Irrigation Efficiency Programs

Audited Entities

• Department of Sustainability and Environment

Audit Objective

• This report examines how effectively, efficiently and economically irrigation-related programs have been planned and managed to achieve intended outcomes.

Audit Scope

• The audit examined the planning processes for the Foodbowl Modernisation Project and the Sugarloaf Pipeline, but not the achievement of outcomes. This will occur in a subsequent audit, following completion of the projects.
• The audit also examined the planning, project management and project outcomes for the Central Goulburn 1234 Channel Automation Project, Shepparton Irrigation Area Modernisation Project and the Macalister Channel Automation Project.

Audit Criteria

• Not available.

Main Audit Findings

• Victorian Government decisions to invest around $2 billion in irrigation efficiency and related projects between 2004 and 2007 were poorly informed. Whether these projects represent the best solution to achieve the government’s policy objectives of saving water and securing Victoria’s water, remains unclear.
• This was particularly evident for the Foodbowl Modernisation Project, where the decision to commit $1 billion was based on advice of water savings and cost assumptions that had not been verified, technology that had not yet proven itself and the feasibility of the project, which was unknown. As a consequence, assumed water losses have been significantly revised down, making the achievement of intended water savings less certain.
• That all projects went straight to the development of business cases, without adequately demonstrating the need to invest or properly consider the most appropriate solution, represents a significant departure from mandatory requirements. Poor documentation and record keeping has been a consistent concern in this audit and has inhibited The Department of Sustainability and Environment’s (DSE) ability to provide the necessary assurance on the status of the irrigation efficiency programs.
• From the information provided, while the three irrigation projects have generally progressed as planned against their time frames for completion, in some instances the costs of the projects exceeded the planned costs, expected water savings had not been achieved and the effectiveness of the modernisation was uncertain.

Audit Recommendations

• The Department of Sustainability and Environment should:
  • develop processes and quality assurance mechanisms for the planning of major investments so that future investment decisions are appropriately informed and considered, consistent with mandatory guidance.
  • develop an approach to cost-benefit analysis that demonstrates consistency and enables comparisons over time.
• The Department of Sustainability and Environment should:
  • better document decisions and project information, with particular emphasis on demonstrating outcomes; and
  • routinely report publicly on the status of projects, including time, cost, quality and achievement of water savings.
• The Department of Sustainability and Environment and water authorities should produce more comprehensive project status information to provide greater transparency around the status of projects.

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