Farmers demand answers after being blindsided by 53 per cent rise

Hefty water charge increases for hundreds of irrigators on the Fitzroy River near Rockhampton won’t start until mid-next year after the sharp rise shocked farmers.

The Fitzroy River barrage on February 4, 2020 with the gates open.

New hefty water charge increases affecting hundreds of irrigators on the Fitzroy River will be delayed until mid 2025 after a number of frustrated and surprised farmers questioned the process.

Rockhampton Regional Council on Tuesday, December 4 voted to delay the introduction of the higher fees until July 25 to allow Fitzroy River Water officers time to consult with irrigators to better explain the reasoning behind the increases.

The fixed price for about 300 medium priority irrigators using council’s water from the Fitzroy River Barrage was to increase 53 per cent from $37.15 per megalitre to $56.96 per ML with a minimum charge of $300.

However they will now be charged just $38.45 per ML with a minimum charge of $300 before the higher prices start from July.

Farmer Henrik Christiansen who waters 120,000 macadamia trees on 340ha of land in South Yaamba, was one of the larger scale operators who was upset last week by the size of the increase and the lack of consultation leading to it.

Macadamia nut farmer Henrik Christiansen, who waters his 120,000 macadamia trees on 340ha of land in South Yaamba, said the impact of Rockhampton Regional Council's new pricing structure on his bottom line was significant.

He and other farmers spoke with Cr Edward Oram over the last week to express their concern which partly led to FRW and council deciding to review the fee introduction timing.

At Tuesday’s meeting Cr Elliot Hilse suggested FRW consider introducing the higher fees over a staggered period instead of in one go.

Cr Marika Taylor thanked FRW officers for the move to delay the higher fees.

“I know that it means a lot to the people that it affects,” she said.

A senior FRW officer explained the method behind the higher increase saying council had to apply “full cost recovery” process by government legislation.

The barrage on the Fitzroy River in Rockhampton's city centre.

That involved applying the “weighted average cost of capital” which is essentially working out the percentage return council should get from its capital investment in its infrastructure.

The key input into that was the “risk free rate which is worked out from the previous 12 month average of what 10 year bonds are paying”. He said that rate jumped from 2.6 per cent to 4.4 per cent which was a 70 per cent hike which helped drive up the cost of capital input.

The second major impact was the cost of proposed FRW capital works over the next five years with that rising from $1.3m to $15.5 million due to all the refurbishment work that has to be done on the barrage.

The revaluation of the barrage rising 8 per cent from $37.5m in 2019 to $40.6m in 2024 also had an impact on recovery cost pricing calculations.