High and dry … Riverina rice farmer, Jeremy Morton, with some local children. Mr Morton wants to sell his water entitlements, and close this irrigation channel so he can give up farming. Photo: Quentin Jones
INTERNATIONAL investors are circling Australia’s water market, looking to snap up hundreds of millions of dollars worth of our most precious national resource, with almost no government limit on how much they can buy.
Foreign investors have already bought millions of litres of water rights in our most strategic food-producing areas and are poised to buy more after the massive shake-out tipped to occur when the long-awaited Murray-Darling Basin plan is released.
The head of an Australian fund designed to cash in on future water scarcity leaves tomorrow on a trip through Asia, North America and Europe aimed at raising $100 million from investors to buy water in the Murray Darling Basin.
”There is a chronic supply/demand imbalance for Australian water which will result in higher water prices,” says the website of the Causeway Water Fund, whose managing director Richard Lourey will scour the world for investors.
Water has become a hot-button topic for the federal rural independents locked in talks over who will form government.
Overseas stakes in our $30 billion market already include:
$20 million worth of entitlements bought by the US-owned Summit Global Management through an Australian subsidiary;
An estimated $130 million worth of water bought by Olam International of Singapore in a deal involving the purchase of almond groves in northern Victoria;
More than $30 million worth of rights in western NSW held by Tandou which has substantial overseas ownership.
Meanwhile, the chief executive of the NSW Irrigators Council, Andrew Gregson, has revealed that merchant banks have approached the organisation for advice on how European investors can pour hundreds of millions of dollars more into Australian water.
In some financial circles water is dubbed ”blue gold”. The online investment journal Investment U recently had the headline, ”The oil of the 21st century … how ‘blue gold’ can make you rich”.
Australia has spawned the most advanced water market in the world, with more than $3 billion worth of rights changing hands last year.