Postal Address: PMB 1 Childers, . 4660

Telephone: (07) 4126.4400

A.C.N. 009 657 078

NOTICE TO SHAREHOLDERS ICSM POSITION ON PARADISE

Dear Shareholders,

The future of Paradise Dam is very important to ICSM and the Board would like to provide information to shareholders on ICSM’s position and approach on this important topic.

ICSM has sought to be considered and objective on this issue as there does appear to be a bit of emotive commentary in the community. We have been following developments very closely and have been talking to industry stakeholders and representative organisations regularly and participating in consultative meetings on this topic. This includes participation in the Bundaberg Irrigation Advisory Committee, Burnett Catchment Industry Forum and Sunwater’s stakeholder workshop for Developing Future Scenarios in the Burnett Region.

We have reviewed the array of technical reports that have been made publicly available by Sunwater and by Rizzo International, Inc. These involve complex dam engineering and safety issues that are difficult for ‘non experts’ to interpret. To assist in our understanding and our desire for ourselves and other stakeholders to be fully informed we identified numerous queries and provided a list of questions to Sunwater. Accordingly, Sunwater have provided responses to these queries and also shared this information through their consultative forums which will have assisted other stakeholders in interpreting the available information. A copy of the questions and responses is attached for your reference. We are seeking additional information and will shortly be providing further questions to Sunwater.

We are aware that the Qld Dam Safety Regulator (part of the ) has issued Sunwater with a dam safety condition requiring it to lower the primary spillway by a nominal 5m by 1 December 2020. The ICSM Directors will continue to be objective and considered on this very important issue and have a stated position of:

ICSM’s position is that any storage capacity lost in Paradise dam to mitigate safety concerns needs to be replaced. ICSM’s preference is that the capacity is replaced via the safe re-instatement of Paradise Dam to its pre-existing capacity.

We trust this information will provide some insight into our approach and welcome any feedback from shareholders.

Yours Sincerely,

Chairman Peter Russo, on behalf of ICSM’s Board of Directors. 21 May 2020

Reference: Notice to Shareholders_ICSM Position on Paradise Dam Page 1

Sunwater Response to ICSM Questions 23 April 2020

# ICSM Question Sunwater Response

1 What is the timing for the Works to lower the dam wall are scheduled to commence in May essential works 5m and to be completed by December 2020. If there are significant reduction to be unexpected delays, we may need to finalise the Essential Works commenced and beyond this wet season, but the plan is for completion this year. completed? 2 Can the further Sunwater must act now to lower the dam wall to improve its investigation proposed stability and the safety of downstream communities. by Rizzo (6 block samples and 30 core samples) be Sunwater and Building Queensland will work together over the sampled and analysed coming months to: before the essential  develop a 3D geological model and geotechnical assessment works is commenced, or of the dam foundations (currently underway) completed?  carry‐out further sampling and testing of the primary

spillway’s roller compacted concrete (RCC)  conduct an anchoring trial to confirm existing dam foundation capacity (currently scheduled)  refine option designs and cost ranges using this updated information.

Additional geotechnical assessment, sampling and testing recommended will be undertaken in parallel with the Essential Works – this testing and analysis will take many months and cannot be completed before the Essential Works. We aim to have results from this testing by late 2020 but there are detailed logistics to work through in relation to the testing and analysis. 3 Can the further No. As stated above, Sunwater will conduct an anchoring trial in investigation proposed by parallel with the Essential Works to confirm existing dam Rizzo and the necessary foundation capacity. Anchoring cannot be reliably planned resulting mitigation works without the results of that trial, and updated geological (indicated to be multiple modelling. post tensioned anchors) be undertaken before the Anchoring would be a significant undertaking at Paradise Dam next wet season? and is estimated to require up to approximately 100 anchors across the primary spillway, of 90 metres length, and including a strengthening beam constructed into the crest and along the length of the spillway – this would take approximately two years to complete.

It is important to note that anchoring is not common on RCC , and there is no known precedent of this scale. In addition, # ICSM Question Sunwater Response

anchoring the primary spillway does not address all the failure risks at Paradise Dam, and is not as effective or feasible in the short term for the Essential Works phase compared to lowering the spillway. Anchoring would need to be implemented as part of a larger, more complete dam improvement project that addresses all dam failure risks (or alternatively mass concrete buttressing), amongst other improvement works. 4 Will the essential works The construction methodology involves progressing activities and activities involve work zones from the left abutment to the right side of the dam removing 5m at a time in (looking downstream). It will be initially focussed in cutting and sections or is there removing the reinforced concrete crest on the primary spillway at multiple smaller the left abutment end, then expanding across the spillway width reductions over the entire with multiple work fronts as lowering progresses. The wall will be length of the wall? progressively lowered with the leading work fronts removing the concrete crest, following crews removing the RCC layers and trailing work fronts installing strengthening anchors (dowel bars) and reconstructing a temporary crest at the lowered level. 5 Can the essential works No. be suspended mid way, at 2m for example, if it It is important to note that Rizzo International’s analysis only becomes apparent that assesses the risk of dam failure caused by the condition of the the RCC is in better RCC lift joints. condition than anticipated? This is insufficient as it fails to account for other issues that contribute to the overall dam failure risk as presented in the table below (and outlined in technical reports released publicly in November 2019).

