In the Australian context integrated urban water management (IUWM) processes consistently recommend the implementation of recycled water and stormwater harvesting projects. These projects are typically decentralised and planned by a variety of organisational types. Major international research programmes have thus far focused on how IUWM should be operationalised as a single-tier, city scale planning system. This study investigates IUWM in relation to two under researched aspects: planning scales and approval processes, by investigating eight project case studies from Melbourne, Australia. Results reveal that IUWM projects are often planned at the sub-regional and local scales, without coordination from metro scale strategies, and that many of these projects are experiencing issues achieving final approvals. Major barriers to approval include a lack of communication between regulators and planners, and the absence of consistent financial evaluation methods. A multi-tier water planning system has been proposed to lessen these barriers through effective division of decision making responsibilities across scales, and setting of consistent frameworks, methods, and objectives at the metro scale. It is considered that this multi-tier planning system may help facilitate the implementation of decentralised IUWM projects.

## Introduction

### Urban water management

The effective management of water is a critical factor for the ongoing viability of cities (Marlow et al., 2013). Traditionally urban water management has been performed along the lines of segregated water supply, wastewater, and drainage services (Khouri, 2006; Brown et al., 2009). These services are delivered via a network of buried pipes that connect residents to water sources, and treatment and disposal outlets (Marlow et al., 2013).

Water management in urban areas has gone through a number of phases throughout its history (Marlow et al., 2013). Urban water management in the modern era began with the creation of dams and the supply of water to cities. The need to provide sanitation and dispose of water led to the use of both separate and combined sewer and drainage systems (Brown et al., 2009). Around the time of the 1970s, in many countries, environmental considerations came into the spotlight, as governments began to realise that current practices were unsustainable (Mukhtarov, 2008). This related to the pollution of waterways, and social amenity considerations as well as unsustainable water usage patterns (Brown et al., 2009).

In many areas of the world, limits on water resources are now forcing water authorities and governments to look beyond traditional water sources towards alternative water sources. Globally there is a simultaneous trend towards (a) centralised large scale desalination plants, (b) centralised direct potable reuse schemes, and (c) smaller scale decentralised fit-for-purpose recycled sewage and stormwater schemes (Bell, 2015).

As urban water management practices evolve away from purely water supply, sewerage and drainage functions towards a wider set of environmental considerations, such as river and ocean ecology, and social considerations, such as liveability and recreation, there is an associated increase in planning complexity (Bell, 2012). The progression of urban water management principles and practices towards the mastery of this complexity is typically described using the rhetoric of a transition from traditional water management towards Integrated Water Management (Furlong et al., 2015).

### Integrated urban water management

The idea that traditional water management and planning practices needed to change began being discussed widely after a series of global conferences in 1977, 1992 and 2002, which created the foundations from which integrated water management concepts emerged. At the end of the 2002 World Conference on Sustainable Development, the United Nations recommended that all countries develop integrated water resource management (IWRM) plans (Mukhtarov, 2008). These IWRM plans were designed to consider the overall water resource situation of countries in an integrated way. In relation to urban infrastructure, the integrated water paradigm is gradually becoming known amongst practitioners and academics as integrated urban water management (IUWM) (CSIRO, 2010; Closas et al., 2012; Furlong et al., 2015).

According to Biswas (2004), at that time there was no agreement on exactly what needs to be integrated, or by whom, and any list of these factors could be extended almost indefinitely. A number of concepts, however, are common throughout the literature, including the following (Mukheibir et al., 2014):

1. Proactive, long term planning.

2. Active consideration of water supply, wastewater, and drainage services, and the interactions between them.

3. Fit-for-purpose water use.

4. Collaboration between organisations and departments.

5. Inclusion of water considerations into urban planning processes.

6. Both centralised and decentralised planning and infrastructure.

### The planning challenges associated with IUWM

Within the ‘traditional’ water management paradigm, urban water infrastructure planning has been done in much the same way for the centuries since the creation of the first water supply dams and sewer systems (Bell, 2012). Even as drivers changed over the decades, for example, when water authorities began to actively consider environmental concerns (Mukhtarov, 2008), water infrastructure planning processes have remained reactive and segregated (Mukheibir et al., 2014). However there is an ever-growing consensus in the water management field that reactive planning of segregated services is no longer the optimal way to conduct water infrastructure planning. IUWM proponents propose the adoption of a proactive and integrated planning approach involving assessing multiple water infrastructure options, across many criteria, over a long time span (Maheepala, 2010; Closas et al., 2012; Marlow & Tjandraatmadja, 2014).

At the conceptual level IUWM can mean different things to different people. At the physical infrastructure level there are a number of project types that are consistently selected by IUWM planning processes. Australia does not at present have any direct potable recycling schemes, i.e. recycled water to drinking water (ATSE, 2013). The types of infrastructure projects most commonly associated with IUWM in Australia are decentralised non-potable recycled wastewater and stormwater harvesting projects, which utilise previously unwanted water for fit-for-purpose uses (Barker et al., 2011; Institute of Sustainable Futures, 2013). These two types of projects represent the crux of the IUWM paradigm by cutting across the traditionally segregated services of water supply, wastewater, and drainage. The addition of these alternative water source projects to existing centralised infrastructure such as dams and desalination plants can be described as a gradual water infrastructure hybridisation process (Marlow & Tjandraatmadja, 2014), meaning that the existing centralised sources are supplemented by an increasing diversity of water sources over time.

