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Variation 3 to Project Schedule dated 5 September by 95hDBGa

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									VARIATION
VARIATION NUMBER 3 TO THE PROJECT SCHEDULE 2 TO THE WATER MANAGEMENT
PARTNERSHIP AGREEMENT BETWEEN THE COMMONWEALTH AND QUEENSLAND FOR
THE WATER FOR THE FUTURE QUEENSLAND STATE PRIORITY PROJECT ON-FARM WATER
USE EFFICIENCY PROJECT
     VARIATION
     VARIATION NUMBER 3 TO THE PROJECT SCHEDULE 2 TO THE WATER
     MANAGEMENT PARTNERSHIP AGREEMENT BETWEEN THE COMMONWEALTH
     AND QUEENSLAND FOR THE WATER FOR THE FUTURE QUEENSLAND STATE
     PRIORITY PROJECT ON-FARM WATER USE EFFICIENCY PROJECT



     Parties
     This Variation No.3 is made between:

     The Commonwealth of Australia (Commonwealth) represented by its
     Department of Sustainability, Environment, Water, Population and Communities
     (SEWPAC and formerly DEWHA)

     AND

     The State of Queensland (State) represented by its Department of
     Environment and Resource Management (DERM)

     (the Parties)

     Context
     This Variation No.3 is made in the following context:

A.   The Commonwealth, represented by SEWPaC (then known as DEWHA) and
     the State, represented by DERM, entered into a Water Management
     Partnership Agreement (the Agreement) on 11 January 2010.

B.   In accordance with clauses 5.1.1.b and 16.2.1 of the Agreement, the Parties
     signed a project schedule (the Project Schedule) for the Water for the Future
     Queensland State Priority Project On-Farm Water Use Efficiency Project (the
     Priority Project) on 31 August 2010.

C.   Under clause 16 of the Agreement, a Project Schedule is to be varied by the
     written and signed agreement of the Parties.

D.   In accordance with clause 16 of the Agreement, the Parties varied the Project
     Schedule on 7 March 2011 (Variation No. 1) and again on 10 March 2011
     (Variation No. 2).

E.   In accordance with clause 16 of the Agreement, the Parties now agree to further
     vary the Project Schedule as set out in this Variation No. 3.
1.       Interpretation

1.1.     Definitions
1.1.1.   Unless the contrary intention appears a term in bold type has the meaning
         shown opposite it:

         Agreement              has the meaning given in Recital A.
         Project Schedule       has the meaning given in Recital B.
         Variation Date         means the date on which this Variation is
                                signed by the last Party to do so.
         Variation No. 1        has the meaning given in Recital D.
         Variation No. 2        has the meaning given in Recital D.
         Variation No. 3        means this variation document including
                                any annexures and attachments.

1.2.     Interpretation
1.2.1.   Clause 18.5 of the Agreement applies to this Variation No. 3 as though all
         references in that clause to the "Agreement" were instead references to this
         "Variation No. 3".

2.       Variation of the Project Schedule
2.1.1.   The Parties agree that, on and from the Variation Date, the Project Schedule is
         varied as shown in track changes text in Annexure 1 to this Variation No. 3.

2.1.2.   Subject only to the amendments contained in this Variation No.3, the Parties
         confirm all other provisions of the Project Schedule, as previously varied by
         Variation No. 1 and Variation No. 2, and the Agreement.

3.       Effect of Variation
3.1.1.   The Parties agree that Annexure 2 to this Variation No. 3 shows a clean
         version of the Project Schedule after it is varied in accordance with clause 2 of
         this Variation No.3.

4.       Costs
4.1.1.   The Parties shall each bear their own costs and expenses (including legal
         costs) arising out of and incidental to the negotiation, preparation and signing of
         this Variation No.3.

5.       Counterparts
5.1.1.   This Variation No.3 may be signed by the Parties in two counterparts, in which
         case the two counterparts together will be taken to constitute the one Variation.
ANNEXURE 2              CONSOLIDATED PROJECT SCHEDULE




                 PROJECT SCHEDULE


     COMMONWEALTH OF AUSTRALIA REPRESENTED BY
     THE DEPARTMENT OF SUSTAINABILITY, ENVIRONMENT, WATER,
     POPULATION AND COMMUNITIES


     WATER FOR THE FUTURE
     QUEENSLAND STATE PRIORITY PROJECT
     ON-FARM WATER USE EFFICIENCY PROJECT


     PROJECT SCHEDULE 2 TO THE WATER MANAGEMENT
     PARTNERSHIP AGREEMENT BETWEEN THE COMMONWEALTH
     AND QUEENSLAND




 QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011   1
PROJECT SCHEDULE 2 – ON-FARM WATER USE EFFICIENCY PROJECT– PHASE ONE
QLD 02


A.       Terminology used in this Project Schedule

A.1.1.   Capitalised terms in this Project Schedule have the same meaning as in
         clause 18.4 of the Water Management Partnership Agreement between
         the Commonwealth and Queensland (the Agreement).

A.1.2.   For the purpose of this Project Schedule only, the terms specified in this
         item have the following meaning:

         a.   Agreed Water Savings: means the total volume of water that is to
              be saved by a Round of On-Farm Works. This will be agreed by the
              parties in accordance with Item B.4 and included in Item E of this
              Project Schedule for a Round following the Commonwealth
              Assessment of the Works Package for that Round. The
              amendments to Item E for a Round must specify the amount and
              characteristics of the part of the Agreed Water Savings that are to
              be saved by each Proponent as a result of each of its On-Farm
              Works in that Round;

         b.   Business Case Information Requirements: means the criteria set
              out in Schedule E of the Intergovernmental Agreement on Murray-
              Darling Basin Reform;

         c.   Commonwealth Assessment: means the Commonwealth's
              assessment of the value for money, technical merit and
              environmental benefits of the Works Package proposed by the
              State for a Round;

         d.   Component: means a component of this Priority Project that is
              specified in the definition of 'Project Activities' in Item A.1.2.n of this
              Project Schedule and 'Components' means two or more of those
              components;

         e.   DERM: means the Queensland Department of Environment and
              Resource Management;

         f.   DSEWPaC: means the Commonwealth Department of
              Sustainability, Environment, Water, Population and Communities
              (formerly known as the Department of Environment, Water,
              Heritage and the Arts or DEWHA) ABN 34 190 894 983 or other
              department or agency that has from time to time responsibility for
              this Agreement, and includes its Personnel and successors.

         g.   Due Diligence Assessment: means the Commonwealth’s
              assessment of a State’s business case for this Priority Project
              against the Business Case Information Requirements as required
              under clause 5.1 of the Agreement;

         QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011            2
h.   Entitlement Owner: means, in respect of a Water Entitlement, the
     person who is the registered legal owner of that Water Entitlement,
     (which may, but need not be, a Proponent);

i.   Land Owner: means the legal owner of the land on which a
     Proponent's On-Farms Works are to be constructed (which may, but
     need not be, a Proponent);

j.   Legal Due Diligence: means, in respect of a Water Entitlement, the
     legal assessment of the characteristics of that Water Entitlement
     and the Entitlement Owner's ability to Transfer that Water
     Entitlement to the Commonwealth, to be completed by a legal
     provider nominated by the Commonwealth;

k.   On-Farm Works: means the irrigation efficiency works undertaken
     by a Proponent as part of this Priority Project, and may include
     supplier-provided testing and training associated with infrastructure
     installation;

l.   Phase One: means this Priority Project under this Project Schedule,
     which involves the performance of the State's Queensland Murray-
     Darling Basin Healthy HeadWaters Program up to October 2013;

m. Phase Two: means a second phase of the State's Queensland
   Murray-Darling Basin Healthy HeadWaters Water Use Efficiency
   Program which is not part of this Project Schedule;

n.   Project Activities: means all of the activities required to undertake
     the key Components of this Priority Project, which are:

     i.     the Basin Appraisal Study as described in Item C.2 of this
            Project Schedule;

     ii.    Industry development, extension, marketing, client contract
            facilitation and project management activities as described in
            Item C.3 of this Project Schedule;

     iii.   On-Farm Works (Round One) as described in Item C.4 of this
            Project Schedule; and

     iv. On-Farm Works (Round Two) as described in Item C.5 of this
         Project Schedule.

o.   Project Overview Group: means a group comprising of
     representatives from DSEWPaC and DERM who will monitor the
     progress of this Project Schedule;

p.   Proponent: means any person who is to be funded by the State to
     undertake On-Farm Works as part of a Round under this Priority
     Project;




QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011          3
q.   Round: means a funding round conducted by the State for its
     Queensland Murray-Darling Basin Healthy Head Waters Program,
     which will involve the State calling for, assessing and overseeing
     on-farm irrigation proposals and works. There will be up to two
     Rounds in this Priority Project: Round One and Round Two;

r.   Start-up Amount: means any funding that has been received by the
     State from the Commonwealth to commence early works related to
     this Priority Project. Both Parties acknowledge that the
     Commonwealth has previously allocated $898,150 (excluding GST)
     under a funding agreement, signed 16 February 2009, to
     commence those early works for Project Activities. This includes
     $843,150 for early works relating to the Basin Appraisal Study and
     $55,000 for early project management activities;

s.   Water Entitlement: means, in relation to a Proponent, a 'water
     access entitlement' as defined in section 4 of the Water Act 2007
     (Cth) that is:

     i.    used for irrigated agricultural production; and

     ii.   is required to be Transferred by the Entitlement Owner to the
           Commonwealth to provide it with the Commonwealth's
           Proportion of the Agreed Water Savings for that Proponent's
           On-Farm Works.

     Once this Project Schedule is amended to reflect the details of a
     Round, the Water Entitlement(s) relating to each Proponent in that
     Round will be identified in Item E and/or Attachment 3 of this Project
     Schedule;

t.   Water Transfer Deed (WTD): means the legally binding deed
     between an Entitlement Owner and the Commonwealth under
     which the Entitlement Owner permanently Transfers to the
     Commonwealth its unencumbered Water Entitlement equal to the
     Commonwealth’s Proportion of the Agreed Water Savings for a
     Proponent's On-Farm Works as specified in Item E and Attachment
     3. The Water Transfer Deed must be in the form provided by
     DSEWPaC. DSEWPaC may make amendment to the WTD during
     the course of this Priority Project. The Entitlement Owner is required
     to enter into, and complete, the Water Transfer Deed with the
     Commonwealth prior to the State paying any Funds to the
     Proponent under this Priority Project;

u.   Works Agreement: means the legally binding agreement between
     the State and a Proponent (and any Land Owner or Entitlement
     Owner that is also required to be a party to the Works Agreement
     as per Item B.5.1.a and b) that sets out the terms on which the
     State agrees to provide Funding to the Proponent and the
     Proponent agrees to use that Funding to complete its On-Farm
     Works; and

QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011        4
         v.   Works Package: means DERM’s assessment, ranking and
              recommendation of Proponents’ proposals, consistent with the
              Business Case Information Requirements, which DERM is required
              to submit to DSEWPaC.

