ࡱ> hji5@ 4bjbj22 7\XXO+~~~~~~~82TD06:|{0}0}0}0}0}0}0$23R50~"""0~~0%%%":~~{0%"{0%>%&V.@~~s/ ΰV". {0000.x>6L$~6s/~~~~6~s/:|%d 00$D% West Corurgan Oaklands Rd, PO Box 156, Berrigan NSW 2712  HYPERLINK "http://www.corurgan com.au" www.corurgan.com.au email ;  HYPERLINK "mailto:info@corurgan.com.au" info@corurgan.com.au Ph HYPERLINK "http://www.corurgan.com.au"  03 5885 2392 Fax 03 58852660 Mobile 0419 156 429 ABN 92 793 193 219 PUBLIC SUBMISSION TO WATER MARKET RULES ISSUES PAPER BY WEST CORURGAN P.I.D. BOARD OF MANAGEMENT ON 8TH MAY 2008 INTRODUCTION : West Corurgan Board of Management represents 295 farm unit stakeholders coupled with the immediate community within the Private Irrigation District . Operating since 1969 as a private entity , West Corurgan has actively participated in the water market regime, operated successfully without financial input from Government and facilitates a valuable contribution to the stability of the surrounding community . Question 3 Water market and trading objectives Are there any other factors that the ԭ should consider when interpreting the water market and trading objectives? Comment: To date there has been insufficient attention to recognition of the potential demographic and economic impacts on community areas that may suffer as a result of water exports from the district. Question 4 Restrictions To what extent, and in what circumstances , is it appropriate for an operator to be able to impose restrictions on the parties to whom water can be sold? Comment: All water traded must retain original characteristics particularly in relation to levels of security, eg High/General Security in NSW . Changes in Security status may be considered providing predetermined conversion ratios are adhered to with no impacts on security of all other entitlements With the unbundling process in place, doesnt it become irrelevant if a purchaser is a non user or non landowner? Constraints To what extent, and in what circumstances , is it appropriate for an operator to be able to impose restrictions on the export of water ? Comment: Operators should have reasonable discretionary power to limit water exports by means of acceptable restriction parameters. Whilst it is acknowledged that individual rights are extremely important so to are the rights of those remaining within the operational scope of the operators district . Each operator is somewhat unique and therefore should not be bound by blanket legislation that fails to take into account that operators particular situation. There is an additional issue here with potential constraints that may be necessary to regulate water transmission losses between operators. For example, 10,000 Megalitres transferred from Upper Murray NSW to Lower Murray Sth Aust creates an issue with the river operator in regard to the quantity of water required to deliver the transferred water downstream. Question 4.4.1 Security for future payment of fees To what extent do irrigators who elect to maintain their delivery entitlements following the sale of their water entitlement present a risk to the revenue security of an operator.? Comment: Whilst Water entitlements can no longer be attached to land, delivery entitlements should be attached , this then provides an avenue for an operator to secure revenue. When transferred out of an operators district, there should be no ongoing tagged charges attributable to the purchaser. Theoretically, tagged fees are fine, the practicalities , I believe make it somewhat unworkable. Question 4.4.2 Requirement to offer security Is it appropriate for an operator to require security to be offered ? Comment: If water rights are transformed from an operators license , it is presumed that the only fees applicable to that transformed water are Govt Fees that then remain the responsibility of the individual. If that water right is going to be used within an operators district the fees applicable to that use then become a negotiable item as are the conditions of use of that water. Once a water right is transformed, the presumption is that water can then be used (subject to conditions) anywhere in the valley for example because it is then held by the individual. Question 4.5 Administrative fees and charges Comment: Operators Fees are I believe currently negligible , they should be applied and probably be based on cost recovery. Question 4.6 Cut-off dates and trading seasons Should an operator be able to specify cut-off dates for completing trades or define trading seasons? Comment: Trading seasons and cut-off dates should be able to be determined by an operator . However those seasons should be predetermined each season and highly publicised throughout the industry. Allocations are given intermittently and therefore operators should be able to apply flexibility to the trading process. Question 4.7.1 Interaction between operators and intermediaries Do operators recommend specific brokers or exchanges to irrigators seeking trade?. Comment: Water sales/trade should be open market with no restrictions on who facilitates the process . Current exchange operators are already in a position to monopolise . There should however be licensing parameters in place for water brokers particularly in relation to security of funds, transparency and accountability. Question 5.1.1 and 5.1.2 Terms and conditions for transformation and/or trade To what extent are operators terms and conditions for transformation and or trade presently clearly