The highest price paid to date for a Gulf water licence, $125 a megalitre, is the amount set by the state government for its latest release of water from two of the system’s catchments.
It’s a price described by Flinders River Agriculture Precinct chairman Brendan McNamara as “on the high side”.
News of the latest allocation of water came during a parliamentary estimates hearing in July when Natural Resources Minister Anthony Lynham caught many unawares with the news that the government was making another 92,500ML available in Gulf catchments, with the majority slated for the Gilbert River and a small portion for the Cloncurry River.
For the first time, the release was to be under a fixed price regime rather than the usual tender processes, to facilitate a “rapid and efficient release of water”.
What that price should be has been the subject of intense debate by north Queenslanders, resulting in a thorough analysis by Herron Todd White valuer Roger Hill.
Mr Hill said it would now be interesting to watch the market uptake.
“On the one hand, government represents society’s interest in the sale of natural resources, and on the other is free market industry and development,” he said.
“It’s a difficult ground to structure allocations in.
“It’s in the government’s interests to get the best price but it’s also in their interests to ensure sustainable development is kick-started.”
On Monday, Dr Lynham opened “first-in first-served” applications after announcing a range of payment options.
They include a longer term outright upfront payment for a 93-year licence, or annual payments over a 20-year period.
The longer term licence allows greater flexibility but requires full payment up-front of $125 per megalitre.
The alternative is an annual payment plan for a 20-year licence with the first instalment starting at $6.25 per megalitre.
Dr Lynham said this allowed those who didn't have the capacity to pay in full the opportunity to gain access to water as a first step in developing an irrigated agriculture business.
“There will be an option to surrender that licence and transition to a long-term licence after five years,” he said.
He also referenced community consultation in August in Cloncurry and Georgetown, which had identified “some concerns” particularly in relation to flexible payment options and vegetation clearing, as a reason for the range of payment options.
While welcoming the government’s intentions, Brendan McNamara said without a foundation of capital expenditure, potential irrigators remained in the non-development rut they’d fallen into following the first two Gulf water allocations.
“A fair bit’s been allocated already and nothing’s happened,” he said. “We have to work out what the catalyst is, but price is obviously part of the issue.”
He believed $125/ML was expensive when the costs of all the start-up infrastructure was added on.
“I understand though that it’s a tradeable commodity and can be onsold within boundaries.”
Applications can be lodged online at the DNRM website, and they will stay open while water remains available from this release process.
Dr Lynham said online lodgement provided a more efficient, direct and responsive process that would assist business planning.
“We understand there will be strong demand for this precious resource so it is imperative applicants ensure they comply with all terms of sale requirements before submitting their application online,” he said.
“This is to avoid disappointment as the water will be allocated on a first in, first served basis for applications that provide all of the necessary information.
“Department of Natural Resources and Mines officers are available to assist potential applicants to work through the necessary information requirements prior to submitting their application.”
Dr Lynham said the volume of water being made available reflects known demand and the need to retain water for emerging large-scale proposals.
The release follows the granting of more than 194,000 megalitres of water through two previous tender processes in the Gulf Water Plan area.
For more information on unallocated water in the Gulf visit www.dnrm.qld.gov.au, phone 4760 0750 or email WaterInfoNorth@dnrm.qld.gov.au
Sally Gall
Based at Blackall, CW Qld, where I've raised a family, run Merino sheep and beef cattle, and helped develop a region - its history, tourism, education and communications. Get in touch at 0427 575 955 if you've got a story idea for me.
Based at Blackall, CW Qld, where I've raised a family, run Merino sheep and beef cattle, and helped develop a region - its history, tourism, education and communications. Get in touch at 0427 575 955 if you've got a story idea for me.
