Barnaby Joyce requested updates on $80m sale of water by Eastern Australia Agriculture

Extract from The Guardian

Murray-Darling Basin 

Joyce asked department to ‘report back to me on this and seek final approval before settling the purchase’

Anne Davies

@annefdavies

Tue 23 Apr 2019 04.00 AEST Last modified on Tue 23 Apr 2019 04.02 AEST

Barnaby Joyce says he played no part in the water negotiations with Eastern Australia Agriculture – a company founded by the energy minister, Angus Taylor. Photograph: Lukas Coch/AAP

Former agriculture minister Barnaby Joyce specifically asked to be kept informed by his department about progress on the $80m sale of water by Eastern Australia Agriculture – a company founded by the energy minister, Angus Taylor – documents released to the Senate show.
Joyce, who was minister at the time the controversial $80m water buyback went through in mid-2017, has said he played no part in the negotiations with the company.
But, as responsible minister, he signed off on the authority to negotiate with the company without going to open tender and he put specific conditions on the department’s work. He also signed off on the $80m price.

Revelations of Joyce’s particular interest in this sale came as 12 independent candidates jointly called for immediate action on the allegations of what they called misuse of public funds relating to the 2017 purchase.
“These so-called ‘Watergate’ allegations of misuse of public funds clearly demonstrate the need for the urgent adoption of a comprehensive national integrity commission with retrospective powers,” they said in a media release.

Eastern Australia Agriculture was founded in 2007 by Taylor while he was working in investment banking, before he became a member of parliament. The company was owned by a Caymans-based subsidiary in which several international investment funds held shares. The details are not publicly available because the Caymans does not make public the shareholders of companies.
Taylor served briefly as a director of the Australian company between 2008 and 2009. Amid questions about this water purchase, Taylor has put out a statement saying he did not have an interest in Eastern Australia Agriculture or associated companies, and he did not receive a benefit from the sale. He has also said he played no part in the negotiations.
The Australian company booked a $52m gain on the value of its water rights within days of the deal being signed.
Unlike other water purchases around this time, Joyce took a specific interest in this sale. Part of Joyce’s interest in this particular sale related to the future of the small town of St George, where he had lived when he served as a senator for Queensland.
Joyce put three conditions on the negotiations: he wanted them to explore the possibility getting Eastern Australia Agriculture to do works for free to reduce flooding in the southern part of the town; he wanted advice on the impacts to employment in the region; and he wanted the department to “report back to me on this and seek final approval before settling the purchase”.
The department did win some concessions on flooding.
But the crucial issue of whether the government got value for money remains unclear, because the department redacted all figures from the valuation advices before releasing them to the Senate. Part of the issue is the price. The documents show the company initially wanted $2,200 per ML but during negotiations it rose to $2,750 per ML.
The value of the sale was complicated because Eastern Australia Agriculture was initially proposing to sell the government a large storage dam to hold the overland flows, which are essentially flood waters that move across the land.

The government appears to have compensated Eastern Australia Agriculture in the price per megalitre, even though it did not end up buying the storage.
The advice on the sale of overland flows was prepared by the Brisbane office of Colliers International. A year earlier Colliers was acting as agent for EAA to sell the properties.
“Colliers International has the pleasure of offering to the market one of Australia’s largest premium agricultural land and water portfolios; the Eastern Australia Agriculture portfolio consisting of the Kia Ora and Clyde properties in Australia,” it said on its LinkedIn page in September 2015.
In September 2016, and again in March 2017, Colliers provided advice to the government on the value of the overland flow water it bought for $80m in 2017.
The circumstances regarding the hiring of Colliers by the department are not revealed in the Senate’s call for papers. Large parts of the two valuation documents Colliers provided to the government were redacted.
Colliers noted that the valuation of overland flow water “is very complex” and the main driver of the valuation would be the impact on the farming business that the sale of water would have. It noted that overland flows were not really tradeable, because it needed the infrastructure on the land, such as levies and channels, to harvest the irregular floodwater that made up these flows.
The calculations of the volumes of water to be sold were largely done by EAA’s consultant, Tony Reid, who was also a former director of EAA and who has a shared business history with Taylor going back 20 years.

Documents obtained by the Guardian under freedom of information laws show Reid was involved throughout the negotiations.