specified, comprehensive and readily available? Comment: Trade agreements should be comprehensive, with clear distinction between govt conditions and operators conditions . Question 5.2.2 Transformation and/or trade administrative process Should operators be required to establish and clearly specify the minimum terms and conditions on which they will provide delivery services to those who hold a transformed water access entitlement? Comment: Terms and conditions are appropriate, with the ability for an operator to differentiate between transformed members and those with irrigation rights. Bulk supply delivery conditions can vary to the operator on an annual basis, therefore delivery conditions should be able to be set on an annual basis if needs be. Question 5.3.1 to 5.3.7 Transformation and/or trade administrative process What action, information etc is required for this process? Comment: Information requirements should be determined by individual infrastructure operators. Application checks to remain responsibility of the operator. Third party consent is particularly important . Standardised form would be good but hard to achieve. Approvals should come from the Board, not management. Question 5.4.1 to 5.4.3 Timeliness Factors in determining time limits . Comment: Timeframes are appropriate, permanent transfers/transformations involve not only considerable amounts of money to irrigators but access to the purchased water can be critical . Timeframe to begin with lodgement of correctly completed application with the operator and conclude with final approval of the relevant Govt Agency. Our experience indicates that slow processing time problems are generally with the Govt agencies, not the private sector. Question 5.5.1 to 5.5.4 Operators water registers and accounts Comment: To establish a national register that encompasses all individuals within operators districts as well as all the individual water right holders appears to be a potential bureaucratic nightmare. This register would contain 3rd party mortgage/financial information and if established so as to be public could present personal info security issues. Any register, whether it be National or otherwise that is accessible to the public should not have 3rd party financial interests disclosed. The attributes of the water are all that need to be available for perusal. Operators, will have 3rd party interests registered and the checking of that information will become part of the operators transfer process, financial information should be immaterial to the purchaser. The saving of current transfer costs (which are negligible at this time) will be far outweighed by the overall operational and maintenance costs of a national register. Current Govt agencies, have access to water right licenses now, private sector operators will still maintain their own registers(for security and integrity reasons) as a base to provide information to those with a legitimate interest . The use of traded water is limited by physical hydrological restrictions, therefore a national register to facilitate trading appears to me to not be warranted. Access should be restricted. Question 5.6 Market Information Is adequate market information currently available from operators ? Comment: From our experience in the market place, we believe that there is quite sufficient info out there to facilitate the trading process. There should be no need to pay for information, brokers etc are private enterprise touting for business, they will continue to make info available without the need for direct fees. Basic info regarding entitlements and allocations is readily currently available to the public. The information regarding trading in the public market place appears to be adequate, however there is an apparent issue with transparency and trading information in relation to Govt agency puchases. Question 7.1.1 and 7.1.2 Coverage of the water market rules To what extent should the water market rules apply to all operators to the same degree? Comment: As stated earlier there should be provision for market rules to be flexible enough to permit the unique situations of some operators(particularly small operators) to be recognised. Legislated regulations that result in compliance costs to operators should be borne by Govt not the operator. Perhaps smaller operators should have delayed implementation as they may not have the resources available to comply if time frames are instigated or the capacity to pay if compliance costs are unilateral. Question 7.3.2 Monitoring compliance with the water market rules Are there any other issues the ԭ should be aware of in developing and implementing monitoring arrangements ? Comment: Socio-economic impacts are issues that have not been addressed adequately, particularly in view of the fact that the Federal Govt has entered the market place with far more finance than the private sector can access. It is essential that adequate monitoring of potential hot spots be implemented where large exports of water diminish the viability of localised communities. CONCLUSION: It must be emphasied that irrigation providers are individually unique, many of them have been operating successfully for decades in harmony with their community and that fact should be recognised . Federal legislation should be flexible enough to permit that unique quality to continue into the future . Peter M Wallis Secretary/Manager West Corurgan . 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