B.       Priority Project

B.1.     Summary and duration of the Priority Project
B.1.1.   In the July 2008 Intergovernmental Agreement (IGA) on Murray-Darling
         Basin Reform, the Commonwealth agreed in-principle to provide funding
         of up to $510 million for Queensland’s State Priority Projects (including
         $350 million of water purchasing by the Commonwealth), subject to Due
         Diligence Assessment and compliance with the Commonwealth’s
         Business Case Information Requirements and this Agreement.

B.1.2.   The State submitted a business case to DSEWPaC for a proposed on
         farm water use efficiency priority project (Proposed Project) on 14
         September 2009. The State developed the Queensland Murray-Darling
         Basin (QMDB) Healthy HeadWaters Program (HHP) as its vehicle for
         delivering the Proposed Project.

B.1.3.   The Commonwealth's Due Diligence Assessment of that Proposed
         Project against the Business Case Information Requirements was
         completed in February 2010. As a result of the Due Diligence
         Assessment, the Proposed Project of 14 September 2009 was split into
         two phases. This Project Schedule only deals with Phase One of the
         that Proposed Project. A separate Project Schedule would govern any
         Phase Two of the Proposed Project.

B.1.4.   This Priority Project has four distinct Components, which are set out in
         the definition of “Project Activities” in Item A.1.2.n of this Project
         Schedule. Project Milestones for each of these Components are (or will
         be) identified in Item C of this Project Schedule.

B.1.5.   The maximum possible Funding payable by the Commonwealth for this
         Priority Project (excluding the Start-Up Amount) is currently $54,743,745
         (excluding GST). However, the actual maximum Funding payable for
         Round Two On-Farm Works will be determined based on the outcomes
         of the Commonwealth Assessment of the Round Two Works Package
         as outlined in Item B.4 and will be incorporated into the Project
         Schedule in accordance with the process set out in Item B.4.5.

B.1.6.   The State is required to obtain Other Contributions from Proponents for
         this Priority Project that equal at least 10 per cent of the total Project
         Cost for this Priority Project specified in Item D.1.2 of this Project
         Schedule and must be identified in the Works Package referred to in
         Item B.1.7.




         QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011          5
B.1.7.   The State agrees to present the Commonwealth with a Works Package,
         Other Contributions and the proposed Agreed Water Savings, for a
         Round. The State must not include in the Works Package any irrigator
         proposal:

         a.   that offers a Water Entitlement that is attached to land;

         b.   that contains an irrigator's proposed in-kind contribution (if any) to
              an On-Farm Works that has not been certified as a reasonable
              value for the in-kind contribution by an expert third party or by an
              authorised officer of DERM (as agreed by the Commonwealth); or

         c.   that does not contain evidence of certification by a Professional
              Engineer of Queensland or an Irrigation Australia Limited Certified
              Irrigation Designer or an Irrigation Australia Limited Certified
              Irrigation Agronomist as to the technical feasibility of its proposed
              on-farm works and the associated identified water savings.

B.1.8.   Where a Water Entitlement includes one or more special conditions that
         individually or together prevent the Water Entitlement being transferred
         to the Commonwealth, the State agrees to commence removing each of
         those conditions from the Water Entitlement after the Commonwealth
         agrees to the Works Package that contains that Water Entitlement. The
         completion of this process, without substantial change to any of the
         other characteristics of that Water Entitlement set out in Item E and
         Annexure 3, is a prerequisite to:
         a.   the Water Entitlement passing Legal Due Diligence; and
         b.   the Commonwealth signing a Water Transfer Deed for the
              Transfer of that Water Entitlement.

B.1.9.   This Priority Project will commence on 1 May 2010 and will be
         completed by 30 October 2013.


B.2.     Aim of Project Activities
B.2.1.   This Priority Project will provide the necessary baseline information for
         project management and governance as well as an opportunity to test
         the proposed delivery methodology of on-ground irrigation efficiency
         infrastructure works, prior to agreement and implementation of any
         further on-ground works in Phase 2.

B.2.2.   This Priority Project will assist the State to meet its commitments to the
         IGA and national water reform specified in Schedule 1 of the
         Agreement. The Priority Project will result in Agreed Water Savings that
         will be shared between Proponents and the Commonwealth; adoption of
         technology and practices that result in improved on-farm water use
         efficiencies; and setting in place opportunities for sustaining irrigation
         communities into the future.


         QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011         6
B.2.3.   The Priority Project will involve early and up front assessment and
         planning to identify improvements to on-farm water use efficiency,
         including the identification of initial water recovery targets. It will also
         involve informed consideration and design of how best to promote
         involvement and adoption of irrigation infrastructure efficiencies by
         irrigators and deliver on-ground works to achieve Agreed Water
         Savings.

B.3.     Project Requirements
B.3.1.   The State agrees that:

         a.   The Project Activities will be carried out in accordance with all
              applicable laws (including, but not limited to, all required planning,
              environmental, development, building, occupational health and
              safety and regulatory approvals and all applicable Australian
              standards);

         b.   In undertaking this Priority Project the State will comply with the
              requirements of the Environment Protection and Biodiversity
              Conservation Act 1999;

         c.   The construction and use of the On-Farm Works will comply with all
              applicable laws (including, but not limited to, all required planning,
              environmental, development, building, occupational health and
              safety and regulatory approvals and all applicable Australian
              standards);

         d.   The State is responsible for ensuring the proper and efficient
              conduct of Project Activities; and

         e.   The State is responsible for meeting the Project Milestones
              specified in this Project Schedule.

B.3.2.   The State acknowledges that DSEWPaC is not required to perform any
         aspect of this Priority Project, other than undertaking Legal Due
         Diligence and the Commonwealth's own conveyancing activities to
         Transfer the Water Entitlements to the Commonwealth.

B.3.3.   The State agrees to comply, and to ensure that its Proponents and their
         subcontractors comply, with all applicable requirements of the National
         Code of Practice for the Construction Industry as set out in Attachment 1
         to this Project Schedule.

B.3.4.   The State agrees to comply, and to ensure that its Proponents and
         subcontractors comply, with all applicable requirements of the Australian
         Government OHS Accreditation Scheme as set out in Attachment 2 to
         this Project Schedule.

B.3.5.   The State agrees to ensure that Proponents maintain:




         QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011            7
         a.   Workers’ compensation insurance for an amount required by
              Queensland legislation;

         b.   Public liability insurance for $20 million or more per claim or
              occurrence giving rise to a claim, in respect to activities undertaken
              under this Project Schedule; and

         c.   Insurance against any loss or damage to an asset valued at over
              $5,000 or more that is created or acquired in whole or part with the
              Funding for its full reinstatement or replacement cost.

B.3.6.   Further to clause 14 and Schedule 5 of the Agreement, the State agrees
         to provide its program publications for the Queensland Murray-Darling
         Basin (QMDB) Healthy HeadWaters Program (HHP) to the
         Commonwealth for comment prior to their release. DSEWPaC agrees to
         provide comment on such publications within 10 Business Days
         (excluding publications that requires approval by the Commonwealth
         Minister for Water). The State agrees to put in place arrangements to
         ensure that only the latest version of program documentation for the
         Queensland Murray-Darling Basin (QMDB) Healthy HeadWaters
         Program (HHP) is available to applicants.

B.4.     Process relating to a Round of On-Farm Works, including
         Commonwealth Assessment and Legal Due Diligence
B.4.1.   The State will open a funding Round and request that irrigators submit
         applications for funding for on-farm works. The State will assess the
         funding proposals it receives consistent with the Commonwealth’s
         Business Case Information Requirements.

B.4.2.   The State will then submit a Works Package to DSEWPaC that
         assesses proposals for that Round and demonstrates that the proposed
         on-farm works are consistent with the Business Case Information
         Requirements and satisfies the Commonwealth’s investment principles
         specified in clause 1.1.3 of the Agreement. The Works Package for a
         Round must also contain the State's proposed Agreed Water Savings
         for that Round and Other Contributions as identified in Item B.1.7.

B.4.3.   DSEWPaC will then undertake the Commonwealth Assessment of the
         Works Package submitted by the State for that Round and will notify the
         State of the outcome. DSEWPaC may accept all, some or none of the
         proposals identified in the Works Package. If the Commonwealth does
         not accept some or all of the proposals identified in the proposed Works
         Package for a Round, both parties agree to re-negotiate any outstanding
         Project Activities, Project Milestones, Project Cost and Funding
         payments.

B.4.4.   If the Works Package passes the Commonwealth Assessment (i.e.
         DSEWPaC accepts some or all of the proposals identified in the Works
         Package), the parties will then agree the Agreed Water Savings (and the



         QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011         8
         Commonwealth's Proportion of those Agreed Water Savings) for that
         Round. The Agreed Water Savings are subject to:
         a. each Water Entitlement in the Works Package for the Round
            passing Legal Due Diligence; and
         b. the Entitlement Owner of each Water Entitlement executing a WTD
            with the Commonwealth for the Transfer of that Water Entitlement
            within 30 days of DSEWPaC issuing it to the Entitlement Owner (or
            longer period as may be agreed by the Commonwealth) and the
            completion of that WTD within the timeframe required by that WTD.

B.4.5.   The parties will then amend Item C.4 (to reflect the Commonwealth's
         Assessment of Round One) or Item C.5 (to reflect the Commonwealth's
         Assessment of Round Two), as well as Items D, E, I and J and
         Attachment 3 of this Project Schedule for each Round, to reflect the
         Agreed Water Savings, Project Milestones, maximum Funding and
         Funding payments, reporting requirements and Water Entitlements for
         that Round. The first and second variations to this Project Schedule
         contained these amendments to Item C.4 in respect of Round One.

B.4.6.   Once the Project Schedule has been amended for a Round in
         accordance with Item B.4.5:
         a.   DERM will commence negotiating and executing Works
              Agreements with each Proponent (and any Land Owner or the
              Entitlement Owner that is required by Item B.5.1. a and b to be a
              party to the Proponent's Works Agreement) for that Round of the
              On-Farm Works. DERM must be satisfied that the Proponent has
              obtained all of the approvals necessary for the commencement of
              its proposed on-farm works prior to DERM executing a Works
              Agreement with that Proponent. DERM will submit copies of the
              signed Works Agreements to the Commonwealth;
         b.   DSEWPaC will commence its Legal Due Diligence assessment for
              the Water Entitlements that are the subject of the Agreed Water
              Savings for that Round. Should a Water Entitlement fail Legal Due
              Diligence, the State may replace that Proponent's proposal with a
              similar proposal from outside the Works Package that is acceptable
              to DSEWPaC. If an alternative irrigator proposal is not available to
              replace the Proponent's proposal, the Project Schedule will be
              amended to reduce the Agreed Water Savings and the Funding for
              that Round. The State is required to terminate its Works Agreement
              with a Proponent if the Water Entitlement relating to that Proponent
              fails Legal Due Diligence; and
         c.   DSEWPaC’s nominated legal provider will undertake the Legal Due
              Diligence and the Commonwealth's conveyancing to Transfer Water
              Entitlements from Entitlement Owners to the Commonwealth.

