GROUNDWATER PURCHASE TENDER IN THE QUEENSLAND
UPPER CONDAMINE ALLUVIUM
CENTRAL CONDAMINE ALLUVIUM AND ELIGIBLE TRIBUTARIES
FREQUENTLY ASKED QUESTIONS
What is the aim of the tender?
The aim of this groundwater tender is to purchase groundwater licences from the Central
Condamine Alluvium and two eligible tributaries in the Upper Condamine Alluvium—the
Dalrymple Creek Alluvium and Oakey Creek Alluvium.
The Australian Government is helping to protect the agricultural productive base of this area
by purchasing groundwater licences and retaining the water in the aquifer.
Why is the Australian Government conducting a ground water tender?
In accordance with the Murray-Darling Basin Plan, the maximum allowable take in the
Queensland Upper Condamine Alluvium groundwater resource should be reduced by
40.4 gigalitres (GL) to bring use within sustainable diversion limits. Reducing extractions to
sustainable levels will provide long-term protection of the productive base of this
groundwater resource.
When does the tender open and close?
The tender will open at 9am on Monday 30 November 2015 and will close at 5pm on
Wednesday 10 February 2016 (Australian Eastern Daylight Time - AEDT), which is 4pm
(AEST) on 10 February 2016 in Queensland.
What licences will the Commonwealth buy?
The following licences can be offered for sale through this tender:

Groundwater licences located in all four sub-areas of the Central Condamine Alluvium
Groundwater Management Area.

Groundwater licences in the Dalrymple Creek Alluvium Groundwater Management Area.

Groundwater licences in the Oakey Creek Groundwater Management Area.
What if I don’t know which groundwater management area my water licence is located
in?
If you do not know which groundwater management area your water licence is held in then
please contact the Queensland Department of Natural Resources and Mines
Toowoomba office on (07) 4529 1394 for assistance.
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Why are there only two eligible tributaries in the Upper Condamine Alluvium?
The Dalrymple Creek Alluvium Groundwater Management Area and Oakey Creek
Groundwater Management Area have water sharing rules that allow groundwater licences to
be traded.
The other tributaries in the Upper Condamine Alluvium do not have tradable groundwater
licences and therefore licences in these tributaries are not eligible to be offered for sale in
this tender.
Who can make sell offers?
Legal owners of eligible licences can make sell offers through the tender. If a licence is
owned by more than one person all of the owners must sign the application form. In the case
of company owners, at least two of the listed directors must sign the application form.
How can sell offers be made?
An application form must be completed and submitted to the Water Purchasing and
Conveyance Section in the Department of Agriculture and Water Resources. Applicants are
able to nominate the price they are seeking for their water licences. A sale will only proceed
if the price is acceptable to both the seller and the Commonwealth. Only one application will
be accepted per water licence.

