Next Round of Water Buybacks Opened for Southern Murray Darling

A new round of water purchasing in the southern Murray Darling Basin worth $120 million has been opened - marking the second water buy-back tender as part of the Government’s $3.1 billion Restoring the Balance in the Murray Darling Basin program.

According to the Minister for Climate Change, Energy Efficiency and Water Penny Wong, the buy-back program is part of the water reform adjustment process to address issues of over-allocation exacerbated by the effects of climate change:

Across the Murray Darling Basin, extended drought and the effects of climate change have been compounded by decades of mismanagement and over-allocation of water resources. For too long we have taken too much water out of the Murray Darling Basin. Now the Rudd Government is putting water back, to restore the health of the rivers. By purchasing water from willing sellers and investing in irrigation infrastructure, the Australian Government is smoothing the transition for Basin communities as they adjust to new, lower water use limits that we can expect under the Basin Plan.

The second tender round commenced on Tuesday 9 March 2010 and close on Monday 29 March 2010, and follows on from the most recent tender round in January 2010 which attracted considerable interest from irrigators looking to sell their water entitlements. As at 31 December 2009 the Restoring the Balance in the Murray-Darling Basin program had secured the purchase of 766 gigalitres of water entitlements worth over $1.2 billion. In 2009-10, $270 million will be spent in new water purchasing initiatives in the southern connected system of the Murray- Darling Basin.

As part of the previous water purchase tenders, the Australian Government made the largest single purchase of water for the environment in Australia's history when it purchased 240 gigalitres of water entitlements from Twynam Agricultural Group for $303 million. These water entitlements will be used to restore river and wetland health in many stressed catchments, potentially benefiting the ecologically significant wetlands of the Macquarie Marshes, Gwydir Wetlands, Booligal Wetlands, and Fivebough and Tuckerbill Swamps. The Australian Government also contributed to the NSW Government's purchase of Toorale Station, in exchange for water entitlements to extract 16 gigalitres of water from the Warrego and Darling Rivers each year, along with rights to harvest water from the floodplain. It was anticipated that this deal will return an average of 20 gigalitres of water to the Darling River each year, peaking at up to 80 gigalitres in flood years. Up to $120 million will be made available for buy-backs under this tender, however there will be a limit of 44.4 gigalitres on purchases from New South Wales, consistent with the agreement between the Australian and New South Wales governments on water purchases from that state.

This tender will also not include the purchase of entitlements from the northern catchments, such as Wimmera-Mallee, Broken, Kiewa, Avoca or Ovens catchments, because of uncertainty in the environmental benefit and relatively lower priority environmental water needs. The third tender in the series is expected to commence in late April or early May 2010. In the March 2010 tender, offers will only be accepted from the Murray, Murrumbidgee and Lower Darling catchments in NSW, the Murray, Goulburn, Campaspe and Loddon catchments in Victoria, and the South Australian portion of the Murray-Darling Basin.

Information on the average price of offers for each water entitlement type pursued in the January tender is available here.

Guidelines and application forms can be downloaded here.