According to Documents obtained under a Senate order to produce by the South Australian senator Nick Xenophon, it seems as though the federal government bought “ghost water” for environmental flows into the Darling, paying $78m for water entitlements in the Lower Darling, which was more than double the sum recommended by its own official valuation.
According to the documents, $38m was paid for water entitlements and $40m went to one of Australia’s largest irrigators, Webster Limited, in compensation.
The $78m was paid for water entitlements associated with Tandou, an isolated cotton and grain property in a dry lake east of Broken Hill that draws its irrigation water from the Menindee Lakes, based on the basis that Tandou had access to 100% of its water entitlement all the time, even though the department’s own reports showed that Tandou had been unable to plant crops in 5 of the past 14 years due to a lack of water in the region.
Experts now fear that while the Tandou purchase may help the federal government meet its water saving targets on paper, it will do little to improve the environment.
The Senate order for production documents, which run 308 pages, have questioned why the purchase was made on a private valuation by Herron Todd White obtained by the New South Wales government, while a valuation obtained from the Australian Bureau of Agricultural and Resource Economics and Sciences (Abares) by the federal agriculture department was totally ignored.
A former director of environmental water planning at the Murray-Darling Basin Authority, Bill Johnson, said he was concerned the purchase would amount to “ghost water”.
“It is highly questionable whether the commonwealth got any water for this money,” he said. “The security of the water has been reduced so much that it is little or no better than having no licences at all. This is because there is increased extractions upstream in the Barwon-Darling and its tributaries.”
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