10 December, 2025
Synergies undertook the economic analysis component of the North Pine Dam Staged Strengthening Options Analysis and Dam Improvement Project Preliminary Business Case for Seqwater. The project involved undertaking a cost-benefit analysis of several options for addressing the dam failure risk, noting North Pine Dam was assessed as non-compliant with the ANCOLD Dam Safety Guidelines. The Staged Strengthening project involved the analysis of early works to partially address the dam’s non-compliance, while the Dam Improvement Project involved more extensive works to ensure the dam remains fully compliant with ANCOLD requirements over the long term.
North Pine Dam has been identified as non-compliant with the ANCOLD Dam Safety regulations, due to a combination of the increased risk of major weather events due to climate variability and increased residential development downstream from North Pine Dam.
Seqwater has identified several infrastructure solutions to address this non-compliance and ensure the Full Supply Level (FSL) of the North Pine Dam can be reinstated and maintained over the long term, while maintaining compliance with ANCOLD regulations. Furthermore, Seqwater also identified some initial works that could be completed in the short term to significantly reduce the risk of dam failure (noting the dam will still remain non-compliance with ANCOLD regulations).
Synergies was engaged to undertake the economic analysis of the options identified by Seqwater, both in terms of the Staged Strengthening and the full Dam Improvement Project. The analysis was to be completed in accordance with the Queensland Government’s Business Case Development Framework (BCDF), with the economic analysis involving a comprehensive cost-benefit analysis of the shortlisted options relative to the base case.
Robust cost-benefit analysis requires the definition of a detailed and robust base case. For dam improvement projects, the focus of the base case process is two-fold:
The definition and quantification of these components of the base case facilitate a robust analysis of the economic benefits and costs of the shortlisted options.
Synergies worked with Seqwater and other service providers, including engineering and hydrology consultants, to gather the various data and information required to quantify the economic cost of dam failure risk. This involved the collection of data on the annual incidence of the full range of failure modes relevant to North Pine Dam and hydrologic modelling outputs in terms of the extent of the damage caused by the failure events and the risk to human life and property and infrastructure within the extent of the dam failure.
Economic values were then applied to this data, including estimates for the economic value of human life, metrics for the costs of direct and indirect damage to residential and non-residential properties and infrastructure, and the intangible/social cost of dam failure events. This enabled the comprehensive modelling of the economic cost – monetary and non-monetary – of each dam failure event. The relevant probabilities were then applied to produce a probability-adjusted profile for the economic cost of the failure of North Pine Dam.
The modelling described above was undertaken for the base case and each shortlisted option – both for the Staged Strengthening and the full DIP – to estimate the economic benefit from the extent to which each option alleviated the risk of the failure of North Pine Dam.
In terms of the urban water supply-demand balance and its treatment in the cost-benefit analysis, the focus of the analysis was assessing the extent to which those options that involve reductions to the FSL of the North Pine Dam (i.e. alleviating the safety non-compliance by reducing the volume of water stored in the dam) impacted on the cost of maintaining the water supply-demand balance in the SEQ Water Grid.
This involved liaising with Seqwater’s Grid Modelling Team to quantify the impact of reducing the FSL of North Pine Dam in terms of the economic cost (welfare loss) of water restrictions imposed on SEQ water users and the impacts on Grid operating costs and future water supply augmentation costs. The quantification of these impacts effectively facilitated an assessment of the trade-off between the capital costs required to reinstate the FSL for North Pine Dam while achieving compliance with ANCOLD regulations and the economic cost of worsening the supply-demand balance in the SEQ Water Grid by reducing the dam’s FSL.
A discounted cashflow model was developed for the economic analysis, with the key outputs including the Present Value of each economic benefit and cost stream and the Net Present Value of each shortlisted option relative to the base case.
Extensive sensitivity and scenario analysis was undertaken to understand how changes to key assumptions and parameters, including the incidence of dam failure, intangible/social costs of dam failure, and the timing of future water supply infrastructure augmentations, impacted on the results of the cost-benefit analysis. Synergies prepared both a standalone report to Seqwater, in addition to writing the economic analysis chapter of both the Staged Strengthening Detailed Business Case and the DIP PBC.
The economic analysis was approved as robust and comprehensive by both an external peer reviewer and the Gateway Panel for the business case review process. The robust analysis of economic benefits and costs for each shortlisted option facilitated the identification of two clear options to be subject to detailed economic analysis as part of the Detailed Business Case for the DIP.
To find out more about this project and how Synergies can assist you, send an email to: contactus@synergies.com.au