B.4.7.   If a Water Entitlement passes Legal Due Diligence, the Commonwealth
         will execute a WTD with the Entitlement Owner of that Water Entitlement
         and negotiate any necessary supply and distribution agreements.


         QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011      9
B.4.8.   At settlement of a WTD with an Entitlement Owner, the Commonwealth
         will receive validly executed and registrable Transfer documents in
         respect of the Water Entitlement that is the subject of that WTD. The
         State must then pay the first instalment of funds to the relevant
         Proponent under its Works Agreement with that Proponent within 1-2
         weeks after that settlement occurs. DSEWPaC will then reimburse the
         State for the amount of that first Works Agreement payment in the next
         Treasury-to-Treasury payment cycle in accordance with Item J.1.7 and
         J.1.8 of this Project Schedule.

B.4.9.   If, during a Round, a WTD for a Water Entitlement is not executed by an
         Entitlement Owner within 30 days of DSEWPaC issuing it to that
         Entitlement Owner (or longer period as may be agreed by the
         Commonwealth), or the WTD is not completed within the timeframe
         required by that WTD, the Project Schedule may be amended to reduce
         the Agreed Water Savings, the Commonwealth's Proportion of the
         Agreed Water Savings and the Funding for that Round to reflect the
         removal of the relevant Proponent's On-Farm Works. The State must
         terminate its Works Agreement with that Proponent.

B.5.     The Works Agreement and the Water Transfer Deed
B.5.1.   The State is required to ensure that its Works Agreement with each of
         its Proponents is consistent with, and gives effect to, the State’s
         requirements under this Agreement. Without limiting the generality of the
         preceding sentence, the State is required to:
         a.   ensure that if the Proponent is not the Land Owner of the land on
              which the Proponent's On-Farm Works are to be constructed, the
              Land Owner of that land is also a party to the Works Agreement
              with that Proponent;
         b.   ensure that if the Proponent is not the Entitlement Owner of the
              Water Entitlement that is specified in Item E or Attachment 3 in
              respect of the Proponent's On-Farm Works, the Entitlement Owner
              of that Water Entitlement is also a party to the Works Agreement
              with that Proponent;
         c.   ensure that any Works Agreement that is executed with a
              Proponent who is a trustee company does not limit DERM's ability
              to recover Unspent Funds from the Proponent to the value of the
              assets in the relevant trust.
         d.   ensure that its Works Agreement with each Proponent requires the
              Proponent to warrant that it has obtained, prior to the signing of the
              Works Agreement, certification from a Professional Engineer of
              Queensland or an Irrigation Australia Limited Certified Irrigation
              Designer or an Irrigation Australia Limited Certified Irrigation
              Agronomist as to the technical feasibility of its proposed On-Farm
              Works and the associated identified water savings. An authorised
              officer of the Queensland Department of Environment and
              Resource Management or expert third party will also be required to

         QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011      10
     certify that the amount of any Proponent in-kind contributions is
     reasonable;

e.   ensure that its Works Agreement with each Proponent provides that
     it will be immediately terminated by DERM if:

     i.        DSEWPaC advises DERM that the Water Entitlement relating to
               the Proponent has not passed Legal Due Diligence;

     ii. DSEWPaC advises DERM that the Entitlement Owner of the
         Water Entitlement relating to the Proponent has not signed a
         WTD with the Commonwealth within 30 days of DSEWPaC
         issuing the WTD to that Entitlement Owner for signature (or
         longer period agreed by the Commonwealth); or

     iii. DSEWPaC advises DERM that the Entitlement Owner of the
          Water Entitlement relating to the Proponent has signed a WTD
          with the Commonwealth but the WTD has been terminated due
          to it not having been completed by the date specified in that
          WTD.
f.   ensure that its Works Agreement with each Proponent contains:
          i.     a consent by the Proponent to the State or the
                 Commonwealth accessing the Proponent's premises, records
                 and accounts for the purposes of verifying the performance of
                 the Proponent's On-Farm Works and its expenditure of
                 Funding; and
          ii.    an agreement that the Proponent, and/or any separate Land
                 Owner and/or Entitlement Owner, will not make a claim
                 against the State or the Commonwealth in respect of any
                 liability the State or Commonwealth may have arising out of
                 any injury suffered by, or death of, a Proponent, any separate
                 Landholder or Entitlement Owner, or its employees, agents or
                 contractors as a result of the performance of the On-Farm
                 Works;
g.   ensure that its Works Agreement with each Proponent:
          i.     prohibits the Proponent paying more than 25% of any
                 subcontract in advance of the goods or services that are to be
                 provided to the Proponent under that subcontract; and
          ii     provides that if this Project Schedule is terminated for any
                 reason, the State may immediately terminate the Works
                 Agreement and the Proponent must immediately cease
                 expenditure of the Funding;

h.   effectively manage each Works Agreement with a Proponent and
     monitor the Proponent’s compliance with the Works Agreement;




QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011             11
          i.   enforce the State’s rights and Proponents', and any separate Land
               Owners' and/or Entitlement Owners', obligations in those contracts
               including if required by DSEWPaC at no cost to the Commonwealth;
               and

          j.   consult with DSEWPaC before varying the Works Agreement
               template for a particular Proponent or varying an executed Works
               Agreement. The State is required to provide a signed copy of the
               State’s Works Agreement with each of its Proponents to
               DSEWPaC.

 B.5.2.   The State may only provide Funding for the construction of On-Farm
          Works to a Proponent if:
          a.   the Proponent has entered into a legally binding Works Agreement
               with the State; and
          b.   the Proponent's On-Farm Works, and the Funds to be provided for
               those On-Farm Works, are identified in this Project Schedule or
               otherwise approved in writing by DSEWPaC; and
          c.   the Entitlement Owner of the Water Entitlement relating to the
               Proponent has entered into and completed all of its obligations
               under the WTD; and
          d.   for payments, other than the first payment under each Works
               Agreement, the Proponent and the Land Owner are not in breach of
               the Proponent's Works Agreement with the State.
B.5.3     As this Priority Project requires the State to provide grants from the
          Funds to Proponents, any amount that the Commonwealth may recover
          from the State under clause 6.3 and/or clause 17 includes any amount
          the State has provided to a Proponent minus the greater of:
          a.   the first payment of Funds paid to the Proponent under a Works
               Agreement; or
          b. the sum of the Funds spent, legally due and payable and legally and
              irrevocably committed by the Proponent in accordance with the
              Works Agreement for work done on the Proponent's On-Farm
              Works up to the earlier of the expiry or termination of the Works
              Agreement.
          The State is not to make a payment of Funds to a Proponent under a
          Works Agreement until and unless that Proponent has demonstrated
          that it has spent (or will in the next 10 days spend) all of the Funds
          previously paid to it under that Works Agreement for its On-Farm Works
          in accordance with this Project Schedule and the Works Agreement.

 B.5.4    Notwithstanding any withholding of Funds under the Agreement by the
          Commonwealth, the State agrees to continue to perform this Priority
          Project, and ensure that its Proponents (and any separate Land
          Owners) perform their Works Agreements with the State, unless
          DSEWPaC agrees otherwise in writing.



          QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011     12
C.       Project Requirements and Project Milestones

C.1.1.   This Item C identifies the requirements, including the Project Milestones
         for the Components of the Project Activities.

C.1.2.   The Project Milestones for Round One have been included in Item C.4.
         The Project Milestones for Round Two are set out in Item C.5.

C.2      QMDB Basin Appraisal Study (BAS)

C.2.1.   The Basin Appraisal Study (BAS) will run in parallel to the On-Farm
         Works. The outputs of the BAS will be considered together with the
         findings from each Round of On-Farm Works to inform future investment
         in on-farm works in the QMDB. The BAS will be undertaken using a mix
         of internally run projects through DERM and external consultancies. The
         outputs of the BAS are as follows:
         a.   A description of the water management rules and characteristics of
              water products as determined by the current water planning
              processes for the catchments of the QMDB;
         b.   An appraisal that identifies at a catchment zone scale the potential
              for water savings to be realised through the implementation of on
              farm water use practices and measures;
         c.   Identify and analyse the benefits and impacts of this Priority Project
              on the regional economy as a result of delivering improved on-farm
              water use efficiency works. This information will be used to further
              quantify the socio-economic impacts and benefits of this Priority
              Project and the on ground works that may be proposed for Phase
              Two;
         d.   Define and map landscape risks and environmental assets. The
              findings of this assessment will be used by DERM in the
              assessment process for this Priority Project and Phase Two; and
         e.   An analysis of the outputs of the above components by DERM to
              determine key information sets that will provide the focus across the
              QMDB on where and how on farm water use efficiency investment
              is best directed.

C.2.2.   The maximum Funding payable by the Commonwealth to the State
         under this Project Schedule in respect of the Basin Appraisal Study is
         $1,156,850 (excluding GST).

C.2.3.   Both parties acknowledge that the Commonwealth provided the State
         with a Start-Up Amount of $843,150 (excluding GST) under a separate
         funding agreement to enable the State to commence early works
         regarding the Basin Appraisal Study. The Start-Up Amount is in addition
         to the Funding specified in Item C.2.2 of this Project Schedule.




         QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011      13
             C.2.4.        The Project Milestones for the BAS Component of the Project Activities
                           are as follows and are subject to Item B.4.3:
 Project                                                                                       Completion Date
                                                                                   Cost ($)
Milestone            Project Milestone for the Basin Appraisal Study                             for Project
                                                                                  excl. GST
Number                                                                                            Milestone
            a. Development of spatial layers and rules to underpin the hazard
               and risk assessment framework for Queensland Murray
   A1          Darling Basin (QMDB) collated and version 1 of risk maps           $328,425        30 Jul 2010
               produced.
            b. Development of selection criteria for assessment identified.
            a. Development of project specification to fill gaps identified by
               the National Centre for Engineering in Agriculture-Feedlot
               Services Australia (NCEA-FSA) consultancy.
   A2       b. Completion of On-farm case studies of adopted WUE                  $328,425        30 Jul 2010
               technologies and development scenarios in lower Balonne &
               Border Rivers for use in communication and extension
               activities.
            a. Finalisation of project specification for the additional on-farm
               economic case studies in the upper Condamine and other
               WUE options.
   A3                                                                             $125,000       30 Sept 2010
            b. Completion of engagement round with irrigators and
               stakeholders to present the findings of the NCEA-FSA
               consultancy and seek input into adoption of recommendations.
            a. Completion of landscape risk assessment study and selection
   A4                                                                             $125,000       31 Dec 2010
               criteria for assessment.
            a. Completion on-farm economic case studies for upper
               Condamine and other water use efficiency (WUE) options.
   A5       b. Completion of socio-economic impact analysis.                      $125,000       31 Mar 2011
            c.   Completion of project to fill gaps identified by the NCEA-FSA
                 consultancy.
            Outputs of BAS analysed alongside learnings to date from Phase 1
   A6       to develop recommendations for amending the WUE project in            $125,000     31 December 2011
            Phase 2.
                      Total Funding and Project Cost for BAS Component            $1,156,850




             C.3           Industry development, extension, marketing and client contract
                           facilitation and project management
             C.3.1.        This Component of the Project Activities will provide for the project and
                           contract management, capability, education, extension, marketing and
                           monitoring activities associated with delivery of the BAS, Round One
                           and Round Two of On Farm Works.
                          The outcomes of this Component are to:



                           QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011       14
         a.   Ensure this Priority Project is embedded into relevant irrigation
              industry forums to ensure effective and constructive communication
              and feedback and to foster interaction;
         b.   Provide a range of extension services to improve water use
              efficiency in irrigated agriculture in the Qld MDB and support the
              implementation of this Priority Project;
         c.   Strengthen the capacity of the irrigation industry to support the
              efficient delivery of this Priority Project. The State has identified that
              a registered training organisation will provide training and
              development opportunities for irrigation professionals, to improve
              the skills of irrigation professionals and broaden their knowledge in
              relation to providing advice for improving on-farm water use
              efficiency under this Priority Project;
         d.   Improve the decision-making capability of Proponents through
              increasing the provision of data which Proponents can base
              decisions;
         e.   Enable irrigators to access advice on measures to improve water
              use efficiency specific to their enterprise;
         f.   Provide specific Priority Project information to Proponents;
         g.   Implement the funding application and assessment process for
              each Round;
         h.   Undertake the contractual processes (e.g. the Works Agreements)
              for On Farm Works once successful applicants have been notified
              in accordance with Items B.4 and B.5; and
         i.   Project manage this Priority Project.

C.3.2.   The maximum Funding payable by the Commonwealth to the State
         under this Project Schedule for this Component (being project
         management, industry development, extension, marketing and client
         contract facilitation and project management) is $5,645,000 (excluding
         GST).
C.3.3.   Both parties acknowledge that the Commonwealth provided the State
         with a Start-Up Amount of $55,000 (excluding GST) under a separate
         funding agreement to enable the State to commence early project
         management works. The Funding specified in Item C.3.2 of this Project
         Schedule is in addition to this Start-Up Amount.
C.3.4.   The Project Milestones for this Component of the Project Activities are
         as follows and are subject to Item B.4.3:




         QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011         15
                                                                                      Funding for    Completion
Project       Performance Indicators for Project Management Industry Development,
                                                                                        Project          Date for
Milestone     Extension, Marketing and Client Contract Facilitation
                                                                                      Milestone           Project
Number
                                                                                       GST exc.          Milestone


              Coordination and collection of data to support the Round One funding
              application process complete. Round One funding application package
              developed and released by DERM. Extension program and Industry and
              Capacity development initiated and underway.

              The State will also have achieved the following:

              a)   DERM assessment process for Round One established and Round
                   One launched;
    B1 & B2




              b)   Extension program: Agreement executed between DERM and                                 30 Jul
                                                                                      $848,260
                   Queensland's Department of Employment, Economic Development                            2010
                   and Innovation (DEEDI) to provide extension services; and

              c)   Extension program: Advisory Committees Established; and

              d)   Extension program: Centre Pivot / Lateral Move (CPLM) System
                   Evaluation workshop material and content developed; and

              The Progress Report will demonstrate evidence of project and contract
              management activities, promotional activities, staff employed on
              program and their locations, budget expenditure by components.

              Round One funding application process closed. DERM assessment of
              Round One commences.

              The State will also have achieved the following:
              1. Extension program: first series of capacity building workshops
                 delivered; and                                                       $462,770
                                                                                                         30 Sept
    B3




              2. Project overview group meeting held between DSEWPaC and                                  2010
                 DERM; and

              The Progress Report will demonstrate evidence of project management
              and contract management activities, promotional activities, staff
              employed on program and their locations, budget expenditure by
              components.




                           QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011      16
                                                                                     Funding for    Completion
Project     Performance Indicators for Project Management Industry Development,
                                                                                       Project          Date for
Milestone   Extension, Marketing and Client Contract Facilitation
                                                                                     Milestone           Project
Number
                                                                                      GST exc.          Milestone


            1. Round One Works Package - Submitted for Australian
               Government assessment; and

            2. Extension Program and Industry Capacity Development:

                 a. IAL training: Round one IAL certified training complete; and

                 b. Water use & performance benchmarking program: design and
                    Catch Can Assessments completed and individual reports
                    detailing system performance provided to irrigators; and

                 c.   Extension program: WUE investment workshop materials and       $491,030
                                                                                                         31 Dec
    B4




                      content developed; and
                                                                                                          2010
                 d. Extension program: Second series of capacity building
                    workshops delivered; and

                 e. Extension program: Report on advice provided to irrigators
                    assessing options for WUE improvement investments and
                    feedback received; and

                 f.   Extension program: Advisory Committees meeting held; and

            3.    Project Overview Group Meeting - Held between DSEWPaC and
                  DERM.

            1. Round One Works Agreements – Execution commenced with
               Proponents in accordance with Items B.4 and B.5 of this Project
               Schedule once this Project Schedule has been amended to
               incorporate the Round One requirements in accordance with Item
               B.4; and

            2. Round One On-Farm Works - Commenced for those proposals
               where a Round One Works Agreement has been signed and the
               Water Entitlement has been Transferred to the Commonwealth; and       $491,030
                                                                                                         31 Mar
    B5




            3. Extension Program and Industry Capacity Development:                                       2011

                 a. Extension program: Third series of capacity building workshops
                    delivered; and

                 b. Extension Program: Report on advice provided to irrigators
                    assessing options for WUE improvement investments and
                    feedback received; and

                 c.   Extension Program: Advisory Committees meeting held; and



                          QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011      17
                                                                                     Funding for    Completion
Project     Performance Indicators for Project Management Industry Development,
                                                                                       Project          Date for
Milestone   Extension, Marketing and Client Contract Facilitation
                                                                                     Milestone           Project
Number
                                                                                      GST exc.          Milestone


            4. Project Overview Group Meeting - Held between DSEWPaC and
               DERM.




            1. Round One Works Agreements – Execution finalised with Round
               One Proponents in accordance with Items B.4 and B.5 of this
               Project Schedule; and

            2. Round One On-Farm Works - All Round One On-Farm Works are
               progressing according to the milestones identified in Schedule 2 of
               Round One Works Agreements; and

            3. Round Two Applications: DERM opens the Round Two
               Application process to irrigators; and

            4. Extension Program and Industry Capacity Development:

                a. IAL training: Second round of IAL certified training complete;
                   and

                b. Water use & performance benchmarking program: Season 1
                   completed, including seasonal water use comparisons,
                   workshops conducted and progress report submitted; and
                                                                                     $669,290
                                                                                                         30 Jun
    B6




                c.   Extension program: WUE investment decision support tools                             2011
                     available and WATERpak updated; and

                d. Extension program: Fourth series of capacity building
                   workshops delivered; and

                e. Extension program: Report on advice provided to irrigators
                   assessing options for WUE improvement investments and
                   feedback received; and

                f.   Extension program: Advisory Committees meeting held; and

                g. Extension program: Support tools available to irrigators:
                   including CPLM DVD produced and accessible on web; and

                h. Extension program: Existing irrigation system assessments
                   completed; and

            5. Project Overview Group Meeting - Held between DSEWPaC and
               DERM.


                         QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011       18
                                                                                        Funding for    Completion
Project     Performance Indicators for Project Management Industry Development,
                                                                                          Project          Date for
Milestone   Extension, Marketing and Client Contract Facilitation
                                                                                        Milestone           Project
Number
                                                                                         GST exc.          Milestone


            1. Round One On-Farm Works - Works are progressing according to
               the milestones identified in Schedule 2 of the Round One Works
               Agreements; and

            2. Round Two Applications: DERM closes Round Two Application
               process to irrigators; and

            3. Round Two Works Package: Submitted by DERM for Australian                                   30 Sept
    B7




               Government assessment by SEWPAC; and                                     $531,520
                                                                                                            2011

            4. Extension Program and Industry Capacity Development:

                a)   Extension program: Fifth series of capacity building workshops
                     delivered; and

            5. Project overview group meeting - Held between DSEWPaC and
               DERM.

                1. Round One On-Farm Works - Works are progressing
                   according to the milestones identified in Schedule 2 of the
                   Round One Works Agreements;

                2. Round Two Works Agreements: – Execution commenced with
                   Proponents in accordance with Items B.4 and B.5 of this
                   Project Schedule once this Project Schedule has been amended
                   to incorporate the Round Two requirements in accordance with
                   Item B.4; and

                3. Round Two On-Farm Works - Commenced for those proposals
                   where a Round Two Works Agreement has been signed and the
                   Water Entitlement has been Transferred to the Commonwealth;          $509,780
                                                                                                            31 Dec
    B8




                   and
                                                                                                             2011

                4. Implementation, Monitoring and Evaluation - Of Round One
                   On-Farm Works already commenced; and

                5. Extension Program and Industry Capacity Development:

                     a. IAL training: Third round of IAL certified training complete;
                        and
                     b. Water use & performance benchmarking program: Second
                        round of water use & performance benchmarking program
                        for summer irrigation period started; and

                     c.   Extension program: Sixth series of capacity building



                           QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011        19
                                                                                    Funding for    Completion
Project     Performance Indicators for Project Management Industry Development,
                                                                                      Project          Date for
Milestone   Extension, Marketing and Client Contract Facilitation
                                                                                    Milestone           Project
Number
                                                                                     GST exc.          Milestone

                         workshops delivered; and

                    d. Extension program: Report on advice provided to irrigators
                       assessing options for WUE improvement investments and
                       feedback received; and

                    e. Extension program: Advisory Committees meeting held; and

                6. Project Overview Group Meeting - Held between DSEWPaC
                   and DERM.

                1. Round One On-Farm Works - All Round One On-Farm Works
                   are progressing according to the milestones identified in
                   Schedule 2 of the Round One Works Agreements; and

