ࡱ> EGD!` +bjbj\\ .>>>#%TTTTTTTh8$$h'"h":::!!!!!!!$#h%Z!T!TT::!T:T:!!TTB:  Q<!!0'",Q&Q&BQ&TBdv!!v'"hhh$ hhhhhhTTTTTT Public Submissions to Water Market Rules Issue Paper by Thomas McCallum ԭ Thomas McCallum Water Branch 98 Russell St Water Market Rules-Issues Paper Deniliquin 2710 GPO Box 520 Ph/fax 03 5881 4803 Melbourne VIC 3001 Mob. 0448897339 05/05/08 Dear Sir/Madam, I am an Irrigator and a Real Estate Agent in Deniliquin. I work for Rodwells & Co which has 20 agencies and head quarters in Melbourne. I sell temporary and permanent water licences, including ground water. I deal mainly in water within the Murray Irrigation Area and the 016 ground water area. It is in Murray Irrigation LTD (a bulk water entitlement holder) that I will be addressing. I have sold over 10 000 water entitlements to the Government and believe I have knowledge and success, to be taken seriously. Murray Irrigation Limited or MIL has 2400 members, holding 1 494.312 water entitlements, according to their web site. MIL is doing everything to prevent sales of water to the Govt. and as late as Tuesday 8th April 08 announced a Rule change that made five of my water sales fall over. It is affecting property sales as well as land prices. They are excluding their members from the biggest buyer in the water market, The Govt. MIL is influenced strongly in its decisions by S.R.I. Southern Riverina Irrigators and other landholder groups that have Director Members and who have vested interests in the manipulation of the MIL water market. These pecuniary interests have lead to some insider trading. More important than this are the MIL Fees. The termination charge is $382.95 per mega litre, which they claim is 15 times the cost of the supply of water. Annual access fee is $9.47 and their variable charge is $10.18 In a year of 100% allocation, they only deliver 83% at any landholding. 83% of $10.18 =$8.44 If I add that to $9.47 = $17.91 x 15 = $268.65 Please find enclosed a copy if MIL charges. They are adding in Govt charges and Land & Water Management charges that were being funded by the Govt. If you try to sell a MIL water entitlement and convert it to a mega litre they claim 17% of the water but you terminate100% as they issued you with 100% delivery entitlements. This makes the cost to terminate, per meg. $461.38 When I sell a farm, the farmer pays for 100% water entitlements. He pays Stamp Duty on 100%. Every water entitlement is one mega litre at the Mulwala Take Off on the Murray River but when the farmer goes to sell his water back to the river, for the environment, MIL claims 17% is theirs. Farmers all accept there is a loss down the channel to their farms but where is this water going when it is put back in the river before the Take Off. I am claiming that the true cost of supply is not $25.53 not $17.91 but lower. MIL is a company but the shares are not listed. Many directors are farmers with vested interests and they operate with inefficiencies that other companies would correct. For Example: Rodwells & Co Pty Ltd operate a water exchange, so does MIL. MIL does not charge MIL members to use their exchange and run it at a loss. There are several other water exchanges eg. Waterfind, Elders & Landmark plus water brokers. The water exchange MIL operates for MIL members. They trade MIL to MIL in 3 days, but if a trade is to external buyers, the trade takes 4 to 5 weeks. I believe that MILs internal trades still have to be transferred through State Water and would take 4 to 5 weeks officially. MIL is duplicating services commercially available and they build these services into the cost of supply of water and that gets built into the termination fee which then becomes a barrier to trade because the charge is enormous The termination fee should only be about $150 per meg. and this would allow trade in water and farm sales with delivery entitlements to proceed. By MIL charging no fee, trading water in 3 days, MIL members sell their water at a discount to the general market. This suits the bigger MIL water users but excludes other efficient industries thereby doing three things:- Lowering the price of temporary water to MIL members both buyers and sellers. Stop water being used outside MIL by making it easy, cheap and quick to trade inside, again restricting trade to outside. Making it difficult for commercial exchanges and water brokers to source temporary water for their clients either to sell or buy. Another issue being asked by MIL and its members is how to make Delivery Entitlements worth money. I believe the Government should look at the carryover rules. At the moment in MIL you can carry over 40% of your water entitlement. This gears all value towards the water entitlement. In MIL 20% carryover should be with the Delivery Entitlement and 20% with the water entitlement. This change would make no difference for the majority of MIL irrigators who own Water and Delivery Entitlements If you only owned MIL Water Entitlements you would only carryover 20%. If you owned Delivery Entitlements you could buy water and carryover 20%. Since MIL has issued ONE delivery entitlement to ONE water entitlement, this would work. This would add another reason for MIL growers, who sell water entitlements, to keep paying for delivery entitlements, and operate as seasonal farmers, thus paying for maintenance etc. I have made many suggestions to MIL including zoning MIL into 100% secure zones guaranteeing water supply and allowing these areas to conversions to High Security with no water to be traded off allowing 60% to be sold off in other zones and 99% in other zones just guaranteeing stock and