ࡱ> EGD "bjbj 4,hh    8C_ ${{{{{M$O$O$O$O$O$O$$z&)Bs$s${{$B{{M$M$A"h}#{W] "9$$0$"^)4^) }#^)}#s$s$$^) : Public Submission to Water Market Rules Position Paper George Falkiner - 13th August 2008 Member Tenandra , Marthaguy Irragation Schemes,Riperian Irrigator. Page xi Transformation and/or trade of water rights. These points need to be considered: Each scheme needs to be reviewed independently. And an independent arbitrator consulted to set these charges. Fees and Charges Termination/Exit Fees. Schemes where Members own the scheme ( Tenandra and Marthaguy Irragation Schemes) When calculating termination fees the accrued share in any profits or cash at bank, built up by pumping profits etc held by the scheme should be offset against exit fees. Also to be taken into account in termination fees should be the value of the fixed assets and infrastructure being left behind by the exiting members. To encourage schemes in becoming efficient the exit fees for irrigators wishing to transform their water should be kept to a minimum. If the costs are prohibitive this will be a disincentive to transform water. The scheme shareholders will rely on the fees paid by members exiting and can retain the status quo, with no change to how the schemes are run etc. Activities such as these following will not be carried out, particularly in low water years: Collective farming lease or purchase land at the most efficient distribution area with 0 10 Kilometres from pump site on river (this has been done on the Goulbourn River in Victoria). Scheme to be shortened to its most efferent length 10 Kilometres vs. 80 Kilometres when allocation is less than the optimum for reducing conveyancing losses in low water years See appendix 1. Page 8.Split bottom half. Socialization of losses worked when water was unlimited, this fails on low water years (greater than or equal to 20%) when scheme members which to have water delivered to outer channel arms or bottom end with 80km from pump site. The schemes constitutions need to be rewritten to make scheme cases the focus of management. By restraining trade by making exit fees too high prevents water moving to the most efficient distribution area, ie closer to the source of water (eg the river). If this is achieved then conveyance losses are minimised, sometimes to as little as 1 -2 % vs. 5 30% on inefficient schemes. Restricting the activities of irrigators by charging prohibitively through exit fees does not realise the potential of alternative operations within a scheme ie utilising alternative distribution systems which may be available. (ie opportunities exist to share the distribution network afforded by adjacent schemes to direct water in the most efficient way, lower operating overheads and conveyancing losses). Schemes will rely on the high fees charged to exiting members to maintain the status quo and may not take up the modernisation grants offered by the Murray Darling Basin modernisation scheme. The higher the termination fees and conveyance loss allowance the lower the value of the remaining scheme members water . Ie River water is currently worth $1250 meg scheme water is only worth $900 if all suggested fees are paid. Access Fees Some schemes are in the process of being modernised and changes are being made to water distribution systems. If this is occurring the new cost structure should be taken into account when access fees are being calculated. (modern efficiencies could lower running costs ie electronic meter reading; reduced role/need for water bailiff etc). Fees should reviewed on a twelve monthly basis to allow for the above. 6.6 Conveyance loss. We do not agree with the argument that a member exiting a scheme to either a more efficient delivery system (Riparian) or sale to the Federal or State Government) must leave a share component of the water entitlement equal to the schemes last 10 years average loses. This gives the scheme no incentive to strive to lower losses by: Redesign Re engineering (lining/ piping etc) Shortening Collective farming If scheme is a recipient of Federal Government modernisation grants, members should not be penalised for leaving as the scheme will be becoming more efficient. For example, losses will drop to 8.4% on the Tenandra scheme if scheme is shortened and modernised. (See Appendix 9). Page xvii The cap of 4% should be increased immediately to allow trading of scheme water to commence immediately. If you are to re-design a scheme it should be done properly and not in disjointed parts so all members who wish to leave can do so at the same time NB. Any parked water (ie Riperian water) should also pay a fixed O&M charge ie $1350/ 1000 megs/month (which is in line with scheme members charges).... Fees for all water removed from the scheme regardless of volume/type should incur the same charges otherwise scheme members are subsidising parked water owners as they currently only incur a pumping charge and do not contribute to O & M charges.. It is not feasible to assume that conveyance losses will increase if a member leaves a scheme, as losses depend on such factors: i. management efficiency ie block watering, ii. position of the member on the scheme ie distance from pump, iii which branch of the scheme a member is on ie secondary supply channel or main and iv. whether small volumes are directed thus incurring large conveyance losses. See appendices number 5. 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