Greenfield Irrigation DevelopmentPublic Private Partnerships

Irrigation Australia 2014Chris Thompson

Managing Director , Macquarie Franklin

Background

• In Tasmania – we have approx 12% Australia surface water runoff – generally not where the usage is !! – predominance of stream diversion as method of irrigation supply

• Sustainable greenfield development in Tasmania is $2000 per ML upwards

• Irrigated agriculture is expanding rapidly• Existing supplies under stress

• Political Intervention to augment supplies and support water infrastructure

• Public – Private partnership as the way forward

Thank you

Chris ThompsonMacquarie Franklin

cthompson@macfrank.com.au

• Why PPP When done properly• Best (I believe !) process to implement• Best method of valuing, managing and

apportioning risk – apply the risk to those who can appreciate/manage/afford it !!

• Risk issues– Approval Risks (EPBCA 1999 and the contingent outcomes in state acts)– Stakeholder Risks – ie “buy in” from irrigators and communities, government

instrumentalities and “third parties”– Financing risks – “impatient capital”, returns to investors, Project lifespans– Engineering risks – technical and budgeting risks – aggressive or conservative ?– Environmental Risks – real or perceived – often mismanaged and poorly understood– Agricultural risks – understanding future markets and needs– Climate risk !!!!! – impact on both water availability and growing conditions

• The outcome• 5 projected completed 3 others underway• Around $350 M spent approx 60/40 Govt

private• All on time and under budget

Thank you

Chris ThompsonMacquarie Franklin

cthompson@macfrank.com.au