Water Management Partnership Agreement - The Commonwealth of Australia and the State of Victoria


Signed 11 January

Water Management Partnership Agreement

The Water Management Partnership Agreement is made between and binds the Commonwealth of Australia and the State of Victoria.

On 3 July 2008 the Commonwealth and the Basin States (being the States of New South Wales, Queensland, South Australia and Victoria and the Australian Capital Territory) signed an Intergovernmental Agreement on Murray-Darling Basin Reform (IGA). Alongside the Water Act 2007, the IGA progresses the objectives of the National Water Initiative (NWI) which are to increase the productivity and efficiency of Australia's water use, to service rural and urban communities and to ensure the health of river and groundwater systems. In doing so the IGA reaffirms the parties' commitment to the NWI.

Part Four of the IGA provides for the Basin States and the Commonwealth to enter into Water Management Partnership Agreements to give effect to the urgent need to undertake water reforms in the Murray-Darling Basin to deliver a sustainable cap on surface water and groundwater diversions across the Murray-Darling Basin to ensure the future of communities, industry and enhanced environmental outcomes.

The Water Management Partnership Agreements provide for the Basin States to undertake one or more Priority Projects that will substantially contribute to improved water use efficiency and enhance the sustainability of rural water use in the Murray-Darling Basin. The Agreements recognise the direct link between the need for the Basin States to undertake water reforms in the Murray-Darling Basin and the provision of Commonwealth funding for each Priority Project. This Commonwealth funding is provided from its Sustainable Rural Water Use and Infrastructure program, which is a component of the Commonwealth's Water for the Future initiative.

In entering into this Agreement, the Commonwealth and the State recognise that they have a shared responsibility and mutual interest in improving outcomes in the Murray-Darling Basin.

Northern Victoria Irrigation Renewal Project Stage 2

The Australian Government commitment to fund Stage 2 of the Northern Victoria Irrigation Renewal Project (NVIRP 2) as part of the Murray Darling Reform Intergovernmental Agreement 2008. This agreement was subject to the provision of a business case from Victoria and a Commonwealth due diligence process.

Following due diligence, the Australian Government approved funding of $953 million for the project on 6 November 2010, with water savings from the project to be shared between the environment and irrigators. The Commonwealth is funding 90% of the project and Victorian Government (10%).

Heads of Agreement

In October 2011 a Heads of Agreement was signed between the Commonwealth and Victoria giving effect to a new Victorian Food-Bowl Modernisation Project (VFMP). The new project includes changes proposed by Victoria to the original NVIRP 2 project. The VFMP will deliver 214 gigalitres of water savings to the Commonwealth for the environment.

Key features of Heads of Agreement include:

  • A revised project structure for the $1.06 billion NVIRP Stage 2 project to streamline delivery of the project, underpinned by an outcomes-based delivery framework;
  • Australian Government funding of $43.7 million for a project (NVIRP Stage 2 - On-Farm Project) re-scoped under the Water Management Partnership Agreement supporting on-farm irrigation modernisation integrated with the roll-out of NVIRP2. The Commonwealth is funding (90%) of the project and Victorian irrigators 10% cash and in-kind).
  • A sale offer of 102 gigalitres - the second half of savings from NVIRP2 - by the Victorian Government to the Commonwealth, and acceptance of this offer;
  • Victoria granting trade approval for approximately 88 gigalitres of water trades from previous Commonwealth tenders blocked by the Victorian four per cent limit on out of district trade;
  • Victoria continuing to work cooperatively with the Commonwealth Environmental Water Holder to facilitate arrangements for environmental water delivery;

The new package was announced on 18 October 2011 by the Australian Government Minister for the Environment, and the Victorian Minister for Water.

Project Schedules

Project schedules form part of the Water Management Partnership Agreement and formalise the specific funding arrangements for each of the agreed State Priority Projects. Where funding was provided to states for a State Priority Project prior to the execution of the Water Management Partnership Agreement, funding agreements were developed.

Links to funding schedules/agreements are below: