Water windfall: Melbourne gains $750m of Goulburn-Murray water

In 2008 Melbourne’s three water retailers paid $300m for Goulburn Murray water savings worth at least $750m today.

Mellbourne’s three water retailers are being handed 75,000 megalitres that could be sold to the Commonwealth for $750m, given its 12 years since any of that water flowed down the North-South pipeline (pictured) to Sugarloaf Dam.

Melbourne’s three water retailers are about to be granted 75 gigalitres of Murray and Goulburn Connections Project water savings, which could be sold to the Commonwealth for about $750 million.

Yarra Valley, South East and Greater Western Water have lodged applications with Victorian Water Minister to each gain 25GL of long-term average annual yield in the Goulburn and Murray systems, in return for their combined $300m investment in stage one of the GMW Connections Project.

But while the retailers invested $4000 for every megalitre recovered from the Connections project, brokers and irrigation industry groups estimated it was worth about $10,000, given the federal government was offering 1.75 times the market price for efficiency savings.

Selling the 75GL to the Federal Government for $750m or more could bolster the Victorian Government’s budget, with the state’s net debt at $89.6 billion, as at December 31.

Asked if a Coalition Government would sell the 75GL, Opposition water spokeswoman Stephanie Ryan said: “we will consider every option available to ensure no further water is taken from the consumptive pool to meet any shortfall in the delivery of the 605GL”.

But Victorian Water Minister Lisa Neville said: “if we were to sell this recovered water to the Commonwealth, it would mean less water in the consumptive pool for Victorian use and that is unacceptable”.

The 75GL of Connections Project water savings were recovered so the three retailers could divert water during droughts to Melbourne’s dams, via the North-South Sugarloaf pipeline, but only if their storages had fallen below 30 per cent capacity on November 30 of any year.

In June 2009 Melbourne’s storages fell to 26 per cent capacity, but since then retailers had not needed the extra water and had been selling annual allocations against their entitlements to GMW irrigators on the temporary market.

Ms Neville said: “our policy is that water recovered by the Connections Project and owned by the water corporations should be put on the market each year so it can be purchased by irrigators in Northern Victoria”, a position backed by the Victorian Farmers Federation.

“Victoria has already achieved 826 gigalitres of its 1075 gigalitre obligation under the Basin Plan, with the remainder to be met by offset projects.”

But that 826GL failed to account for an additional 266.2GL that Victoria must deliver through its SDLAM projects, which were struggling to deliver.

Both Ms Neville and Ms Ryan had dismissed delivering an extra 450GL of water, above the Murray Darling Basin Plan’s original recovery target, which Federal Labor had promised to recover if elected.

Federal Labor Leader Anthony Albanese made the commitment earlier this month, but failed to detail whether he would enter the market to strip the water out of irrigation communities to deliver it.

Ms Ryan said a Victorian Coalition Government would “not, under any circumstances, agree to the recovery of the 450GL that Federal Labor and the Greens are seeking”.

Ms Neville has repeatedly stated “Victoria strongly opposes buybacks towards the 450 gigalitres or any other target”.