested that property prices at Menindee have increased by between 10% and 20% since 2006. The total value of Sunset Strip properties is estimated to have increased by 20% to $11 million.

One third of the value of the Sunset Strip properties is assumed to relate to the amenity value associated with water stored in Lake Menindee. The remaining value is attributed to rental income (from both residents and workers on irrigated properties) and the benefits of a having access to a relatively isolated retreat.


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It is noted that this assumption may over estimate the impact on Sunset Strip properties given that they have consistently appreciated in value over the past ten years despite the absence of any water held in Lake Menindee. Nevertheless, if the price appreciation only relates to the non-lake based values then the underlying increase is in the order of 35% per annum. While this is high, it is not impossible; particularly if there have been any shortages of accommodation elsewhere in the region.

The base case assumes that the current amenity value provided by the lakes occurs in 75% of years. Under each of the assessed schemes, the value of the properties relating to the Lakes is assumed to change in proportion to the time over which Lake Menindee storage volumes are reduced from base case level.

Property values are asset values. They incorporate the sum of all future benefits. Their valuation is forward looking. Any expected impact arising from the schemes should be quickly reflected in property prices, prior to the completion of works and the commencement of new operating rules. The impact on property values is therefore not discounted.

2.5 Valuing water savings The schemes reduce evaporation from the Lakes. Reduced evaporation from the Lakes has little or no economic or environmental utility in its own right. However, reduced evaporation can provide additional, previously unavailable, downstream river flows.

In this CBA, values are ascribed to changes in modelled annual average changes in:

• Flows at Burtundy on the Lower Darling;

• Anabranch outflows to the Murray River; and

• Excess modelled diversions.

Within the southern MDB, environmental water is managed as part of a larger portfolio comprising planned (or rules based flows) and codified entitlements (adaptive environmental water).

The nature of the modelled flows may be amenable to codification as ‘rules based’ environmental water as they could accommodate years of both increased and decreased flows. However, there is no market for such flows, and the specific environmental outcomes of these changes in flows have not been identified, precluding the use of a non-market based valuation methodology.

The flows provide periods of both increased and decreased flows, outflows and/or diversions. Figure 13 and Figure 14 show the ranked annual average changes in flows at Burtundy and Anabranch outflows respectively.

The periods of reduced flows are inconsistent with existing tradeable entitlements. Nevertheless, in the absence of non-market values, flows are valued as proxy water allocations.

The estimation of changes in average annual allocations uses the mid-point between the hydrology model summary average annual flow outputs and an average annualised long term simulated monthly flow data.

The change in flows represent additional, unregulated flows and in this very broad context are similar in nature to NSW Supplementary Water Access Licences.

The proxy allocations are converted to a hypothetical entitlement volume by dividing them by an assumed long term reliability factor of 10%. This factor is below the Long Term Cap Equivalent


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factor implied in the price paid for Supplementary Water Access licences (SWAL) on the Lower Darling and Murray River by governments for environmental watering.

The hypothetical entitlement volume is then multiplied by a notional price ($100 per share) for this type of unregulated flows within a regulated river. The notional price is around half the prices declared for SWAL transactions in the Macquarie Regulated River and a tenth of the price declared for transactions in the Gwydir Regulated River.

This results in an effective price of $1,000 per ML of average annual flow. This proxy entitlement is only available following the completion of works and commencement of new operational arrangements, so the discounted value used in the CBA is $695 per ML of annual flow.

Figure 13: Ranked change in annual flows at Burtundy


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Figure 14: Ranked change in annual Anabranch outflows

Figure 15: Valuation of water savings

1 2 & 3 4 5 6

Burtundy



Anabranch outflows



Assumed Burtundy flows 155 60 40 29 15

Assumed Anabranch outflows 23 15 13 10 10

Excess modelled diversions 1 1 1 1 1

Total water savings as flows (GL/year) 179 76 54 40 27

Effective entitlement estimate (10% reliability) 1,792 765 543 399 267

Value of entitlements (at $100/share) 179 76 54 40 27

Discounted value of entitlements ($’million) 125 53 38 28 19


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There are several alternative market based valuation methods (such as valuing the increase in flows and the decreases in flows as two distinct entitlements, or assigning allocation prices to annual flows and averaging the series).

However, the simpler approach described above, is used in the CBA on the basis that it relies on fewer assumptions and that the second method is not possible at this time due to limited availability and time series of allocation prices under different allocation levels (particularly in the Lower Darling).

It is noted that, assuming agreement can be reached on any required changes to inter-state agreements to give effect to the changed operating rules underlying the schemes, the water savings might be achieved through their codification as planned environmental water. The timing of this could coincide with the required remaking of the Water Sharing Plan in 2014, which is the first year of anticipated water saving flows (following the completion of relevant capital works).

2.6 Unquantified impacts

2.6.1 Cultural heritage impacts

Cultural heritage impacts are discussed and assessed in a distinct report commissioned by SKM and as unpriced costs or benefits have not been included in the CBA, but are recognised in the MCA.