Difficulties arise in the planning of these types of projects for a number of reasons. Firstly, they involve many different stakeholders, organisations, departments, and regulators (CSIRO, 2010; Mukheibir et al., 2014). Secondly, they present higher levels of risk and uncertainty to organisations than traditional servicing solutions because the governing organisations have less experience with them (Marlow & Tjandraatmadja, 2014), and because alternative water source costs and demands cannot always be accurately predicted (Institute of Sustainable Futures, 2013). Thirdly, even under idealised circumstances, these projects generally do not achieve full cost recovery, and are often done on the basis that they provide environmental and social benefits to residents which are difficult to value financially (Marsden Jacob Associates, 2013).

Planning for IUWM projects therefore requires a new planning regime which effectively includes proactive consideration of complex interrelated objectives, trade-offs between social, environmental and economic factors, and long term consideration of possible infrastructure portfolios (CSIRO, 2010).

In recent years there has also been increasing speculation in regard to the role that markets and competition play in urban water management and planning (LECG Limited Asia Pacific, 2011; Arup, 2014). Internationally water service competition and privatisation has been a contentious issue for decades (Bakker, 2008). The transition towards IUWM means that there will be a larger number of smaller water infrastructure projects. In Australia this has meant that many new on-site, i.e. building-scale, decentralised systems are owned and operated by private entities rather than public water utilities (Mukheibir et al., 2015).

### Previous research into IUWM

The planning of urban water infrastructure has always been a function undertaken by water authorities, but has not historically been extensively considered by academic literature. Purely for the purposes of illustrating this point, a search of the Scopus database was conducted and yielded 88,821 results for ‘water management’, 4,679 results for ‘water planning’, and 20 results for ‘water infrastructure planning’ (search conducted 30/3/15).

Research into the practicalities of water infrastructure planning within the IUWM paradigm has largely been undertaken by major government and industry led initiatives, there are however some notable research projects conducted by academics. Ferguson et al. (2013) considered the institutional context required to facilitate the adoption of IUWM but did not delve into planning frameworks and processes. Dominguez et al. (2011) compared a number of different approaches to using strategic planning to deal with uncertainty in relation to the planning of water infrastructure over a 20–30 year time period, and included some basic steps through which infrastructure strategies should be developed.

The most significant contributions to the literature on IUWM planning have been undertaken by SWITCH, the World Bank, and the CSIRO.

The SWITCH research project ran between 2006 and 2011 and was funded by the European Commission with a budget exceeding €20 million. The main objective of the research was to determine how to achieve sustainability in urban water management. As part of this research a ‘strategic planning approach’ to water management was designed (SWITCH, 2010). This research focused on building a joint vision and the development of strategy (Howe et al., 2011), and did not specifically address infrastructure planning issues. One reason for this was that the SWITCH project suggested that long-term (30 year) strategic thinking should be predominantly related to abstract/societal systems rather than specific infrastructure considerations. Infrastructure was considered on an operational level, with a time scale of zero to 5 years (Jefferies & Duffy, 2011).

World Bank research conducted in 2012 utilised metro-scale case studies from the developing world to consider the process for the operationalisation of IUWM. Barriers to implementation, specific issues, and further research requirements were identified. A process was developed through which cities were expected to adopt IUWM, and a dialogue was begun on the issues of choosing between various infrastructure options (Closas et al., 2012).

Perhaps the most pertinent and practical research project completed to date on this topic is the IUWM Planning Manual. In 2010 the CSIRO, a major research organisation supported by the Australian Government, together with the US-based Water Environment Research Foundation, conducted an international study into infrastructure planning processes for IUWM. The study put forward a single tier, city-scale planning framework for how IUWM should be implemented, and recorded information on six metro-scale case studies (CSIRO, 2010).

### Water governance and the politics of scale

Within the literature there have been long running discussions of water management at different spatial scales and it is argued that a scalar perspective is crucial for understanding water governance (Sneddon, 2003). Some topics of discussion include: whether decisions should be made at the river-basin scale rather than being divided by state and local government areas (Warner et al., 2008), if local scale water governance increases decision making power in communities (Norman & Bakker, 2009), at what spatial scale should water security be considered (Cook & Bakker, 2012), the idea of scale as a social construct and the relationship between authoritarian governance and scalar politics (Swyngedouw, 2000), the role of scales in scenario planning (Warwick et al., 2003), and discussing how stakeholder interests change across spatial and jurisdictional scales in relation to understanding competing interests (Lebel et al., 2005). From this it can be seen that scalar issues are considered in academic literature in the field of water management.

It is understood that the transition towards IUWM requires a shift from centralised infrastructure to diverse, flexible infrastructure solutions at multiple scales via a suite of approaches (CRC for Water Sensitive Cities, 2012; Mukheibir et al., 2015). However major research efforts into IUWM by those such as SWITCH, the World Bank and the CSIRO have not thus far addressed the scalar issues relating to how these distributed infrastructure projects should be identified, planned and approved.

In water industry practice however there has been a shift towards acknowledging that water infrastructure planning does, and should, occur across multiple scales with a division of responsibilities across scales. This is demonstrated by the difference between the Water Services Association of Australia (WSAA) planning manuals in 2005, which do not acknowledge planning scales or division of tasks between scales, and in 2014, which include both (Erlanger & Neal, 2005; WSAA, 2014).

### This study

None of the identified major IUWM research programmes specifically address two important questions for IUWM planning which form the basis for this paper. The first question is that if IUWM projects are to be distributed throughout the water grid, in the form of decentralised recycled water, stormwater harvesting, rainwater harvesting and sewer mining schemes, then at what scale should potential projects be identified and planned, and by whom? The second question is if these projects are in fact going to be implemented by a variety of different organisations at different scales then who should be responsible for oversight, approval and regulation of these projects, and how should this be done?

