Value-able information
Cause for celebration - a rare victory this week for transparency and openness! Last Friday, Queensland’s Information Commissioner determined that the valuations of Council’s water allocation were not confidential information, and that they should be disclosed. Council released them yesterday.
Two of the valuations had previously been provided:
In December 2020 a water broker estimated the value at between $2,500 per ML and $2,750 per ML.
In January 2021 another water broker estimated the value as between $2,500 per ML and $3,401.50 per ML.
Now, in the previously undisclosed valuation from November 2021 (which Council grudgingly obtained due to POW!’s insistence on getting a valuer to do a valuation), a valuer was of the opinion that a value of between $2,500 per ML and $4,000 per ML could be achieved on the open market.
The eagle eyed amongst you will notice that $2,500 per ML is the low end of all 3 estimates. What are the odds that the Council deal with Granite Belt Water is for the lowest amount - $2,500 per ML? The difference of around $700,000 between the $1.1m that the low price would get Council and the $1.8m at the higher end of the estimates is significant and every dollar would reduce the amount that Council has to pay Granite Belt Water to buy its 585 ML in Emu Swamp Dam.
The valuer noted that it was difficult to determine value for a number of reasons, and that their investigations were inconclusive. They pointed to a large sales spread from $2,500 per ML up to $10,000 per ML (i.e. $2,500 per ML is rock bottom). For example, downstream in the Border Rivers catchment there have been recent trades of up to $5,700 per ML for unsupplemented water allocations purchased by large cotton growers. Not much less than the $6,000 per ML that investors are happy to pay for water from Emu Swamp Dam.
With such uncertainty around the actual value of the allocation it is hard to see how the Council, and the Minister who eventually will have to approve this deal (because it’s not being done on the open market), will be able to get comfortable that it’s getting the right price for a valuable public asset. Of course, given that purchasing this allocation is critical to the Emu Swamp Dam project, a savvy Council should have been able to negotiate more than “open market” value, which assumes simply a willing purchaser rather than a desperate purchaser like Granite Belt Water.
One thing is for sure though: we will eventually know what price Council agreed for this allocation. Either when the deal goes through, or when the deal falls over. In both cases there will no longer be any basis to say the sale price is confidential. Let’s hope we all know before the next election rolls around, so we can cast our judgement on whether the Councillors negotiated a good deal for us, the ratepayers, or whether this was just one more cosy deal for the benefit of “irrigators with friends”.