SHEAOAK LOG ESTATE
Grapevines require regular watering to supplement the natural annual rainfall. To produce the quality of wine grapes expected for this business, the Sheaoak Log Estate vineyard requires approximately 1.5ML of water per hectare of supplementary irrigation given the region's annual rainfall.
The western region of the Barossa Valley has limited ground water for use in irrigation. Accordingly, the Sheaoak Log Estate vineyard has never relied on this source for its supplementary irrigation.
The water is delivered to the grapevines through a series of pumps and mainlines according to the irrigation designed for the vineyard.
The sophisticated ‘in-line’ drip irrigation system, supplied by Netafim Australia in 2004, is considered the most effective supply of irrigation. The irrigation system is controlled by a computer network which enables the efficient application of the water through centralised control.
SOUTH AUSTRALIAN WATER ENTITLEMENTS
As has been seen in recent years (and in particular between 2003 and 2010), potential risk exists that the vineyard may have an insufficient water supply in periods of drought. Accordingly, NVFA3L has secured rights to 120ML of Barossa Infrastructure Limited (“BIL”) via the ownership of 210,000 shares in BIL (see below). Since 2004, NVFA3L has paid infrastructure charges (to pay off the scheme capital) and annual usage charges. Accordingly, water is the 2nd most expensive cost to the vineyard on an annual basis (after labour).
Whilst NVFA3L is satisfied that it has secured sufficient water and that the method of delivery via the BIL pipeline will be sufficient to provide water for the vines in most years, it is a reality that supply can be restricted due to extremely dry conditions or other unforeseen events.
NVFA3L considers irrigation and its management to be the most important aspect of its operations. Considerable time was spent on the design of the irrigation system for the Sheaoak Log Estate vineyard but a risk still exists that the irrigation system may malfunction.
BAROSSA INFRASTRUCTURE LIMITED - SHARES
BIL is an unlisted public company with capacity to supply 10,000 ML per annum of supplementary irrigation water to viticulture in the Barossa Valley. Commencing 1 Oct 2015, the Scheme can supply 9,000 ML from entitlements held and therefore has latent capacity of 1,000 ML. SA Water provides the connection to the Warren Reservoir, supplemented with water supplied via the Mannum Adelaide Pipeline and Warren Transfer Main, from the River Murray.
BIL is required to have River Murray Water Allocations for the water supplied by SA Water. This water comes from Water Access Entitlements, either purchased or in the form of long term leases, and annual Water Allocations purchased on the market.
It is the objective of the company to achieve the ownership of about two thirds of average customer demand in the form of High Security Water Access Entitlements (or equivalent). BIL has also been active in seeking alternative water sources in the interests of sustainability of viticulture in the Barossa. During 2010, in cooperation with The Barossa Council, reuse of treated effluent from Nuriootpa Community Water Management Scheme (CWMS) was commissioned. The water is supplied to a small number of customers along Gomersal Road, Tanunda, including NVFA3L, and this represents about 4% of annual use.
BIL’s customers are shareholders in proportion to their contracted volume of Premium Water (which can be used all year round) and 1,750 shares equates to 1 ML of water entitlement from the scheme.
The Scheme cost was approximately $30 million (in year 2000) and the final loan payment of $1.4 million will be repaid to bankers in July 2016. This will finalise the annual infrastructure charge
“To provide a high quality water supply in the Barossa which, when applied in environmentally and viticulturally appropriate quantities, sustains crop yield and quality through dry periods at a cost that is lower than other quality water sources.”