An attempt will be made to begin to explore these questions by investigating IUWM in Melbourne, Australia, and the planning scales and approval processes of eight project case studies. Melbourne was selected as the location for this research due to the fact that it is considered to be a world leader in IUWM, and since 2009 has had a significant number of decentralised recycled sewage and stormwater harvesting reuse schemes planned (Jefferies & Duffy, 2011; Ferguson et al., 2013; Green, 2014).

## Research methodology

The overall methodology for the current research was informed by the works of Thomas (2011) in relation to case study structure and analysis. The study has involved an investigation into the progression of IUWM in Melbourne, and eight nested case studies of IUWM project planning within this context. The data sources for this work have included consultation with 34 water industry experts and a variety of published and unpublished literature.

### Assembling a group of industry contacts

For the purposes of this research, 34 water industry experts from Melbourne and across Australia have been consulted. The organisational types, organisations and numbers of experts consulted in total can be seen in Table 1.

Table 1.

Organisational types consulted.

Organisational type Organisations Description Number of experts
Academic Centre for Water Sensitive Cities, Institute of Sustainable Futures Academic institution working in an area related to water planning
Bulk supplier Melbourne Water, South Australia Water, Water Corporation Manager of bulk water supplies and bulk sewerage treatment
Government body OLV, Metropolitan Planning Authority Government body in the area of water planning
Local government Ballarat City Council, Melbourne City Council Local government agencies that have responsibilities relating to water
Private G&M Consultants, AECOM, two more private consultants Private consultancies working in the area of water planning
Retailer City West Water, South East Water, Western Water, Yarra Valley Water Water retailer acting as a direct customer interface for water and sewerage 14
Total 34
Organisational type Organisations Description Number of experts
Academic Centre for Water Sensitive Cities, Institute of Sustainable Futures Academic institution working in an area related to water planning
Bulk supplier Melbourne Water, South Australia Water, Water Corporation Manager of bulk water supplies and bulk sewerage treatment
Government body OLV, Metropolitan Planning Authority Government body in the area of water planning
Local government Ballarat City Council, Melbourne City Council Local government agencies that have responsibilities relating to water
Private G&M Consultants, AECOM, two more private consultants Private consultancies working in the area of water planning
Retailer City West Water, South East Water, Western Water, Yarra Valley Water Water retailer acting as a direct customer interface for water and sewerage 14
Total 34

Industry experts were identified and contacted through two sampling methods. The first, Snowball Sampling, means that industry experts were asked to recommend additional experts which is most suitable when sampling restricted populations where trust is required (Barbour, 2014). The second, Maximal Variation Sampling, means that a conscious effort was made to include a variety of experts (Flyvbjerg, 2011), in this case meaning from a spread of organisational types. It can be said that there is no such thing as a neutral expert (Haack, 2014), and while maximal variation sampling helps alleviate this issue by gaining a spread of opinions, potential biases remain a limitation of the present research and will be considered in the conclusion section of this document.

### Consultation phases

Industry consultation occurred steadily throughout the research. These consultations can be delineated into three groups according to the time period in which the consultation occurred: prior to the design of the research method (n = 13), during the data collection phase (n = 17), and to verify the findings (n = 4). In order to gain the maximum benefit from the knowledge of industry experts a semi-structured interview process was used. Meeting minutes were recorded from each interview and sent to the relevant interviewee for verification.

#### Preliminary work

Thirteen industry experts were consulted prior to the design of the research questions and were consulted in order to understand the planning processes used by their organisations and their views on historical and current water infrastructure planning and existing research. The information collected during this first round of consultation was used to inform the development of the research gap and method.

#### Case study selection and analysis

Through discussions with industry experts it was eventually agreed that eight nested project planning case studies should be investigated for this research. This number was selected on the basis that in order to answer the research questions it was absolutely necessary to investigate a spread of projects. A total of eight projects allowed the inclusion of public and private, small and large, utility and local government led, successfully implemented and also projects which did not achieve implementation. If a spread of projects was not included it would not be possible to draw potential logical generalisations to the broader population (Thomas, 2011), in this case IUWM projects in Melbourne.

Seventeen experts were consulted during this phase, in relation to selecting the most appropriate project case studies and also for collecting information on these. Selection was done through creating a long list of 14 case studies from which 8 were selected. Criteria through which eight were selected related to (a) availability of information, including factors such as documentation available and political sensitivity, (b) independent/succinct planning processes, and, to a lesser extent, (c) a spread of organisations, types of projects and project outcomes. The final selection was informed by a targeted workshop held at Melbourne Water Corporation with the Water Services Delivery team in September 2014. Two meetings were held in relation to each of the eight selected case studies, the first to establish background and gather documentation, and the second to confirm findings.

## Water management context in Melbourne

Urban water infrastructure in Melbourne has developed since the gold rush in the 1850s (Rhodes, 2000), with the first water supply dam being built in 1857 and sewerage and drainage networks constructed over the following decades (Ferguson et al., 2013). Over the period between 1850 and 1984 major water supply augmentations were conducted in the form of new dams through which Melbourne's water supply storage was increased dramatically. Towards the end of the century the focus of water management turned away from water supply towards catchment and waterway protection (Rhodes, 2000).

Officially Melbourne's major ‘Millennium drought’ began in 1997 (Ferguson et al., 2013). Between 2000 and 2007 the drought continued to worsen. Over this period water supply became an increasing policy priority for government (Ferguson et al., 2013). By 2008 it was well understood within Melbourne Water that climate change would affect the ongoing sustainable yield limits of water resource systems (Tan & Rhodes, 2008).

