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Commonwealth Environmental Water Holder water sale in Gwydir

Media release

Wednesday 29 January 2014


The Commonwealth Environmental Water Holder has accepted 16 offers to buy a combined total of 10 gigalitres of Commonwealth environmental water for a return of $3.217 million for the Murray Darling environment.

The Commonwealth Environmental Water Holder David Papps said the first trade was great news for the environment with proceeds of the sale to be held in the Environmental Water Special Account, until a purchase of water for greater environmental benefit within the Murray-Darling Basin is identified.

The Commonwealth Environmental Water Holder has entered into contracts with successful bidders, which, subject to State Water approval, will result in the 10 gigalitres of water being made available to Gwydir Valley irrigators.

The tender closed at 3pm on Thursday and successful bidders were notified of the outcome of their bid the next day. The sale, conducted via an open tender process over three days, received 51 bids with 16 of those bids considered best value for money for the Commonwealth.

“The success of this first trade is testament to the careful analysis undertaken by my office of the favourable conditions in the Gwydir, with strong demand and strong prices paid for temporary allocations. The 10 gigalitres of water allocation will support landholders in the Gwydir including producers of cotton, cattle, and wheat and pulse crops,” Mr Papps said.

“I am yet to determine whether environmental conditions are right for trade of small proportions of water allocations in other catchments at this stage. My first priority is to finalise the Gwydir valley sale and review how our trade framework and operating rules held up. Only then will I be in a position to consider further trade.

Any future sale of allocations will require a thorough investigation of whether the objectives of the environmental watering plan in each catchment have been met, and whether there are requirements in the foreseeable future that still need to be met using current allocations.

“In the meantime, we’re continuing to work with stakeholders across the Basin, in preparation for the likelihood of a dry phase. This will mean that Commonwealth environmental water will be used to protect habitat such as permanent waterholes that support the survival of water dependent populations of native plants and animal life,” he said.

Consistent with the Commonwealth Environmental Water operating rules, full details of the Environmental Water Holder’s successful trade will be published following State Water approval of the last trade.

Background

The Commonwealth Environmental Water Holder (CEWH) has legislated responsibility under the Water Act 2007 (Water Act) for decisions relating to Commonwealth environmental water, including the management of the portfolio so that it maximises environmental outcomes across the Murray-Darling Basin over time.

The Commonwealth environmental water holdings comprise of a portfolio of assets (water entitlements) and the accumulated annual yield of water (allocations) against those entitlements. This water may be delivered within the current year to meet environmental needs, carried over to future years to meet future environmental needs or traded (disposal or acquisition).

The portfolio is managed in accordance with the Water Act and the Murray Darling Basin Authority’s Environmental Water Plan. The portfolio is also managed within the State government rules that apply to other equivalent entitlement holders (typically agricultural users). For example, the Commonwealth pays the same fees and charges for the holdings, receives the same annual allocations as equivalent entitlements, and operates within the same rules including the rules relating to carryover of water between years.

The Commonwealth Environmental Water Holder’s decision to enter the market corresponded with the introduction of robust governance arrangements including a trade framework, operating rules, procedures and protocols. These arrangements provide the necessary reassurance that the Commonwealth will buy and sell water allocations or entitlements in a responsible, fair, equitable, transparent and accountable manner.

For further information, please refer to:

The Framework for Determining Commonwealth Environmental Water Use http://bit.ly/1d5qlzS

The Commonwealth environmental water trading framework

Media contacts:

Department of the Environment media hotline 02 6275 9880 or media@environment.gov.au and follow us on twitter @thecewh