2.6.2 Local environmental impacts

The Menindee Lakes have environmental significance in their own right. The environmental savings valuations focuses on flows and do not take into account on-site impacts. Local impacts of schemes within the Menindee Lakes are unpriced and have not been included in the CBA, but are recognised in the MCA.

2.6.3 Marginal changes in local water quality

The modelling of the schemes does not provide quantified estimates of marginal changes in local water quality (specifically salinity).

With respect to Broken Hill’s water supply, there are potential impacts on water quality. These need to be investigated further. Where there is an impact, the establishment of an annuity to support the leasing of reverse osmosis facilities may be the most cost effective option for managing these impacts. The alternative is to construct a permanent reverse osmosis plant. The relative cost effectiveness of these options will depend on the frequency with which the schemes result in unacceptable increases in salinity.

No quantified costs for managing marginal changes in salinity have been included in the CBA.

2.6.4 Impacts on local stock feed and water access

There are a number of grazing enterprises operating adjacent to the Lakes. The extent to which they are dependent on the Lakes for stock water supplies and the benefits of any change in local flooding (providing additional feed following inundation) is unclear, although the absence of water in the Lakes over recent years would suggest that alternative, contingency water supply options will already be in place.


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3 Results

Figure 16 shows quantified costs and benefits for each scheme. Total benefits and costs represent the change in community well being (the Net Social Benefit). The Benefit Cost Ratio (BCR) is the proportion of benefits to costs. A positive net social benefit has a BCR greater than 1 and represents a net improvement in the distribution of resources.

Figure 16: Summary of benefits and costs ($ million)

Stage 3 schemes Scheme 1 2 3 4 5 6 Hydrology Model Run 5294 5386 5386 5403 5404 5405 Lake Pamamaroo Drain (2.4) (2.4) (2.4) (2.4) (2.4) (2.4) Lake Menindee Drain (5.1) (5.1) (5.1) Lake Cawndilla Drain (0.6) (0.6) (0.6) Enlarged Menindee Regulator (8.6) (8.6) (8.6) Enlarged Cawndilla Outlet (23.8) (23.8) (23.8) High Level Morton Boolka Regulator (12.5) (12.5) (12.5) (12.5) Broken Hill security offset - MAR (24.4) (24.4) (24.4) (24.4) (24.4) (24.4) Total works related costs (27) (27) (77) (39) (77) (77) Irrigation Earnings 0.0 0.0 0.0 0.0 0.0 0.0 Value of Hydro Electricity 0.8 (0.3) (0.3) (0.0) 0.2 (0.0) Hume Recreation Value 0.1 (0.1) (0.1) 0.1 0.1 0.0 Flooding Benefit 0.2 0.1 0.1 (0.2) (0.2) 0.0 Salinity Benefit 6.8 1.6 1.6 (2.1) 0.2 (1.9) Broken Hill water security 0.0 0.0 0.0 0.0 0.0 0.0 Local tourism and recreation (1.4) (0.8) (0.8) (0.1) (0.3) (0.1) Local property values - Sunset Strip (1.3) (0.9) (0.9) (0.4) (0.4) (0.0) Total third party impacts 5 (0) (0) (3) (0) (2) Flows at Burtundy 108.0 41.5 41.5 27.5 19.9 10.5 Anabranch Outflows 19.4 10.7 10.7 9.2 6.9 7.1 Diversions above cap 0.8 1.0 1.0 1.0 1.0 1.0 Water Savings 125 53 53 38 28 19 NET SOCIAL BENEFIT 103 26 (25) (4) (50) (61) BENEFIT COST RATIO 4.5:1 1.9:1 0.7:1 0.9:1 0.4:1 0.2:1 RANK 1 2 5 3 4 6


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4 Discussion

4.1 Sensitivity to the discount rate The results of a CBA can be highly sensitive to the discount rate applied to future costs and benefits.

Figure 17 shows the sensitivity of the core scenario results (using a 7% discount rate) to a spread of discount rates (4%, 7% and 10%).

The sensitivity of each scheme is dependant on the ratio of water savings to capital works costs. The higher the ratio (such as scheme 1) the more sensitive the scheme is to the discount rate. This relationship is clearly illustrated by comparing scheme 2 with scheme 3. The first has minimal capital works while the latter has extensive capital works. Both use the same operating rules and provide the same value of water savings. Scheme 2, with its fewer capital costs, is clearly more sensitive to the discount rate than scheme 3.

All schemes are more sensitive to a reduction in the discount rate than an increase.