Crucial decisions about water resources in Melbourne over the drought period were made as part of centralised metro-scale strategies with government involvement. Five strategies were conducted over the 1997–2007 drought. The occurrence of this major drought and the strategies for dealing with it began to lay the groundwork for innovation and a transition towards IUWM within Melbourne's water sector.

The first metro-scale strategy, in 2002, determined that climate change was not a serious threat and that emphasis should be placed on water efficiency measures, although a 20% water recycling by 2010 target was also suggested (Water Resources Strategy Committee for the Melbourne Area, 2002). The second strategy, in 2004, was a policy framework for Victoria, in which there was a broadening of focus to consider river and groundwater system health, as well as economic arguments around pricing and allocation mechanisms (Department of Sustainability and Environment (DSE), 2004). The third strategy, in 2005, was known as the Central Region Sustainable Water Strategy and focused more broadly than water supply, and added the consideration of rivers for tourism. As part of this strategy it was recommended that a reservoir separated from the Melbourne water grid should be reconnected and a number of water recycling opportunities were identified, including Boneo Recycled Water Scheme (DSE, 2005), which is one of the case study projects for this paper.

The fourth strategy, in 2006, conveyed no sense of urgency in regard to water security, other than a continued focus on water efficiency and the possible creation of an eastern water recycling scheme (Melbourne water utilities, 2006). However the fifth and final strategy, only 1 year later in 2007, painted an entirely different picture. Melbourne found itself quickly running out of water and operating in crisis mode. This final state government strategy included the recommendation that the biggest desalination plant in Australia (150 GL/year capacity) should be constructed, in addition to a 70 km pipeline to connect the Goulburn River to Melbourne. These investments amounted to a predicted total of AUD$4.9 × 109 in capital (DSE, 2007), and when operating costs are included the cost of the desalination plant is expected to be AUD$18.3 × 109 over 27 years (Cook, 2014a, 2014b). The combined capacity of these projects is equivalent to about 64% of Melbourne's water consumption (Productivity Commission, 2011).

Since the rushed construction of the North South pipeline and desalination plant neither of these major infrastructure projects has ever been used to supply water to Melbourne (Ker, 2010; Cook, 2014a, 2014b). Water infrastructure planning processes and outcomes in Melbourne between 2000 and 2008 have resulted in widespread public outcry from the community (Ferguson et al., 2013). Many critics argue in hindsight that cost benefit and ‘real options’ analysis of a variety of alternative water sources such as additional recycled water and stormwater harvesting projects would have resulted in a better outcome for the community (Porter, 2013).

When the drought period ended there was a greatly increased awareness of liveability and environmental issues associated with water management (Fam et al., 2014). It is from this backdrop of drought, centralised water strategies which pushed the boundaries of what the water sector should consider, major augmentations which have never been used, and focus of water management issues in the media and the community that IUWM emerged so strongly in Melbourne.

From 2008 to 2012 the number of IUWM recycled water and stormwater harvesting schemes in Melbourne steadily increased. Ferguson (2013) cites that in 2012 there were 108 stormwater harvesting schemes in operation in Melbourne, many of these operated by local government and private companies, and large swathes of residential developments with mandated recycled water dual pipe systems. This period is described by consulted experts as ‘the golden age of recycled water’.

In May 2012, the state government created an independent statutory body, named the Office of Living Victoria (OLV), to facilitate the implementation of IUWM (Byrnes, 2013). The media has criticised this new institution for a number of things including: its tendering and human resources processes, and conflicts of interest (Baker & McKenzie, 2014a, 2014b), and also allegedly awarding some of its community grant funding to pay consultant invoices and office renovation (Baker & McKenzie, 2014c). After a state election this institution was dissolved in 2014 (Cook, 2014a, 2014b). Consideration of the actual planning processes and outcomes achieved by the OLV is worthy of a whole paper on its own.

By 2012 the government and the public at large had lost much of their interest in reuse schemes as it reached 5 years since the drought had ended. Due to this waning interest federal government grants dried up, the 20% recycling target was met and then forgotten, and the focus in the water sector turned towards reducing water bills, customer satisfaction, and stormwater management. This prompted experts to say ‘the golden age of recycled water is over’ in Melbourne.

Water planning in Melbourne has become a highly sensitive and political issue with numerous headlines in the press, and a hot topic for the last three elections. One headline read ‘The state election that neither side deserves to win’. This was based on the premise that both major parties had such a bad track record with water management (Davidson 2014), with one party building a desalination plant which cost more than it should have and has never been used, and the other party installing the OLV which the media has described as ‘the biggest cabal of mates looking after mates this state has seen’ (Baker & McKenzie, 2014a).

Aside from this controversy, the institutions generally involved in IUWM within Melbourne are Melbourne Water, as a bulk supplier and caretaker of major drainage networks and waterways, three retailers who are the interface with the community, a small number of state government agencies, and a large number of local government areas which are known as Local Councils. One of the case studies, Toolern Stormwater Harvesting Scheme, was planned on the fringe of Melbourne and therefore involved a semi-urban water utility, and a rural water and groundwater authority which deals primarily with farmers.

The bureaucratic agencies which are relevant to the case studies are the Essential Services Commission, a pricing regulator, the Department of Treasury and Finance, the Department of Health, and the Environmental Protection Authority (EPA) which all report to the State Government. The water and environment portfolios of the Victorian government have shuffled around between a number of arrangements including: the Department of Sustainability and Environment, the Department of Environment and Primary Industries, and now currently the Department of Environment, Land, Water and Planning.

Combinations of these agencies have been responsible for identifying, planning, funding, regulating, and approving Melbourne's IUWM projects at a variety of scales. The following case studies illustrate these complex relationships and provide valuable learnings in relation to planning scales and approval processes for IUWM.

