The Commonwealth Environmental Water Holder has sold environmental water allocations for $6.458 million to be used to improve the Murray Darling Basin.
Of the 22.864 gigalitres sold, more than 95 per cent was bought by Victorian Goulburn and Murray irrigators.
The remaining allocations were sold to primary producers in South Australia.
The Commonwealth Environmental Water Holder, Mr David Papps, said the first trade of Commonwealth environmental water in the southern Murray Darling Basin was great news for both the environment and irrigators.
“It’s a win-win. Victorian irrigators have been able to buy much needed water for their farms, the Goulburn River’s needs are still able to be met and I will use the sale proceeds to benefit the environment elsewhere in the Basin in the future,” he said.
The tender closed on 28 October 2015 and successful bidders were notified of the outcome of their bid on Friday 30 October.
The sale, conducted via an open tender process over three days, received 525 eligible bids, with 53 of those bids considered best value for money for the Commonwealth.
The volume weighted average price of successful bids was $282 per ML. One successful bidder, a regional water broker, distributed 5111 ML secured through the tender among 22 of its clients including 21 dairy farmers in the Goulburn valley.
“The success of this trade is testament to the careful preparation and analysis undertaken by my office and the strong demand for temporary allocations. The 22.864 GL was sold in parcels ranging from 30 ML to 5111 ML and my decision to set a minimum parcel size of 30 ML provided an opportunity for small irrigation enterprises to access water based on their business needs and affordability,” Mr Papps said.
Since 30 September 2015, over 4914 GL of Commonwealth environmental water has now been delivered to rivers, wetlands and floodplains of the Murray-Darling Basin, with early signs of significant environmental benefits showing up in monitoring programs.
At the same time as the Commonwealth Environmental Water Holder conducted this trade, more than 320 additional Victorian Goulburn and Murray regulated river allocation trades were recorded, totalling 26 GL at a VWAP of $281 per ML, indicating that other sellers in the market were not impacted negatively by the sale of Commonwealth allocations.