                2. Round Two Works Agreements: – Execution finalised with
                   Round Two Proponents in accordance with Items B.4 and B.5
                   of this Project Schedule; and

                3. Round Two On-Farm Works - All Round Two On-Farm Works
                   are progressing according to the milestones identified in
                   Schedule 2 of the Round Two Works Agreements; and

                4. Implementation, Monitoring and Evaluation - Of Round One
                                                                                    $531,520
                   and Round Two On-Farm Works continues; and                                           31 Mar
    B9




                                                                                                         2012
                5. Extension Program and Industry Capacity Development:

                    a. Extension program: Seventh series of capacity building
                       workshops delivered; and

                    b. Extension program: Report on advice provided to irrigators
                       assessing options for WUE improvement investments and
                       feedback received; and

                    c.   Extension program: Advisory Committees meeting held; and

                6. Project Overview Group Meeting - Held between DSEWPaC
                   and DERM.

                1. Round One On-Farm Works - All Round One On-Farm Works
                   are progressing according to the milestones identified in
                                                                                    $659,800
                                                                                                        30 Jun
    B10




                   Schedule 2 of the Round One Works Agreements; and
                                                                                                         2012
                2. Round Two On-Farm Works - All Round Two On-Farm Works
                   are progressing according to the milestones identified in


                         QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011      20
                                                                                        Funding for    Completion
Project     Performance Indicators for Project Management Industry Development,
                                                                                          Project          Date for
Milestone   Extension, Marketing and Client Contract Facilitation
                                                                                        Milestone           Project
Number
                                                                                         GST exc.          Milestone

                    Schedule 2 of the Round Two Works Agreements; and

                3. Implementation, Monitoring and Evaluation - Of Round One
                   and Round Two On-Farm Works continue; and

                4. Extension Program and Industry Capacity Development:

                    a. IAL training: Fourth round of IAL certified training complete;
                       and

                    b. Water use & performance benchmarking program:
                       Completion of end of Season 2, including seasonal water
                       use comparisons, workshops conducted and final report
                       submitted; and

                    c.   Extension program: Eighth series of capacity building
                         workshops delivered; and

                    d. Extension program: Report on advice provided to irrigators
                       assessing options for WUE improvement investments and
                       feedback received; and

                    e. Extension program: Existing irrigation system assessments
                       completed; and

                    f.   Extension program: Advisory Committees meeting held; and

                    g. Extension program: Case studies documenting benefits of
                       WUE investments collated and publish in industry
                       publications and on web; and

                5. Project overview group Meeting - Held between DSEWPaC
                   and DERM.

                1. Round One On-Farm Works - All Round One On-Farm Works
                   are progressing according to the milestones identified in
                   Schedule 2 of the Round One Works Agreements; and

                2. Round Two On-Farm Works - All Round Two On-Farm Works
                                                                                                            31 Dec
    B11




                   are progressing according to the milestones identified in
                                                                                        $150,000
                   Schedule 2 of the Round Two Works Agreements; and                                         2012

                3. Implementation, Monitoring and Evaluation - Of Round Two
                   On-Farm Works continues.




                          QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011         21
                                                                                       Funding for    Completion
Project     Performance Indicators for Project Management Industry Development,
                                                                                         Project          Date for
Milestone   Extension, Marketing and Client Contract Facilitation
                                                                                       Milestone           Project
Number
                                                                                        GST exc.          Milestone


                  1. Monitoring and Evaluation - Of this Priority Project completed;
                     and

                  2. Round One On-Farm Works - All Round One On-Farm Works
                                                                                                           13 Oct
                     completed; and
                                                                                                            2013
    B12




                                                                                       $300,000
                  3. Round Two On-Farm Works - All Round Two On-Farm Works
                     completed; and

                  4. A Final Report - For the Priority Project will be completed and
                     submitted to DSEWPaC.


                         Funding and Project Cost for this Component                   5,645,000




            C.4           On-Farm Works (Round One) Funding

            C.4.1.        The maximum Commonwealth Funding payable to the State in respect
                          of Round One is $27,941,895 (excluding GST).

            C.4.2.        DSEWPaC acknowledges that the State commenced its activities in
                          relation to Round One on 1 June 2010.

            C.4.3.        The details of the Round One On-Farm Works are set out in the
                          following table:


                                  Table has been removed – Commercial–In-Confidence




                          QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011        22
C.4.4.    The Project Milestones relating to each Round One Proponent's On-
          Farm Works are as follows:
          a. Completion of the first milestone in the Proponent's Works
             Agreement, being the settlement of the WTD for the Water
             Entitlement relating to the Proponent.
          b. Completion of the second (or first intermediate) milestone specified
             in the Proponent's Works Agreement that demonstrates satisfactory
             progress of the Proponent's On-Farm Works;
          c. Completion of any third (or second intermediate) milestone specified
             in the Proponent's Works Agreement that demonstrates satisfactory
             progress of the Proponent's On-Farm Works;
          d. Completion of any subsequent intermediate milestone (being a
             milestone prior to the final milestone) specified in the Proponent's
             Works Agreement that demonstrates satisfactory progress of the
             Proponent's On-Farm Works; and
          e. Completion of the final milestone specified in the Proponent's Works
             Agreement (including completion and commissioning of the
             Proponent's On-Farm Works).

C.4.5.    The Commonwealth will make payments to the State in respect of the
          Round One Project Milestones as specified in Item J.1.6 to J.1.8 and
          J.1.11.

C.4.6.    The State agrees that the Commonwealth will be entitled to a proportion
          of any cost savings that a Round One Proponent achieves in the
          completion of its On-Farm Works. The Commonwealth's proportion of
          any such cost savings is the proportion of the total budgeted cost of
          those On-Farm Works that will be met by the Funding specified in Item
          C.4.3 for those On-Farm Works. The Commonwealth may reduce a
          payment to the State in respect of a Proponent's On-Farm Works by the
          Commonwealth's proportion of any cost savings that the Proponent
          achieves in the completion of its On-Farm Works.

C.5       On-Farm Works (Round Two) Funding

C.5.1     The maximum possible Commonwealth Funding payable to the State in
          respect of Round Two is $20,000,000 excluding GST.

C.5.2    However, the amount of the Commonwealth's actual maximum Funding
         for the Round Two On-Farm Works will be negotiated, based on the
         Commonwealth Assessment of the Works Package that the State
         submits to SEWPAC for Round Two. The Agreed Water Savings for
         Round Two will be agreed by the parties based on the Round Two Works
         Package accepted by the Commonwealth. The parties will amend this
         Item C.5 and Items D, E, I and J and Attachment 3 in accordance with the
         process outlined in Item B.4.5.


          QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011       28
 C.5.3    The State opened Round Two on 3 May 2011. In implementing Round
          Two, the parties will follow the process outlined at Item B.4 of this Project
          Schedule.

 C.5.4    The Project Milestones relating to each Round Two Proponent's On-Farm
          Works are as follows:
          a. Completion of the first milestone in the Proponent's Works Agreement,
             being the settlement of the WTD for the Water Entitlement relating to
             the Proponent.
          b. Completion of the second (or first intermediate) milestone specified in
             the Proponent's Works Agreement that demonstrates satisfactory
             progress of the Proponent's On-Farm Works;
          c. Completion of any third (or second intermediate) milestone specified
             in the Proponent's Works Agreement that demonstrates satisfactory
             progress of the Proponent's On-Farm Works;
          d. Completion of any subsequent intermediate milestone (being a
             milestone prior to the final milestone) specified in the Proponent's
             Works Agreement that demonstrates satisfactory progress of the
             Proponent's On-Farm Works; and
          e. Completion of the final milestone specified in the Proponent's Works
             Agreement (including completion and commissioning of the
             Proponent's On-Farm Works).
C.5.5     No amount will be paid to the State in respect of Round Two until the
          activities in Item C.5.2 are completed.

C.5.6     Subject to Item C.5.5, the Commonwealth will make payments to the
          State in respect of the Round Two Project Milestones as specified in Item
          J.1.6 to J.1.8 and J.1.11.

C.5.7     The State agrees that the Commonwealth will be entitled to a proportion
          of any cost savings that a Round Two Proponent achieves in the
          completion of its On-Farm Works. The Commonwealth's proportion of
          any such cost savings is the proportion of the total budgeted cost of those
          On-Farm Works that will be met by the Funding that will be specified in
          this Item C for those On-Farm Works. The Commonwealth may reduce a
          payment to the State in respect of a Proponent's On-Farm Works by the
          Commonwealth's proportion of any cost savings that the Proponent
          achieves in the completion of its On-Farm Works.

 D.        Project Cost

 D.1       Project Cost for Priority Project
 D.1.1.    Unspent Funding provided for the Project Activities described in Items
           C.2 and C.3 may, with the prior written agreement of DSEWPaC, be
           spent by the State on a Round's approved On-Farm Works (see Item
           J.1.10 of this Project Schedule) to enable a greater number of On-Farm


            QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011      29
                               Works to be funded in that Round (but not to cover any cost overruns
                               incurred by a Proponent in its performance of its On-Farm Works).

                 D.1.2.        The maximum possible Project Cost for this Priority Project is set out in
                               the following table:

                                  On-farm Water Use Efficiency Project – Phase One

                                    Commonwealth Funding for this Priority Project

                                                                                        FY13/14        Maximum
                                                                                                     Commonwealth
                                FY09/10      FY10/11        FY11/12        FY12/13                     Funding
  Item of Expenditure
                                  (exc      (exc GST)       (exc GST)     (exc GST)    (exc GST)       (exc GST)
                                  GST)

QMDB Basin Appraisal               $0       $1,031,850      $125,000          $0           -$0         $1,156,850
Study

Industry development,
extension, marketing and
client contract facilitation       $0       $2,293,090      $2,242,110     $809,800     $300,000       $5,645,000
and project management
activities

Maximum funding
identified in Item C.4.1 On-       $0       $12,550,625    $12,038,243    $2,235,352   $1,117,675     $27,941,895
Farm Works (Round One)

Maximum possible funding
 for Round Two On-Farm             $0           $0             TBC           TBC          TBC          20,000,000
                  Works

Maximum possible Commonwealth Funding for this Priority Project (exc
                                                               GST)                                    $ 54,743,745
            Minimum Other Contributions for this Priority Project (exc GST)
       (Other Contributions to equal at a minimum 10 per cent of the Total
                                                            Project Cost)                             $ 6,082,638.3

                                  Project Cost for this Priority Project (exc GST)                     $ 60,826,383

                 D.1.3.        Other Contributions (as required under Item D.4 of this Project
                               Schedule) must be specified in the Works Agreement between the State
                               and Proponents.

