Environmental Flows Workshop

20 August 2002

Chief Executive of Murrumbidgee Irrigation, Geoff Hipkins, in his address to the MDBC Community Advisory Committee workshop in Canberra today highlighted the performance problems with water transfer markets.

Mr Hipkins said "recovery of environmental water to date has involved regulation as an aggregate constraint on water use, and water transfer systems to reallocate water to so called highest value uses.

Mr Hipkins continued, "clearly, the transfer market has failed to deliver - because the policies are in conflict. Costs to water users have often been worsened by market failures. The lessons do not need to be learned again.

Mr Hipkins continued, "the water transfer market will only work properly if action is taken to correct failures. Creation of unrealistic expectations of what the market can achieve will inevitability lead to high costs."

For the markets to work fairly and effectively, what we need is:

• Clear and certain property rights that reflect supply conditions,

• A fully integrated system of water storage and delivery,

• Transparency, full information, and stability for participants, and

• Market governance that is consistent with environmental and usage objectives.

In summary Mr Hipkins said we need participative review of transfer markets and improved efficiency by correcting sources of failure.

ends

For further information contact: Geoff Hipkins, Chief Executive, Murrumbidgee Irrigation, phone: 6953 0100