The Commonwealth and Victorian governments have announced a new agreement that will deliver the country’s largest irrigation infrastructure renewal project and will see 214 gigalitres returned to the Murray for environmental flows.


Federal Minister for Water and Environment Tony Burke and Victorian Water, Agriculture and Food Security Minister Peter Walsh signed the new contract for Stage 2 of the $1.2 billion Northern Victoria Irrigation Renewal Project (NVIRP2).


The project is set to be the largest single irrigation infrastructure investment by the Federal Government and is expected to produce upwards of 214 gigalitres in water savings to be delivered to Commonwealth ownership. The savings are will make up a significant portion of Victoria’s environmental flow requirements under the Murray Darling Basin Plan.


The plan will see the Federal Government contribute $952 million, while the Victorian Government will invest $106 million in Stage 2 of the NVIRP,  generating 204 gigalitres of water savings to be split between the Commonwealth and Victoria.


Under the new agreement, water to be returned to the environment has nearly doubled what was originally planned under the agreement.


The key parts of the agreement are:

  • Agreement for the NVIRP Stage 2 to proceed, with Victoria fully responsible for project delivery.
  • Changed water sharing arrangements for the NVIRP2 under which 102 gigalitres of the water savings will be sold to the Commonwealth for environmental use.
  • The Victorian irrigators' contribution to the NVIRP will come from the proceeds of selling the second 102 gigalitres of water savings generated from the project.
  • A new $48.5 million on-farm water infrastructure project undertaken by Victoria, with the Commonwealth contributing $43.7 million and Victoria $4.9 million, to be provided by participating Victorian irrigators. The water savings of 20 gigalitres will be shared between irrigators and the Commonwealth with 10 gigalitres of water to the Commonwealth for environmental use.
  • Agreement by the Victorian Government to give trade approval for around 88 gigalitres of water trades from previous Commonwealth tender rounds blocked by Victoria's four per cent limit on water traded ‘out of a district.


The second stage of the plan will be rolled out over seven years and will involve substantial upgrades to irrigation systems that will aim to benfit properties across the Goulburn Murray Irrigation District.


Mr Burke said the 214 gigalitres to be transferred to the Commonwealth for environmental water use over the next six years would make a significant contribution to 'bridging the gap' to sustainable diversion limits under the Murray Darling Basin Plan.


All water savings are expected to be generated through improved efficiency and quality of irrigation technology and practices.


The water purchase element of the package will be funded from the Australian government's water buyback program.