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Covering the Goulburn and Murray valleys

MIL fee change review

Murray Irrigation Ltd is reviewing fee changes that are expected to turn the company's losses to profits.

November 15, 2012 4:13am

Gradual price increases to be introduced by Murray Irrigation Ltd (MIL) over the next four years will eventually see the company turn around major operating losses.

The increases, outlined in the Network Service Plan (NSP), were initially implemented last year.

But MIL general manager Anthony Couroupis said recent customer feedback on the projections led to a Fees and Prices Policy review being developed in August.

Customers are now being invited to provide official feedback in two phases, the first of which ends on November 23.

Helping MIL recover expenditure costs in the new policy is the implementation of a number of new fees.

It will eventually see the company’s estimated profits go from a predicted loss of $2.6 million in this financial year to a projected $782,163 profit in 2016/17.

‘‘The new policy established a range of new fees, including landholding access, outlet and tiered usage fees,’’ Mr Couroupis said.

‘‘The board considers the current fees and prices structure provides sound signals to customers that encourage on-farm water sales and also encourage customers to consider how their landholding is connected to the Murray Irrigation water supply and drainage network.’’

The landholding access fee is charged per landholding, and was introduced last financial year.

It started at a cost of $1,020 and increased by $31 to $1051 this year. Over the next four years it will increase between $31 and $34 each year, with a fee of $1,182 payable in 2016/17.

The new fee adds more than $2 million to MIL’s income each year, which over five years is a combined $10,841,911.

Over the same five years the new outlet fees — to be paid for small, large and unmetered domestic pipes — will inject a combined $11,164,721 into the company.

Minor increases have been scheduled for variable standard water usage fees, which have also been divided into three different payment structures.

The tier one fee is for users of between 0-5 megalitres of water, who will be subject to MIL usage fee increases of between $1.14 and $1.26 per megalitre over the next five years - to $44.17 in 2016/17. Added to government charges, which will also increase slightly, the total charge per megalitre in 2016/17 will be $124.

Tier two sets a price for between 6-100ML used. It proposed MIL usage increases of between $0.31 and $0.34 to end up with $11.94/ML in 2016/17 and a combined fee of $26.32/ML.

Tier three sets the price for landholders who use more than 100ML, and the NSP recommends MIL usage charge increases of between $.015 and $0.17. By 2016/17 the MIL usage fee will be $5.97/ML and the combined charge will be $13.17.

The amount collected from MIL variable rates over the five year period is estimated at almost $16.3 million combined.

Southern Riverina Irrigators chair Ted Hatty said he believes the higher charges for small landholdings sparked the review.

He believes MIL, through the review, is trying to have a more balanced approach to fees and distributing costs.

He encouraged all customers to be part of the feedback process.

To make the feedback process easier, MIL has developed an online survey for customers. It can be accessed at www.murrayirrigation.com.au, and must be completed by 5pm on November 23.

Another consultation round will be held in February 2013.

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