Issues that contribute to the dam failure Risk risk contribution Sliding / overturning on monoliths through 53% RCC Undermining on spillway monoliths due to overflow scour, loss of apron or scour at 42% toe Sliding / overturning on secondary spillway 5% monoliths through the foundation

Given the impact a dam failure would have on the lives and livelihoods of the downstream community, it is important decisions are made following a robust analysis of all the issues involved.

Results from RCC sampling, which is planned to occur progressively as the lowering work proceeds and to access # ICSM Question Sunwater Response

different areas and levels of the spillway, will take time to undertake. The work includes collecting samples, laboratory testing and a revised assessment of RCC strength. The results will then need be incorporated into updated dam stability calculations, and an assessment and peer review conducted before any change to the Essential Works scope could be made. This is simply not practical.

Sunwater cannot afford to pause the Essential Works scope at any interim lowered level for several months in an incomplete state, to await these results. Nor can Sunwater alter the Essential Works scope based on a subjective assessment only. The Essential Works are required to achieve short term risk reduction measures as soon as reasonably practical, following detailed assessment and peer review by various experts. In parallel work will progress to assess long term options and determine the final improvement scope required to achieve acceptable risk reduction outcomes. 6 The Rizzo report states on Sunwater does not agree with that statement. Paradise Dam is p25 “…RIZZO results likely to be unstable at flood levels similar to the 2013 event (i.e. a indicate that an event one in 200‐year event). having a recurrence interval on the order of The risk of failure at Paradise Dam is significantly above the 1000 years would have to Australian National Committee on Large Dams (ANCOLD) limit of occur before major tolerability and we are acting to reduce this risk as soon as distress would occur.” reasonably practicable. How does this compare with what the dam was The issues at Paradise Dam have been subject to extensive originally designed for investigations carried out by Sunwater and independent and what is required in engineering advisors over seven years and reviewed by both current dam safety national and international experts. standards? The ANCOLD Guidelines require that the life safety risks for a dam associated with dam failure scenarios be calculated and plotted against the limit of tolerability as noted above.

The original design basis for the dam was to safely pass a 1 in 30,000 year flood event. For a major dam situated upstream of communities, to fail or be close to failure for a 1 in 1,000 year flood event would typically be completely unacceptable.

Paradise Dam is likely to be unstable at flood levels similar to the 2013 event (i.e. a one in 200‐year event).

# ICSM Question Sunwater Response

In addition, it is worth noting that Queensland has experienced a number of flood events within the last ten years that have reached at least a 1 in 500 year flood event. 7 Does the Rizzo report No. Refer to response to Q5 above. address all of the dam safety risks? 8 Do the Rizzo No. As stated above the Rizzo report does not address all dam recommendations meet failure risks. ANCOLD and Qld Dam Safety regulatory requirements? 9 How will the irrigator Sunwater is working with Building Queensland to provide a firm community be involved in recommendation to the Queensland Government on the future of the planning for the Paradise Dam and water security in the region. This process will dam’s remediation? look at all available options, with only the dam’s decommissioning ruled out at this stage.

Sunwater is committed to working with stakeholders throughout this process and to further identify and determine the viability of alternate water storage options if required to meet future demand within the Burnett River region.

Since September 2019, Sunwater has been engaging with customers and the community about the importance of lowering the dam wall, water allocations and long‐term water security for the region.

There are three engagement forums where information is shared, and the voices of the irrigator community can be heard: ‐ the Paradise Dam Community Reference Group (CRG) ‐ the Burnett Catchment Industry Forum (BCIF) and ‐ the Bundaberg Water Supply Scheme Irrigator Advisory Committee (IAC).

The BCIF recently decided to establish working groups on the topics of: ‐ Intermediate water product ‐ Economic assessment assumptions ‐ Alternate storage options

The working groups are tasked with undertaking detailed issue specific work, including the development of proposals, that can be presented to the BCIF for review and endorsement.

# ICSM Question Sunwater Response

Sunwater has been providing regular updates and information to the wider community and our customers via drop‐in information sessions, letters, advertisements, shed talks, kitchen table meetings and community newsletters. We have a dedicated project webpage and are also sharing information via social media on a new Paradise Dam Facebook page.

The Department of Natural Resources, Mines and Energy (DNRME) has approved an amendment to water‐sharing rules that will enable Sunwater to maximise allocations in the region for the next water year, commencing 1 July.

We encourage anyone who has any questions or concerns to get in touch with us. We are also happy to consider any suggestions on how we can best share information and engage with customers and the community. 10 If capacity is reduced in A preferred location has not been confirmed. Sunwater started Paradise dam, what is the investigating alternate storage options through the development timeframe for this of its Burnett Regional Blueprint in late 2019. This work will now storage capacity to be be enhanced, with a particular focus on identifying suitable sites replaced and what is the in the Burnett River sub‐scheme to provide additional water preferred location for the storage capacity to meet future demand. replacement storage capacity? Sunwater will be working with local stakeholders and will provide this information to Building Queensland as it determines the best long‐term option for Paradise Dam. The Burnett Catchment Industry Forum working group will be involved on this matter in an in‐depth way and information on preferred locations, sizes etc will come through that group and the BCIF over the coming months.

Regarding the timeframe, Hon Dr Anthony Lynham, Minister for Natural Resources, Mines and Energy has explained that it is essential that water availability is maintained ahead of demand.

Unfortunately, we cannot hold information sessions and community meetings at the moment due to COVID‐19. We are still available to discuss questions and are very happy to arrange a digital meetings with any interested customers or community members. Please contact us at [email protected] or telephone 3120 0270 if you would like to arrange a meeting.