Minister for Agriculture and Food Security
Minister for Water
The Hon. Tony Burke MP
Minister for Sustainability, Environment, Water, Population and Communities
Northern Victoria Irrigation Renewal Project Stage 2 agreement
18 October 2011
The Australian and Victorian governments have reached a new agreement to deliver the nation's largest irrigation infrastructure renewal project.
The agreement will help restore the Murray River to health and deliver a world-class irrigation system for northern Victoria's food producers.
Federal Water and Environment Minister Tony Burke and Victorian Water, Agriculture and Food Security Minister Peter Walsh today signed a new contract for Stage 2 of the $1.2 billion Northern Victoria Irrigation Renewal Project (NVIRP2).
The project is the largest Australian Government investment in irrigation infrastructure and will produce 214 gigalitres in water savings. These water savings will make an important contribution from Victoria towards reaching the sustainable diversion limits under the Murray Darling Basin Plan.
As previously agreed, the Australian Government will contribute $953 million and Victoria $106 million to Stage 2 of the NVIRP, generating 204 gigalitres of water savings to be split between the Commonwealth and Victoria.
Under the new agreement, the amount of water to be returned to the environment has more than doubled from what was originally planned under the NVIRP2.
The key parts of the new agreement are:
- Agreement for the NVIRP Stage 2 to proceed, with Victoria fully responsible for project delivery.
- Changed water sharing arrangements for the NVIRP2 under which 102 gigalitres of the water savings will be sold to the Commonwealth for environmental use.
- The Victorian irrigators' contribution to the NVIRP will come from the proceeds of selling the second 102 gigalitres of water savings generated from the project.
- A new $48.5 million on-farm water infrastructure project undertaken by Victoria, with the Commonwealth contributing $43.7 million and Victoria $4.9 million, to be provided by participating Victorian irrigators. The water savings of 20 gigalitres will be shared between irrigators and the Commonwealth with 10 gigalitres of water to the Commonwealth for environmental use.
- Agreement by the Victorian Government to give trade approval for around 88 gigalitres of water trades from previous Commonwealth tender rounds blocked by Victoria's four per cent limit on water traded out of a district.
The second stage of the NVIRP will be rolled out across seven years and involve upgrading irrigation delivery systems to benefit properties across the Goulburn Murray Irrigation District.
Mr Burke said the 214 gigalitres to be transferred to the Commonwealth for environmental water use over the next six years would make a significant contribution to 'bridging the gap' to sustainable diversion limits under the Murray Darling Basin Plan.
"I am determined that Murray Darling Basin reform delivers healthy rivers, strong communities and sustainable food production," Mr Burke said.
"We can achieve this by investing in infrastructure upgrades and improving the efficiency and productivity of our irrigation industry while we also recover water for the rivers.
"The water purchased will be used to improve the health of Murray Darling Basin rivers, wetlands and floodplains and will complement the Gillard Government's major investments in more efficient irrigation water delivery and use.
"All of the water saved through this package will be achieved through improved water infrastructure efficiency. It means irrigators can increase productivity through improved technology and there is more water to return to our precious environment."
Mr Walsh said the revised agreement would help keep water delivery prices down, by offsetting the contribution which Victorian irrigators were previously expected to make to the project.
"The main focus of the Victorian Coalition Government in negotiating this agreement was the need to reduce the cost to irrigators and maintain the future prosperity of the Goulburn-Murray irrigation district," Mr Walsh said.
"As a result of this deal, irrigators will no longer face increases in the price of water as a result of the contribution they were expected to make to the project.
"The agreement gives certainty to one of our most important food producing regions and represents a strategic recovery of water for the Commonwealth.
"The $43.7 million for on-farm efficiency projects will also allow irrigators to derive the maximum benefit from an upgraded irrigation system," Mr Walsh said.
These water transfer arrangements in the new package replace all previous understandings between the Commonwealth and Victoria with regards to water savings from the NVIRP2.
Mr Burke said the water purchase element of the package will be funded from the Australian government's water buyback program.
"All Basin States have the option of making offers to sell water entitlements to the Commonwealth to help 'bridge the gap'," Mr Burke said.
The infrastructure elements in the NVIRP2 and the on-farm program bring to life the $1 billion Commonwealth commitment made under the 2008 Intergovernmental Agreement on Murray Darling Basin Reform. In that Agreement, Basin governments committed to a new culture and practice of basin wide management, through new structures and partnerships, including the preparation of the Basin Plan.