## Project case studies

For the purposes of this research paper the scope of interest for the case studies is limited to the following details: (1) what are the key features of the project, (2) at what scale was the project identified and planned, and by who, and (3) what was the approval process for the project, and what has been the outcome. A summary of the case studies can be found in Table 2 at the end of the section.

Table 2.

Summary of case study planning information.

Case study Project lead Identification scale and method Critical approval hurdle Planning result and reason
Altona stage 2 RW project Retailer Specific issue at local scale State Government, Pricing regulator On hold – only stated reason is that project is not ‘time critical’
Boneo RW project Retailer Metro-scale strategy Department of Treasury and Finance Approved – assisted by a 20% recycling target for the Melbourne region
Coburg SWH project Retailer Strategic planning process at sub-regional scale Internal board, Federal grant process and Local Council Cancelled – original grant received but then cost increase due to stakeholder requests and geo-tech conditions made project unviable
Coldstream RW project Private consortium Customer request at local scale Seeking external funding On-going – Having difficulty sourcing external funding
Doncaster Hill RW project Retailer Strategic planning process at sub-regional scale EPA and Local Council On hold – community concerns caused Local Council to refuse planning permit
Fitzroy gardens SWH project Local government Strategic planning process at local scale Local Council and Federal grant process Approved – community support and federal grant
Kalkallo SWH project Retailer Strategic planning process at sub-regional scale Internal board and Federal grant process Approved – innovative solution and federal grant received
Toolern SWH project Retailer Specific issue at local scale Federal grant process and SRW On hold – grant received, could not reach agreement with water users, pilot trial in process, grant terminated
Case study Project lead Identification scale and method Critical approval hurdle Planning result and reason
Altona stage 2 RW project Retailer Specific issue at local scale State Government, Pricing regulator On hold – only stated reason is that project is not ‘time critical’
Boneo RW project Retailer Metro-scale strategy Department of Treasury and Finance Approved – assisted by a 20% recycling target for the Melbourne region
Coburg SWH project Retailer Strategic planning process at sub-regional scale Internal board, Federal grant process and Local Council Cancelled – original grant received but then cost increase due to stakeholder requests and geo-tech conditions made project unviable
Coldstream RW project Private consortium Customer request at local scale Seeking external funding On-going – Having difficulty sourcing external funding
Doncaster Hill RW project Retailer Strategic planning process at sub-regional scale EPA and Local Council On hold – community concerns caused Local Council to refuse planning permit
Fitzroy gardens SWH project Local government Strategic planning process at local scale Local Council and Federal grant process Approved – community support and federal grant
Kalkallo SWH project Retailer Strategic planning process at sub-regional scale Internal board and Federal grant process Approved – innovative solution and federal grant received
Toolern SWH project Retailer Specific issue at local scale Federal grant process and SRW On hold – grant received, could not reach agreement with water users, pilot trial in process, grant terminated

SWH = stormwater harvesting; RW = recycled water; SRW = Southern Rural Water.

For the purposes of this paper specific definitions have been adopted for some terms relating to planning scales. Centralised planning process is considered to be a coordinated process conducted by a collective of organisations looking at options for the entire Melbourne region. Strategic planning process is considered to be a coordinated process conducted at a high level of one organisation to determine which IUWM infrastructure projects should be implemented in their particular area. A specific need is defined as being identified either through a customer request, or a small scale identification of an issue affecting one area which is not part of a larger strategy process.

Key features: Intended to supply up to 4.7 GL of recycled water per year from a sewage treatment plant to industrial customers via a 21 km pipe system at a cost of AUD$80M in capital. Planning scale: Identified due to a specific demand at a local scale. The project has been planned and arranged by a water retailer in discussion with industrial customers without coordination from a metro or sub-regional strategy. Approval process: The scheme is predicted to be net present value (NPV) positive but has been put on hold for 5 years by the State Government for the stated reason that the project is not ‘time critical’ i.e. there is no window of opportunity that will close if the project does not proceed at this time. The decision to put the project on hold was informed by advice from the Essential Services Commission (pricing regulator). There is some uncertainty in the water industry in regard to how this decision was reached and why. However the official decision has not precluded the project going ahead with other, potentially private, sources of funding. ### Boneo recycled water scheme Key features: Currently supplies 1.7 GL/year of recycled water from a small local sewage treatment plant via a 9 km pipeline to surrounding market gardens, golf courses and parks at a cost of AUD$16M in capital.

Planning scale: Identified as part of a centralised metro-scale strategy, known as the Central Region Sustainability Strategy (CRSWS), as mentioned in section 3 of this paper, then planned and implemented locally by the relevant water retailer.

Approval process: The Boneo project was required to meet the 20% recycling target set by the CRSWS centralised planning process and therefore the project did not experience noteworthy issues achieving approval from the Department of Treasury and Finance.

