Water NSW : Murray Region
Water New South Wales
Who manages the water?
Both groundwater and surface water are used for irrigation in southern NSW. Groundwater has variable quality and is managed by the NSW Office of Water. The majority of licensed surface water users receive their water from the Murray River.
The Murray Darling Basin Commission manages the water resources of the Murray River system according the Murray Darling Basin Agreement 1992. The Agreement outlines in detail how the water resources of the River Murray system are shared between NSW, Victoria and South Australia. The Water Act 2007 is to be amended in 2008 to reflect agreement between the Murray Darling Basin states and the Commonwealth Government to refer some of the State powers in relation to water to the Commonwealth Government.
This will result in the Murray Darling Basin Agreement 1992 being replaced by a Schedule to the Water Act 2007. This Schedule, like the Murray Darling Basin agreement will describe in detail how the water resources of the River Murray System are shared. The changes to the Water Act will also describe the process for providing for critical human needs during periods of extremely low water availability in the River Murray.
State Water is principally responsible for the operation and maintenance of water infrastructure and water delivery in NSW. The largest irrigation water provider in southern NSW is Murray Irrigation Limited. Murray Irrigation is an unlisted public company; its members are the irrigator landholders in the company’s area of operation. Murray Irrigation provides irrigation water and drainage services to over 2,400 farms owned by more than 1,200 farm businesses through a gravity fed channel system covering an area of 748,000ha.
Within Murray Irrigation there are three classes of entitlements - Class A entitlements (reserved for supply of water to towns), Class B (High Security) & Class C (General Security). The majority of Murray Irrigation shareholders hold general security entitlements. For more information on Murray Irrigation refer to their website.
Water Allocation
How does it work?
The waters of the Murray River are shared according to detailed and prescriptive arrangements in the Murray Darling Basin agreement (which will be replaced by a Schedule to the Water Act 2007 (Cmth).
Victoria and NSW manage their water resources differently. Victoria has a lower yield but a higher reliability policy. In contrast NSW does not have a compulsory reserve other than that required to supply South Australia. This results in NSW having a higher yield but a more variable water supply than Victoria. NSW has a higher average use than Victoria but also has some years when allocations are lower than Victoria’s.
Allocation announcements are made on the 15th of each month (or the next business day if the 15th is a weekend or public holiday). Additional interim announcements may be made between formal announcements.
An advantage in the NSW system is the ability of general security entitlement holders to carryover unused water from one season to the next (with an upper limit of 50%), therefore allowing irrigators to have water at the beginning of the season and giving them the ability to mitigate some of their risks.
Since November 2006 the NSW Murray Lower Darling Regulated River Water Sharing Plan has been suspended because of extreme drought conditions. The NSW Department of Water & Energy, since this date has implemented contingency water sharing arrangements.
How does it work?
The maximum allocation in Murray Irrigation will generally not exceed 90% of entitlements. Customers should also be aware that the combined total of water carried over and water allocated to a landholding cannot exceed 110% of entitlements in any one year.
| Irrigation Season | Allocation of General Security Entitlement |
|---|---|
| 1996/1997 |
100%
|
| 1997/1998 |
84%
|
| 1998/1999 |
93%
|
| 1999/2000 |
35%
|
| 2000/2001 |
95%
|
| 2001/2002 |
105%
|
| 2002/2003 |
10%
|
| 2003/2004 |
55%
|
| 2004/2005 |
49%
|
| 2005/2006 |
63%
|
| 2006/2007 |
0%
|
| 2007/2008 |
0%
|
Water Costs
The annual water charge in the MIL is about 50% fixed based on the number of delivery entitlements a shareholder has and 50% variable based on the actual ML used.
The annual water charge in 2007/08 had a fixed cost of $12.64 per Delivery Entitlement held plus a variable cost of $13.70 per ML of water used.
For example, if an irrigator holds 1,000 Delivery Entitlements and uses 800 ML during the irrigation season then the annual water charge will be:
1000 ML (Delivery Entitlement) x $12.64 (fixed cost) + 800 ML (water used) x $13.70 (variable cost) = $23,600 (Total annual water charge).
Water trading
Annual Water Trade
Annual water trading is used extensively in Murray Irrigation. The price of annual water varies considerably and is highly influenced by the availability of water in any one season. View the changes in water prices over the seasons.
Murray Irrigation places no restrictions on annual trade as long as a shareholder has water available. Murray Irrigation landholders can sell water to anyone with a Water Access Licence in the geographically connected river system, however, different costs and restrictions apply to intravalley, intervalley and interstate trades.
Murray Irrigation also operates a telephone and internet based water exchange operating 24 hours, 7 days a week during the irrigation season. No commission is charged on exchange transactions. Water traded between company landholders, via the exchange or privately can generally be credited to the buyers account within 24 hours of the transfer being authorised.
No loss factor applies to water traded between Murray Irrigation landholders. However when water is temporarily traded into Murray Irrigation’s region from another area, the company applies a loss factor to account for transmission losses. The loss factor is subject to change in response to seasonal conditions, but is generally 10%. In 2007/08, because of limitations on water availability a loss factor of 15% has applied since October 2008. Annual water trade price history is available on the Murray Irrigation website.
Permanent Water Trade
Changes to Murray Irrigation’s constitution in 2006 mean that Murray Irrigation water entitlements can be owned without the need to own land within the region. All except 5 water entitlements, 5 delivery entitlements & 5 shares can be sold from a Murray Irrigation landholding.
Murray Irrigation maintains a register of buyers and sellers of permanent entitlements and displays sale & buyer prices on our website. Murray Irrigation water entitlements can be bought and sold from Victoria, South Australia and the Murrumbidgee Valley.
Water entitlements can be transferred from Murray Irrigation’s license and onto a NSW Murray River Water Access License. When approving a transfer the company will retain its 17% loss factor and allow 83% to be transferred from the license.
Buyers and sellers should be aware of the implications of the allocation of delivery entitlements to Murray Irrigation shareholders. Murray Irrigation’s delivery entitlements are attached to Murray Irrigation landholdings and as such cannot be traded externally. Within Murray Irrigation shareholders need to be aware that when they are purchasing water entitlements, they may or may not also be purchasing delivery entitlements, this will have an influence on price.
If neither the buyer nor seller wants the delivery entitlements; or cannot take them, if they do not own land within Murray Irrigation’s area of operation, the seller when transferring water entitlements without delivery entitlements is required to terminate the corresponding number of delivery entitlements. This change was introduced in April 2007. The termination fee is currently $382.95 per delivery entitlement. . This may alter the selling price of the water entitlements. Permanent water trade price history including and without delivery entitlements is available on the Murray Irrigation website.