The Yarrawonga Weir on the Murray River, part of the Murray-Darling Basin. Photo: MDBA

FARMING groups have criticised the recent sale of 30,614.7 megalitres of water entitlements by Duxton Water to the Federal Government for an estimated $121.3 million, as announced last week to the ASX.

The sale was part of the government’s Expressions of Interest 2 – Large Portfolios of Water tender process, an initiative under the Restoring Our Rivers Act, aimed at recovering 450 gigalitres of water to enhance environmental outcomes across the Murray-Darling Basin and support local communities.

The agreement includes 3010ML of high-security permanent water entitlements in New South Wales, 13,114ML of high-reliability permanent water entitlements in Victoria, and 14,491ML of general-security permanent water entitlements in NSW.

Duxton Water said the sale provides the company with “the flexibility to rebalance its portfolio and unlock value for its shareholders”.

“This strategic sale aligns with the company’s commitment to sustainable water management and to supporting the Federal Government’s efforts to deliver a healthy, sustainable river for future generations,” the statement said.

“The Board believes this transaction is likely to have a positive impact on the Company’s future profitibility.

“Proceeds from the sale of these water entitlements will be used to settle permanent water entitlement acquisitions totaling $19M, which are contracted but not yet settled, as well as to reduce the company’s debt facility.”

VFF calls out deal

In response to the news, the Victorian Farmers Federation said the agreement has sent off alarm bells in MDB communities.

Brett Hosking.

VFF president Brett Hosking said the water sale would hurt farmers and regional communities the most.

“While the wealthy shareholders of Duxton Water in inner-city seats might receive a financial benefit out of [the] announcement, it destroys family farms and their ability to get on with the job of farming and growing food,” Mr Hosking said.

“It’s pretty simple; you need water to grow food and without that the Commonwealth is ultimately driving family farms off the land.”

Lack of transparency

VFF Water Council chair Andrew Leahy said the organisation was concerned the Federal Government was providing no detail on which irrigation districts the 30,614 ML from Duxton Water will impact, and was disappointed the Victorian high reliability has been targeted, as it is one of the most secure water products.

“How can farmers plan for the future when the Commonwealth behaves no better than a corporate raider?” Mr Leahy said.

“Even worse, they are using taxpayers’ money.”

National Farmers’ Federation Water Committee chair Malcolm Holm said the disclosure being made by the vendor under market-disclosure rules, and not the government, raised serious concerns.

“This confirms what industry has been saying all along: the government’s buyback program is being conducted behind closed doors, with no transparency or accountability,” Mr Holm said.

“The only reason we know about this deal is because Duxton Water has a legal obligation to disclose it.

“Meanwhile, the government continues to operate in an opaque manner, currently in the market for 200GL of buyback water without disclosing details. It smells very anti-competitive.”

Questions over due diligence

Mr Holm said the lack of due diligence in finalising this deal so quickly also raised alarm bells.

“How has this transaction been pushed through so fast?

“We call on the Inspector-General to take a close look at this process.”

Shadow Water Minister and National Party Senator for NSW Perin Davey said it was surprising to see the deal rushed through so close to the upcoming federal election.

“A cynic may think they really are just pursuing water entitlement transfers in the fastest and easiest way possible, or are they racing against the clock of a federal election, trying to get as many contracts signed as possible before entering caretaker mode?” Ms Davey said.

“That is the only explanation as to how it is possible to exchange contracts under the EOI in less than a week when it takes up to six months to complete all the paperwork for a tender purchase.

“How can they have done all the analysis for value for money, social and economic impacts, and links to environmental outcomes?”

Source: Duxton Water, VFF, NFF, The Nationals