The following question has been submitted by the Secretary of the Department of Works and Railways for advice:

I am directed by the River Murray Commission to request your advice regarding the matter referred to herein.

The South Australian Government has submitted a claim in connection with the above-mentioned storage, providing for a lake with a capacity of 541,000 acre feet.

The matter was considered at the last meeting of the River Murray Commission, when the question was raised as to whether the increase in the capacity of the lake, as proposed by the South Australian Government, would not be an infringement of the provisions of clause 49 of the Agreement.

I am enclosing, herewith, for your information a copy of the scheme, as submitted, together with a copy of the River Murray Act and Agreement. The scheme submitted contained the following:

The original design provided for a storage capacity of 514,000 acre feet, and the original estimate was £205,000, which in accordance with prices of today would be £256,000, including £10,000, for land in each instance.

The present design provides for a storage of 541,000 acre feet at an estimated cost of £275,000, this including £10,000 for land.

I think it is desirable to take full advantage of the Lake Victoria Storage and 541,000 acre feet is the maximum quantity that can be stored without unduly increasing the cost.

The question as to whether the scheme submitted is one of which the Commission can or ought to approve cannot be decided with reference to clause 49 of the Agreement alone, but requires a consideration of the whole Agreement. That Agreement, set out in the Schedule to the River Murray Waters Act 1915, has been ratified by the Governments concerned; and the question must be answered on the proper construction of the Agreement, and not upon considerations as to whether the Agreement might be improved upon. On the other hand, the Agreement does not lay down hard and fast limitations, but itself provides for a certain degree of elasticity. If a proposal is one fairly within the play of that elasticity, it is within the discretion of the Commission to approve it or not as it thinks fit.

The Agreement, clause 20, includes 'the provision of a system of storage at Lake Victoria' among the works to be provided for, and under clause 21 the works are to be constructed by the Government of South Australia. Clause 23 provides for the preparation and submission by that Government of a general scheme, designs and estimates for the approval of the Commission, which may approve, alter or refer back for amendment. Under clause 33 the cost of the Lake Victoria Storage works is estimated at £205,000; and under clause 36:

'If in the opinion of the Commission for the effective construction of any of the works provided for in this Agreement it is necessary to exceed the amount set out in clause thirty-three of this Agreement the Commission may pay to the Government constructing such work an amount in excess of that so set out and the amount of such excess expenditure shall be borne by the Contracting Governments in the proportion set out in clause thirty-two of this Agreement.'

Clause 49 provides for the allowance of water to South Australia, and that the minimum quantity in each year shall be 'sufficient to fill Lake Victoria Storage once' with certain specified additions. Clause 54 provides that the States of Victoria and New South Wales will facilitate the construction, maintenance and use by the State of South Australia of 'the Lake Victoria Works mentioned and described in Schedule A to this Agreement'. Clause 56 gives South Australia power to divert water into Lake Victoria and store it there, and clause 57 gives the same State, subject to certain conditions, power to determine the uses to which such water may be devoted.

Schedule A describes the Lake Victoria works as: 'A regulation reservoir with a storage capacity of about twenty-two and a half thousand millions of cubic feet at and about Lake Victoria . . . '

The South Australian Engineer-in-Chief says: 'The original design provided for a storage capacity of 514,000 acre feet, and the original estimate was £205,000', which he calculates in accordance with prices today would be £256,000. 'The present design provides for a storage of 541,000 acre feet at an estimated cost of £275,000'. He adds that he thinks it desirable to take full advantage of the Lake Victoria Storage, and 541,000 acre feet is the maximum quantity that can be stored without unduly increasing the cost.

It is to be observed that the Agreement has fixed roughly the work authorised, and it is not sufficient that some other work is thought desirable, nor is it left to South Australia to determine what increase in price is undue. If the increased capacity does not fairly come within the margin that the word 'about' in Schedule A implies, the Commission is faced with the question whether the excess expenditure it is proposed to incur over the estimate is such that 'for the effective construction of any of the works provided for in this Agreement it is necessary' to incur it within clause 36.

On the materials submitted there is no suggestion that the excess expenditure is necessary for the effective construction of the work provided for, but the suggestion is that it is desirable in the interest of South Australia to enlarge the scheme provided for under the Agreement. If this is so, I do not think that the Commission can properly approve the scheme submitted.

To enlarge the storage would be to increase the minimum allowance of water to South Australia under clause 49, and would give South Australia increased rights, and at the same time impose on the other States and the Commonwealth in addition

to a corresponding diminution of their rights, far the larger part of the additional expenditure proposed.

In view of the way in which the proposal is put forward it is not necessary to consider very closely what margin the word 'about' in Schedule A would cover. The estimate in Schedule A is expressed in cubic content, while that in the scheme submitted is expressed in acre feet. But if the Engineer-in-Chief for South Australia admits that the increase proposed is one of 27,000 acre feet, and would cost £19,000 more to construct now, and £70,000 more than the estimate in the Agreement, it would not in my opinion come within the margin, particularly as the increase would not be due to faulty calculation or the necessities of the case, but to an intention to depart from the scheme authorised in the Agreement.

[Vol. 16, p. 68]