Figure 17: Sensitivity to discount rates ($ million)

Discount Rate 4% 7% 10%

Scheme Net Social Benefit

Benefit Cost Ratio

Net Social Benefit BCR Net Social

Benefit Benefit Cost

Ratio

1 126 4.8:1 103 4.5:1 85 4.2:1

2 32 2.0:1 26 1.9:1 20 1.8:1

3 (24) 0.7:1 (25) 0.7:1 (25) 0.6:1

4 (3) 0.9:1 (4) 0.9:1 (5) 0.9:1

5 (54) 0.4:1 (50) 0.4:1 (46) 0.3:1

6 (67) 0.2:1 (61) 0.2:1 (55) 0.2:1

Discount rates can be used as a general risk factor. A higher discount rate may be warranted for this project in the context of uncertainty over:

• The completion of works and commencement of new operating arrangements;

• The value of the water savings to the environment;

• The lumpy and unpredictable nature of future hydrologic conditions or possible climate change scenarios; a higher discount rate may be appropriate.


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4.2 Investment cost of savings The capital works (including Broken Hill’s alternative water supply option) are the most significant cost associated with all of the schemes. They represent direct investment by government in securing the water savings.

Investments in water savings are assessed on a cost effectiveness basis. Figure 18 shows the entitlement price ($ per share) required to cover the cost of capital works. Four of these (schemes 1,2 and 4) are below the core scenario assumption of $100 per share.

Figure 18: Investment cost per ML of water savings entitlement


4.3 Local impacts on the Menindee community There are three factors assessed that have the potential to affect the local Menindee economy and community:

• Property values at Sunset Strip;

• Visitation for tourism and recreational purposes; and

• Local irrigation of table grapes and other horticulture around the township and broad acre irrigated cropping (at Tandou Farm).

The latter (local irrigation impacts) are discussed in some detail later in this report (in 4.4.2).

The impacts on property values and tourism and recreation expenditure represent challenges to the local Menindee community. The assessed impacts are negative for all schemes as they generally reduce the resident time of water in Lake Menindee.

Scheme 1 results in the most significant impacts for these two values.

• The estimated $1.5 million reduction in property values represents a 16% fall; and

• The $1.3 million fall in tourism and recreation value represents an annual impact of $90,000.

Scheme 6 results in virtually no impacts on these two factors.

As previously noted this assessment assumes that both property values and tourism and recreational visitation are highly correlated with the volume and resident time of water in Lake Menindee. However, they have increased in recent years despite the absence of water in Lake Menindee, to support the amenity and visitation levels, since 2001.


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4.4 Irrigation impacts – sequencing and timing of allocations

The hydrology model simulation indicates no tangible change in the long-term average irrigation earnings. The capitalised value of these average annual earnings is, in turn, negligible and has no impact on the overall results of the CBA.

However, it may not fully account for opening and pre-season announced allocations and their potential effect on irrigator behaviour (specifically planting decisions) and within season watering ability (as NSW licences do not allow for diversions above account levels at any time).

Consideration of potential impacts on behaviour and watering activities is provided through a review of simulated announced allocations at various times in the year - opening (July) allocations, pre summer planting (August to October), within season (January) allocations, and end of year (June) allocations - for each scheme.

Preliminary case study farm models for rice, pasture, and viticulture on the Murray River, and table grapes, citrus and cotton at Menindee and on the Lower Darling were developed in early 2009. However, these have not been finalised. The methodology requires the refinement of the models (to account for adaptation and other farm management responses) in consultation with water user focus groups, using hydrology outputs for the assessed schemes. This has not been possible, as the assessed schemes were not publicly released during their development and refinement.

4.4.1 Irrigation allocations – Murray River High Security

There are small, and generally compensating, impacts on the timing or sequencing of opening (July) announced allocations for Murray River High Security entitlements. However, all opening season impacts are eliminated by August.

Changes in opening announced allocations are similar for most schemes.

All schemes reduce opening allocations in 1986 and schemes 2 & 3, 4 and 5 have an additional year of reduced opening allocations in 1905.

Most schemes (with the exception of scheme 6) ameliorate or eliminate the reduced opening allocations that occur under the base case in 1913, 1930 and 1941.

Figure 19 illustrates these impacts using a chart of schemes 2 and 3 opening allocations, which have the highest impact in 1905.

However, as Figure 20 shows, all negative impacts are eliminated by August. It is reasonable to assume that there is no risk to irrigation plantings reliant on High Security allocations.


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Figure 19: Schemes 2 & 3 – Murray High Security opening allocations

Figure 20: All schemes - Murray High Security allocations - August


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4.4.2 Irrigation allocations – Murray General Security

NSW General Security access licences are more likely to be affected by the schemes than High Security licences due to the way storages are operated and water allocated to them.

Opening and pre summer season allocations are particularly important for irrigators of annual crops who need to make planting decisions in Spring.

Schemes 1 and 6 have no substantive negative impacts on opening, pre-summer season or full year allocations.

Schemes 2 & 3, 4 and 5 have similar, small impacts, and a notable reduction in opening allocations between 1907 and 1908 pre-summer season, extending through to year-end. This is illustrated in Figure 21.

