Water supply in regional Victoria Australia: A review of the water cartage industry and willingness to pay for recycled water

Many urban and regional areas of Australia have been facing severe drought over the past decade. This is particularly the case for most areas in the state of Victoria (located in the south east of the country). The management response to this situation has often been reactive with little thought about subsequent and long-term impacts. This paper reviews the water cartage industry in regional Victoria Australia which has developed in response to drought, suppling water in drought affected areas of the state. The review involved the survey of six water cartage businesses, and interviews with local government and water authority officers. The review found that the cost of the carted water is up to thirty-four times higher than the cost of the delivery of mains water in Australian cities and towns. Formal review of the water cartage industry and associated regulations is recommended to assess the environmental, social and economic impacts of water cartage. Secondly, and the paper benchmarks willingness to pay values for recycled water in a specific market segment of regional Victoria—Bendigo office workers (n = 305). The contingent valuation method was used to elicit maximum willingness to pay for recycled water. The study found that participants were willing to pay on average A$7.66/kL for recycled water delivered to their homes (on January 18 2009, A$1.00 = €0.50.US$0.68). This was an amount significantly greater than the A$1.33/kL charged to Bendigo residents for the delivery of potable mains water which is subject to water use restrictions. The results of this study indicate that individuals facing prolonged restrictions to the use of water may be willing to pay a higher price for recycled water than policy makers may anticipate. The established water cartage industry which services the Bendigo area may have influenced the high willingness to pay for recycled water which was evident in the particular segment of the population surveyed. Lessons learnt from this research will be beneficial for catchment (watershed) management globally. An important component of sustainable water management is consideration of impacts across catchments.