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$78m water deal ‘anti-democratic’

Thursday, 4th October, 2018

By Craig Brealey

The $78 million that taxpayers gave to one of the nation’s biggest cotton corporations showed the anti-democratic nature of the deals between big business and government, according to a new investigation of the controversial sale.

Just three months after agribusiness Webster bought Tandou Station at Menindee, the Commonwealth had determined the value of its water holdings, said Maryanne Slattery, Senior Water Researcher for the Australia Institute.

That was in 2015, and 18 months later Webster sold the water to the government for $38 million, and received another $40 million in compensation for the loss of its earnings.

This was the first and only time that compensation was paid to anyone in the Murray-Darling Basin. The money paid for the 21,900 megalitres of water was triple the going rate and Webster then posted a $37 million profit.

It was also allowed to keep the water for a year to grow another crop of cotton, Ms Slattery said.

She said the Commonwealth’s Department of Agriculture and Water Resources (DAWR) had a very close relationship with Webster and commissioned the valuation of Lower Darling water purchases in record time.

“Given the usual cautious pace of public service-report commissioning processes, it seems likely that these discussions began months before, possibly even before Webster’s bought Tandou,” she said.

“If this is the case, it raises serious issues around DAWR’s interaction with private companies, property and water markets. 

“Unlike many other stakeholders, Webster’s managers were on first-name terms with senior DAWR officers, insisted on confidentiality and were able to negotiate their compensation package.”

The Commonwealth Procurement Rules state that the Commonwealth cannot discriminate between suppliers based on size.

Unless other water holders are given the same level of compensation, the Commonwealth Procurement Rules may have been breached, Ms Slattery said.  

The Basin Plan also requires that watersaving projects, such as the rejigging of the Menindee Lakes that would reduce its capacity by 80 per cent, must have no detrimental impact on water holders. 

“The Menindee Project and the Webster deal will reduce the reliability of supply to Lower Darling water holders,” Ms Slattery said.

“While Webster was the largest water holder in the Lower Darling, it was not the only one with significant entitlements. There is no doubt that everyone in the Lower Darling will be affected by the Menindee Project, including through economic loss.”

But Ms Slattery said the story of the river and the Webster deal was about much more than “one large company getting a lot of money” from the public purse.

“The conflict around the Basin Plan is typically presented as agriculture versus the environment, or upstream states versus downstream states. 

“While such framing helps politicians and advocacy groups champion their respective constituents, it distracts from the more important point - that Aboriginal people, graziers, downstream water users, communities, small irrigators and the environment are being sacrificed for the profits of ever more powerful irrigation corporations.” 

Now, these corporations grow cotton and nuts but what they produced is not the point, Ms Slattery said.

“A change in commodity prices will change what they farm, or indeed if they farm anything at all. 

“What is important is the concentration of power and water in the hands of few people, and their ability to influence decisions that affect their own financial interests, to the detriment of everyone else and the environment.  

Webster could get a deal done with “lightning speed”, Ms Slattery said, while other irrigators have their lives and businesses “on hold indefinitely.”

“The problem is that Webster’s financial health is paramount, but the town of Menindee is not.

“Democratic governments and their agencies are supposed to govern in the interests of the wider community. This is not happening in the Lower Darling, or elsewhere in the Basin.”

 

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