By October and November most negative impacts have been negated and announced allocations are notably higher in a number of years.

At year end, announced allocations continue to be reduced in 1909 but increase in 2006, as shown in Figure 22.

Figure 21: Schemes 2 & 3 – NSW Murray General Security opening allocations


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Figure 22: Schemes 2 & 3 – NSW Murray General Security end of year allocations

4.4.3 Irrigation allocations – Menindee and Lower Darling High Security

Opening High Security announced allocations are generally higher than the base case under schemes 1 and 6.

Figure 23 shows the benefits provided by scheme 1 on opening allocations and Figure 24 shows that there are only marginal (positive) impacts pre-summer season (September).

Scheme 6 has a similar profile with the exception of one stand alone year of depressed allocations in September 1936.

Scheme 5 has a number of years of depressed opening allocations. However, as with scheme 1 these are generally eliminated by September and fully eliminated by year end.

Schemes 2 & 3 and 4 also have a number of years of depressed opening allocations. By September these are reduced to three years for 2 & 3 (1933, 1936 and 1961), and for the latter two years under scheme 4.

None of the schemes affect end of year allocations.


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Figure 23: Scheme 1 – Lower Darling High Security opening allocations

Figure 24: Scheme 1 – Lower Darling High Security allocation – September


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Figure 25: Schemes 2 & 3 – Lower Darling High Security opening allocations

Figure 26: Schemes 2 & 3 – Lower Darling High Security allocations - October


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Figure 27: All schemes – Lower Darling High Security allocations – June

4.4.4 Irrigation allocations – Menindee and Lower Darling General Security

Most General Security shares in the Menindee and the broader Lower Darling region are held and used by Tandou Farm.

However, there are a number of permanent plantings that rely in part on General Security access. This is a result of the very high level of reliability for General Security allocation levels since the completion of storage works at the Lakes (particularly compared with any other regulated river in NSW).

Opening allocations for all schemes are depressed in some years, particularly schemes 1, 2 & 3, 4 and 5. Scheme 6 shows both improvements and reductions.

By September most of these reductions fall in frequency and intensity. By October, impacts on announced allocations are negligible and by January they are generally eliminated.

Full year allocation levels across all schemes are generally unaffected for all schemes. There is a reduction in year end allocations under schemes 2 & 3, 4 and 5 in 2007. However this is generally compensated with the mitigation or elimination of reduced allocations at all other times.

Figure 28 to Figure 37 show these impacts in detail for schemes 1, 2&3 and 6.


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Figure 28: Scheme 1 – Lower Darling General Security opening allocations

Figure 29: Scheme 1 – Lower Darling General Security allocations – October


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Figure 30: Scheme 1 – Lower Darling General Security allocations – January

Figure 31: Schemes 2 & 3 – Lower Darling General Security opening allocations


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Figure 32: Schemes 2 & 3– Lower Darling General Security allocations – October

Figure 33: Schemes 2 & 3– Lower Darling General Security allocations – January


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Figure 34: Scheme 6 – Lower Darling General Security opening allocations

Figure 35: Scheme 6 – Lower Darling General Security allocations – October


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Figure 36: Scheme 6 – Lower Darling General Security allocations – January

Figure 37: All schemes – Lower Darling General Security year-end allocations


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Simulated monthly diversions for Tandou Farm provide additional perspective on the combined impacts of each scheme on local General Security allocations, capacity of existing works and the frequency and timing of allowable inter-valley trade.

The net impact of scheme 1 is notably positive. Diversions are significantly reduced in 1920. However, the scheme eliminates all reductions in diversions from 1922 to 1986 (with one exception – 1945) providing an extended period of increased financial stability for these operations.

Schemes 2 & 3, 4 and 5 have similar patter of impacts on diversions, with scheme 2 & 3 being the most significant. Unlike scheme 1 there is no exaggerated reduction in diversions in 1920 and there is a similar, but less absolute, amelioration of reductions in diversions.

Scheme 6 has the only net negative impact on Tandou Farm’s diversions. It increases the frequency of reduced diversion years, increases one reduction in diversions, and only eliminates a single reduction in diversions.

Figure 38: Scheme 1 – Tandou Farm annual diversions


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Figure 39: Schemes 2 & 3 – Tandou Farm annual diversions

Figure 40: Scheme 6 – Tandou Farm annual diversions


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4.5 Water savings

4.5.1 Significance of water savings

Water savings represent the most significant benefit in this analysis. The valuation of these savings is therefore a key determinant of the CBA results.

The schemes provide increases in average flows at Burtundy ranging from 15 up to 155GL per annum and increases in outflows from the Anabranch ranging from 10GL up to 23GL per annum.

The combined value of these flows is significant in the context of current diversions and the augmentation of environmental water availability. However, annual averages do not take full account of the pattern of water savings.

4.5.2 Sensitivity of results to different water savings prices

A core input to the valuation of the water savings is the price assigned to the effective entitlement required to provide the average annual modelled flows from each scheme. The core assumption is $100 per share.

