Groundwater purchasing

Under the Sustainable Rural Water Use and Infrastructure Program, the Australian Government committed $3.1 billion to purchase water to assist with bridging the gap to the sustainable diversion limits in the Murray-Darling Basin Plan 2012.
Sustainable diversion limits limit how much water can be used in the Basin by towns and communities, farmers and industries, while keeping the rivers and environment healthy.

To meet these SDLs, the Australian Government needs to reduce groundwater extractions in the Queensland Upper Condamine Alluvium by 38.45 gigalitres (GL).

The department has held open and limited tenders to purchase groundwater licences in this area, enabling progress towards the long-term protection of the productive base of the aquifer. To date the Australian Government has recovered 35.2 GL (LTTAY) towards the SDL.  

See progress on water recovery.

Upper Condamine Alluvium groundwater purchase tender

After 5 unsuccessful open groundwater tenders in the Upper Condamine Alluvium, industry proposed a two-stage approach:

  • the Australian Government hold an open water purchase tender (Round 6)
  • the Queensland Government would consider reducing water entitlement volumes for those who did not contribute their pre-determined share.

Under Round 6, the Australian Government purchased 35,697.40 ML of groundwater entitlements for $68,070,646 through open tender.

Between holding the open tender, and the Queensland Government making its reductions to groundwater licences to meet the sustainable diversion limit in the Upper Condamine Alluvium (Central Condamine Alluvium), several entitlement holders advised the department they still wished to contribute to water recovery in the area. The department entered into limited tender arrangements with these entitlement holders, giving them the same opportunity and conditions as purchases made under the Round 6 open tender.

The department purchased 912.2 ML of groundwater entitlements for $1,750,260 through limited tender.

Total recovery was within:

  • 288 ML of the Central Condamine Alluvium target
  • 2,954 ML of the Upper Condamine Alluvium (Tributaries) target.

Contract Details

Information about groundwater contracts awarded under the Upper Condamine Alluvium Groundwater Purchase Tender (Round 6) and Upper Condamine Alluvium Limited Tenders is available on data.gov.au.

Open tenders

The department has held 6 open tender rounds to purchase groundwater entitlements.

Open Tender name Tender period Volume purchased (GL, nominal) Total value of tender
($AUD)
2013-14 Queensland Central Condamine Alluvium Groundwater Round 1 10 February 2014 – 7 March 2014 0 $0
2013-14 Queensland Central Condamine Alluvium Groundwater Round 2 24 March 2014 – 11 April 2014 0 $0
2014-15 Queensland Central Condamine Alluvium Groundwater Round 3 21 July 2014 – 14 August 2014 0 $0
2015-16 Queensland Central Condamine Alluvium Groundwater Purchase Tender Round 4 30 November 2015 – 10 February 2016 1.9 $3,234,400
2015-16 Queensland Central Condamine Alluvium Groundwater Purchase Tender Round 5 6 May 2016 – 19 May 2016 0.4 $780,000
2018 Queensland Upper Condamine Alluvium Groundwater Purchase Tender Round 6 19 April 2018 – 31 July 2018 35.7 $68,070,646

Limited tender groundwater purchases

In July 2016, the department made 2 strategic groundwater purchases through limited tender.

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QLD Central Condamine Alluvium, July 2016

  • Date: July 2016
  • Status: Complete
  • State: Queensland
  • Water entitlement class: Central Condamine Alluvium Groundwater
  • Closest town: Bowenville, QLD
  • Nominal volume of offer accepted: 334 megalitres
  • LTAAY volume of offer accepted: 292.3 megalitres
  • Price per megalitre: $1,850 per megalitre
  • Total contract price: $617,900
  • Austender ID: CN3361041

In July 2016, the department purchased 334 ML of Central Condamine Alluvium Groundwater entitlements via limited tender. The department held 3 open tenders prior to this purchase, however, none of the offers met value for money requirements. The total value of this purchase was $617,900.

This purchase represented good value for money as the proposal price of $1,850 per megalitre was below the maximum independent market valuation price range for groundwater in this area of up to $2,000 per megalitre. The department paid $1,850 per megalitre.

This procurement was consistent with Division 2 s10.3(a)(i) of the Commonwealth Procurement Rules as no value for money submissions had been received in the previous 3 open tenders.

The department engaged with the Queensland Government, who confirmed they had no objection to the purchase.

There was strong local community support for the Australian Government to purchase groundwater in the area, with the Upper Condamine Alluvium being the only area identified in the Murray-Darling Basin Plan requiring groundwater recovery. The seller’s agent advised the department that the sale was to form part of a business restructure, with a transition from groundwater to surface water irrigation.

QLD Central Condamine Alluvium, July 2016

  • Date: July 2016
  • Status: Complete
  • State: Queensland
  • Water entitlement class: Central Condamine Alluvium Groundwater
  • Closest town: Bowenville, QLD
  • Nominal volume of offer accepted: 500 megalitres
  • LTAAY volume of offer accepted: 437.5 megalitres
  • Price per megalitre: $1,850 per megalitre
  • Total contract price: $925,000
  • Austender ID: CN3361181

In July 2016, the department purchased 500 ML of Central Condamine Alluvium Groundwater entitlements via limited tender. The department held 3 open tenders prior to this purchase, however, none of the offers met value for money requirements. The total value of the tender was $925,000.

This purchase provided good value for money as the proposal price of $1,850 per megalitre was below the maximum independent market valuation price range for groundwater in this area of up to $2,000 per megalitre. The department paid $1,850 per megalitre.

This procurement was consistent with Division 2 s10.3(a)(i) of the Commonwealth Procurement Rules as no value for money submissions had been received in the previous 3 open tenders.

The department engaged with the Queensland Government, who confirmed they had no objection to the purchase.

There was strong local community support for the Australian Government to purchase groundwater in the area, with the Upper Condamine Alluvium being the only area identified in the Murray-Darling Basin Plan requiring groundwater recovery. The seller’s agent advised the department that the sale was to form part of a business restructure, with a transition from groundwater to surface water irrigation.

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