Offer for Temporary Trade – 2000 Megalitres of FIN’s Distribution Loss Allocation

5 Dec 2019

The Fairbairn Irrigation Network (FIN), as a Shareholder owned entity with a strong customer focus, has the ability to be more flexible and responsive to customer needs than has been the case in previous times.  With unfavourable short-term rain forecasts for the Central Highlands, and the low level of the Fairbairn Dam, we have been working to determine how FIN can best serve the interests of you, our customers, with the resources we have at our disposal.

Prior to transitioning to a locally managed company, a potential opportunity presented by the historic underuse of distribution loss allocations was identified.  Following analysis of our year to date water distribution efficiencies, we have forecast our distribution loss requirements for the seven months to 30 June 2020 using very conservative parameters.  This has enabled us to determine that we are in a position to offer 2000ML of carryover loss allocation to eligible customers.

FIN is of the view that priority should be given to assisting its customers through this dry period.  The strength of FIN relies entirely on the strength and future of its customers as a collective, and its ability to provide them with water.  Under the circumstances, FIN has determined that a fair and equitable allocation of the water is to pro rata the resource based on existing water allocation on the scheme.

The offer price has been set at a level to reflect what would be considered a normalised temporary trading price based on historical data and will enable customers to utilise a portion of the loss allocation for productive purposes.  Profits recouped by FIN as a result of the sale will be utilised by the company to regulate future distribution prices within the scheme over the next 6 to 18 months.

The decision to allocate and sell water as outlined above is particular to the circumstances currently being experienced, and FIN reserves the right to deal with future water sales at its discretion and in accordance with its constitution.

FIN reserves its right to cancel or amend the terms of this expression of interest and will not be bound to complete a trade until it makes formal offers to participating customers following the distribution process set out above.

FIN will continue to monitor water distribution efficiencies/loss forecasts on a month by month basis and reassess its position as the year progresses.

Once the water offer closes, total nominations will be tallied and the above distribution factor calculation will be applied.  Subsequently applicants will be advised of the resulting pro rata allocation and their acceptance of the allocation will be sought together with payment.

Please find the attached letter send to eligible customers including examples of calculations.–-2000-Megalitres-of-FIN’s-Distribution-Loss-Allocation-1.pdf


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