The table shows that scheme 1 is positive across the range of prices. Scheme 2 is break-even around $50 per share and positive for all prices above that level. Scheme 4 is break-even to positive for prices of $100 per share or more. Scheme 3 is break-even for prices of $150 per share or more. Schemes 5 and 6 are negative for all of the tested entitlement prices.

Figure 41: Sensitivity of results to water savings entitlement price

1 2 3 4 5 6

$200/share 228 79 29 34 (22) (42)

$150/share 165 53 2 15 (36) (52)

$100/share 103 26 (25) (4) (50) (61)

$50/share 41 (1) (51) (23) (64) (70)

Due to the manner in which water savings values are calculated and a coincidental correspondence between the assumed reliability (10%) and the core entitlement price ($100 per share) – these results can also be used to consider the sensitivity of results to changes in the assumed reliability of the water savings. A reduction in reliability from 10% to 5% provides the same results as a reduction in the price of the proxy entitlement from $100 per share to $50 per share. Similarly, an increase in reliability from 10% to 20% provides the same results as an increase in the price of the proxy entitlement from $100 per share to $200 per share.

4.5.3 Pattern of water savings – as flows

The nature of the water savings as changes in annual flows may be considered in terms of their ranked annual change from the base case.

Figure 14 shows the change in annual Anabranch outflows ranked from highest to lowest. It shows that all of the schemes provide:

• Increases in outflows in around 35% of years of up to 400GL;


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• Decreases in outflows in around 30% of years of down to minus 80GL; and

• The frequency and volume of changes in flows is relatively similar under all schemes.

Ranked changes in flows at Burtundy (Figure 13) vary significantly between schemes and there are virtually no years of nil change in flows.

4.5.4 Required entitlement price for a break even results

Schemes with a positive net social benefit require a lower entitlement price assumption to provide a break even outcome. Equally, schemes resulting in a net social loss require a higher value.

Figure 42 shows the required entitlement price for each scheme, to produce a neutral outcome. This is similar to the direct investment estimate of cost effectiveness (see 4.2). However, it represents the social cost per ML of water savings entitlement.

Figure 42: Break even entitlement price assumption ($ per share)



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5 Conclusions

5.1 Scheme 1 Scheme 1 has the highest net social benefit – with minimal capital works, significant water savings, and net positive third party impacts.

The net third party impacts reflect positive salinity (and to a lesser extent Hume recreation, flooding and hydro-electricity) benefits, which are only partially offset by the largest impacts on the Menindee community (with regards to property values and local tourism and recreation) of any scheme. Sunset strip properties are estimated to fall by around 15% and local tourism and recreational benefits are reduced by an estimated $150,000 per annum. These impacts are expected as the scheme involves never filling Lakes Menindee or Cawndilla.

Interestingly, this scheme has no tangible impacts on Murray River allocations. Such impacts might be anticipated as the reduction in storage at the Lakes could increase commitments on the upper Murray storages when the Menindee Lakes cannot contribute to cross border flow commitments.

This scheme improves opening allocations for Lower Darling High Security, and there is no tangible change in allocations by September of each year. While it reduces opening allocations for Lower Darling General Security in some years, there are notable improvements in others. By October most of the differences are ameliorated and improvements in some years offset declines in others, and by January there are few if any tangible differences with the base case.

5.2 Scheme 2 Scheme 2 has the second highest net social benefit – with minimal capital works, moderate water savings and no significant net third party impacts.

There is a small salinity benefit. This is wholly offset by a 10% reduction in Sunset Strip property values and a $60,000 reduction in local tourism and recreation values.

Scheme 2 reduces opening allocations for NSW Murray entitlements. By August these differences have been eliminated with regards to High Security licences. By year-end Murray General security allocations are relatively unchanged with the exception of a reduced allocation in 1908, albeit this is offset by small improvements in several years including 2004 and 2006.

Lower Darling High Security opening allocations are reduced in four or five percent of years. These reductions are generally eliminated by October and are totally eliminated by year end. Lower Darling General Security shows decreases in opening allocations. Those reductions are generally eliminated by October and almost wholly eliminated by January. Year end allocations show some improvements in the very limited number of reduced allocation years with the one exception of 2007.

5.3 Scheme 3 Scheme 3 results in a moderate net social loss. It has identical impacts to Scheme 2, but is burdened by extensive capital works costs resulting in a significant net loss (of $33 million).


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5.4 Scheme 4 Scheme 4 results is break even – with few capital works, moderate water savings and net negative third party impacts.

Capital works are limited to the minimum set of works and a High Level Regulator at Morton Boolka.

Net third party losses are high relative to other schemes (but still small in the context of the overall project) due to a salinity loss.

Local impacts on property values, and tourism and recreation are small with a 4% reduction in property values and a $10,000 per annum reduction in tourism and recreation.