                 D.2           Contribution Components of Priority Project
                 D.2.1         The various GST-exclusive contributions for this Priority Project are set
                               out in the following table:



                               QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011    30
                                                               Contribution
                      Party
                                                                 (exc GST)
Commonwealth Funding                                        Up to $54,743,745
State Contributions                                            See Item D.3
Other Contributions (Minimum 10 per cent of Total
                                                              $ 6,082,638.30
Project Cost)
                               Total Project Cost              $60,826,383

D.3         State Contributions
D.3.1       The State agrees that it will meet any shortfall in the Project Cost for this
            Priority Project should Other Contributions fail to meet the minimum 10
            per cent of Total Project Cost under this Project Schedule.

D.4         Other Contributions
D.4.1.      The Commonwealth and State agree that the State is required to ensure
            that Other Contributions equivalent to a minimum 10 per cent of Total
            Project Cost is provided under this Project Schedule.

E.          Transfer of Water Entitlements

E.1         Agreed Water Savings (clauses 5.2.3 and 5.2.4)
E.1.1.      The timing for the agreement of Agreed Water Savings specified in
            clause 5.2.3 of the Agreement is modified in this Item E.1.1 for this
            Priority Project. This Item E and Attachment 3 together show the amount
            and characteristics of the Agreed Water Savings for Round One and
            their attribution to each Round One Proponent's On-Farm Works.

E.1.2.      Once the Commonwealth has assessed the Round Two Works Package
            and agreed the Agreed Water Savings for Round Two with the State,
            this Item E and Attachment 3 will be amended in accordance with the
            process set out in Item B.4.5 to show the amount and characteristics of
            the Round Two Agreed Water Savings and their attribution to each
            Round Two Proponent's On-Farm Works.

E.1.3.      The Agreed Water Savings for Round One are 15,541 ML and are
            calculated as follows:




             Table has been removed – Commercial–In-Confidence




            QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011       31
E.2      The Commonwealth’s Proportion of Agreed Water Savings (clause
         5.2.3)
E.2.1.   The Commonwealth and State agree that the Commonwealth’s
         Proportion of Agreed Water Savings for a Round will not be less than 50
         per cent of the Agreed Water Savings for that Round.

E.2.2.   The Commonwealth’s Proportion of the Agreed Water Savings for
         Round One is 7,954 ML and is calculated as follows:


          Table has been removed – Commercial–In-Confidence




         QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011   33
      E.3.     Transfer of Water Entitlements (clauses 5.2.6 – 5.2.8)
      E.3.1.   The Commonwealth and State agree that, subject to satisfactory Legal
               Due Diligence and the completion of the relevant WTDs and Item E.3.2,
               the Water Entitlements specified in Attachment 3 will be permanently
               Transferred to the Commonwealth in accordance with the Agreement
               and this Project Schedule.

      E.3.2.   Where the Water Entitlement to be Transferred to the Commonwealth
               will be created by subdividing an existing Water Entitlement, the licence
               number of that Water Entitlement should be specified as the “Water
               Entitlement Licence Number” together with the words “subdivision
               required” in Attachment 3. The “Volume of Water” specified in
               Attachment 3, however, is to be the volume of the Water Entitlement
               that after the subdivision is to be Transferred to the Commonwealth.

      E.4.     Arrangements between the State or a third party or a Proponent
      E.4.1.   Refer to Items B.4 and B.5 of this Project Schedule.

      E.5.     Verification of Actual Water Savings (clauses 5.2.9 and 5.2.10)
      E.5.1.   Clauses 5.2.9 and 5.2.10 of the Agreement do not apply to this Priority
               Project.

      F.       Sharing Actual Water Savings additional to Agreed Water Savings

      F.1.1    This Item does not apply to this Priority Project.

      G.       Agreement Material and Existing Material relating to this Priority
               Project

      G.1.     Agreement Material
      G.1.1.   In relation to clause 11.2 of the Agreement the following conditions
               apply to the following Agreement Material that relates to this Priority
               Project:
Item of Agreement Material (excluding a Report)              Condition or restriction on
                                                             Commonwealth’s use of that
                                                             Agreement Material
Nil                                                          None




               QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011       34
      G.2.         Existing Material
      G.2.1.       In relation to clause 11.3 of the Agreement, the following conditions
                   apply to the following Existing Material that relates to this Priority
                   Project:
Item of Existing Material (excluding that which is               Condition or restriction on
contained in a Report)                                           Commonwealth’s use of
                                                                 that Existing Material
Nil                                                              None

      H.       Indemnity

      H.1.1.       Notwithstanding any other provision of this Agreement, the State agrees
                   to indemnify, and keep indemnified, the Commonwealth against any
                   cost, liability, loss or expense incurred by the Commonwealth:

                   a.   In rectifying any environmental damage; or

                   b.   In dealing with any third party (including Commonwealth Personnel)
                        claims against the Commonwealth, which includes without limitation
                        the Commonwealth’s legal costs and expenses on a solicitor/own
                        client basis and the cost of time spent, resources used and
                        disbursements paid by the Commonwealth;

                   arising from any act or omission by State or its Personnel in connection
                   with the Priority Project specified in this Project Schedule.
      H.1.2.       The State’s liability to indemnify the Commonwealth under this Item H
                   will be reduced proportionally to the extent that any fault on the
                   Commonwealth’s part contributed to the relevant cost, liability, loss or
                   expense. In this Item H.1.2 in ‘fault’ means any reckless, negligent or
                   unlawful act or omission or wilful misconduct.

      H.1.3.       The right of the Commonwealth to be indemnified in this item is in
                   addition to, and not exclusive of, any right, power or remedy provided to
                   the Commonwealth by law, but the Commonwealth is not entitled to be
                   compensated in excess of the relevant cost, liability, loss or expense.

      I.           Project Reports

      I.1.         Priority Project Reports
      I.1.1.       The State agrees to provide the following Project Reports:




                   QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011        35
                                            Project Reports
    Type
e.g. Progress                                                                            Date Report
                                  Information Report is to Contain
  Report, or                                                                                 Due
Final Report
                                                                                          th
Progress         The State is required to provide a quarterly progress report on its    13 of the
(milestone)      performance of the Priority Project during the previous quarter,       month
Reports for      consistent with Item I.1.2 below.                                      immediately
Items C.2 and                                                                           following the
C.3              Payment of Funds under Item J for Project Milestones in Items C.2      end of the
                 and C.3 is dependant on the State’s quarterly Progress Report          quarter that is
                 demonstrating the State’s satisfactory achievement of the Project      subject of the
                 Milestones in Items C.2 and C.3 that were due for completion in the    report or as
                 previous quarter.                                                      specified in
                                                                                        ItemsC.2 and
                                                                                        C.3.
                                                                                          th
Report           The State is required to provide the Report specified in Item I.2 to   20 of each
required in      demonstrate that a Proponent has satisfactorily completed a Project    month in
respect of       Milestone specified in its Works Agreement (other than the first       relation to the
Project          Project Milestone in that Works Agreement) and to enable the State     Item C.4 and
Milestones for   to obtain Commonwealth reimbursement for payments that the State       C.5 Project
each Round of    has made under its Works Agreements.                                   Milestones
On-Farm                                                                                 completed and
Works (see                                                                              paid by DERM
                                                                                                      th
Items C.4 and                                                                           since the 20
C.5) other                                                                              of the previous
than the first                                                                          month.
Project
Milestone in a
Works
Agreement
Evaluation       A summary of the extent to which this Priority Project has met,        31 March
Report           exceeded or fallen short of its aims/objectives stated in Item B.2,    2012
                 consistent with Item I.5.
                 This Evaluation Report will be used during the assessment of Phase
                 One to facilitate the design and development of any Phase Two.
Audited          Audited financial Reports, that contain the information specified in
Financial        Item C of Schedule 4 of the Agreement, are required as follows:
Reports                                                                                 15 Nov 2011
                 - Audited Financial Report for 2010-11 by 15 November 2011
                 - Audited Financial Report for 2011-12 by 15 November 2012             15 Nov 2012

                 - Audited Financial Report for 2012-13 by 15 November 2013             15 Nov 2013

                 - Audited Financial Report for 2012-13 by 15 November 2014             15 Nov 2014
                                                                                        unless Item
                                                                                        C.1.1.b of
                                                                                        Schedule 4 of
                                                                                        the Agreement
                                                                                        requires an
                                                                                        Audited
                                                                                        Financial
                                                                                        Report at a
                                                                                        different time.



                   QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011         36
                                           Project Reports
    Type
e.g. Progress                                                                          Date Report
                                 Information Report is to Contain
  Report, or                                                                               Due
Final Report
Final Project   A final Report as specified in Item I.3 below                         13 Oct 2013
Report

      I.1.2.     Each quarterly progress Report that is required under Item I.1.1 must
                 demonstrate evidence of project management and contract
                 management activities, progress and performance of each Round's On-
                 Farm Works, promotional activities, staff employed on program and their
                 locations and budget expenditure for each Component and must contain
                 the following information:
                 a.   a description of actual performance of the Priority Project to date
                      against the aim of the Priority Project (as specified in Item B.2 of
                      this Project Schedule) including information and evidence to
                      demonstrate the State’s completion of the Project Milestones (see
                      Item C of this Project Schedule) that were due for completion during
                      the period that is the subject of this Progress Report (Period);
                 b.   a description of the activities, if any, undertaken for the Priority
                      Project to date by each Proponent (if any);
                 c.   an income and expenditure statement of the Funding, number of
                      staff employed on the Priority Project and their locations, State
                      Contributions and Other Contributions for the Priority Project for the
                      Period;
                 d.   an income and expenditure statement of the Proponents' use of the
                      Funding, any State Contributions and the Other Contributions for
                      the Priority Project for the Period;
                 e.   a statement as to whether the Priority Project (including the On-
                      Farm Works) is proceeding within the Project Cost and if it is not, an
                      explanation as to why the Project Cost is not being met and the
                      action the State proposes to take to address this;
                 f.   a statement of the interest earned by the State to date on the Funds
                      provided for the Priority Project;
                 g.   promotional activities undertaken in relation to, and media coverage
                      of, the Priority Project during the Period;
                 h.   a description of the work that will be undertaken to complete the
                      Project Milestone(s), and any expected promotional opportunities,
                      during the next reporting period;
                 i.   the Agreed Water Savings (if any) for the Project to date; and
                 j.   any other items that are agreed by the State and the
                      Commonwealth to be included in the Progress Report.



                  QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011        37
I.1.3.   As noted in Item J.1.4, a Progress Report that complies with the
         requirements in Item I.1.2 is required for payment of a Project Milestone
         specified in Item C.2 and C.3.

