Water services are provided by a government corporation and monopoly supplier (Sydney Water Corporation). It has a strong engineering culture overlain by a strong economistic approach to water-management issues. In the face of occasional criticism, it has developed a strong defensive institutional culture.

From its origins as a colony, Sydney has for the last two centuries responded by projecting the demand without any fundamental review of the services it provides and then setting out to provide the supply. Sydney Water Corporation’s response to the increasing demand for water has been to follow the traditional ‘project and provide’ approach to water services.

It is now clear that Sydney cannot simply continue to harvest waters from sources outside its immediate region to meet what appears to be an unquenchable demand without serious environmental consequences and without failures in supply. This is acknowledged in the Metropolitan Water Plan, which was been developed in part to meet the increased demand for water from a predicted increase in Sydney’s population of around one million over the next 25 years. The Plan implicitly assumes an ever-increasing supply to meet demand.

The focus on increasing supply of water in the ‘traditional’ way will eventually prove problematic and unmanageable because of the environmental stresses associated with the approach and, not least, on cost grounds. A more fruitful way of continuing to meet reasonable demands for potable water from Sydney Water Corporation’s existing storage facilities such as Warragamba Dam lies in encouraging residents to reduce their water consumption and to accept greater responsibility for security of their own supply and wastewater management in a manner that reduces the demand for potable water, improves the sustainability of the city and simultaneously enables the government to meet new environmental targets.

There is an urgent need for a major change in the way demand for water should be managed at the level of the individual household, together with new measures to reduce the consumption of potable water in the home. Such an approach is built on the assumption that initiatives need to be taken to minimise the environmental stresses that accompany the present consumption of water and the management of wastewater flows (Guy et al. 2001). It is also assumes that we cannot simply turn to a new system and ignore the path-dependency effects of the water-supply and sewerage systems in place, a point made strongly by Dingle in Chapter 1. A new approach would need to be phased in as part of a new water-demand management model which would lead to less reliance on the traditional reticulation system and reduce the per-capita consumption of potable water supplied by Sydney Water Corporation.

Over the past six years we have had a plethora of national conferences and summits on water services. Much of the focus of these meetings has been on ‘reform’, which is code for privatisation of aspects of the services. The conferences have usually been built on the assumption that the present institutional structure of the urban water ‘industry’ is given, that the present engineering solutions are only to be made more efficient, that pricing is an acceptable, indeed major, tool for moderating demand (the shape of which is essentially taken as given) along with exploration of the privatisation of aspects of the water services to improve ‘efficiency’ but that there should be a vigorous search for ‘new’ sources. The program of the Sixth Annual ‘Australian Water Summit’ scheduled for March 2008, for example, provides a typical illustration of this constrained approach. These new sources tend to be ways of extracting more from existing dams by exploiting waters that were previously thought to be not worth using or were too costly to treat. Given the fact that all ‘natural’ sources are now fully exploited and in such a manner that there is little spare capacity to allow for the variation in rainfall and therefore of runoff from the dam catchments, the currently favoured solutions are to develop recycling plants (in the ACT these are coyly called ‘water purification plants’) and desalination plants.

We do not dwell here on the proposals to build desalination plants (although Peter Spearritt in Chapter 2 does document some of the consideration of such solutions to water supply in Southeast Queensland) which are now under construction in most major cities except to point out that desalination plants are not only expensive in environmental terms but they cannot easily be run efficiently in low-flow conditions (SMH 2007). The residents of Sydney are now being advised that the desalination plants now under construction will cost all households in Sydney an estimated $110 per year which, together with other measures the Sydney water corporation proposes, would increase water bills by $275 per year which is equivalent to an increase of 33 per cent in the average water bill (SMH 2007).

The present approach to water supply is to search for some ‘new’ source, with no review of the existing shape of the demand.