Impacts on allocations are very similar to schemes 2 and 3, but reduced in intensity.

5.5 Scheme 5 Scheme 5 results in a moderate to high net social loss – it has extensive capital works the cost of which is not offset by the value of their moderate to low water savings.

As with schemes 2 and 3, net third party impacts are minimal, and local impacts are substantially reduced – with a 3% fall in property values and a $20,000 reduction in tourism and recreation.

As with scheme 4, impacts on allocations are similar to schemes 2 and 3, but reduced in intensity.

The scheme results in a substantial, $60 million, net social loss.

5.6 Scheme 6 Scheme 6 results in high net social losses – it has extensive capital works the cost of which is not offset by the value of their moderate to low water savings and exacerbated by third party losses comparable with Scheme 4.

As with schemes 3 and 5, this scheme is burdened with an extensive set of capital works.

Water savings are the lowest of all schemes and represent less than 15% of the additional average annual flow volumes obtained under scheme 1.

Third party impacts are significant, driven by a loss in salinity. However, there are virtually no local impacts on property values or tourism and recreation.

This absence of local third party impacts is understandable, as the scheme has the least impact on reducing storage volumes (and therefore evaporation and water savings).

The scheme has no significant impacts on allocations on the Murray or on Lower Darling High Security and provides marginal improvements to Lower Darling General Security allocations. However, it is the one scheme that marginally affects Tandou Farm diversions.


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Appendix 1 – Assessment Scope

The project brief defined the scope of the PART B economic analyses - summarised here.

“The six integrated schemes documented in the Part A summary report will form the core of the Part B hydrologic assessment. While the principal focus of the water savings initiatives will continue to be on Menindee Lakes, it will be necessary to undertake much more detailed assessment of other integrated scheme components. This particularly relates to implementation and evaluation in hydrological terms of offset mechanisms for third party impacts that may arise from Menindee works or operations. This will include detailed exposure of other stakeholder impacts and the ability of scheme offset components to address them in the analysis and reporting of the hydrology for Part B …”

“In addition, longer term strategic plan initiatives which aim to secure water savings from the upper Darling Basin will be addressed in the context of:

1. Determining the likely volume of additional water flowing to or remaining in the upper Darling River or its tributary streams, and

2. Evaluating how this additional volume will contribute to addressing drought security for local Menindee Lakes water requirements, and continuity of access to unregulated flow events for upper Darling system water users.”

“The aim of the economic analysis is to produce an economic assessment of the costs and benefits of all integrated schemes, as a fundamental input into decisions on whether to implement any of the integrated schemes proposed in the 20 year strategy.”

“The short-listing of schemes in Part A was aided by a preliminary benefit cost assessment and a preliminary regional economic development assessment. The economic models used in these assessments provided a basis to consider multiple factors such as the sensitivity of individual options within each integrated scheme to changes in flow regime, salinity impacts, construction costs and the regional impact on various water user groups, and will be an input into subsequent economic assessment. The economic assessment in Part B will cover as a minimum:

1. Capital expenditure, and recurrent and operating costs of any proposed works.

2. Economic impacts of any changes to reliability of water supply.

3. Water market costs, including purchase within an integrated scheme (possibly as an offset).

4. Environmental and riverine ecology impacts and cultural heritage impacts. (It is acknowledged that this may not be possible to quantify, and a qualitative assessment may be necessary. The consultant is to propose a way forward for Steering Committee approval).

5. Value of water savings, based on hydrological modelling which means (unless otherwise agreed by the Steering Committee) an estimate of the value of the water in alternative uses including:

• In agricultural production - assessed using approaches such gross margin modelling; and the associated economic development potential, recreation, tourism and regional development

• In environmental use - assessed using approaches such as benefit transfer; and

• Half in agricultural production and half in environmental use.


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6. To the extent that it can be estimated, the market cost of a product equivalent to the water saved.

Water quality impacts, which means the assessment of salinity and any other water quality impacts already within models used by or approved by the relevant NSW Department and the Murray-Darling Basin Commission.

Other relevant costs and benefits.

In undertaking this economic assessment, the consultant will therefore:

Actively participate in discussion to identify alternatives that may reduce the financial cost or optimise the economic performance of the preferred scheme(s) and to model the agreed alternatives.

Present several case-study assessments to approximate the economic impact at a farm level across selected regions and industries. This will include potential responses to long-term changes in security of supply as well as the economic impact in extreme years. Key localities will include the mid Murray, lower Murray and lower Darling Rivers.

• Participate in a round of community meetings (Broken Hill, Menindee, Wentworth, Deniliquin, Bourke, Moree) to explain the preliminary outcomes of economic assessment and to consider stakeholder feedback.

• Undertake sensitivity analysis of key parameters, commenting on the outcome of varying key economic inputs. The sensitivity analysis should be initially be linked to the assessed error bounds associated with key assumptions, and then expanded to explore requirements to achieve cost-recovery (if negative).

