Community & Business
16 April, 2024
$36 million of water to be sold in auction
WATER recovered through the first stage of a modernisation program for the Mareeba-Dimbulah Water Supply Scheme will be available for sale from the end of this month and is the first new water available for permanent purchase in the supply scheme since the 1990s.
Efficiencies gained within the infrastructure means the scheme is more responsive to water demands, reducing overflow losses and allowing for more controlled and regulated water delivery.
Anyone can put a bid in to buy the 11,500ML of water, meaning it could be sold to investors who may hang onto the water allocation with a view to selling it at a future date for profit.
The base price for the water is $3200 per megalitre, with lot amounts of 5ML to 500ML being offered over a three-week period, starting on 29 April and finishing on 15 May.
According to FNQ Growers president Joe Moro, the price was discussed at length, with some growers wanting the water at a lower reserve price, while others saw it as de-valuing water.
“Some producers have high debt and have borrowed money based on valuations of water prices and their concern was that if water sold at, say $2600, their water would become de-valued.”
He said the cost of water had markedly increased since the last time an auction was held in the mid-1990s when water was valued at around $700ML.
That has raised suggestions that someone wishing to financially benefit from the continual rise in the cost of water could purchase lots in the upcoming auction, and it would not be bought by local producers.
But Mr Moro is not overly concerned about that.
“The most important thing is that the water has been ‘found’ and that it is available within the system – for a good percentage of growers, if that water stayed in Tinaroo and never got sold, that would just increase the reliability for them,” he said.
“The reason we wanted the efficiency project to be done was that growers wanted more water to have water security – as far as farmers are concerned, water security is that they have reliable water all the time.”
While he did not expect all the water to be sold at the auction, he was certain there would be high interest.
“This water auction will determine a lot of things about the value of water - is all 11,500ML going to sell? – some people think all of it will sell, others do not,” he said.
“There is a need for some growers to have more water for expansion and the other part of it was to provide farmers with an ability to ‘insure’ their crops by having excess water allocation, meaning that if there is an announced allocation which is low, they can still keep producing.
“There are three reasons why people will buy this water – some farmers are going to buy it because they think it’s a good investment, the second one is that they need more water to produce whatever crop they are growing, and some will buy it to protect their existing production.”
Given that the efficiency project was jointly funded by the Queensland ($20.94 million) and Australian Governments ($11.6 million), the question is now being asked as to where the proceeds from the auction will go.
“The government could easily argue that’s that is consolidated revenue money, but what irrigators want is for the profits to be reinvested back into the scheme and we’ve been saying that from day one.
“There is a second stage of modernisation which would yield about another 2000-3000 megalitres but it will probably cost twice as much to recover as the 11,500ML did.”
“We want the $20 million-plus that the government will likely make in profit from this water auction re-invested back into the scheme to continue modernising it – that’s the only thing that the industry believes it should be spent on.”
But a Sunwater spokesperson said the money raised from this auction would “offset the cost of the project and assist Sunwater across all of its operations in regional Queensland as we work to better utilise water throughout the state”.
“Sunwater will continue to look for new and innovative ways to enhance water delivery and efficiency in the Mareeba-Dimbulah region,” the spokesperson said.
HOW TO TAKE PART IN THE AUCTION...
Anyone wishing to participate in the auction, must contact Ruralco Water broker Lincoln Parr.
“To take part, an interested party must contact me so that I can create a bidding profile for them, provide the relevant documents, and provide training on the platform which is a 10-20 minute process depending on familiarity with online platforms,” he said.
“Once the training has been provided, they will be authorised to bid.”
For information or to take part in the auction, contact Mr Parr on 0419 473 153 or go to www.ruralcowater.com.au or www.sunwater.com.au/water-for-sale
There will be an open session held at the Mareeba Leagues club on Tuesday from 6pm-8pm for any interested parties to attend and ask questions and go over the online bidding platform.
