The Meander Dam
has been one of the longest running environmental and financial battles in Tasmania in recent
years.

An irrigation dam on the headwaters of the Meander River in northern
Tasmania, the Meander Dam has lurched from one disaster to the next, been the
subject of two separate legal actions, and is running two years behind schedule. Tasmanian
Water Solutions (TWS), a consortium which includes KPMG and McConnell Dowell,
won the contract to build the dam in late 2004, after a sensational backflip by
the Tasmanian Government which saw the “preferred proponent,” led by NM
Rothschild and Sons, ditched.

TWS immediately devised a strata title structure
so complicated as to defy all attempts to fully understand it, particularly, it
seems, by the dairy and vegetable farmers that were meant to buy into the scheme.

This structure
requires pre-selling 2,400 units of 10 ML (10,000,000 litres) of water at about
$10,000 per unit, which will give the owners access to that amount of water
each irrigation season. This, plus $7 million from the Tasmanian Government,
$2.6 million from the Australian Government and $2 million from Hydro Tasmania
(who will own and operate a mini-hydro electricity scheme) will pay for the $35
million capital cost of the dam. An additional $1.5 million per year will be
raised to pay for running costs.

However, it was
announced late last week that only around 800 units have been presold to
farmers, and external investors have not been forthcoming. This has prompted
the Tasmanian Government to announce that it would pitch in and buy water from
the dam, but it will not announce the quantity it intends to purchase, nor the price it will seek for on-selling the
water. This raises further complicated legal and competition issues, which
nobody seems to be prepared to address.

Why anybody
would want to invest in a proposal which the actual customer base – the
farmers – have decided is too expensive and has also yet to be explained. Perhaps
Milo Minderbinder has recently taken up residence in Tasmania.