Murray Darling Basin water tender: Irrigators offer prices locked in for 12 months

The government has demanded irrigators make “binding and irrevocable” offers to sell water to the federal government at prices that are locked in for 12 months.

Once Irrigators lodge an offer to sell water to the federal government they will be locked into that price until May 19, 2024.

NSW and Queensland irrigators selling their water to the Federal Government, under its 41.1 gigalitre Murray Darling Basin buyout, will have to lock in the price they offer for 12 months.

The federal Department of Climate Change, Energy, the Environment and Water released tender documents late yesterday that demand irrigators lodge “a binding and irrevocable offer to sell water rights at the price specified in the tender application form” by May 19 this year and “the offer remains open for acceptance by the Department for offer period which ends on 19 May 2024”.

National Irrigators Council chairman Jeremy Morton said it seemed “extraordinary that someone who’s offered up their capital asset for sale is bound for 12 months, with no certainty on whether it will be purchased or not”.

Minister for the Environment and Water Tanya Plibersek. Picture: NCA NewsWire / Martin Ollman

NIC chief executive Isaac Jeffrey said: “The tender documents say they will be evaluated between May and July, and acceptances will be made between July and August this year.

“This is in stark contrast to a line further into the documents revealing the Government could choose to accept them up to 19 May 2024.

“When the tenders are legally binding offers, this extended acceptance period will mean water holders are tied up for 12 months and won’t likely be able to withdraw the offer or change any details.

“If the government moves ahead with further buybacks and pushes up the price of water or we enter a significant dry period, people with an open offer could be much worse off. I encourage anyone thinking about engaging in this process to get legal and finance advice about what it actually means for your business.”

As it stands the tender documents clearly state: “the Department requires that tenders submitted in response to this ATM remain open for acceptance during the tender offer period (until 19 May 2024).

A DCCEEW spokesman said “a tenderer can ask to withdraw their offer after the closing time and the department can consider that request”.

“A tender offer period is a standard element of government procurement processes that allows time to evaluate tenders, determine value for money and engage with tenderers on contract matters.

“With regard to water purchases, additional time is required for the conveyance process which includes registration processes via State authorities. It is the Department’s intent to work as quickly and efficiently as possible.”

NSW Irrigators Council chief executive Claire Miller said “requiring sellers to keep their offer open for up to a year just makes a bad situation worse.

“It leaves everyone in those valleys in limbo and uncertain about their future.”

Australian Water Brokers Association president Andrew Martin said, “I think once word gets out on this the majority of people will say “stuff it”.

“It’s non-commercial and not right,” Mr Martin said. “If you’re a seller you would be charging a big premium for that (12 month) option.”

Federal Opposition water spokeswoman Perin Davey said: “A lot can happen in 12 months and people selling water need to know that once they have put a tender in, they will be on the hook.

“There aren’t too many businesses which could afford the uncertainty on a key asset created by having to wait up to 12 months to see if the government wants the water. It also raises questions as to whether the government is seeking to purchase more water beyond ‘Bridging the Gap’.”

Under the tender the Federal Government plans to buy:

10GL out of the NSW Murray irrigation system

14GL from Qld’s Condamine-Balonne

1.6GL from the Barwon-Darling

9.5GL from the Namoi Valley

5.1GL from the NSW Border Rivers

0.9GL out of the Lachlan

DCCEEW is also seeking 3.2GL of groundwater from Queensland’s Condamine-Balonne system.

Anyone who lodges a tender must not make a statement or provide any other information for publication in any media concerning the tender process.

DCCEEW documents also state it “may exclude a tender from further consideration if the tenderer does not comply with this requirement”.