The Coliban region supports agricultural and primary industries through twelve rural supply systems comprising 360 km channels and 140 km pipelines. We typically supply 4-7 gigalitres (GL) of raw and recycled water to rural customers yearly.

The supply system was built to supply the former booming mining industry and associated services. The ageing and leaky system currently encroaches on or passes through urban districts, and its current configuration does not always support what’s best for regional prosperity.

The channels are largely unlined and highly inefficient. At only 60% efficiency, the channels collectively lose over 2 GL/year due to leaks and seepage. Similar levels of water loss are occurring in private supply channels.

We are preparing a Preliminary Business Case (PBC) for modernising our rural system.


  • Modernisation of Coliban Water’s Rural Water Supply System wouldl be highly beneficial to the local community, with flow-on economic impacts to the broader economy.
  • Modernisation of the rural supply system would replace a network of open channels that are currently characterised by large losses of water through seepage and evaporation. Over 40 % of water supplied to the channels is lost before use.
  • An efficient rural supply network would benefit all Coliban Water customers (urban and rural).
  • A Rural Modernisation Project may boost future agriculture by providing opportunities for expansion and support primary industries that are currently constrained by the availability, reliability, and quality of water.
  • The efficiency gained by replacing leaking channels with a piped system would result in water savings that may become available for productive or environmental purposes.
  • As part of the investigations we may consider rationalising parts of the system where practicable. This means people should only have water allocations for the water they expect to use. Part of this investigation will look at whether customers would be interested in reducing their allocation, and ‘buy-back’ may be an option.


Federal funding

The Federal government has made money available for large-scale water savings projects. We successfully applied for funding to develop a PBC. Works to modernise the system are not part of this planning process and this report may provide the basis for Coliban Water to seek funding to undertake a Detailed Business Case for the modernisation work. The PBC can be used to petition for further funding to modernise our rural system.

Customer funded

Our customers fund our investments and services. Every five years, our prices, investment, and service levels are reviewed by the Essential Services Commission (ESC). We prepare a Pricing Submission demonstrating that our prices and investment are prudent, meet our business requirements and are fair regarding the impact on our customers and the community.

We have decided not to review rural customer pricing and services until we have completed the PBC. Therefore, rural pricing is on hold. So as of 1 July 2022, rural prices will not increase (other than CPI).

Coliban Water is committed to continuing to provide a service to its wide base of customers, and this needs to be undertaken as part of a long-term sustainable water strategy. In some cases, service levels will need to change.


Harcourt Rural Modernisation Project

A business case for the Harcourt Modernisation Project was completed in July 2011. The business case was endorsed by the then Victorian Minister for Water and approved by the then Victorian Treasurer in January 2012.

Highlighted benefits of the project included:

  • Estimated water savings of 950ML/y
  • Increased reliability of supply for Harcourt irrigators
  • Improved capacity to respond to a future shortage in urban supplies

Harcourt was chosen for modernisation as it had the highest water use of any of Coliban Water’s rural systems. Primarily the system is used for agriculture in contrast to some other systems, which often feature small water users and hobby farmers.

One of the unique drivers for Harcourt, in contrast to other rural systems, was the link between this project and the Southern Interconnector/Castlemaine Link project. The Harcourt modernisation presented as a step in a broader project to allow the transfer of water from Bendigo to Castlemaine, increasing operational flexibility and improving urban water security for the Coliban South system.

In modernising the system, the following principles were utilised:

  • Buybacks offered at $2,000/ML for full or $1,000/ML for partial entitlement.
  • Pipe sizing allows entitlements to be delivered over 18 weeks.
  • Customers must hold three days of water to allow for pipeline maintenance.
  • Tanks are required for all customers with licenses equal to or less than 5 ML.
  • Customers are expected to pay for any works downstream of their meter, with project benefits expected to offset the upfront costs.

Once modernised, a termination fee was introduced for customers choosing to leave the system, to ensure that remaining customer would see no change to their existing tariffs due to a lower customer base. This fee does not apply where entitlement is traded within the system.


To develop the PBC we need feedback from rural customers. Feedback will help us provide the most accurate information we can and give us the best chance to obtain funding. Once we understand the outcomes of our bid for money through the PBC, we will share the next steps.

Rural Customer Survey