Record water price: Plibersek pays $17,290/ML for Namoi water

The Albanese Government paid a record $17,290/ML for cap-equivalent water, as irrigators hold back, knowing prices will rise.

The federal government paid $5.7 million for a parcel of general security water on the Namoi River.

The federal government has paid the equivalent of $17,290 a megalitre for Murray Darling Basin cap-equivalent water entitlements – more than twice the going market price.

A contract appeared on the Government’s AusTender website this week that showed the Hamparsum family sold a $5.7 million parcel of Lower Namoi general security water to the federal government.

The NSW Water Register shows the parcel of 1215ML sold for $13,000/ML, which equates to $17,290/ML of cap-equivalent water, based on the government’s own conversion factor (1ML of Namoi general security equals 0.75ML of cap-equivalent entitlement).

The record price is more than twice that of the commercial trade among irrigators in the Southern Murray Darling Basin markets, where Victorian Murray River high reliability entitlement trades for $7000/ML and Murrumbidgee high security for $8500/ML, both of which are cap equivalent.

The Namoi purchase formed part of the federal government’s 2023-24 Bridging the Gap water tender, which recovered 26,250ML of its 41,100ML target, at a cost of $205 million.

Since then federal Water Minister Tanya Plibersek has embarked on recovering another 100,000ML this financial year, which includes a 70,000ML tender that closes on September 11, plus calls from large and corporate water holders to sell parcels of 20GL or more.

But water brokers say irrigators are holding back, knowing prices are likely to surge over the next three years, given the government has set a target of recovering 450GL by December 31, 2027.

Australian Water Brokers Association president Andrew Martin said he only knew of a couple of irrigators considering selling to the Commonwealth and that “20-30 per cent over the market price seems to be the starting point”.

All up the federal government has set itself the target of recovering:

•100GL in 2024-25

•100GL in 2025-26

•100GL in 2026-27

•150GL in the first six months of 2027-28.