The Commonwealth has delivered $129 million of Murray Darling Basin Plan funds for state governments to start work on controversial water saving projects.
The funding is for supply measure projects, which upgrade infrastructure or river operations to enable equivalent environmental outcomes with a smaller volume of water.
This means the volume needed for the environment can be reduced so the amount available to irrigation is maximised.
"Farmers have to be smart with water, now we're being efficient with environmental water too," said Water Minister David Littleproud.
"Communities right across the Basin are struggling from the Rudd-era buybacks and we don't want to put them under any more pressure.
"We're getting on with the job of implementing the Basin Plan with the Basin states and this is great news for Basin communities."
Basin Plan law says supply measure works can reduce irrigation cutbacks by up to 605 gigalitres.
Supply projects include pumps, regulators and other works to deliver water to lakes and floodplains without creating overbank flooding, altering weirs to move water more efficiently, new river operating rules.
The most controversial project is at Menindee, NSW where a pipeline will be built to supply drinking water to reduce evaporation loss from Menindee Lakes water storages.
Today's $129m funding will go towards pre-construction works, such as project design, community engagement and assessment of environmental impacts.
There are 37 projects split between the three states, which are estimated at a total cost of $1.3 billion.
The tranche of funding announced this week provides $2.5m to SA, $29m to Victoria $29m and $98m to NSW.
The Productivity Commission conducts the only formal, legislated review of the Basin Plan. In January it released its five year progress assessment.
It was highly critical of the framework for delivering the supply projects, and the progress made to date.
Under the Basin Plan the supply projects must be completed by 2024. If they are not, or the works are found to deliver insufficient water savings, the Commonwealth will enter the market for more direct buybacks of irrigation entitlements, which the PC estimated would cost $480m.
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To date the states have provided scant detail of how their proposed projects will work and there are concerns over the projects' ability to deliver the required savings.
The PC said the states are so tardy the 2024 deadline must be delayed.
"The process has lacked transparency and candour with stakeholders who are concerned about potential impacts," the PC said.
Concerns include environmental issues such as impacts to the Lower Darling from NSW's re-engineering scheme at Menindee Lakes, as well as an inability for the offset projects to deliver the required capacity to handle increased flow rates with damaging flooding.
The MDBA provides an annual progress report on the projects, focusing on the most demanding initiatives.
But the PC said this was insufficient. It called for the MDBA to be split up into two agencies - an advisory body and a compliance regulator.
Federal and state governments are yet to respond to the PC's report.
Currently the MDBA is responsible of advises states in project development and for assessing their progress.
"These roles are conflicted and the conflicts will intensify in the next five years," the PC said.
"The MDBA is an inherently conflicted entity and is perceived as such by stakeholders... it cannot be a trusted advisor to Basin governments and be a credible regulator".
Adding to concerns about project delivery is the fact little progress has been made on works to ease constraints in the river that will restrict the increased flows that will come with recovery of water for the environment.
Constraint adjustment works will include physical features such as crossings and bridges, as well as negotiating easements where private land is flooded.