Commonwealth water purchasing in Murray-Darling Basin
Under the Sustainable Rural Water Use and Infrastructure Program, the Australian Government has committed $3.1 billion to purchase water to assist with bridging the gap to the sustainable diversion limits in the Murray-Darling Basin Plan 2012. The Water Recovery Strategy for the Murray–Darling Basin outlines the government's approach to recovering water for the environment while maximising positive outcomes for farmers and communities in the Basin. This includes prioritising surface water recovery through infrastructure investment over water purchasing, which is limited to 1,500 gigalitres.
1,500 gigalitre cap on surface water purchasing
In 2015, the Australian Government legislated a 1,500 gigalitre cap on surface water purchases to provide certainty to Basin communities that the government is prioritising infrastructure investment over water purchasing. This has been a key component in ensuring the Basin Plan delivers a balanced outcome for the economy, for Basin communities and for the environment. Recovery under this 1,500 GL limit is published on the department’s website under the progress of water recovery page.
Surface water and groundwater purchasing
To bridge the gap to the surface water sustainable diversion limits in the Basin Plan, the government has recovered water through a combination of water purchases, contracted infrastructure investments, and other state and federal recoveries. Where a gap remains to be bridged, the government continues to prioritise infrastructure investment over water purchases, with the focus of remaining surface water purchasing on high priority, strategically important initiatives.
To bridge the gap to the groundwater SDLs, the Basin Plan requires groundwater extractions in the Queensland Upper Condamine Alluvium to be reduced by 40.4 gigalitres. Several open tenders have previously been held to purchase groundwater licences in this area, enabling progress towards the long term protection of the productive base of the aquifer. Information on the current 2018 open tender can be found on the groundwater purchasing website.
Approach to market
The department can consider proposals to sell water directly to the government in limited circumstances. To consider any proposal, the department would need the following information: water licence number, water licence location, water licence volume and proposed price per megalitre. For further information about water purchasing, email Water Purchasing or call the Water Information Line on 1800 218 478.
The department reports on all water purchased in the monthly report at progress of water recovery towards bridging the gap to SDLs. For contracts valued at or above the reporting threshold outlined in the Commonwealth Procurement Rules, a contract notice is also published on AusTender within 42 days of entering into the contract. Disclosure of information in these notices must comply with the requirements set out in the Privacy Act 1988.
Pricing information is usually published at the conclusion of an open water purchase tender to help provide greater transparency and to assist water entitlement holders who may be considering placing an offer to sell water in the future. The average prices of offers pursued from previous open tenders are published on our website. For strategic water purchases, information is published in the table below.
Table 1: Strategic water purchases
|Month published||Contract value||SDL Resource Unit|
|May 2016||$384,000||Border Rivers, QLD|
|June 2016||$8,000,000||Murray, SA|
|July 2016||$925,000||Upper Condamine Alluvium, QLD (Groundwater)|
|July 2016||$617,900||Upper Condamine Alluvium, QLD (Groundwater)|
|January 2017||$4,483,290||Murrumbidgee, NSW|
|June 2017||$7,484,800||Warrego, QLD2|
|June 2017||$9,492,800||Warrego, QLD2|
|June 2017||$38,000,0001||Lower Darling, NSW2|
|August 2017||$39,939,750||Condamine-Balonne, QLD2|
|August 2017||$38,951,550||Condamine-Balonne, QLD2|
1 This transaction also included payment of a further $40 million (plus GST) as compensation for the transformation of the property to dryland farming, cancellation of works approvals and the decommissioning of irrigation infrastructure. Departmental media release.
2 Further information about these strategic purchases is available on the department’s ‘On the record’ website.
Water market price information
The department commissions independent consultants to compile quarterly market price reports that assists the public to understand the prices that are being paid for various water entitlements across the Murray–Darling Basin.
Independent advice on water purchasing
The department commissioned CSIRO to conduct a review of its water purchasing program, with a view to enhance competition and increase participation.
Dr Andrew Reeson and Dr Stuart Whitten, 2015
|Motivating the Market PDF||25||426 KB|
|Motivating the Market DOCX||25||222 KB|
If you have difficulty accessing these files, please visit web accessibility.
Survey of water entitlement sellers under Restoring the Balance in the Murray-Darling Basin
The Department of the Environment released a commissioned report by Marsden Jacob Associates that independently assessed the impact on participating irrigators of water sales to the Commonwealth. See Survey of water entitlement sellers under the Restoring the Balance in the Murray–Darling Basin Program.
Contact us for more information on Commonwealth water purchasing in the Murray-Darling Basin.
Email: Water Purchasing
Phone: (02) 6272 2004