• Provide a detailed assessment of the economic impact of the preferred scheme(s) in average years and very dry years, focussing on the regions and industries that are likely to be most affected, and to identify potential offsets for very dry years

• Provide a qualitative assessment of implementing water savings and on-farm water efficiency measures in the broader Darling River catchment.

• Present a multi-criteria assessment of the quantitative and qualitative information generated by the project. This will include environmental and cultural heritage impacts.

• Provide draft and final reports for consideration and endorsement by the Steering Committee and integration into the overall project report.

The Steering Committee would provide assumptions on how the water saved under the Strategy would be used as an input to the economic assessment.

The economic assessment will take into account long-term changes in reliability of water supply as well as the economic impact in some of the worst years (such as conditions during the recent drought).

In the calculation of net present value, schemes should use a return period of 30 years and a discount rate of 7%. Net present values should also be assessed and reported for discount rates of 10% and 5%.

The economic assessment is required to be completed within 6 weeks of the completion of the hydrological assessment.

As a follow-on from the economic assessment, the consultants would recommend a Preferred Scheme or Preferred Schemes to the Steering Committee based on multi-criteria assessment including an optimisation approach that ranks integrated schemes based on both economic indicators and non economic indicators.

GHD Pty Ltd

132 Clarence St, Sydney 2000

© GHD 2009

This report has been prepared by GHD in response to a specific brief issued by State Water and the Proposal for services presented by GHD.

This report is intended for the sole use of the client. It has been prepared in accordance with the Terms of Engagement for the commission and on the basis of specific instructions and information provided by the client.

The contents and conclusion of this report cannot be relied upon by any third party.

This report should not be altered, amended or abbreviated, issued in part or issued incomplete in any way without prior checking and approval by GHD.

Document Status

Rev No. Author

Reviewer Approved for Issue

Name Signature Name Signature Date 1 Arthur

Buckingham 1/03/2010



Appendix C Broken Hill Water Treatment

Two types of desalination technologies could be considered to reduce the salinity in the Darling

River raw water when it exceeds 1,000EC (~600mg/L TDS). These are brackish water /low

pressure reverse osmosis BWRO/ LPRO and electrodyalsis reversal (EDR).

Reverse Osmosis (BWRO/LPRO) - In reverse osmosis, pressure is used to force feed water

through a semi permeable membrane. This results in a purified product water passing through the

membrane, with the majority (typically 95-99%) of the salt ions retained by the membrane and

discharged as waste brine.

Algae and suspended solids would need to be removed in advance of the RO by a solids removal

process such as DAF/ multimedia filtration or microscreening/microfiltration. Additional pre-

treatment must be provided to prevent organic and mineral (scaling) fouling and may require one or

more of the following:

� Acid or antiscalant addition to control pH to prevent calcium carbonate deposition

� antiscalant addition to prevent scaling by calcium, barium and strontium sulphates

� Cartridge filtration to prevent colloidal plugging, and

� Prevention of fouling of metal oxides (iron, manganese).

Depending on the detailed feed characteristics, LPRO water recovery rates could be expected to be

in the range of 70 to 80%. This means that the waste stream for a 10 ML/d plant could be in the

range of say 2.5-4.3ML/d, and for a feed TDS of 3,300EC (2000mg/l), the brine would have a TDS

of 11,000EC – 16,000EC (6500-9600mg/L). Feed pressure of 15-25 bar would be required.

Electrodialysis Reversal (EDR) - Electrodialysis is another membrane process used to treat

brackish water. In this process, electric energy is used to transfer ionised salts from feedwater

through membranes, leaving behind a purified product water. Whereas, the pure liquid moves

across the membranes in RO, there is a migration of ions in EDR, leaving behind pure liquid.

Membranes having anion and cation exchange properties are alternately stacked in a press with a

narrow water passage between them. When direct current is applied to the electrodes (located on

either side of the stacked membrane), the anions migrate to the anode and vice versa. In the

reversal (EDR) process the polarity of the electrodes is reversed at a frequency of 3-4 times/hr and

the flows are simultaneously switched by automatic valves, so that the product cell becomes the

brine cell and the brine cell becomes the product cell. The reversal process aids in breaking up and

flushing out scale, slimes, and other deposits in the cells. Reversal of polarity eliminates the need

to continuously add acid and/or antiscalent.

EDR systems can be cost effective where desalination of brackish water is required (<5,000EC or

<3 000 mg/L) and the desalinated water requirements are not too low (i.e. there is still substantial

ionic strength in the purified (product water). EDR can control the outlet TDS, and cope with



varying feed TDS by adjusting the applied current. EDR does not remove silica, nor significant

amount of total organic carbon (TOC), including algal by-products.

