Australia’s Millennium Drought had been going on for years.

Melbourne was running out of water.

The politicians responsible for keeping the taps running and their seats well heated and cozy faced the kind of question no minister wants to answer:

What happens if it does not rain?

So Victoria made a decision.

Large.

Huge.

It would build one of the biggest desalination plants in the world.

Con 2 c*jones… or with 2 eggs.

A plant capable of producing 150 billion litres of drinking water every year.

Enough to supply approximately one-third of Melbourne’s annual water needs.

Great.

Costs?

Approximately A$3.5 billion.

How?

A 30-year PPP.

World-class.

Climate-resilient.

Future-proof.

Blah, blah, blah.

By the time the project completed commissioning in December 2012, it rained.

Melbourne’s water storages had recovered dramatically.

Well…

The drought did… but the bills from the machine did not… disappear.

These plants are not the kind of stuff you simply switch off, put under a cover and forget about.

Nope.

The debt still had to be repaid.

The plant still had to be operated.

Maintained.

Inspected.

Tested.

And kept ready to produce water whenever the government ordered it.

Well…

That is how resilience infrastructure works.

You are not only paying for what it produces.

You are paying for its availability.

For the option.

For the insurance policy.

And insurance can look incredibly expensive when the disaster does not happen.

For several years, the Victorian Desalination Plant became an easy political target.

Billions spent.

Water not ordered.

A gigantic plant sitting beside the ocean while the reservoirs were full.

Another white elephant?

Maybe…

Or maybe not.

Climate is unpredictable.

Melbourne kept growing.

By 2026, this expensive toy has delivered hundreds of billions of litres into Victoria’s water system.

For 2026–27, the government ordered the plant’s full annual capacity:

150 billion litres.

So…

Time will tell.

Perhaps Victoria bought an expensive asset too early.

Perhaps it bought insurance just before insurance became essential.

Perhaps both things are true.

These are tough choices.

Brave ones.

Some people get discussing forever.

Others deliver.

If it rains.

A disaster.

If it not.

A great idea.

And all depending on the rain.

That nobody controls… for now.

Governments frequently present infrastructure decisions as binary choices.

Build the full solution now.

Or leave the public exposed to catastrophe.

But there are usually other questions:

Could we build a smaller first stage?

Could the project be expanded later?

Could we secure the land and approvals now without constructing all the capacity?

Could we diversify supply through several smaller interventions?

Could we preserve the option without purchasing the entire option today?

To help you with tough decisions, you may need a call.

ASSET / SPV MANAGEMENT SOLUTIONS - Intro Call - 30 min Book me now

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