5 April 2002 – Basslink Pty Ltd has accepted the need to make controversial changes to the design of its power link between the Australian state of Victoria and Tasmania in order to address environmental concerns sparking fears that the cost burden, estimated at A$100m($53m), will fall on consumers.

The A$500m interconnector has been delayed while the issue of corrosion from the single cable remained unresolved. The problem was how to complete the electric circuit by providing a path for the return current.

Basslink’s preferred and cheaper option was to bury electrodes offshore on each side of Bass Strait and allow the current to return via the sea and earth. Developers of a gas pipeline, Esso, commercial fishers and environmentalists said that Basslink’s option would cause corrosion as stray electric currents followed other metallic surfaces.

Basslink has always maintained that its method would be safe, but has now decided to use a metallic return – a second smaller cable, bundled with the main conductor, to carry the return current, in order to allow the project to proceed.

“We want Basslink up and running as soon as possible and unfortunately that is not going to happen if we stick to our guns on the proven technology of sea-earth return,” said Basslink Chief executive Geoff Singleton.

Shadow Treasurer Denise Swan and Greens MP Peg Putt both said the change could add $100 million to the project, and Basslink would not be paying it. “One way or another, Tasmanian taxpayers will be footing the bill for the extra cost and that will become apparent on our quarterly power bills, already the highest in Australia,” Ms Swan said.

Mr Putt said the project’s economic viability had to be re-evaluated because Hydro Tasmania, the state’s electricity generator, had told the impact study that a 10 per cent cost increase would make it unviable. Hydro chief executive Geoff Willis welcomed Basslink’s change of mind and said the two companies were negotiating over meeting the extra cost through a change to the annual usage
fee.

Deputy Premier Paul Lennon said the government had not been approached for money. However the government, which regards the project as an essential part of its overall energy plan which also includes gas and wind power, has indicated it would help if necessary.