July 19, 2021
The Second instalment in LPC’s What’s Up in Water? Series will focus on the unique challenges faced by Australia’s water industry that are the driving force behind new (and expedited) solutions to challenges that have long been considered by the water industry.
Every aspect of life is impacted by water – from ensuring access to safe and reliable drinking water, to treating wastewater, supporting agriculture, providing recreational opportunities, protecting Australia’s waterways, flora and fauna, conserving water for future generations, and everything that flows in between. It is therefore crucial to address the immediate and long-term challenges being faced by the water industry to ensure its security for future generations.
Immediate Challenges
Firstly, COVID19. The COVID19 pandemic has left a lasting impact on Australia’s economy, and the way we work, move and consume. The seemingly “overnight” shift from workplaces to home offices, has seen an unexpected increase in demand for water services in regional Australia. This change in demand emphasises the importance of flexibility to meet fluctuating demand, and provides helpful insight into the need for new and upgraded assets significantly earlier than once planned.
Investment in the construction of new or upgraded water infrastructure now, will not only stimulate the economy by creating jobs and encouraging expenditure, but it will also further secure ongoing access to safe and reliable water.
To add to this complexity, revenue sustainability has been undermined by a rise in hardship calls from households and businesses who are facing financial strain.
These unique issues faced by the water industry have been compounded by the challenges faced by other industries during the pandemic, including:
- Social distancing requirements limiting the size and efficiency of contractors, operators and/or site maintenance teams;
- Significant delays in the delivery of projects (those being commenced or already on-foot), due to travel restrictions, financial uncertainty and/or restrictions implemented to manage the impact of COVID19; and
- Working from home in the context of technology constraints and the availability of equipment and resources.
Secondly, a distinctive challenge faced in the construction of water infrastructure is managing the risk of augmenting an in-use asset, which provides essential water and wastewater services and cannot simply be “turned off” for extended periods for construction. Strategic planning in the delivery of a brownfield upgrade, as well as a thorough understanding of the relevant environmental obligations, are crucial to ensure the safe, affordable, and on-time delivery of the project.
For principals and contractors operating in this uncertain context, early engagement of a legal team to assist in navigating through risk management, entitlement to Force Majeure, change in law, frustration, suspension or delay, and dispute resolution, is critical to minimising the impacts of the pandemic in the water and infrastructure industry. LPC Lawyers have the skill, expertise, and industry-specific knowledge to assist both principals and contractors from pre-project commencement to project completion.
Future Challenges
One of the greatest challenges to the Australian water industry is climate variability and change. Australia’s water industry and consumption relies heavily on rainfall, which is becoming less frequent and reliable. At the same time, water consumption continues to rise as the growing population attempts to live in increasingly hot and dry conditions, and water treatment infrastructure and assets are being damaged and interrupted due to the rise in extreme weather events.
Whilst the capture and storage of water has been a significant challenge faced by the water industry for decades, the addition of sporadic extreme weather events and an increasing population will be the ultimate test for the capability of Australia’s water infrastructure. For future water security, the industry will be compelled to consider the development of new and augmented assets now, and investigate the use of new technologies, to counteract the impacts of climate change.
Further, as the population grows, so does the stress placed on Australia’s water resources and infrastructure. Growth of major cities and the nation’s population as a whole has been consistently (and significantly) underestimated in projections – in 1998, the Australian Bureau of Statistics forecast Australia’s population in 2051 to be between 23.5M (which was reached in 2014) and 26.4M (in December 2020, Australia’s population was circa 25.7M).
As water infrastructure is planned and developed on the basis of projections for future population size and water availability, the rapid growth in Australia’s population means assets planned for construction to meet the demand of a population of 26M in 2051, is now being outgrown 30 years earlier.
To ensure the continued provision of safe and reliable water, the changing environment driven by climate change and Australia’s rapidly growing population will force the industry to find new (and expedited) solutions to age-old problems. Whilst these issues will continue to challenge the water industry, it also provides great opportunity to increase efficiency, transform the way the water network is operated and water services are delivered, and improve resilience of assets to future trends and shocks.
As the need for projects for new and augmented water infrastructure grows, so too does the need for legal teams in this unique area. LPC Lawyers can assist contracting parties with the augmentation or construction of water infrastructure through:
- Project-specific advice on contracting models;
- Contract preparation and pre-contract and tender negotiations; and
- Ongoing support during the project’s delivery.
Lamont Project & Construction Lawyers
Our Team have the industry knowledge and experience to assist both Principals and Contractors in all major projects, including water. If you would like to discuss any matters raised in the above article or the forthcoming series as it relates to your specific circumstances, please contact Lamont Project & Construction Lawyers.
The contents of this article is for information purposes only; it does not discuss every important topic or matter of law, and it is not to be relied upon as legal advice. Specialist advice should be sought regarding your specific circumstances.
Contact: Peter Lamont or Lili Hoelscher
Email: [email protected] or [email protected]
Phone: (07) 3248 8500
Address: Suite 1, Level 1, 349 Coronation Drive, Milton Qld 4064
Postal Address: PO Box 1133, Milton Qld 4064