Key features: Intended to supply 213 ML/year of treated stormwater to new apartment buildings for toilet flushing and clothes washing, as well as public open space irrigation at a cost of AUD$13–16M in capital. Planning scale: Identified through a semi-structured strategic planning process by a water retailer at the sub-regional scale which looked for opportunities to implement IUWM. Approval process: Received a federal grant for half its estimated cost and a detailed design process was begun. During the detailed design some local stakeholder requirements around aesthetics and features added to project costs. Through a well-implemented engagement process these requirements were substantially reduced. However these costs and also additional costs from unexpected geological conditions in the area contributed to a significant cost increase which has resulted in the project becoming unviable and being cancelled by the water retailer in 2013. ### Doncaster hill recycled water project Key features: Intended to be a 400 kL/day sewer-mining scheme which would supply recycled water to new residential apartments. Planning scale: Identified through a semi-structured strategic planning process by a water retailer, with assistance from a local council, at the sub-regional scale which looked for opportunities to implement IUWM. Approval process: As a sewer-mining scheme the project required a nearby location for its treatment plant. A number of objections to this facility's location were made by local residents. A planning permit from the local Council was required for construction of the treatment plant. Councillors voted against issuing a planning permit at a Council meeting in 2012. Resident objections to the project are still visible online and include: the risk that raw sewage will be spilled near houses (Unknown, 2012a, 2012b), why that location was the only one being considered (O'Brien, 2012), potential increases to water bills, and gas emissions from the plant (Unknown, 2012a, 2012b), that the plant was to be within 25 m of existing residences, and that the EPA had not given their approval by the time of the Council vote (Welsh, 2012). The Council vote was influenced by the strong community sentiment of distrust around what the impacts of the treatment facility would include. Some also believe that trust between the community and government planners may have been impacted by a previous government highway project in the area. According to a representative of the council the main reasons for refusing the treatment plant planning permit were as follows (Daws, 2015): 1. Proximity to adjoining properties. 2. Visual amenity impacts. 3. Potential amenity issues emanating from noise and odour. 4. Loss of open space/parkland. 5. Impacts on native vegetation. ### Kalkallo stormwater harvesting project Key features: Intended to supply 360 ML/year of treated stormwater for direct potable use, and was the first of its kind in Australia at a cost of ∼AUD$20M in capital.

Planning scale: Identified through a semi-structured strategic planning process by a water retailer at the sub-regional scale which looked for opportunities to implement IUWM.

Approval process: Received a federal grant for half of its expected cost, was approved by the retailer's board and then constructed. However due to time limitations on the relevant government grant it has been built prior to development in the area, and so currently sits unused awaiting development. Once development in the area has commenced the project will initially supply water to a Class A non-potable recycled water system. While supplying recycled water, water quality monitoring will be undertaken to demonstrate that treated stormwater is of the standard required by the Department of Health for potable water supply. Community consultation will also be needed to determine if the community is happy to drink treated stormwater prior to supplying this water to the drinking water network.

### Coldstream recycled water project

Key features: Intends to supply 1 GL/year of recycled water to high value produce farms, such as wine-grapes and strawberries, via a 15 km pipeline for a capital cost of approximately AUD$6M. Planning scale: Identified and being planned by a private consortium of farmers in Victoria's Yarra Valley Region, on the outskirts of Melbourne. Approval process: This project is still in its planning phase. Farmers originally approached a retailer to own and operate this scheme. The retailer estimated a cost of AUD$15M, which the farmers considered to be an overestimate as well as ‘gold plated’ to urban standards, which are different to agricultural requirements in terms of pressure and reliability. Farmers are seeking to build an AUD$6M scheme, with AUD$2M worth of support from either state government, for local economy benefits, or Melbourne Water, for river health benefits. The private consortium is progressing with the planning of this project and has experienced considerable hurdles trying to achieve its objectives. Farmers are in discussion with a private water utilities company around taking on ownership of the scheme.

