The Federal government is providing nearly $400,000 to encourage the development of innovative solutions to improve transparency and reliability of water market information.
Four firms, Aither, Civic Ledger, NGIS and the Marsden Jacob Unit Trust have been given grants, ranging from $80,000 to nearly $100,000, under the Business Research and Innovation Initiative (BRII).
Federal Industry, Innovation and Science minister Arthur Sinodinis said the latest round of the BRII aimed to encourage small to medium enterprises (SMEs) to create new products and services in five areas, identified by the government.
“SMEs with the most promising ideas and products arising from these 20 initial grants may be eligible for a further grant of up to $1 million each,” Mr Sinodinis said.
“This would be to develop a prototype, or proof of concept, of their solution with government having the option of being the first customer.”
Civic Ledger’s chief executive Grantly Mailes said the company aimed to bring transparency and confidence into Murray-Darling Basin water markets.
“The Australian water market is highly complex with four state registries and many brokers and exchanges,” Mr Mailes said.
“This complexity introduces lags and information asymmetry.
“If we can improve the transparency and reliability of water market information, we boost confidence in the market, which will lead to increased participation and better use of this precious resource."
Civic Ledger is an Australian start-up technology company that uses the best of emerging technologies to solve complex business process problems within public sector markets.
“It is in the application of emerging technologies that we see an opportunity for water users to transact with each other easily, securely and efficiently; while at the same time providing a wealth of value-added public information to guide market participation and public policy,” Mr Mailes said.
Aither director Chris Olszak said the company was working with stakeholders and water market users to understand their needs and the improvements for which they were looking.
“The type of technology we use will depend on what people want, what they can get access to and how they want it delivered,” Mr Olszak said.
“We think there is a big need for improved water market information – we are already operating in that space, we are already providing lots of water market information to some clients.”
Mr Olszak said Aither would like to see that information provided to a broader range of users.
He said the company was working with a firm specialising in digital transformation to come up with the best solution to getting the information to as wide an audience as possible.
Marsden Jacob director Rod Carr said the company hoped to consolidate the “broad set” of information, which was available.
He said Jacob Marsden was an economic and financial advisory firm, which had done a great deal of work on water markets.
“What we observed is that the markets, particularly the southern Murray-Darling Basin, are maturing - but there are a number of concerns, which are impacting on market performance,” he said.
“There are also plenty of parties out there who are not trading water who could benefit from that trade - and others who are not sure they are getting the best outcomes from their trading actions.”
Mr Carr said the company was not seeking to develop a new trading platform.
“There are plenty out there already,” he said.
Like Aither, Jacob Marsden was going through a process of interviewing potential users of the service “to really try and understand what their needs would be".
“I am hopeful what we can do is make it easier to access the breadth of information and thus make it a bit easier to trade,” he said.
“We are aware of the complexity of the water market and the challenges many are facing.
“It’s about helping those who don’t have certainty in the market and are being affected by that to feel more comfortable with trading outcomes.”
Mr Carr said Jacob Marsden would provide independent advice on how to improve transparency.
“We don’t trade; by standing independent of the market, we can draw on other’s experience from an actual market perspective, but ensure what we are presenting is our own independent advice, without bias,” he said.
Jacob Marsden would look at an on-line system, but a decision was yet to be made about a precise platform or platforms.
The feasibility studies are due for completion in June.
All firms involved said they welcomed input from water users, to help them develop the best model.