Sunraysia farmers have raised concerns about who is going to pay for the further roll-out of the region’s latest irrigation modernisation project.
Victorian Farmers Federation (VFF) Sunraysia branch infrastructure spokesperson Bill McClumpha said there were growing questions about Lower Murray Water’s (LMW) Sunraysia Modernisation Project Part Two (SMP2).
"Irrigators are legitimately concerned about backing the inherently risky project, as effective co-mortagors and as conscripted partners in a common irrigation scheme,” Mr McClumpha said. “They have to-date assiduously avoided any consultation with the general irrigators or customers of LMW. Some general sessions have just been announced but they are unlikely to result in substantive details being revealed."
LMW has three months to prepare its business case for the SMP2, with Registrations of Interest (RoI) to close off, next week.
“Everything will be top secret, you won’t know how much they are paying for their water delivery – it’s a real likelihood existing irrigators will subsidise the setting up of the project, and the ongoing running costs, through higher rates,” Mr McClumpha said.
“There is universal concern about expansion and what the implications are for the irrigators, cost wise, but also some irrigators are concerned regard water transport and security issues, if the expanded area is substantial in size.”
Water Minister Lisa Neville said it was still “early days” for SMP2.
“All of these issues will be factored in and form part of considerations for any future decisions,” Ms Neville said. “LMW will be conducting a cost-benefit analysis to ensure existing customers in the district are not negatively impacted by the proposed SMP2 options.
LMW customer and stakeholder manager Andrew Kremor said SMP2 was a response to market demands and would benefit existing customers.
The number of private diverters, along the Murray River, had more than doubled, in the past 10 to 12 years, he said. Blocks which had been “browned off” during the drought, or for which irrigation entitlements had been sold, were now being revived.
Federal capital funding was available for up to 50 per cent of the project, to help pay for new pipes, dams, pumps and other associated water infrastructure. LMW was not in a position to indicate which enterprises had shown an interest in the new scheme.
“Our model is to get 50 per cent of the funding from proponents, and 50pc from the government, so there would not be any need for existing irrigators to contribute to those developments, at all,” Mr Kremor said. “There will be some benefits that go to existing customers, we will have a greater water delivery base to spread costs over, and there will be economies of scale, in terms of additional pipes, pumps and dams. Our aim is to ensure new developers pay for the new development of the water infrastructure, but existing customers will be beneficiaries of that.”
But former First Mildura Irrigation Trust chair Jim Belbin said the biggest issue was the cost to existing irrigators.
“There certainly seems to be a suggestion that what’s going to happen is the Lower Murray business case will propose delivering water to the SMP2 area on the basis of just the marginal cost of pumping the water, not the full cost of recovery,” Mr Belbin said.
The greatest concern was that water from the Merbein pipeline would be tarriffed at a lower rate, for the SMP2 customers. He said he was also worried about a lack of transparency, with LMW refusing to make the business case for the first modernisation project public.
“If Mildura council was making this sort of proposal, they would be bound by law, to go through a public consultation process; they would have to display their plans, open the planning arrangement for submissions and public comment, they would review the comments, they would republish their plans and then ratepayers would get a vote at the next election. There is unseemly haste in the whole process, they are going to produce a business case by March, and that just beggars belief in terms of the rigour you would expect.”
Mr Kremor said LMW anticipated interest in increased irrigation capacity would continue.