THE Brumby government has been accused of a ''criminal waste'' of taxpayers' money after it financed millions of dollars of new irrigation infrastructure in places where it will not be needed.
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Many irrigation meters and gates installed in the past two years in the Shepparton and central Goulburn area will have to be relocated after the government developed a new policy to reduce the area under irrigation.
News of the costly rethink of the $174 million FutureFlow scheme came as the government said it would investigate concerns raised in The Age yesterday about a possible conflict of interest involving a senior consultant working on the government's $2 billion food bowl modernisation project.
The government has confirmed that, pending Commonwealth approval of stage two of the food bowl project, it will seek more water savings by cutting irrigation in two districts where the infrastructure has already been upgraded.
The government is achieving billions of litres of water savings by closing down ineffcient channels. Affected farmers are offered compensation.
Works on the FutureFlow project started in 2008 after the government's food bowl scheme was created. FutureFlow was a separate modernisation scheme run by state-owned authority Goulburn-Murray Water and three private partners. Unlike the government's food bowl scheme, it involved little rationalisation of farms and has left the district with expensive infrastructure connecting farmers who may not stay on the land.
A member of the government's food bowl steering committee, Dudley Bryant, told The Age he advised Goulburn-Murray Water not to go ahead with the FutureFlow upgrades.
Mr Bryant, one of the strongest supporters of the food bowl project and president of Northern Victorian Irrigators, said it was an embarrassing waste of money.
''I argued black and blue with Goulburn-Murray Water and (then chief executive) Russell Cooper that we are stupid to let this go ahead. I said we should stop and plan for a year, as (the food bowl project) did.
''It's going to be embarrassing when people see excavators pulling out new stuff. People will think it is stupid. It is stupid. But redoing it is probably the most cost-effective thing.''
The government body that oversees the food bowl project, the Northern Victorian Irrigation Renewal Project (NVIRP), has confirmed it is preparing to revisit the FutureFlow work.
''We are certainly keen to establish a modernisation committee which goes and has another look at what's happened in those areas,'' said chief executive Murray Smith.
He said he hoped to recover 80 per cent of the infrastructure costs because meters and gates could be moved. It is unclear how many will need to be removed.
The government said it was confident financial costs could be limited because the new infrastructure was portable. "The only reason that we can now go back and save even more water is because the Premier was able to secure an additional $1 billion from the federal government for stage 2 of this project," said Water Minister Tim Holding.
Opposition country water resources spokesman Peter Walsh described FutureFlow was a ''criminal waste'' of taxpayers' money. ''The indecent haste to effectively shovel money out the door on these projects so the government could claim savings for the north-south pipeline have led to huge wastes of money. There has not been proper planning and due diligence.''
The expensive infrastructure has pushed up bills, and irrigators in Shepparton say they now welcome the government's push to shrink the system so there are fewer new meters and gates on which to pay maintenance. ''We are now finding out there are costs to the new automated system,'' said Shepparton water services committee deputy chairman John Horder.
Under the scheme and in an alliance with companies including Transfield Services and Sinclair Knight Merz, Goulburn-Murray Water has replaced hundreds of old meters, regulators and other infrastructure in the irrigation districts known and Shepparton and Central Goulburn 1-4 since 2008.
The scheme had been agreed to but not implemented in mid-2007 when Labor announced its wider $2 billion foodbowl project, and the contentious north south pipeline.
Under the food bowl project, the government is now trying to pare back the system's arteries so that new and expensive equipment is not connected to unviable farms. By contrast, FutureFlow focused on replacing all of the old meters and gates with expensive new equipment on properties unlikely to need them because their channels will be closed.
NVIRP also confirmed that it would investigate one of its most senior consultants who is helping with food bowl scheme.
Yesterday The Age reported on Sustainable Soils and Farms, a company led and backed by former federal Labor MPs Neil O'Keefe, Gavan O'Connor and Bob Sercombe, and currently purchasing groups of struggling dairy farms in northern Victoria.
The reports revealed that a consultant helping landholders reconfigure farms and apply for government compensation had appeared to represent Sustainable Soils in negotiations with at least one farmer, raising questions a conflict of interest.
An NVIRP spokeswoman said: ''The circumstances as reported in today's Age are being investigated by NVIRP.''
Yesterday, prominent Melbourne businessman and Sustainable Soils shareholder John White defended the company and its proposed involvement in dairy farming.
He denied that the company got special treatment from government authorities through Labor links or Mr O'Keefe's role as a director with Water for Rivers, a federal-state company established to return water to the Murray and Snowy systems.
''We don't get any insight that isn't available in the public domain,'' he said.
Mr Brumby said he knew nothing about the company or the role of ex-Labor MPs. He defended the food bowl project.
