Existing property solutions

NSW and VIC regulations require a new UPSS to have:

•   A system for detecting and monitoring leaks.

•   Groundwater monitoring wells at sensitive locations and a program to test them.

•   An Environment Protection Plan for the facility.

•   Systems in place for record keeping, reporting of leaks and notifying the relevant authority when a UPSS is decommissioned.

Existing UPSS

•   Owners had up to 1 June 2009 (NSW) or 1 January 2010 (VIC) to implement an Environment Protection Plan plus procedures for monitoring and detecting leaks; and up to 1 June 2011 (NSW) or January 2011 (VIC) to install groundwater monitoring wells.

•   UPSS which require significant modifications (replacement of more than half the tanks or work which requires a Development Consent) must meet the mandatory requirements for a new UPSS.

•   UPSS which have not been used for more than 2 years should be decommissioned.

UPSS solutions when purchasing a property

Environmental Due Diligence (EDD) on a site with a UPSS can define the risk and create solutions:

1) Preliminary Environmental Site Investigation (PSI)

•   Desktop review and site walkover to identify any areas of environmental concern requiring further investigation.

2) Detailed Environmental Site Investigation (DSI)

•   Drilling of boreholes to collect soil and groundwater samples to identify if the site has been contaminated by petroleum products or any other chemicals used onsite.

•   Should only be completed by experienced professionals to avoid damage to UPSS components and ensure discreet behaviour.

3) Remediation

•   Remediation, including removal of fuel infrastructure, may be required if contamination is identified onsite or the site is to be redeveloped.

•   Costs will be dependent upon the level and extent of contamination identified.

4) Environmental Lease

•   If the service station is continuing to operate, the owner of the site should ensure the results of the DSI are referenced as an Environmental Schedule of Condition within the Lease with the service station operator.

•   Define who owns the fuel infrastructure and who is responsible for maintenance or replacement.

•   Set environmental, operational and monitoring requirements (e.g. reporting of groundwater monitoring results on quarterly basis).

•   An Environmental Dilapidations Assessment should be carried out at the end of the lease, therefore attributing any contamination identified, and the associated costs, to the Lessee.

•   Even if the owner of the site decides to sell prior to the end of the lease the environmental assessments provide assurance to potential purchasers that they are not inheriting an unknown liability.

Case Studies

SGA Environmental has undertaken numerous EDD projects for potential purchasers of current and former service station sites. 

SGA Environmental recently conducted an EDD assessment on an operational service station in Sydney, where the purchaser was acquiring the site with an incumbent tenant nearing the end of their lease.  A PSI was undertaken which identified 8 UPSS’s and associated underground pipework with no monitoring system in place.  Fortunately the DSI did not identify soil or groundwater contamination on the site.  A new lease was entered into which referenced the DSI as an Environmental Schedule of Condition.  The lease also specified that ownership and maintenance of the UPSS’s and other fuel infrastructure remained with the tenant.

The groundwater wells installed as part of the DSI enabled a monitoring system to be established with the tenant responsible for reporting the quarterly results to the landlord under the terms of the lease.  Should contamination be identified during operation, or at the end of the lease, the tenant is responsible to take the necessary remedial action, therefore protecting the landlord’s asset.

Unfortunately not all acquisition’s are as straightforward, as highlighted by another former service station in regional NSW which was purchased for redevelopment.  A limited DSI had been undertaken for the service station operator when the site was decommissioned and some minor remediation works were undertaken including the removal of the UPSS’s.

During redevelopment of the site, additional soil contamination was identified which had also impacted the groundwater.  The site owner was undertaking extensive remediation earthworks on the site prior to SGA Environmental’s appointment.  After reviewing documentation and completing some additional investigations, alternative remediation technology was implemented allowing development of the site to continue whilst treating the groundwater.  This strategy saved the site owner considerable time and money. The process highlighted the importance of undertaking adequate investigation pre-acquisition and that alternative remediation technology (as opposed to mass earthworks) can be a success.

If you would like further information on how to manage the environmental risk with owning or operating a service station or property with a UPSS, we can put you in contact with SGA Environmental who are experts in this field.

The information in this article has been provided by SGA Environmental.

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