domestic. This would restructure the area over 10 years. The areas that are to be guaranteed supply would become the irrigation areas. The land price would lift and higher value industries could come to our area. The water sales would come from the other areas and these people would gain from the water sales either expanding in land or getting out. MIL policy is to stop all water sales and water leaving the area. They believe if the area could get a flood that all the climate change talk will be forgotten and life will return to normal. MILs actions have been to allow negotiations with the Govt. to proceed, agreements to be reached only to have MIL change their rules before contracts are exchanged. This is the second time I have experienced MIL change the rules on water sales. The Government Water Purchases The Tender system is terrible! As an agent, I want to get the best price. When we sell temporary water the market is disclosed. We then take the best offer in terms of money and conditions. If you want to buy shares, the market is disclosed. When we sell land and houses we have prices and disclosure. The Govt. need to research the markets and disclose the price they will pay. I have clients accepting lesser offers because they are under pressure and know that this is an offer, when no one knows what the Govt will pay. Rumours are everywhere and the clients are threatening to sue us for not getting them the best price. Will the Govt . pay these clients the difference? When I talk to the Govt. representative of the water sales, they have no power to negotiate but talk about how good they are. What training have they done in sales? How ethical is this system? Do they trust anyone? We have the clients confidentiality to negotiate a deal but they wont negotiate. They wont talk prices and its like talk to a receptionist on how to fill out forms. Will it be disclosed how much these people have been paid to buy water from the market and this be put in a price per meg. of water bought? Will they be paid on achievement and are they cost effective. I really dont think they are and everyone is totally frustrated with them. The Government needs to appoint a specialist person to buy in each region, as each region is different with different rules. MIL has different rules to the Moira Trust, which has different rules to a river pumper. All water is NSW General Security water from the same source. The prices of the water often relate to the rules. The Moira Trust is a group scheme that needs to be investigated as well. They dont even allow temporary trade and this year, refused trades for their members, costing them financially. One member wanted to sell 70 megs of temporary water for $70 000. They would only allow a trade to other members and no member would pay the market price. They may have been prepared to pay $200 but not $1000. The people in charge are arrogant bullies who run the system for their benefit and show no directorship to their members. You can get all the figures from the MIL Web site including their end of year financial report. They claim to make a profit in years where they delivered 400 000 megs. This means 26% of a potential 100% income from delivering water down channels. MIL members would be happy to pay some termination fee, but no member understands how MIL is allowed to put such an excessive fee on their water, when they try to sell it. Yours sincerely Tom McCallum     PAGE  PAGE 1 HO^mnz ! 8 r |  ./IPU_cjkl@JOļĸ츴 h SbhK. h Sbh Sb h Sb5 h_q5h Sbh Sb5h Sbh_qhh5hhh5hh5= hY3h;h;H*h;hhK.h&h}h< zh51Y:HRn $ % & ' 7 = > /&klgd51Y++(E 1!"OKL; & Fgd[2 & Fgd %`cdnv} hv !JKLYl|}:;&'UVrsv  9cefg ļļļĸ촰hnh55hVhrshQXhzhihrhDLh[2hlnhK.hv5hvh %hUfRh>h(h|thK.h SbD;' fg ! !?!!##m$&&''()**++++++ ! !>!?!!!!!!!!!"###$($$$$$$$%&&;'<')j***+++++++++++++++++++++ÿÿ׷װh51Y h51Y0Jjh51Y0JUh|jh|U hxLh[%h$3hhtqhf+hDLhPh\hzh[%hx#hVzh( hxL5hxLhxL5hxLh55h8++++++++++++++++++++h]hgd> &`#$gd>+++++++++ hxLh[%h|h51Yh0JmHnHujh51Y0JU h51Y0J,1h. A!"#$% @@@ NormalCJ_HaJmH sH tH DA@D Default Paragraph FontRiR  Table Normal4 l4a (k(No List4 @4 >Footer  9r .)@. > Page NumberHH 51Y Balloon TextCJOJQJ^JaJ#>HRn$%&'7=>/&kl( E 1 !"OKL;' fg ?m !""###################0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000`?~0000@0@000d $$$' ++;+++  '!!8@0(  B S  ?vDHvt:"vv,Vvԋvdv"vvv\v4NvĨvlnvTv#v4vlvvvv,vlvvv,vlvv88?^^eiir  "####     >GGdmm#qyy  "#### # urn:schemas:contactstitle urn:schemas:contactsSn'urn:schemas:contacts GivenName8*urn:schemas-microsoft-com:office:smarttagsdate9*urn:schemas-microsoft-com:office:smarttagsplace8*urn:schemas-microsoft-com:office:smarttagsCity>*urn:schemas-microsoft-com:office:smarttags PersonName =2008458DayMonthYear ^demns##################6>]   j x iqFO ""##############3333333333333333333R^mn' >##################^d#################FP5h^`OJQJo(hHh^`OJQJ^Jo(hHohpp^p`OJQJo(hHh@ @ ^@ `OJQJo(hHh^`OJQJ^Jo(hHoh^`OJQJo(hHh^`OJQJo(hHh^`OJQJ^Jo(hHohPP^P`OJQJo(hHF         /pZo2&?QbI 15= J   ~S " 8B D qf+Ak%.>5"!-,;$^UV8!#%;%}'T(<+ I+{,#-+.K.9/[2$3Y3x*4 H4J57P@q@:[C>sCD\EWF-H8JQBKxL;pMzeQRt.RUfRSHSTV51YQ}ZJ[T7\^u^&`8W`ga SblLgWgC^g\hi1iCjln.oprqtqqrXrPr?t|t8.v0y< zVz\{Ud{s}| =~n DLZyz| {Z P+v__v>7@<NJ& i_q[ ?;]KRKrs %IPCL}x#ZL}xdrdtv6^rPO~VKTQX/ (*9{) 2q>F6vJY(wQ=@55I#egO@#p@UnknownGz Times New Roman5Symbol3& z Arial5& zaTahoma?5 z Courier New;Wingdings"1h*&*&*&RV@RV@!4d##2QHX ?i2ACCC PREINSTALL sara stark Oh+'0  < H T `lt|ԭ PREINSTALL Normal.dot sara stark2Microsoft Office Word@Ik@4K@$Q@$QRV՜.+,0 hp  OPTIMA@#d ԭ Title !"#$%&'()*+,-./012356789:;=>?@ABCFRoot Entry F%QH1Table a&WordDocument.>(48<CompObjq  FMicrosoft Office Word Document MSWordDocWord.Document.89q