THE new Chinese and Japanese owners of Cubbie Station are looking at selling water back to the federal government less then two months after paying $232 million for the debt-laden cotton farm.
The 96,000 hectare property in south-western Queensland has been the centre of controversy because of its huge water entitlements within the Murray Darling Basin system.
It officially changed hands on January 15 after being bought by CS Agriculture, a company backed by Chinese group Shandong Ruyi, Japanese trading giant Itochu, and fifth generation Australian wool trader Lempriere Group.
Speaking publicly on the sale for the first time, Lempriere Capital managing director Tony McKenna delivered a strong rebuke to critics of foreign investment in Australian agriculture, and also confirmed the water sale plans, The Australian Financial Review reports.
"We have committed to consider the option of selling any excess entitlements into water buyback schemes," Mr McKenna said at the Rural Press Club in Brisbane.
"At this stage, seven weeks into our ownership of Cubbie, we are reviewing it. A hydrology study into the impact of the sale of part of Cubbie's water rights has been commissioned."
The first federal government tender for the Condamine-Balonne Rivers catchment, where Cubbie Station is located, closed in February. Altogether $47 million of water was bought, at an average price of $1532 a megalitre.
Cubbie's new owners expect the tender to keep rolling, and that there will be further opportunities to sell water.
Cubbie Station has about 500,000 megalitres of water storage for its cotton crops.
"For Cubbie, with its massive investment in on-farm storages and irrigation infrastructure, any assessment needs to consider the cost of writing off the value of the infrastructure as well as the water entitlements sold," Mr McKenna said.
"We remain committed to constantly reviewing this and I can assure you it is given serious consideration at board level."
The station was in voluntary administration with McGrathNicol for three years and up for sale for a similar period. Drought and debts of more than $420 million to National Australia Bank and Suncorp made a sale difficult.
But Mr McKenna said the pressure from "a noisy minority" voicing their concerns over foreign investment was the primary impediment to proceeding with the deal to buy Cubbie.
"It took some work explaining to Ruyi that the government was not against them just because a bill was before parliament opposing their purchase of Cubbie," he said.
"There were times when it looked like it was all too hard. There were times when we were genuinely concerned that FIRB (the Foreign Investment Review Board) would not approve the acquisition.
"Chinese investors are worried about the FIRB process and whether they are welcome in Australia."
Last Friday China's richest man, Zong Qinghou, who is interested in buying Australian farms, told The Australian Financial Review he felt discriminated against in Australia, compared with Japanese or American investors.
"The treatment is not equal (with American and Japanese firms)," he said.
"The (Australian) media always reacts to Chinese investment, but there is no reaction at all to American investment."
Mr Zong's fortune is estimated at $US11.6 billion by Forbes magazine.