Shareholder Update - Preparing for the impact of buybacks

Since the commencement of the Restoring our Rivers Act in December 2023, Murray Irrigation (MIL) has been working with fellow irrigation infrastructure operators (IIOs), Coleambally Irrigation Cooperative Limited (CICL) and Murrumbidgee Irrigation Limited (MI), to discuss options to minimise impacts of further water recovery in our regions with the Commonwealth and NSW Government. 

It is clear the Commonwealth Government is going to recover more water for the environment over the next three years. This will include buybacks in the southern Murray-Darling Basin, which will have an impact on the Murray Irrigation footprint. 

MIL, CICL and MI have applied for funding under the Resilient Rivers Program for a feasibility study to explore what is required to bolster the efficiency and resilience of our irrigation networks amid this environment of water recovery, and find a pathway forward that will minimise resultant harm on farmers and communities. This is the first step in the IIOs' joint bid to secure government funding to offset the worst effects of water recovery. 

Completing this feasibility does not involve the transfer of any water entitlements to government. 

If the feasibility application is successful, external consultants will be engaged to work with the three IIOs to provide the government with an evidence base that builds the case for meaningful local government investment to support the long-term resilience of each of the IIOs. The study will further seek to identify the service cost impacts of further water recovery in the southern Basin on MIL shareholders. In this regard, MIL is planning to hold a series of shareholder ‘woolshed’ meetings during September to gain shareholder sentiment and constructive shareholder input on this issue. 

We expect to be notified as to whether our feasibility application has been successful by the end of August 2024. Further information, including how and when shareholders can participate in the woolshed meetings, will be shared at this time.



If you have any questions, please contact Customer Support on:

T. 1300 138 265
E.companysecretary@murrayirrigation.com.au 

Phil Snowden
Chair

Background information – buyback process

Commonwealth Government Announcement

Water Minister, the Hon. Tanya Plibersek released the Restoring our Rivers - Trading Strategy on Thursday 4 July 2024. This document outlines the Government’s approach to buybacks in 2024/2025.
 
Key points from this strategy are:

Southern Basin Purchase Program starting in July 2024

• A purchase program opening the week of Monday 15 July 2024 will concentrate on the Southern Connected Basin, targeting 70GL (long term average annual extraction limit[1]).
  
• Catchments eligible to participate are the Murrumbidgee, NSW, Victorian and SA Murray and Victorian Ovens. (The Upper Murrumbidgee and Upper Murray are excluded).
• The minimum tender volume is 10ML.
• Water Entitlements held in the NSW and South Australian group schemes such as MIL are not eligible to participate in the first tender.
• Victorian entitlement holders in the Goulburn, Broken or Loddon are also excluded.
• There is no fixed volume to be recovered from each state, catchment, or entitlement type.
• The tender documents will be available here

The reason the first open tender will aim to exclude water entitlements held in 'group schemes' (IIOs) is to allow more time for governments to engage with 'group scheme' operators including design and expenditure of the $300M Sustainable Communities Funding which will be delivered via the states.
 
Southern Basin Expression of Interest (EOI) starting August/September 2024

• The Government will commence an EOI from water entitlement holders in the southern Basin who were excluded from the first tender during August/September 2024 for potential purchase in mid-2025.
• The results of this EOI will inform the program approval in 2025. An invitation to participate in a purchase program will be made once the EOI process has concluded.
• Purchase of water entitlements which are currently leased may be considered.

Second Southern Basin EOI Large portfolios of water August/September 2024

• Another EOI will commence in August/September from single legal entities interested in selling a minimum of 20GL. This volume could be across catchments in the southern Basin.
• Purchase of water entitlements which are leased will be in scope for this tender.

The trading strategy will then be reviewed by the Commonwealth and updated for 2025/2026.
 
NSW Government On-Farm Program 

The NSW Government has announced on-farm water savings projects are eligible for funding under the Resilient Rivers Water Infrastructure Program.
 
The application and assessment process are the same as for the larger infrastructure programs and can be quite complex.

If you are looking for more information contact: winsw.programs@dpie.nsw.gov.au. 
 
Irrigation Industry Response 

The commencement of 'buybacks' had been anticipated, with the release of the Commonwealth’s updated Regulatory Impact Statement and the ABARES analysis of the impact of buybacks, which can be accessed here.
 
Media releases from National Irrigators’ Council quickly followed the Ministers Restoring our Rivers Trading Strategy here and NSWIC here.

[1] The conversion factor for Murray General Security is 0.699.