Projects with highest projected capital expenditures set the strategic direction for the water industry each year. These initiatives mobilise authorities, contractors, suppliers, while also serving as a valuable source of insight for early-career water professionals seeking to understand emerging trends within the sector.
All information presented here is derived from publicly available sources including water authorities’ submissions to the Essential Services Commission and other Annual Reports for the 2023–24 financial year.
Primary Treatment Augmentation
Authority: Melbourne Water Corporation
Location: Western Treatment Plant (Werribee)
Melbourne Water has confirmed that this project was delayed to optimise the delivery strategy and mitigate cost escalation risks. In fact, the recent announcement of a $700 million investment at the Western Treatment Plant (WTP) suggests that multiple projects have been bundled under a single initiative, now referred to as the Resource Recovery and Re-Use Complex (RRRC).
The specific major projects consolidated into this larger scope remain unclear, but it is likely to include the following as no other combination of major projects approved for the current regulatory period would not amount to a $700 million investment:
- Primary Treatment Augmentation – Budget: $312.6 million
- WTP 5 West Nutrient Removal Plant (formerly known as 55E Activated Sludge Plant Upgrade) – Budget: $214.4 million
- WTP waste activated sludge treatment augmentation (also known as Gas Plant Upgrade) – Budget: $37.6 million
According to Melbourne Water, the RRRC will deliver the following scope of works:
- New preliminary and primary treatment processes to divert raw sewage away from the overloaded anaerobic lagoons, reducing the frequency of odour intensive maintenance works;
- Improved solids handling and anaerobic digestion processes to divert sludge away from the overloaded aerated ponds, capturing carbon and improving safety;
- A new receiving facility to receive and treat Tankered Waste from customers to manage the risk to the environment and fulfil Melbourne Water’s obligations under the Environmental Protection Act, and;
- A new liquid food waste facility to receive waste from industrial customers for co-digestion, which will generate renewable energy.
The upgrade works is expected to be fully operational by 2029. The Victorian Budget 2024/25 State Capital Program (Budget Paper No. 4) provides additional insight into these projects:
- WTP primary treatment augmentation has a revised budget of $333.82 million, with $40.56 million spent as of 30 June 2024. This phase is expected to be completed by Q4 of 2027-28, indicating that it is on schedule.
- WTP 5 West Nutrient Removal Plant is planned for completion in Q1 of 2025-26, suggesting it remains on schedule despite an initial commencement delay of nearly three years. The revised budget stands at $301.47 million, with $231.78 million spent as of 30 June 2024. Project management was awarded to Jacobs for $5 million while BMD delivering the construction scope for $265 million.
- Gas plant upgrade has a revised budget of $107.11 million, with $10.78 million spent as of 30 June 2024. It is expected to be completed by Q4 of 2027-28, remaining on schedule. Part of this project was awarded to the John Holland-KBR JV for a value of $1.6 million.
Contract history awarded at WTP suggests that additional preparatory and minor works are being undertaken by contractors such as Aqua Metro Services and SFP Joint Venture (which is a joint venture between Abergeldie, Downer, and Stantec).
The principal contractor for RRRC is John Holland Group, which was awarded a design and construct contract valued at $446.2 million. This contract extends until January 2029.
Despite the project’s delayed commencement, the bundled approach appears to have kept it on track for completion. Such an approach is generally an effective strategy for improving outcomes by reducing overhead costs associated with delivering projects individually. However, the combined scope’s budget appears to have increased to $724.4 million, up from the original estimate of $564.6 million submitted to Essential Services Commission (ESC) at the start of the regulatory period in 2021.
While detailed public updates on the status of the bundled projects remain limited, further information is likely to be disclosed in Melbourne Water’s next price submission, due on 1 October 2025.
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