Key features: Currently supplies 69 ML/year of treated stormwater to irrigate one of Melbourne's oldest parks at a capital cost of AUD$4M. Planning scale: Identified through a strategic planning process by Melbourne City Council looking at how to provide water for local parks. Approval process: The project received funding through a government grant in 2011 and was not subject to scrutiny by the Department of Treasury and Finance, so the final approval was given by the local Council. ### Toolern stormwater harvesting scheme Key features: Was conceived as a way to supplement the potable water supply to meet the demands of a new development located in a low rainfall area. It was designed to collect stormwater for agricultural uses, in exchange for taking a share of upstream water from a traditionally agricultural water source to be used for potable uses within the new residential development. The original exchange mechanism was a trade of all harvested urban stormwater for a 25% share of the irrigation entitlement in an upstream reservoir. Planning scale: Identified through a local-scale servicing strategy undertaken by a semi-urban water utility. Approval process: A federal grant was received and planners were optimistic that the project would go ahead. However the rural water and groundwater authority which represented the interests of the irrigators determined that they could not be confident of the predicted quantity reliability of the stormwater supply, and therefore were not willing to accept the risk of trading away their long-term rights to river water until the scheme could be proven. This decision was made despite water resources modelling results (MUSIC and REALM) which indicated the trade would have no adverse effects on irrigators. The project has been put on hold while a pilot scheme is implemented to test the reliability of the stormwater source. However due to this lack of certainty regarding scheme outcomes the federal government has determined that they cannot be confident in the potable water savings generated by the scheme and so in early 2015 it was decided to terminate the federal grant agreement. ## Discussion ### Planning scales for IUWM projects Out of the eight projects, three were identified by a strategic planning process that took place at the sub-regional scale; one was identified by a strategic planning process that took place at the local scale; three were identified by specific demands at the local scale and one was identified through a metro-scale centralised planning process. As would be expected from the decentralised nature of IUWM projects (Marlow & Tjandraatmadja, 2014), the case study projects were identified at multiple scales and through a variety of different mechanisms including the identification of specific issues at the local scale and customer requests. The only project out of the eight considered which was identified through a metro-scale strategy was the very oldest project, which was identified in 2005 and had its detailed design and approval in 2009. These findings demonstrate that there is a conceptual gap in much of the existing literature on water infrastructure planning such as the CSIRO IUWM planning manual (CSIRO, 2010), work by the World Bank (Closas et al., 2012), and also the SWITCH strategic planning process (SWITCH, 2010). These major research programmes consider IUWM at the metro scale, without taking into account multiple scales of identification, planning and decision making responsibilities. ### Approval processes for IUWM projects Three of the analysed projects have been approved and implemented despite all of these being NPV negative projects, three were put on hold despite one of these being NPV positive, and one has been cancelled. The final project, Coldstream Recycled Water Project, which is being led by a consortium of farmers is experiencing difficulty in finalising its planning and is seeking a private organisation to own and operate the scheme. The Coldstream case study provides an example of a function that private water utilities may provide in Melbourne in the future. Final approvals for the case studies, here meaning the essential decision which determined whether the infrastructure was to be built, were issued from a wide variety of sources. They highlight both complexity, and in some cases uncertainty, around who is making decisions about whether infrastructure should be built, and how these decisions are being made. A general process for approvals is revealed by the case studies, with potential barriers being revealed by case studies at each phase. A project must achieve support from senior management and the relevant board of directors. In the Coburg case study it was the board who decided to cancel the project. In order to achieve this support originally, in many of these cases an external government funding grant was required. Coldstream and Altona projects have been unable to receive any funding grants thus far, likely because as industry experts have claimed ‘the golden age of recycled water in Melbourne is over’, and there are far less government grants available. Following on from this, many external stakeholders share the ability to veto spending on these projects such as the State Government, the Department of Sustainability and Environment, the Department of Treasury and Finance, and the Essential Services Commission. Altona, despite being determined to be an NPV positive project was put on hold by the State Government under advice from the Essential Services Commission. In addition to financial regulation, projects must also be approved by the EPA and Local Councils, and in a democracy this in essence means the support of local residents is also required. The Doncaster case study reveals that if a water project requires a treatment facility in a residential area there may be some difficulty achieving this approval. On top of all of these challenges is the need to receive agreement from any potential water users such as irrigators, or local residents, and to ensure that the treated water from any proposed scheme will in fact be used. This is evidenced by the Toolern case study in which irrigators were not convinced of the reliability from the scheme, and Kalkallo, as it is impossible at this stage to determine whether future residents will be willing to drink treated stormwater because the area is currently uninhabited. These results serve to highlight the complex nature of planning in the modern world, which historically has been misrepresented in the light of being objective, linear and rational (Lindblom, 1959). These case studies reveal an important issue in IUWM which is that even if a planning process recommends a piece of infrastructure there is a significant possibility that it will not be approved by all relevant organisations. The results show a 38% approval rate. This is due to the fact that planners and regulators/approvers are usually distinct groups from different organisations with different goals and different priorities. This phenomenon is well understood by preeminent planning scholar Nathaniel Lichfield who in 1975 wrote a book using the terms ‘decision maker’ to describe planners, and ‘decision taker’ to describe approvers (Lichfield et al., 1975). This represents another significant gap in major research programmes such as those of SWITCH, the World Bank, and the CSIRO in the sense that they do not address the fact that planners do not generally have ultimate authority to implement their own recommendations. ### Barriers to IUWM project implementation The five out of eight case studies which have thus far failed to be implemented highlight four major barriers to implementation of IUWM projects: stakeholder and community engagement issues, impacts of previous project outcomes, a lack of communication between regulators and planners, and the absence of consistent financial evaluation methods. Stakeholder and community engagement to encourage public participation has long been considered to be a major component for the successful implementation of IUWM. There is discussion in the academic water management literature about the role of local scale water governance (Norman & Bakker, 2009), and how stakeholder interests change across spatial and jurisdictional scales (Lebel et al., 2005). The Global Water Partnership (GWP) promotes participation by all stakeholders (GWP, 2012). The CSIRO manual recommends community consultation at all stages of planning (CSIRO, 2010), and the SWITCH programme also places a focus on this aspect of IUWM (Howe et al., 2011). Case studies from this paper provide real life examples of community and stakeholder engagement issues. In Toolern planners were unable to convince irrigators of the quantity reliability that the stormwater harvesting scheme would be able to achieve, despite having modelling results from two different hydrological software programmes as evidence. In Doncaster efforts were not successful in convincing residents around the proposed treatment plant that it would not impact on them. Surrounding residents were asking questions about why there were no other sites being considered and raising concerns about the safety of the plant and that there may be a risk of spilling raw sewerage out onto the street, which for a sewer-mining scheme in a developed country cannot be considered to be a significant risk. These community concerns provide evidence that although significant efforts were taken by the water retailer to engage with the community, it is not always possible to convince everyone. In certain areas or circumstances, infrastructure