$26.1 million in funding approved for project

The Federal Government has announced $26.1 million in funding from the National Water Grid Fund to support us in improving the water quality for Portland, Heywood and Port Fairy.

The Quality Water for Wannon Project, estimated to cost a total of $52.2 million, follows years of planning and extensive community, stakeholder and government engagement, and reflects feedback from our customers about the quality of water in those towns.

While there is still much work to be done to deliver improved water quality in the three towns, this funding gives us the certainty to deliver this exciting project and its many benefits for those communities.

We will now move ahead with the next phase of approvals and construction, and work with our communities to determine the most appropriate sequence for delivery in the coming years.


Our customers experience different water quality and taste depending on their water sources. Communities paying an equivalent cost for water services want equitable water quality and taste.

Although the tap water is safe to drink, many people in towns where there is a groundwater supply, such as Portland, Port Fairy and Heywood, find the taste unpalatable as a result of the naturally occurring mineral salts. This leads to reduced consumption.

Investing in the future

There is a demonstrated impact that taste and the factors contributing to it can have on broader public health, cost of living and commercial outcomes in communities where naturally occurring mineral salts impact the taste.

Our research suggests that encouraging higher rates of water consumption will help to combat the higher rates of obesity and dental health issues faced in this region compared to the rest of Victoria.

The project will also reduce the amount spent on bottled water and the maintenance of household appliances and plumbing fittings. There will also be significant benefits to small businesses and industry from providing improved water quality.

Water quality also impacts responses to satisfaction and perceptions of value. In particular, customers from these areas are consistently our most dissatisfied customers when it comes to taste and overall water quality.

Great Tasting Water - Community & Industry Benefits

Funding for the project

In 2022, Wannon Water’s Board endorsed a business case for the program which demonstrates the project will deliver more than $47 million in health, economic and environmental benefits.

The strong support demonstrated by both the federal and state governments recognises that the benefits of improving water quality extend well beyond the household. Delivering great tasting water to these three communities will also deliver broad public health, economic and environmental outcomes for the region.

Australia's peak urban water industry body, the Water Services Association of Australia this week congratulated Wannon Water on the $26.1 million federal budget allocation, recognising that the project is a novel and innovative investment opportunity that will also benefit the national water industry.

The business case that underpinned the application for funding was featured at this week’s national water industry conference OzWater23.

We’ll now work to finalise the order in which the upgrades will be delivered with input from customers. Further design work, including confirming the best overall technical solution for each town, will also begin this year. We expect that it will take around two years to complete each town.

We would like to thank our customers for their patience as we now get underway on building what we know they’ve been asking for. Securing this funding ensures we can now deliver improved services and keep bills in our region as low as possible.

What are the options?

We’re committed to make this happen for our communities, but we also know that changing the treatment for a town’s water supply is complex and needs to be done carefully.

Options we’re investigating include:

  • Upgrading the water treatment plants in each town to reduce the salt content of the existing groundwater source
  • Connecting Port Fairy to the Otway Water Supply System via a new pipeline from Warrnambool.

We are yet to decide on the final technical solution. However, our preferred option is to have local treatment at the existing water treatment plants in all three communities. This is a sustainable, well-proven and accepted solution throughout Australia.

We are yet to make a decision on a preferred solution for Port Fairy. However, our business case has been based on the ‘local treatment option’ rather than the ‘pipeline from Warrnambool’ option because:

• The pipeline option is about three times the capital cost of local treatment ($26 million vs $8 million)

• When considering operating costs, the pipeline option has a net present value approximately twice as expensive (over 25 years) as local treatment ($28 million vs $12 million)

• There are additional and uncosted impacts on the Otway Water Supply System to extract and treat greater quantities of water from the Otways for Port Fairy

• Both options can deliver great tasting water.

We already have 2,980 kilometres of pipelines in our network, including many long transfer pipelines, so the benefits of pipelines are not lost on us. We also believe in making the best place-based and long-term decisions for our customers and community with accurate and relevant information.

Our intention now for Port Fairy is to update and assemble all relevant information on the options, genuinely assess them, indicate a preferred solution and seek community feedback on the preferred solution. We intend for this to be an open and transparent process.