Example of a dodgy water deal par excellence where a Cayman Islands corporation can pocket $78.8 million from a suspect water sale in the beleaguered Murray-Darling Basin........
Eastern Australia Agriculture Pty
Ltd (EAA) was
incorporated in 2007 and is based in St George, Australia. It operates as a
subsidiary of Eastern Australian
Irrigation Limited.
According to The
Courier Mail on 21 March 2018; the company is based in the tax haven of the
Cayman Islands.
The
Land reported
on 19 October2011 that; EAA shareholders are based in Grand Cayman
in the Cayman Islands. Its directors include former Ridley Corporation managing
director Matthew Bickford-Smith and former Colly Farms's grower services
manager Peter Cottle.
EEA’s portfolio
comprises two properties - “Kia Ora” (7km south of St. George) and
“Clyde”
(10km south-west of Dirranbandi) totalling 37,590ha made up of
12,800ha of cotton producing irrigation land with further areas of development
potential.
These
properties are close to the notorious water harvester,“Cubbie Station”, in the Condamine-Balonne Valley.
EAA’s entire
properties, including the water licences were reported to have been independently valued at est. $107m in 2017.
In 2017
the Turnbull Government agreed to purchase over 29
gigalitres of water for $80,041,455 from
EEA, which originally insisted on $2,200 per megalitre. But after negotiation,
the Government paid a higher price - $2,745 per megalitre.
Then Deputy Prime Minister and Minister for Water, Barnaby Joyce, approved the final purchase of 29,159 megalitres of OLF licences in May 2017 - 14,969 ML from “Clyde” and 14,190 from “Kia Ora”.
Department of
Agriculture and Water Resources (DAWR) due diligence later reduced the total volume to 28,740 megalitres and the price paid to $78,891,300.
The water purchased was
for Over Land Flow (OLF) licences, which cannot be traded between irrigators,
because they are attached to land. They have no legal status or any recognition
at a location other than where they were originally purchased. That is, there
appears to be no legal basis for the Commonwealth to ensure it gets to the
places it is intended to be used. [The Australia Institute, March 2018, “That’s
not how you haggle”, p.3]
The sale of
EAA’s OLF licences represented 74% of the value of both EAA properties.
EAA recorded a $52m gain on the sale in their 2017 Annual Report. [ibid, p.8]
The purchase appears to
be in breach of the Commonwealth Procurement Rules because it was not made
available to all licence holders in the valley…. [ibid,
p.3]
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