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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-02-17 Daily Xml
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Grievance Debate

BAROSSA INFRASTRUCTURE LIMITED

Mr VENNING (Schubert) (17:04): Today I want to inform the house about the Barossa Infrastructure Limited (BIL) scheme. This community scheme provides irrigation water to Barossa vineyards in order to supplement natural rainfall and ensure premium quality is achieved. It was set up in May 1998—so it is 10 years old in a few weeks—and it is appropriate that I make this report to the house.

The BIL scheme has been structured as an unlisted public company, wholly owned by its customers—the Barossa grape growers and vignerons—who raised $9.32 million in capital to construct 180 kilometres of buried pipeline to service an area of 450 square kilometres. The shareholders include four managed investment scheme vineyards, taking up 30 per cent of the scheme's capacity. I remind the house that this was set up a long time ago and before oversupply caused disquiet about MIS schemes.

Apart from a loan of $200,000 (since repaid), BIL has received no government financial support. SA Water provides the connection from the Warren reservoir and its catchment is supplemented with water supplied via the Mannum-Adelaide pipeline and the Warren transfer main from the River Murray. The company provides SA Water with irrigation water rights sourced from the River Murray equal to the amount of the water supplied.

With approximately 280 customers, the purpose of the BIL scheme was and is: to reduce the use of high salinity groundwater; to ensure the maintenance of premium wine quality through dry periods; to ensure adequate domestic water pressure throughout the region during periods of vineyard irrigation; to ensure the long-term sustainability of viticulture in the Barossa; and to maintain water prices at the lowest possible level, while ensuring commercial viability.

Barossa Infrastructure Limited customers are currently facing many challenges, including severe water restrictions in the last three years, a downturn in the Australian wine industry both nationally and internationally, the ongoing impact of the global financial crisis and the potential impact of future climate change. Current water restrictions have resulted in severe financial stress. The company has a bank debt of $13 million and currently makes annual repayments of approximately $1.5 million. It has incurred significant additional costs for leasing additional water rights and from reduced volumes sold due to water rationing and an annual SA Water fixed charge of $1.2 million, which is paid even when consumption is reduced due to water rationing.

The company has risen to these challenges by: sourcing River Murray rights on behalf of its customers; entering into an agreement with the Barossa council to supply limited recycled water from Nuriootpa, with a view to future expansion to other areas of the scheme; and investigating additional water storage and ASR (aquifer water storage and recovery) to overcome the impact of drought periods.

In summary, the company is committed to providing a quality water supply which can reduce the use of high salinity groundwater, sustaining crop yields and quality during dry periods through the application of supplementary irrigation water without strict environmental guidelines and striving to achieve innovative solutions to challenges as they arise.

Yes, BIL is living up to the confidence shown in it by the then government and then premier Olsen, who was instrumental in setting up the pioneering arrangement allowing the successful operation of BIL. I also wish to congratulate its leader, Mr David Klinberg OAM, who in no small way has provided the confidence for all involved; and also its general manager, Mr Paul Shanks, who liaises with all the growers involved in this scheme. This scheme has now been copied by other areas, particularly the Clare Valley scheme and also, I understand, interstate.

This was a pioneering effort, and again I pay tribute to then premier Olsen who made it happen. The bureaucrats of the day said that it could not happen because SA Water needed to own it and they wanted to be able to put it in their capital cash stream—it did not happen. I pay the highest tribute to the guy who had the vision for this scheme, a guy who has left the area, Mr Mark Whitmore. He was the single person who had the vision to set up this scheme. It is there: it is working. I pay credit to him and hope he is well.

All I can say is thank you very much for the BIL scheme because it is providing the Barossa with the artery, the lifeline, that enables it to continue to make and sell maximum premium quality wines in times of hardship, particularly at this time when it has forgotten how to rain. Without it, we would be sorely pressed. Even those who do not water premium grapes, certainly use this water to water their new plantings. I certainly commend BIL.

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