Duxton Water makes $63 million on water sale to federal government

Duxton Water has made $1000 a megalitre premium on the Goulburn water shares it sold to the federal government. See the figures.

Duxton has sold 37 parcels of Goulburn water shares to the federal government for $4810 a megalitre, compared to the $3800/ML seasonal average.

Duxton Water has sold 13,114 megalitres of its Goulburn high reliability water shares to the federal government for $63m, earning the speculator $1000 per megalitre above the prevailing market price.

The Victorian Water Register shows 37 parcels of Goulburn shares were transferred from Duxton to the government on Monday June 2 at $4810/ML, compared to the $3800/ML seasonal average.

Duxton first announced the sale in March, but it is only now that the trades have been registered that the price paid per megalitre has been revealed.

Irrigators say they were shocked to learn just how much the government was willing to pay Duxton above the market price.

Victorian Farmers Federation water council chair Andrew Leahy said the federal government had “distorted the market”.

“It seems corporates are able to get higher prices out of the government,” Mr Leahy said.

Asked why it had paid a 25 per cent premium for the water, a government spokesman said “as part of determining value for money, the department considers the price offered by willing sellers alongside the environmental utility of the water offered, the contribution to volumetric targets, and water market factors”.

Duxton managed to gain a premium despite many of the 37 parcels it sold to the government consisting of just one, two or five megalitre lots.

Normally sellers would pay $186 to consolidate all its parcels prior to sale.

But the failure to do so means the federal government faces paying $221.60 in transfer fees on each of the 37 parcels, unnecessarily adding $8200 to its overall bill.

Victorian Water Register trades showing how Duxton water gained $4810 a megalitre for water shares, compared to the seasonal average of $3800/ML.

Goulburn Murray Irrigation District customer committee irrigator Peter Hacon said the latest purchase just reinforced the “same old story” of the federal government buying water to benefit a few, while the community suffered in the longer term.

“They’re (the government) doing this to grandstand in the political arena, while casuing hardship in our community,” Mr Hacon said.

Both Mr Hacon and Mr Leahy questioned how the federal government planned to use the Goulburn water shares, given the intervalley trade limit on moving water out of the district and into the Murray Valley.

That limit has left Goulburn allocation water prices sitting at $165/ML versus $290/ML in the Murray.