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Investor banks on water rights
22 May 2003
National Water Bank, Australia's first speculative water rights investment company, has been given the go-ahead by the Australian Securities and Investments Commission to launch a prospectus. National Water Bank hopes to raise $27.75 million to buy NSW water licences, which rose in value in 2002 by an average 40 per cent. Shares will be sold at $1 each in minimum parcels of 1,000.
The company will be the first speculator to take advantage of the new Water Management Act 2000, which takes effect in NSW from July 1 as part of national water reform. The agreement makes water rights a commodity that can be traded nationally. For the first time, water rights won't be attached to land parcels.
National Water Bank will buy water rights and lease entitlements to farmers wanting short-term supplies. Critics of water rights trading argue, however, that it will be constrained by farmers' resistance and concerns that whole communities could be left without water.
Australian Financial Review, 22/5/03.
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