Review of 2007-08 water entitlement purchases
Hyder Consulting Pty Ltd for Department of the Environment, Water, Heritage and the Arts, 2008
Download the documents
Review of 2007-08 water entitlement purchases by Hyder Consulting
- Review of 2007-08 water entitlement purchases (PDF - 397 KB)
- Review of 2007-08 water entitlement purchases (RTF - 2 938 KB)
Appendix A
- Appendix A - Purchasing water in the Murray-Darling Basin - ABARE report (PDF - 338 KB)
- Appendix A Purchasing water in the Murray-Darling Basin - ABARE report (RTF - 669 KB)
Department of the Environment, Water, Heritage and the Arts - response to the findings
- DEWHA - response to the findings of the Review of the 2007-08 Water Entitlement Purchases conducted by Hyder Consulting (PDF - 63 KB)
- DEWHA - response to the findings of the Review of the 2007-08 Water Entitlement Purchases conducted by Hyder Consulting (RTF - 243 KB)
Related information
About the review report
The Australian Government Minister for Climate Change and Water, announced Water for the Future in April 2008 with funding of $12.9 billion. Within the policy was provision for $3.1 billion to buyback water entitlements through willing sellers to address over allocation in the Murray-Darling Basin. The Minister announced an allocation of $50 million for the first round of water entitlement purchasing (WPP) in February 2008 closing in June 30 2008. The Minister undertook to complete a review of the WPP after the first round of purchases was completed. Hyder Consulting in association with Access Economics was engaged to undertake this review.
The review has found that short-term effects of water availability on prices have been duly taken into account in the implementation of the pricing strategy. The water purchase decisions were appropriate within the context of the first year and with due consideration of value for money. The offer price and the value of each purchase for priority environmental assets were the main drivers in the decision making process. On assessing the outcome of 34.3 GL for a purchase cost of $47.1m, the review concluded that the WPP has been efficient in its purchases1. Methods of ensuring that future rounds of the WPP continue to be effective are shown in the findings below.
- Hydrologic and hydraulic modelling should be undertaken to establish watering requirements and required flow regimes
- A sale offer elsewhere in the system may in future be appropriate to purchase, if transferable to the required site
- Where there is a potential for conversion of entitlements from one security to another then future purchases should consider conversion to the preferred security type
- The allocations market should be considered as a source of water for the short-term needs of environmental assets
- The Australian Government should examine the approach of buying environmental outcomes as part of the WPP
- Competitive sourcing of water for environmental assets through existing entitlement holders should be explored
- The Australian Government should facilitate the transition to a more open and transparent water market where opportunities to do so arise
About the response to the review
The Department of the Environment, Water, Heritage and the Arts has responded to 18 items in the Review of 2007-08 water entitlement purchases report prepared by Hyder Consulting.
1 Since the completion of the review these figures have changed. The Australian Government is currently finalising the purchase of water entitlements worth more than $37 million. This will provide approximately 26 billion litres of water for the environment in the Basin.
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