I.2.     Report required in respect of Project Milestones in Items C.4 and
         C.5 for a Round of On-Farm Works
I.2.1    Subject to Item I.2.2, by the 20th of each month that occurs during a
         Round, the State is required to provide a Report to the Commonwealth
         that specifies the Project Milestones referred to in Items C.4 and C.5 for
         that Round that have been satisfactorily achieved, and in respect of
         which DERM has made a payment under a Works Agreement, since the
         20th of the immediately preceding month. This Report must contain the
         following information:
         a. the name of each Proponent that has satisfactorily achieved an Item
            C.4 or C.5 Project Milestone during that period;
         b. the On-Farm Works in respect of which the Proponent has
            satisfactorily achieved an Item C.4 or C.5 Project Milestone during
            that period (including the reference number for those On-Farm
            Works);
         c. the Item C.4 or C.5 Project Milestone that the Proponent has
            satisfactorily achieved during that period in respect of those On-
            Farm Works; and
         d. the amount that DERM has paid the Proponent under the relevant
            Works Agreement for the satisfactory completion of that Item C.4 or
            C.5 Project Milestone.

I.2.2    DERM is not required to provide DSEWPAC with the report specified in
         Item I.2.1 in order to be reimbursed for the first payment that DERM
         makes to a Proponent under each Works Agreement.

I.2.3    DERM is not to include a Project Milestone in a Report required under
         Item I.2.1 until and unless the relevant Proponent has provided DERM
         with a 'Milestone Report' under its Works Agreement that demonstrates
         the completion of that Project Milestone and contains all of the
         information required by the Works Agreement.

I.3.     Final Project Report
I.3.1    The final Project Report listed in Item I.1.1 of this Project Schedule will
         be a stand-alone document that can be used for public information
         dissemination purposes regarding this Priority Project.

I.3.2    The final Project Report for the Priority Project is due on the earlier of:
         a.   13 October 2013 as identified in Item I.1.1 in this Project Schedule;
              or
         b.   20 Business Days after the completion of the Priority Project; or


         QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011           38
        c.   20 Business Days after the termination of this Project Schedule or
             the Priority Project.

I.3.3   The final Project Report will contain information that:
        a.   describes the conduct, benefits and outcomes of the Priority Project
             as a whole;
        b.   evaluates the Priority Project, including assessing the extent to
             which the aim of the Priority Project (as specified in Item B.2 of this
             Project Schedule) have been achieved and explaining why any
             aspect of the Priority Project was not achieved;
        c.   provides high level financial information regarding the total Project
             Cost, Funding, State Contributions and Other Contributions for the
             Priority Project;
        d.   summarises all promotional activities undertaken in relation to, and
             media coverage of, the Priority Project; and
        e.   includes a discussion of any other matters, relating to the Priority
             Project, which DSEWPaC notifies the State should be included in
             this final Project Report at least 30 Business Days before it is due.

I.3.4   The final Project Report should be accompanied by a certified income
        and expenditure statement signed by a delegated officer of DERM that
        clearly identifies:
        a.   the amount of interest earned by the State on the Funding;
        b.   and confirms that all Funding paid to the State (and any interest
             earned by the State on the Funds) was spent by the State and the
             Proponents in accordance with this Project Schedule;
        c.   any financial or in-kind State Contributions;
        d.   any Other Contributions that were provided for the Project Activities;
        e.   any cost savings or cost overruns for the Project Activities; and
        f.   advice on the amount of any Funds paid to the State that is to be
             returned by the State to the Commonwealth.

I.4.    Audited Financial Reports
I.4.1   An audited financial report is to be provided for the Priority Project as
        specified in Item C of Schedule 4 of the Agreement - see Item I.1.1.

I.5.    Evaluation Report
I.5.1   The State agrees to provide the Evaluation Report referred to in Item
        I.1.1 by 31 March 2012, which must contain the following information:
        a.   the extent to which the Priority Project has met, exceeded or not
             achieved the Priority Project aims/objectives;



        QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011         39
          b.   a summary of irrigator interest and participation in the Project;
          c.   a revised business case for assessment and approval for Phase
               Two, consistent with the Commonwealth Business Case Information
               Requirements; and
          d.   any other items that are agreed by the State and Commonwealth to
               be included in the Evaluation Report.

I.5.2     This Evaluation Report will be used to determine whether the
          Commonwealth will fund Phase Two.

J.        Payment Schedule for Commonwealth Funding for the Project

General provisions

J.1.1.    The maximum possible GST- exclusive Commonwealth funding payable
          to the State in respect of this Priority Project is $54,743,745.

J.1.2.    The maximum GST-exclusive amount of Funds payable by the
          Commonwealth to the State under this Project Schedule in respect of
          the non-water recovery Components in Item C.2 and C.3 is $6,801,850.

J.1.3.    The maximum GST-exclusive amount of Funds payable by the
          Commonwealth to the State under this Project Schedule for Round One
          of the On-Farm Works is $27,941,895. The maximum possible GST-
          exclusive amount of Funds payable by the Commonwealth to the State
          under this Project Schedule for Round Two of the On-Farm Works is
          $20,000,000. However, the actual maximum amount payable for the
          Round Two On-Farm Works will be identified after this Project Schedule
          has been amended in accordance with Item B.4.5.

Payment provisions regarding the Project Milestones in Items C.2 and C.3 of
this Project Schedule

J.1.4.    Subject to the terms of clauses 6 and 17 of the Agreement, the Funding
          shall be paid for the Project Milestones specified in Items C.2 and C.3 of
          this Project Schedule in instalments on the completion of the Payment
          Preconditions specified in the following table. Each payment of Funds
          specified in the following table is due 30 Business Days after the 1st of a
          month that next occurs after the date that the State is assessed as
          having completed all of the Payment Preconditions relating to that
          payment and has provided the Commonwealth with an invoice for that
          payment of Funds.




          QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011      40
Payment Schedule for Commonwealth Funding for the Project Milestones in Items
C.2 and C.3 of this Project Schedule

Milestone       Funding          Payment Precondition for Funding instalment
number          excluding
                GST

A.1 & A.2       $1,505,110       1. Project Schedule signed; and
and B1 & B2
                                 2. Progress Report as per Item I.1.2 of this Project Schedule
                                     that includes evidence of satisfactory completion of Project
                                     Milestones A1 and A2 and B.1 and B.2 (see Items C.2 and
                                     C.3 of this Project Schedule).

A3 & B3         $587,770         1. Progress Report as per Item I.1.2of this Project Schedule
                                    that includes evidence of satisfactory completion of Project
                                    Milestones A3 and B3 (see Items C.2 and C.3 of this Project
                                    Schedule); and

                                 2.   Provision of a Final Report as required under the Funding
                                      Agreement signed 16 February 2009.

A4 & B4         $616,030         1. Works Agreement and Water Transfer Deed templates
                                    finalised and agreed by the parties (subject to any
                                    amendments that may subsequently be made to these
                                    templates as per Item A.1.2.t and B.5.1.j of this Project
                                    Schedule);

                                 2. Progress Report as per Item I.1.2 of this Project Schedule
                                    that includes evidence of satisfactory completion of Project
                                    Milestones A4 and B4 (see Items C.2 and C.3 of this Project
                                    Schedule); and

                                 3.   Agreed Water Savings for Round One approved by Minister
                                      and included in Project Schedule along with the other Round
                                      One amendments as required by Item B.4.5 of this Project
                                      Schedule.

A5 & B5         $616,030         1.   Progress Report as per Item I.1.2 of this Project Schedule
                                      that includes evidence of satisfactory completion of Project
                                      Milestones A5 and B5 (see Items C.2 and C.3 of this
                                      Project Schedule).

B6              $669,290         1.   Progress Report as per Item I.1.2 of this Project Schedule
                                      that evidences satisfactory completion of Project Milestone
                                      B6 (see Items C.2 and C.3 of this Project Schedule).

B7              $531,520         1. Progress Report as per Item I.1.2 of this Project Schedule
                                      that includes evidence of completion of Project Milestone B7
                                      (see Item C.3 of this Project Schedule); and


              QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011        41
                              1. Agreed Water Savings for Round Two approved by the First
A6 & B8      $634,780            Assistant Secretary and included in the Project Schedule
                                 along with the other Round Two amendments as required by
                                 Item B.4.5 of this Project Schedule.

                              2. Progress Report as per Item I.1.2 of this Project Schedule
                                 that includes evidence of satisfactory completion of Project
                                 Milestones A6 and B8 (see Items C.2 and C.3 of this Project
                                 Schedule); and

                              3. Audited Financial Report for 2010-11 provided by 15
                                   November 2011

                              1. Progress Report as per Item I.1.2 of this Project Schedule
B9           $531,520         that includes evidence of satisfactory completion of Project
                              Milestone B9 (see Item C.3 of this Project Schedule); and

                              2. Submission of Evaluation Report as per Item I.5 of this
                              Project Schedule


B10          $659,800         1.   Progress Report as per Item I.1.2 of the Project Schedule
                                   that includes evidence of satisfactory completion of Project
                                   Milestone B10 (see Item C.3 of this Project Schedule).


                              1.   Progress Report as per Item I.1.2 of this Project Schedule
B11          $150,000              that includes evidence of satisfactory completion of Project
                                   Milestone B11 (see Item C.3 of this Project Schedule); and

                              2.   Audited Financial Report for 2011-12 provided by 15
                                   November 2012

B12          $300,000         1.   Audited Financial Report for 2012-13 provided by 15
                                   November 2013;

                              2.   Progress Report as per Item I.1.2 of this Project Schedule
                                   that includes evidence of satisfactory completion of Project
                                   Milestone B12 (see Item C.3 of this Project Schedule); and

                              3.   Submission of Final Project Report as per Item I.3 of this
                                   Project Schedule.

             $6,801,850

J.1.5.    Failure to demonstrate in a Progress Report the satisfactory completion
          of a Project Milestone that is specified in Item C.2 and C.3 and is due for
          completion will result in the Commonwealth withholding the relevant
          Project Milestone payment until such time as evidence of completion is
          demonstrated in a subsequent Progress Report.




          QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011         42
Payment provisions regarding Project Milestones in Items C.4 and C.5 of this
Project Schedule

J.1.6.    Subject to:
          a. the terms of clauses 6 and 17 of the Agreement;
          b. the maximum Funding for a Round specified in this Item J; and
          c. Items C.5.5 and J.1.7 to J.1.11,
          on the Commonwealth's receipt of a Report from the State containing
          the information required by Item I.2 about the Project Milestones for that
          Round, and an accompanying payment invoice from the State, the
          Commonwealth will pay an amount of Funds to the State to reimburse
          the State for payments the State has made in accordance with its Works
          Agreements for that Round during the period that is the subject of that
          Report. The Commonwealth will pay this reimbursement amount to the
          State, via the Treasury-to-Treasury payment arrangements on the 7th of
          the month that immediately follows the month in which the Report was
          provided to the Commonwealth.

