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Efforts to save water in the Menindee Lakes in western New South Wales received a boost today with the award of a $1.3 million contract for the Darling River Water Savings Project (Part B).

Federal Minister for Climate Change and Water, Senator Penny Wong, and NSW Minister for Water, Phil Costa jointly announced Sinclair Knight Merz (SKM) as the successful tenderer.

Senator Wong said the Part B project would refine six water savings options identified under Part A last year to ascertain which option or mix of options achieved the biggest water savings in a practical, cost-efficient manner.

"We've identified six management options for the Menindee Lakes that could save up to 180 billion litres of water currently lost to evaporation," said Senator Wong.

"The Darling River Water Savings Project is an important element of Water for the Future - the Rudd Government's long-term water plan which prioritises using water wisely, securing our water supplies, supporting healthy rivers and tackling climate change."

Minister Costa said the $1.3 million Darling River Water Savings Project (Part B) is being equally funded by the NSW and Australian governments.

"The next step is to find out which options would be most effective and to use this information to develop a 20-year management plan, which will form the blueprint for water management in this area.

"Once recovered, this water will be returned to the Murray-Darling Basin to help maintain the health of the Basin's rivers and wetlands.

"SKM will commence Part B studies immediately, with a report due back to Government by September 2009," he said.

Senator Wong also said that the Menindee Lakes and the community of Broken Hill would benefit from a further Australian Government investigation into a new water supply and storage option for the city.

Senator Wong said the investigation would look in detail at a supply scheme for Broken Hill based on a combination of groundwater extraction and aquifer storage.

"Broken Hill currently sources its drinking water from the Menindee Lakes, located on the Darling River," Senator Wong said.

"An initial assessment undertaken by Geoscience Australia indicates great potential for a combination of groundwater extraction and an aquifer storage system to provide Broken Hill's water in the future."

The next investigation will involve on-ground measurements and preparations for an airborne electro-magnetics study of the region's groundwater systems. This work will commence shortly and is expected to be completed by February 2009.

"The potential use of aquifers could significantly reduce the evaporation losses created by storing the city's water supply in the Menindee Lakes. This saved water can then be returned to the lower Darling and the Murray rivers," Senator Wong said.

"If the next phase determines the use of sustainable groundwater resources and an aquifer storage system is practicable, a project will be developed to fully test this new approach."

Any such project will complement the Darling River Water Savings Project (Part B).

The Australian Government has committed $400 million to reduce evaporation and improve water efficiency at Menindee Lakes, secure Broken Hill's water supply, protect the local environment and heritage, and return up to 200 gigalitres annually to rivers and wetlands.

A copy of the Broken Hill Groundwater Resource Assessment can be found at: www.environment.gov.au

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