2005 – Dam Safety, Risk and Cost-sharing: Review of the Dam Safety Program for Western Australia’s South-West Irrigation Dams

J S Marsden, P H Jacob, R Nathan, R A Davidson and L A McDonald

This paper sets out the principles, practices and issues relevant to the sharing of
costs for dam safety upgrades in southwest Western Australia and other locations.

We review:

• the general principles (noting that in practice multiple conditioning factors
  apply);
• the practical outcomes for cost sharing in Australian jurisdictions;
• the beneficiaries of the dams, the water and the safety upgrades;
• legacy costs (including IPART’s framework and whetherthis can be directly applied to the southwest);
• the Bulk Water Service Agreement;
• the question of price impacts and affordability based on surveys of farmperformance, water use and profitability; and
• the pricing impact of treating safety upgrades as if Harvey Water owned the
  assets itself.

We examine the impact of applying economic allocation principles to this task and the impact of other criteria such as dam safety obligations, hazards presented by a large dam, community expectations for public safety, the broader public safety, welfare and state and regional economic benefits reliant on dam safety, significant community costs subsidised by irrigation customers, State Government ownership, and the effects on bulk water prices should customers be required to fully fund the necessary dam safety upgrading.