J.1.7.    The Report specified in Item I.2 is not required in order for the
          Commonwealth to reimburse the State for the first payment made by the
          State to a Proponent under a Works Agreement. Instead, DSEWPAC
          will advise DERM when settlement will occur and DERM will then make
          the first payment to the Proponent under that Works Agreement within
          1-2 weeks after settlement occurs. On receipt of a payment invoice
          from the State and a covering letter advising DSEWPAC that DERM has
          made this first Works Agreement payment to the Proponent, the
          Commonwealth will pay, via the Treasury-to-Treasury payment
          arrangements, an amount of Funds to the State to reimburse the State
          for that first Works Agreement payment. The Commonwealth will pay
          this reimbursement to the State on the 7th of the month following the
          month in which DSEWPAC receives the payment invoice and covering
          letter from DERM.

J.1.8.    In respect of a Project Milestone specified in Item C.4 or C.5, the
          Commonwealth will not pay the State Funds in excess of the amount
          specified in the Works Agreement for that Project Milestone or the
          amount actually paid by DERM for that Project Milestone and the
          Commonwealth may reduce the amount of Funding that it pays by the
          amount of any Commonwealth proportion of cost savings that a
          Proponent has achieved in its performance of its On-Farm Works (see
          Item C.4.6 and C.5.7).

Other general provisions:

J.1.9.    No payments for Project Activities under this Project Schedule will be
          made to the State outside of this Item J.



           QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011     43
J.1.10.   Notwithstanding clause 6.3 of the Agreement, any unspent Funds for
          Project Activities identified in Item C.2 and C.3 of this Project Schedule
          can be reallocated for expenditure on the On-Farm Works referred to in
          Item C.4 or C.5 provided DSEWPaC agrees to this reallocation.

J.1.11.   Notwithstanding anything to the contrary in clause 17 of the Agreement
          or Item B of this Project Schedule, DSEWPAC agrees to reimburse
          DERM any amount that DERM is required to pay under clause 17.2 or
          17.4(a) of a Works Agreement on termination of that Works Agreement
          provided that this Project Schedule was amended to include the details
          of the Works Agreement's On-Farm Works prior to the Works
          Agreement being executed. Any such reimbursement payment will be
          paid via the Treasury-to-Treasury payment arrangements on the 7th of
          the month following the month (the Notice Month) in which DSEWPAC
          receives:
          a.   evidence that DERM has paid the amount under clause 17.2 or
               17.4(a) of the Works Agreement; and
          b.   an invoice from DERM for the reimbursement payment,

          provided that DSEWPAC receives the information in paragraphs a and b
          three or more Business Days prior to the end of the Notice Month. If
          DSEWPAC receives this information less than three days prior to the
          end of the Notice Month, the reimbursement payment will be made as
          set out above but in the second month immediately following the Notice
          Month.




          QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011     44
ATTACHMENT 1: REQUIREMENTS RELATING TO THE NATIONAL CODE OF
PRACTICE FOR THE CONSTRUCTION INDUSTRY


1.1     Interpretation
1.1.1   In this Attachment 1:

          Code                       means the National Code of Practice for the
                                     Construction Industry 1997, a copy of which can be
                                     downloaded from www.deewr.gov.au/building.
          Guidelines                 means the Australian Government Implementation
                                     Guidelines for National Code of Practice for the
                                     Construction Industry, August 2009, a copy of which
                                     can be downloaded from www.deewr.gov.au/building.
          Project Parties            means all Proponents, contractors, subcontractors,
                                     consultants and employees who perform on-site work
                                     in relation to the Priority Project, including the On-
                                     Farm Works.

1.2      Compliance with Code
1.2.1    The State is required to comply and ensure that the Project Parties
         comply with the Code and Guidelines.

1.2.2    The Guidelines require the State to ensure that:
          a.   all requests for application or tender, expressions of interest,
               submissions and invitations to join 'Common Use Arrangements' in
               relation to the Priority Project made by it or any of the Project Parties
               contain the commitment to apply the Code and Guidelines as set out
               in the model tender documents available at:
               http://www.deewr.gov.au/WorkplaceRelations/Policies/BuildingandCo
               nstruction/Pages/default.aspx; and
          b.   all agreements and contracts entered into in relation to the Priority
               Project by it or any of the Project Parties contain the commitment to
               apply the Code and Guidelines as set out in the model contract
               clauses available at:
               http://www.deewr.gov.au/WorkplaceRelations/Policies/BuildingandCo
               nstruction/Pages/default.aspx.

1.3      State must maintain Records and permit access
1.3.1    The State is required to maintain adequate records of compliance by it
         and each of the Project Parties with the Code and the Guidelines. The
         State is required to permit the Commonwealth or any person authorised
         by the Commonwealth, including a person occupying a position in the
         Office of the Australian Building and Construction Commissioner, full
         access to premises and records of the State and the Project Parties to:
          a.   inspect any work, material, machinery, appliance, article or facility;



           QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011          45
        b.   inspect and copy any record relevant to the Priority Project and
             works governed by this Agreement;
        c.   interview any person,

        as is necessary to monitor compliance with the Code and the Guidelines.

        Additionally, the State undertakes that it and each of the Project Parties
        will agree to a request from the Commonwealth, including a person
        occupying a position in the Office of the Australian Building and
        Construction Commissioner, to produce a specified document within a
        specified period, in person, by fax, or by post.

1.3.2   The Commonwealth and those authorised by it may publish or otherwise
        disclose information in relation to compliance by the State and the Project
        Parties with the Code and the Guidelines. The State is required to obtain
        the consent of the Project Parties to the publication or disclosure of
        information under this clause.

1.4     Appointment of sub-contractors
1.4.1   While acknowledging that value for money is the core principle
        underpinning decisions on government procurement, when issuing
        tenders the State may preference Proponents, contractors, subcontractors
        and consultants that have a demonstrated commitment to:
        a.   adding and/or retaining trainees and apprentices;
        b.   increasing the participation of women in all aspects of the industry; or
        c.   promoting employment and training opportunities for Indigenous
             Australians in regions where significant Indigenous populations exist.

1.4.2   The State must not appoint a Proponent, contractor, subcontractor or
        consultant in relation to the Priority Project where:
        a.   the appointment would breach a sanction imposed by the
             Commonwealth Minister for Employment and Workplace Relations;
             or
        b.   the Proponent, contractor, subcontractor or consultant has had a
             judicial decision against them relation to employee entitlements, not
             including decision under appeal, and has not paid the claim.




          QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011     46
ATTACHMENT 2: REQUIREMENTS RELATING TO THE AUSTRALIAN GOVERNMENT
OHS ACCREDITATION SCHEME


1.1     Interpretation
1.1.1   In this Attachment 2:

         BCII Act                                means the Building and
                                                 Construction Industry Improvement
                                                 Act 2005
         Building Work                           has the meaning given to it by
                                                 section 5 of the BCII Act
         Scheme                                  means the Australian Government
                                                 Building and Construction OHS
                                                 Accreditation Scheme established
                                                 by the BCII Act.

1.2     OHS Accreditation Scheme requirements
1.2.1   Subject to the exclusions specified in the Building and Construction
        Industry Improvement (Accreditation Scheme) Regulations 2005, the
        State must ensure that all of its subcontracts (including with Proponents)
        valued at $3 million or more and requiring Building Work related to this
        Priority Project:
         a.   are notified to the Office of the Federal Safety Commissioner at the
              earliest possible opportunity; and
         b.   contain a requirement that the contractor:
              i.    is accredited under the Scheme;
              ii.   maintains Scheme accreditation for the life of the contract; and
              iii. must comply with all conditions of the Scheme accreditation.




          QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011      47
       ATTACHMENT 3 - WATER ENTITLEMENTS TO BE TRANSFERRED TO THE COMMONWEALTH -

       For the purpose of Item E.3 the Water Entitlements to be Transferred to the Commonwealth for Round One are set out below:

On-Farm    Legal name    Legal name    Water            Volume of     Location /   Supplemented or   If Un supplemented,     Security of   Purpose
Works      of            of            Entitlement      Water (ML)    Water        Un supplemented   does it have an         Water
Referenc   Proponent     Entitlement   Licence          in Water      Source                         overland flow special   Entitlement
e          and ACN (or   Owner for     Number           Entitlement                                  condition that needs
Number     if no ACN,    this Water                                                                  to be removed before
           ABN)          Entitlement                                                                 it can be traded?
                         and ACN (or
                         if no ACN,
                         ABN)
                                                        665ML         Border       Supplemented      N/A                     Medium        Agriculture
                                                                      Rivers                                                 security
                                                                      Zone B
                                                        895ML         Border       Supplemented      N/A                     Medium        Agriculture
                                                                      Rivers                                                 security
                                                                      Zone B

                                                        118ML         Border       Supplemented      N./A                    Medium        Agriculture
          COMMERCIAL-IN-CONFIDENCE                                    Rivers                                                 security
       INFORMATION HAS BEEN REMOVED                                   Zone A

                                                        1,000ML       Lower        Unsupplemented    Yes                     N/A           Agriculture
                                                                      Balone
                                                                      Zone
                                                                      LBU_01
                                                        1,100ML       Border       Supplemented      N/A                     Medium        Agriculture
                                                                      Rivers                                                 security
                                                                      Zone B




                                                     QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011                                 48
On-Farm    Legal name    Legal name    Water            Volume of     Location /   Supplemented or   If Un supplemented,     Security of   Purpose
Works      of            of            Entitlement      Water (ML)    Water        Un supplemented   does it have an         Water
Referenc   Proponent     Entitlement   Licence          in Water      Source                         overland flow special   Entitlement
e          and ACN (or   Owner for     Number           Entitlement                                  condition that needs
Number     if no ACN,    this Water                                                                  to be removed before
           ABN)          Entitlement                                                                 it can be traded?
                         and ACN (or
                         if no ACN,
                         ABN)
                                                        1,000ML       Border       Supplemented      N/A                     Medium        Agriculture
                                                                      Rivers                                                 security
                                                                      Zone B
                                                        1564ML        Lower        Unsupplemented    Yes                     N/A           Agriculture
                                                                      Balone
                                                        160ML         Lower        Unsupplemented    Yes                     N/A           Agriculture
          COMMERCIAL-IN-CONFIDENCE                                    Balone
       INFORMATION HAS BEEN REMOVED
                                                        1,047ML       Border       Unsupplemented    No                      N/A           Agriculture
                                                                      Rivers -
                                                                      upper
                                                                      weir zone
                                                        405ML         Border       Supplemented      N/A                     Medium        Agriculture
                                                                      Rivers-                                                security
                                                                      Zone B




                                                     QLD 02 On-farm Water Use Efficiency Project – Phase One August 2011                                 49

								
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