TASMANIA may be denied $140 million in federal funds for its irrigation expansion program because of a State Government bungle.

Unforeseen legal problems are also creating an unexpected hurdle for the Tasmanian Irrigation Development Board as it tries to fund and build its first irrigation schemes in the North-West and the Midlands.

In an unexpected development, Water Minister David Llewellyn has been told that Tasmanian laws prevent water rights being bought by individuals and companies who do not own any rural property.

There is also uncertainty about whether water rights in one irrigation scheme or district can be sold or traded to a farmer owning land in another river or irrigation system.

But the Federal Government is insisting that water — and the permanent water access rights accompanying its sale — be fully tradeable if the State Government is to qualify for substantial funding available under its new National Water Initiative.

The bungle means Tasmania will not be able to obtain the remaining $120 million of promised federal funds to build 12 major irrigation schemes costing $400 million until its laws are changed.

But State Parliament will not sit until May at the earliest because of the March 20 election, depriving Tasmania of any chance of getting the Commonwealth funds quickly.

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