There are calls for Federal intervention to block the purchase of $34 million of supplementary flood water entitlements in far west NSW by the NSW Government, claiming there will be little reliable benefit to the Murray Darling Basin.
Scarce details of the sale emerged on Friday after the Ministers from the Murray Darling Basin States and Federal Minister for Water, Penny Wong, approved the deal to buy almost 250 gigalitres of supplementary access water entitlements from Tandou Station at Menindee, south of Broken Hill, which are held over and above normal licences to access water in big flood events.
The water was bought predominantly by the NSW Government, with some funds from the Federal Government as part of the Living Murray initiative.
The sale has nothing to do with the current Federal Government buyback program, although Tandou has been previously flagged by the Australian Conservation Foundation as one of six iconic properties the Rudd Government should buy to save water for the river system.
It's believed Senator Wong had little to no knowledge of the sale, and she deflected all questions on the deal following the agreement to her NSW counterpart, Phil Costa.
Mr Costa's department is not actually involved with the purchase either – it's being looked after by the NSW Department of Environment and Climate Change – but he said following the meeting that the deal was a "win-win" for both the environment and Tandou Limited.
But when pressed on the merits of buying supplementary, or flood water, Mr Costa conceded it would be a long time until the benefits of such a big purchase would be realised and that savings would only happen in really big flood events.
Mr Costa said "times are tough" for companies like Tandou - a publicly listed entity – and acknowledged the financial benefits it would reap from the purchase of the water.
NSW Department of Environment and Climate Change Acting Director General Joe Woodward said the NSW Government committed $115 million in 2004 towards the cost of recovering 249,000 megalitres in NSW as part of the 500,000 megalitres Living Murray Program.
He said the purchase means that NSW 'can now be confident it is on track to achieve its share of the program by 30 June 2009' as agreed to with the other Governments.
Mr Woodward said recovering this high-flow licence will allow this water to pass through to wetlands in the Lower Darling and Murray Rivers during floods.
"The sale of their supplementary access entitlement will allow the company to invest further in water efficient technology which will strengthen its investment in high value horticulture," Mr Woodward said.
The purchase of such speculative water has come under attack though, with questions now being asked on just how often the company has accessed such water, how much they pay for those supplementary licences and why the Government didn't buy general security or high security water instead.
NSW Liberal Senator, Bill Heffernan, is outraged by the deal and wants the Federal Government to intervene so the purchase is at least put on hold until its exact nature is revealed.
It's believed Tandou Limited recently valued its entire water holdings at just under $34 million, yet the NSW Government paid the same amount for the flood water entitlements alone.
Its website says it's "business as usual" for the company, which recorded a 19pc jump in its collapsed share value on the announcement of the sale – which coincidently was just a day after a major change in shareholdings was recorded with the Australian Stock Exchange.
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