New chance to aid Murray Darling

HOPES have soared that huge amounts of water from Australia's most famous cotton farm could return to the Murray-Darling river system, after administrators were appointed to handle the affairs of Queensland's Cubbie Station.

After months of trying to sell the huge station and its water entitlement to governments and agricultural businesses, Cubbie chairman Keith De Lacy said the company would be handed to administrators today. "In the end it was drought that beat us," he said.

"We have only had one good season in the last five."

When full, Cubbie holds a mammoth 530 billion litres of water; by comparison, Melbourne's massive Thomson dam yesterday was holding 219 billion litres.

Mr De Lacy said the company was struggling to satisfy a $320 million debt arrangement to the National Australia Bank, and he was confident that going into administration would cause the least disruption to Cubbie's operations.

"We have discussed and have in-principle agreements with the voluntary administrators such that the business can continue to trade and we will work with them during the administration period," he said.

"This will allow the value in the assets to be realised in an orderly way, in the interests of all our stakeholders."

It was unclear last night what the development would mean for the sale of Cubbie and the Commonwealth's buyback of water entitlement in the Murray-Darling river system.

University of Adelaide water expert Professor Mike Young said it increased the chances that Cubbie's infamous water entitlement returning to the environment. "Whether that is through acquisition or the licences being cancelled, this clearly increases the chances that Cubbie's water will return to the river," he said.

Australian Conservation Foundation spokeswoman Dr Arlene Buchan said the Commonwealth, which has baulked at offers to buy Cubbie's water, was faced with a new opportunity.

"There is a renewed space for the Commonwealth to explore the opportunities with state governments and other stakeholders," she said.

Federal Water Minister Penny Wong would not comment on the shift to administration, but said the Government remained open to talks with any willing seller of water in the Murray-Darling system.

Water rules in Queensland, which insist on land and water entitlement being sold together, are known to have played a role in dousing Commonwealth interest in Cubbie.

Independent senator for South Australia Nick Xenophon said Cubbie's failure was proof that the enterprise was not sustainable and state governments could not be trusted with water allocations.

"The only way to avoid more Cubbies is for there to be an immediate national takeover of our river systems, including the Murray-Darling Basin," he said.

Queensland National senator Barnaby Joyce yesterday blasted Liberal senator Bill Heffernan and members of the Federal Government who had publicly questioned the asking price of Cubbie's owners.

Senator Joyce said comments by Senator Heffernan had scared away potential investors and destroyed jobs for residents of the nearby town St George. "Who wins out of this? . . . I never hear them talk about ways to reinvest in the employment of the area," Senator Joyce said.

"All I ever hear about is a tirade of venom that has finally brought about what they want they have managed to be part and parcel of sending a town broke." With AAP