The Evolution of Business Models for Non-Major Desalination Plants in Australia -- Issues for Governance

Seawater desalination is increasingly considered as an important component of the water resources mix required to address the growing demand for water in situations where there is limited fresh water availability. Australia has made heavy investments over the past five years in desalination technology mostly to augment water supplies to the coastal capital cities by building six large desalination plants. In addition to these large plants, there are numerous non-major plants delivering desalinated water to several remote communities. The prolonged drought observed from 2000 to 2006 and impetus for private sector participation in infrastructure development and public service delivery including water supply, resulted in an increase in the numbers of these plants. However, there is very little or no information about these plants. Furthermore private sector involvement in the water supply industry has resulted in a range of business models including desalination industry in Australia. Accordingly the purpose of this paper is to identify the non-major desalination plants in Australia and the different business arrangements under which they operate. This work is part of an ongoing research project funded by the National Centre for Excellence in Desalination Australia (NCEDA) and it presents preliminary findings of the first phase of the project. The data was collected using online desk research and an innovative commercial in confidence snowballing technique. This study identified 666 non-major desalination plants with various business models. Out of the 666 plants identified 382 plants are currently operating and the results presented here are related to these plants. Next phase of the research will further explore all the 'unknowns' in order to obtain a good understanding of the different delivery methods, and potentially identifying the most likely method(s) to best deliver value for money and protect public interest