Please note that on 21 September 2015, responsibility for water policy and
resources was transferred to the Department of Agriculture and Water Resources.
The website is currently being updated to accomdate this change; however the
groundwater tender documents will be made available on the Department of the
Environment website as a temporary measure until further notice. A link to the tender
documents is also available on the home page of Department of Agriculture and
Water Resources.
What were the outcomes from the groundwater purchase tenders held in the Central
Condamine Alluvium in 2014?
While there was some interest from willing sellers in the previous groundwater tenders in the
Central Condamine Alluvium no offers were pursued. Since these tenders, we now have
more information to guide the government and sellers in regards to pricing expectation.
How will the department determine which licences to buy?
Since the previous groundwater tenders were held, the department has new information on
prices in this market and a new independent valuation has been obtained for groundwater
licences in the Central Condamine Alluvium, the Dalrymple Creek Alluvium, and Oakey
Creek Alluvium. This valuation will assist with our understanding of the market value of
licences in each of these areas.
Will there be different prices for licences across the aquifer?
The price which will be paid for groundwater licences may be different for each sub-area in
the Central Condamine Alluvium and for the Dalrymple Creek Alluvium and Oakey Creek
Alluvium.
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Do trades that have already occurred between irrigators within the Upper Condamine
Alluvium influence how much the government is willing to pay for groundwater
licences?
Yes, along with other valuation advice that the department has received from independent
experts and other information.
Am I able to offer part of my licence for sale to the Australian Government?
Yes. Part licences will be eligible for participation under this tender.
If a portion of a licence is sold, will the remaining portion still be subject to the
Announced Entitlements?
Yes. When a portion of a licence is sold to the Australian Government the licence is subdivided into two licences and each portion of the licence retains the same characteristics as
the original licence. This means that each portion of the licence (i.e. the portion being
purchased by the Australian Government and the portion that is being retained by the
original licence holder) remains subject to the Announced Entitlements.
Can I sell a Central Condamine Alluvium ‘Group S’ licence?
Yes, although ‘Group S’ class licences will be eligible for sale as part of this tender, they will
not retain their higher Announced Entitlement when permanently traded. Further information
on this is available in the Central Condamine Alluvium Groundwater Management Area
Water Sharing Rules, available at the Queensland Department of Natural Resources and
Mines website at www.business.qld.gov.au/industry/water/managing-accessing/accessingwater/sharing-rules.
Can I sell my licence if I have already used my water for this year?
Yes. The Commonwealth is purchasing permanent water licences and the associated
nominal entitlement. Any water on the licence (annual entitlement) is available for use by the
owner until the purchase of the licence is settled. After settlement, both the nominal
entitlement and annual entitlement will belong to the Commonwealth.
When the department assesses sell offers is historical use taken into account?
No, the department is buying a portion of the entire stock of licences within the Central
Condamine Alluvium and eligible Tributaries and historical use is not taken into account.
Will the Australian Government buying groundwater licences in the Upper Condamine
Alluvium limit what other people can buy?
No, the Commonwealth will be operating in the groundwater market like any other buyer.
Is the Australian Government buying annual entitlements though this tender?
No. The Australian Government is only buying permanent water licences and the associated
nominal entitlement at this time.
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Can I sell a licence without installed works?
Yes. A groundwater licence without installed works can be offered for sale through this
tender.
Will there be a limit on the volume of licences purchased in each area?
Yes. This tender limits the volume of licences that will be purchased from each sub-area of
the Central Condamine Alluvium and from the Dalrymple Creek Alluvium and Oakey Creek
Groundwater Management Areas.
The Request for Tender specifies the limit for each sub-area of the Central Condamine
Alluvium is as follows:
(i)
2.3 GL for sub-area 1.
(ii)
10 GL for sub-area 2.
(iii)
3.6 GL for sub-area 3.
(iv)
2 GL for sub-area 4.
The Request for Tender specifies that the combined limit for the Dalrymple Creek Alluvium
Groundwater Management Area and Oakey Creek Alluvium Groundwater Management Area
is 2 GL.
This will ensure that initial water recovery is not overly focused on one area. The limit on
purchases from each area will be reviewed prior to any future tenders.
When will applications be evaluated?
Applications will be evaluated after the close of the tender on Wednesday 10 February 2016
and all applicants will be notified in writing of the outcome.
How will applications be evaluated?
Eligible offers received will be ranked from lowest to highest cost in each sub-area of the
Central Condamine Alluvium and eligible Tributaries, and then a value for money
assessment of each offer will be made taking account of:
a. market prices;
b. the bid prices and volume;
c. the conveyance costs associated with the purchase of eligible licences; and
d. the maximum volumetric limit for each sub-area of the Central Condamine Alluvium
and the eligible Tributaries.
What happens if my application passes the evaluation?
The department will notify applicants about the outcome of this evaluation by a letter
dispatched within five business days of the completion of the evaluation.
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If the application passes the evaluation it will be pursued by the Australian Government.
Subject to due diligence checks, a water sale contract will then be issued to the seller. When
the contract is signed and exchanged, the sale will proceed to settlement.
What happens if my application does not pass the evaluation?
If the application is not pursued the applicant will receive a notification letter stating their
offer was unsuccessful. No further action will be undertaken. If there is a future groundwater
purchase tender the applicant may submit a new sell offer in that tender.
Will there be any future rounds of this tender?
The Australian Government may decide to conduct further rounds of groundwater
purchasing, however none have been announced at this time.
Can I withdraw an application?
Yes. An application can be withdrawn at any stage prior to signing a water sale contract.
Will the Commonwealth pay for all costs associated with the trade?
The Commonwealth will only pay for any charges associated with the transfer of the title
from the irrigator. Irrigators selling entitlements will have to pay for the services of their
solicitor or any other professional advice, as well as any outstanding fees or charges relating
to the licence.
Is capital gains tax payable on the proceeds of sale of water licences to the Australian
Government?
Irrigators considering selling water licences to the Australian Government are encouraged to
seek independent financial advice on likely tax ramifications before submitting a sell offer.
What will happen to licences sold to the Australian Government?
Formal transfer of ownership to the Commonwealth takes place on registration of the licence
transfer by the Queensland Department of Natural Resources and Mines. The licence
becomes part of the Commonwealth environmental water holdings at that time.
Commonwealth environmental water is held and managed to protect or restore the
environmental assets of the Murray-Darling Basin. In the case of groundwater the primary
use of licences will be to protect the productive base. Water will be managed in accordance
with the environmental watering plan that will be part of the Murray-Darling Basin Plan. The
Commonwealth Environmental Water Holder will be bound by the same water sharing rules,
seasonal water assignment rules and water licence transfer rules and other provisions that
apply to all licence holders.
Why are groundwater licences that are purchased by the Australian Government
being held by the Commonwealth Environmental Water Holder (CEWH) and not
retired?
All Commonwealth environmental water is held and managed by the CEWH to protect and
restore environmental assets. By holding groundwater licences in the Upper Condamine
Alluvium groundwater management areas the Commonwealth becomes a stakeholder in the
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area just like irrigators, and we will have the opportunity to engage with the Queensland
Government on how the resource is managed into the future.
Can the Commonwealth Environmental Water Holder sell groundwater back to
irrigators in the future?
Section 106 of the Water Act 2007 (Cth) governs the trading actions of the CEWH. It
stipulates that the CEWH can only trade water when it is not required for environmental
purposes during the current year and the allocation cannot be carried over to the following
water year; or in circumstances where it can be demonstrated that a better environmental
outcome can be achieved by purchasing water elsewhere or at another time using the
proceeds of trade (such as was the case with the sale of temporary water in the Victorian
Goulburn catchment that occurred in October 2015). Such trade is unlikely in the Upper
Condamine Alluvium as the reason for purchasing groundwater in the Upper Condamine
Alluvium is to reduce allocation extraction to environmentally sustainable levels.
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