planners may come across particularly concerned and vocal members of the public. Planning decisions are inevitably impacted by social and political circumstances, and there are only a limited number of avenues that infrastructure planners can pursue to engage with and convince residents. Additionally in the Doncaster case residents were concerned about how the costs of the project would affect them, having felt the effects of recent water price increases caused by Melbourne's desalination plant, and some residents may still have been angry about impacts of a previous traffic project in the area. This provides evidence of how previous project outcomes affect the implementation of future projects. The case studies allude to the fact, and expert consultation has confirmed, that, in some cases, there is a noteworthy lack of communication and coordination between policy setters, planners, and regulators, and this problem is exacerbated by election cycles and the creation and dissolving of government institutions such as the recently dissolved OLV, which had a coordination role. In the case of Altona, researchers have determined that the underlying reason for the project being put on hold has not been communicated effectively to planners. However it can be noted that the advice from the pricing regulator to put an NPV positive project on hold implies a lack of consistent financial evaluation methods, particularly in relation to valuing externalities, such as long-term water supply benefits. ### The way forward So far this paper has demonstrated that IUWM is being implemented across different scales without the coordination of metro-scale strategies, and also that the barriers to implementation represent a lack of communication, coordination and consistency in decision making. It can be logically deduced that the two problems are linked. The authors propose that the fact that IUWM projects are identified and planned at sub-regional and local scales does not negate the need for metro-scale strategy development, consistency of message and method, as well as overarching coordination. Industry experts are in agreement that centralised strategies are also required to determine overall water supply and demand balances and inform sub-regional and local-scale strategies. The authors propose that by separating responsibilities between scales, it is possible to have all scales of planning guided by strategy. A visualisation of this argument can be seen in Figure 1. This demonstrates how water infrastructure can be identified and planned at multiple scales with coordination from centralised strategies. The figure shows that higher scale strategies require more flexibility than lower scale strategies. This is because higher scale strategies are more likely to be dealing with overarching objectives, targets, principles and methods, as well as possibly having a longer time horizon. Local scale strategies may have more specific requirements to fulfil such as how a new development should be serviced, and this requires concrete, or certain, recommendations. Fig. 1. Visualisation of water infrastructure planning responsibilities divided across scales. Fig. 1. Visualisation of water infrastructure planning responsibilities divided across scales. Within such a system it is possible for centralised strategies to identify policy directions and create evaluation templates which would then be able to assist planners at lower scales with project planning, valuing benefits, developing business cases and approval processes. It is logical that these centralised and consistent planning directions would assist in the implementation of IUWM projects. The exact way that responsibilities should be divided may be very different depending on the context; however some general suggestions can be made based on the findings from the case studies, expert consultation, as well as logical inferences. A possible way to separate responsibilities is put forward in Table 3. The key thing to note from this separation is that water supply and demand balances, planning frameworks, evaluation methods, and guiding principles and objectives should be set at a higher planning scale, and then sub-regional or local projects should be planned at lower scales in accordance with these recommendations. Table 3. Proposal for separation of responsibilities across scales. Scale Responsibilities Metro/regional - Determination of the overall water supply and demand balance - Frameworks/valuation techniques/guiding principles - Planning of metro-scale augmentations such as desal plants and dams Sub-regional - Planning of sub-regional projects to meet demands identified at the metro-scale - Industrial, residential and agricultural IUWM projects identified through strategic planning processes Local - Planning of local projects to meet demands identified at the metro-scale - Public open space watering schemes to ensure that parks are conserved - Industrial, residential and agricultural IUWM projects identified through specific customer requests Scale Responsibilities Metro/regional - Determination of the overall water supply and demand balance - Frameworks/valuation techniques/guiding principles - Planning of metro-scale augmentations such as desal plants and dams Sub-regional - Planning of sub-regional projects to meet demands identified at the metro-scale - Industrial, residential and agricultural IUWM projects identified through strategic planning processes Local - Planning of local projects to meet demands identified at the metro-scale - Public open space watering schemes to ensure that parks are conserved - Industrial, residential and agricultural IUWM projects identified through specific customer requests In relation to stakeholder and community engagement issues, the authors agree with previous research such as from SWITCH, the World Bank, and the CSIRO, that these issues need to be thoroughly considered at all phases of planning. Doing such community engagement as part of planning should also help to ameliorate any issues with community dissatisfaction around previously implemented projects. ## Conclusions IUWM is becoming a worldwide phenomenon, and is increasingly the focus of efforts and research within the water industry. This study has considered existing research into IUWM, conducted widespread industry consultation, and assessment of IUWM within Melbourne generally and eight project case studies in particular in order to explore at what scale IUWM projects are being planned, and how approval and regulatory processes are functioning. Analysis of the IUWM case studies has shown a trend towards identification and planning of infrastructure at the sub-regional (38%) and local scale (50%). Results also illustrated that regulation and approval processes include a number of significant barriers to the adoption of decentralised infrastructure, with only a 38% infrastructure approval rate. The implications of both the planning scale results and approval results are not well considered in major industry-led research programmes which have so far been conducted into IUWM. However politics of scale has long been considered in academic literature on water management, and therefore perhaps there should be more interaction between the two research sub-sets in the future. The eight case studies revealed some barriers to IUWM project implementation including: stakeholder and community engagement issues, impacts of previous project outcomes, a lack of communication between regulators and planners, and the absence of consistent financial evaluation methods. Barriers relating to community consultation are well understood within the literature already, and the case studies have given examples of these issues playing out in a real life context. Issues surrounding communication between regulators and planners, and also a lack of consistent evaluation methods are not well discussed in existing literature. A multi-tier water planning system has been proposed as a way to help lessen these barriers relating to communication and consistency through coordination from metro-scale water strategies. It is proposed that this system may help facilitate implementation of decentralised IUWM projects. It is a limitation of this research that it has partially relied upon consultation with water industry experts. It can generally be noted that there is no such thing as a neutral expert, as all experts will have their own ideologies, experiences, loyalty etc. However by consulting with a broad range of experts from a spread of organisations, and by hearing consistent messages, it does not appear that it has been a major issue in this research. It is considered that the findings from this study will assist future research, policy development, and infrastructure planning efforts by providing the reader with knowledge of the planning processes of one city which has experienced some transition from the traditional planning paradigm towards the IUWM planning paradigm, and some of the issues that have arisen from this transition. ## Acknowledgements The authors wish to acknowledge the funding contributions of RMIT University and Water Research Australia. The authors also wish to thank the members of the industry contact list who provided input to the research from the organisations of Melbourne City Council, South East Water, City West Water, Yarra Valley Water, Water Corporation, SA Water, Sydney Water, Western Water, Metropolitan Planning Authority, Institute of Sustainable Futures, CRC for Water Sensitive Cities and Barwon Water. 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