Federal Government criticised over Murray Darling Basin tender lock out

Irrigators must lodge expressions of interest to sell water to the Commonwealth by next month, or they will be locked out of next year’s tenders.

The federal government is accused of trying to create the illusion of being swamped with offers from irrigators to sell water in the lead-up to the federal election.

Irrigators who fail to lodge an expression of interest to sell water to the federal government by November 27 will be locked out of all tenders in 2025.

Federal Water Minister Tanya Plibersek’s department released documents this week that state: “Only respondents who submit an EOI in this first stage of the multistage procurement process are eligible and may be invited to participate in any subsequent requests for tender in 2025, arising from this EOI”.

Although EOI documents state all offers are non-binding, any irrigator or corporate water holder who fails to lodge their interest by next month’s deadline will be excluded from selling water in next year’s tenders.

The move will force irrigators to lodge EOIs for fear of missing out on being able to sell water next year, greatly inflating the volume on offer to the federal government as it prepares for an election early in the New Year.

National Irrigators Council chief executive Zara Lowien said it was “clear this process is all about the Federal Government wanting to go to the election with a fake statistic that helps them to paint a picture – they are swamped by interest in buybacks”.

“The Federal Government have designed this process to coerce as many people as possible to express their interest and ensure the Government, have all the cards when it comes to the market information come next year.”

“It’s blatantly designed to give the Minister an inflated statistic of buyback interest to take to the election.”

The EOIs are separate to the 70GL tender the federal government launched in July, but are all part of the government’s bid to drain 450 gigalitres for irrigation communities over the next three years to boost Murray Darling Basin environmental flows.

The EOIs include:

RESTORING OUR RIVERS 2024 EOI 1: Remaining Southern Connected Basin Catchments, which is open to any seller.

RESTORING OUR RIVERS 2024: EOI 2: Large Portfolios of Water Southern Connected Basin, for offers of 20GL or more.

Australian Water Brokers Association president Andrew Martin said the federal process “doesn’t make sense commercially, as it excludes potential sellers from tendering next year if they missed out putting in an EOI.

“It leaves me wondering what motivates them (the federal government). You might draw the conclusion they’re making a big number.”

Another brokers said the federal Department of Climate Change, Energy, the Environment and Water may also be trying to “stop people buying entitlement and flicking it onto the Commonwealth for a profit”.

Ms Lowien said irrigators main concern was “this approach will give false signals, not just about interest in selling water to the Government, but also to the rest of the market, which will lead to hyper-inflated water prices.

“It is a risky approach to market, which is likely to artificially inflate prices and send misleading market signals, that will impact every water user.”

“Ironically, this will drive up water prices for the Government, making their buybacks even less value for money and is questionable market behaviour.

“It’s unacceptable to tell people they must ‘get in now, or they’ll miss out. Time and time again, we’ve seen this Government put politics over process and it’s not good enough.

“This process is clearly about trying to create an illusion they are swamped by buyback interest, to sell their false narrative to the Australian people before the next election, when all they are doing is likely manipulating the water market, impacting users and ignoring alternatives to achieve better environmental outcomes throughout the Murray Darling Basin.”