EDR membranes are less prone to fouling than RO membranes and consequently a simpler pre-

treatment such as DAF is required. Also higher recovery rates should be possible (>85%) as well as

higher concentrations of salt in the reject than for RO/NF. Assuming say a recovery of 85-90% and

a target outlet TDS of 700EC (400mg/L), the brine stream would be 1.1-1.8ML/d, and brine TDS

18,000EC – 27,500EC (11000 to 16,500mg/L).

Thus, while EDR has typically higher capex compared to RO on a stand alone basis, the lower feed

pre-treatment requirements and lower brine volumes expected may make it a more attractive

option. However, commercially RO is available from a much wider range of vendors, with only

one for EDR.

Management of desalination brine -The brine stream from a 10ML/d EDR/ RO plant will be in

the range of 1 to 4ML/d depending on the desalination system and recovery rates possible. Options

that could be considered to manage the brine stream are:

� Deep well injection to a similarly high TDS aquifer

� Evaporation ponds. For recovery at the lower end of expectations (70%), some 30Ha could be

required for operation over 18 months

� Storage/ evaporation but returning the brine at a controlled rate to the Darling River when

stream flows and TDS permit

� Achieving near zero discharge using a technology such as a mechanical vapour compressor

(MVC) for brine concentration. These are high cost ($6M/ML/d of capacity) and energy

intensive (12kwhr/KL), power being the main operational cost. That is for 1to 4 ML/d of

MVC capacity could be $6 to $24M, and power required would be of the order of 0.5 to 2MW.

MVC units are not readily relocatable.

� Broken Hill currently does not have a final solution for the brine from the existing RO plant.

They have resumed 20Ha of land on the outskirts of town for evaporation ponds and have

75%completed the pipeline from the WTP to the brine site. The construction of the dams to

EPA standards will be a very expensive exercise and it is not in any immediate work

programmes for CW.

Permanent installation or temporary solution? - The question of whether to adopt a permanent

or temporary/ mobile desalination plant will need to be addressed. Investment in permanent

desalination plant and equipment needed to be carefully considered as the reliability and

maintenance issues and re start-up issues for plant which is notionally idle between droughts

should not be underestimated. Typical RO membranes need to be preserved if they are not kept in

use. This typically involves cleaning, flushing then preserving with sodium bisulphite solution,

checking monthly, and replacing when required. Instrumentation, pumps etc all need to have some



maintenance programs to ensure that they will startup when required. At typical drought recurrence

intervals of 7-10 years, there could be considerable recommissioning costs, certainly for RO.

There are several companies that will supply fully pre-engineered desalination plants, usually

containerised. One manufacturer typically supplies 1ML/d “mobile” plant per container with

2.5ML/d UF pre-treatment capacity in separate containers.

The following photo shows a containerised permanent installation a 2 x 6ML/d plant in 2 x 5

containers (one service container, two x 3Ml/d for pre-treatment, and two x 3ML/d for RO.

� Photo showing RO containerised permanent installation

These may be leased for nominal contract periods or purchased, and particularly for a leasing

option are usually available at relatively short notice, less than 2months. Consequently, provided

there is a predictable need for a desalination plant in terms of decreasing stored volume/ increasing

TDS, then a lease option could well be appropriate.

Concept cost for RO plants is approximately $2M per ML/d capacity. Hence, if a 10ML/d plant is

required then its capital cost will be about $20M with additional costs for design, approvals and

brine disposal arrangements.



Budget Lease costs

A budgeted 18 month lease cost and operating costs for a 10ML/d containerised RO plant including

pre-treatment is as follows:

Direct Leasing Costs $'000

Preliminaries 160

Transport Sydney - BH 280

18 mth Lease* 6,500

Commission 40

Subtotal 6,980

Operating Costs

Labour 350

chemicals 525

Power 785

Sub-Total 1,660

TOTAL 8,640

*Includes parts and membrane replacement

That is about $8.5M for 18 months water supply at 10ML/d. ($1.65/kL).

This does not include owner’s development/ management costs and preparatory works (fixed infrastructure) that would need to be prepared in advance of desalination equipment arriving on site and might include: � Power/ Transformers � Hardstand � Chemical bunding � Raw Water supply to site, Inlet feed balance tank � Brine disposal system � Solids waste treatment/ disposal � Desalinated water balance tank, and delivery pumps/ pipes. Note that all approvals, in particular for the brine treatment disposal system, would have to be

secured well in advance of a decision to proceed.

Further investigations.

In order to firm up costing and scheme requirements the following would need to be done:

� Confirm design feed quality range and characterisation, and treated water delivery water requirements

� Confirm recovery rates � Confirm preliminary process and scheme designs (sizing/ performance characteristics)) � Develop feasibility level budget estimates for fixed / leased options � Investigate brine management/ disposal alternatives in conjunction with desalination options � Explore in more detail the implementation issues including timeframes, contractual

arrangements, operational / institutional arrangements, process responsibilities, approvals, costs and benefits of leased versus permanent plant.

darling river water saving project part b final report€¦ · name of project: darling river water...

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