Productivity Commission report on Water Trading in the Murray-Darling River Basin

The Productivity Commission has given a big tick to the Federal Government's $10 billion scheme for buying up water entitlements in the Murray-Darling Basin.

The Commission says the plan is an efficient and effective way to put water back into the environment but it is not so keen on other aspects of the Murray-Darling Basin recovery plan. It says spending federal funds on water-saving infrastructure is not cost effective and it wants the Victorian Government to rethink its plans.

The commissioner charged with evaluating the water recovery plan, Neil Byron, says in his draft report that the $3 billion water entitlement buy-up scheme is delivering good value for money. "We need to make sure that is done in the most effective way possible to get the best environmental value for the money available," he said. But Mr Byron says the scheme suffers somewhat from a lack of certainty. "It's still unclear about exactly how much, when, where, where from and how much the Commonwealth needs to pay," he said.

Mr Byron also has questions about the $6 billion set aside for investment in water-saving infrastructure. "There are cases where governments have paid not only 20 or 30 per cent more, but sometimes three or four times more than the market price to recover water through very large, complicated infrastructure projects," he said. "We're also concerned that some of these infrastructure projects actually have environmental disadvantages."

The full news report can be found here: http://www.abc.net.au/news/stories/2009/12/10/2767068.htm