Waimea dam plan ‘doesn’t stack up’ says economist
The proposed Waimea dam, near Nelson, does not stack up, says economist Peter Fraser.
Fraser, a former Treasury economist, told more than 175 people at a public meeting in Richmond on Monday evening that he was neither anti-irrigation nor antidam.
‘‘I’m an economist,’’ he said. ‘‘I look at numbers around projects.’’
It was irrelevant whether he liked the project, Fraser said, adding that he applied tools to determine if projects stacked up.
‘‘This one doesn’t stack up,’’ he told attendees at the first of a planned series of public meetings on the Waimea dam project, organised by a new society called Water Information Network Inc.
Tasman District Council and Waimea Irrigators Ltd are proposed joint-venture partners in the $82.5 million dam project in the Lee Valley, which is tipped to be funded by a mix of ratepayer, irrigator and Crown funding.
A council consultation document on governance and funding options for the project is now open for public submissions.
Fraser said, in his view, the fundamental problem in the Waimea catchment was overallocation – an excess demand for water.
‘‘The proposal we’ve got from the TDC is to solve an excess demand problem with an excess supply solution,’’ he said. ‘‘A much more sensible thing to do is sort out the excess demand rather than permitting and enhancing the excess demand.’’
Fraser said the proposed Lee Valley dam was too big for the area to be irrigated but too small to be a viable irrigation storage scheme.
‘‘There is way too much water for what you actually need.’’
Another problem was estimated $82.5m cost.
‘‘Put a 10 per cent contingency on that – I think, that’s probably pretty conservative,’’ Fraser said. ‘‘Let’s be honest, it’s $100m by the time the ink’s dry.’’
He tipped the cost of the water from the dam would be 60c-plus a cubic metre – more than three times the 14c per cubic metre average cost of water supplied in 2016 by irrigation schemes across the country, according to Irrigation the New Zealand figures. ‘‘It’s just too expensive.’’ There were also risks to ratepayers who, under the proposal, would cover any cost overruns above $3m alone and underwrite $29m for a likely loan from Crown Irrigation Investments Ltd for Waimea Irrigators Ltd.
There would be no difference to irrigators if the dam went ahead or not, Fraser said.
‘‘If it doesn’t go ahead, you can’t use water that’s not there; if it goes ahead, you can’t use water you can’t afford.’’
Other speakers included businessman Paul MacLennan, former mayoral candidate Maxwell Clark, farm management consultant and registered valuer Brian Halstead and Water Information Network secretary Murray Dawson, who argued there was ‘‘abundant’’ capacity in the aquifers and demand for water was dropping as land use changed on the plains.
Halstead said the dam may be needed to augment low flows in the river for just a few weeks of the year.
‘‘So it becomes a very horrendous and expensive insurance premium for both irrigators and rate- payers,’’ he said.
‘‘The only beneficiaries to this dam are going to be the dam builders and the money lenders.’’
MacLennan said he did not believe irrigator subscription would reach its target.
‘‘Too much quality productive land has been cut into uneconomic and lifestyle blocks ... or is now covered in houses,’’ he said. ‘‘Why should ratepayers subsidise ... the irrigator risk.’’
Clark said most of the water released from the dam would flow out to sea. He also raised concern about the seismic risk at the Lee Valley site and a proposal to use of $12.91m from council commercial returns and surpluses to fund part of its expected $26.78m share of capital costs.
At the conclusion of the meeting, most attendees agreed to a resolution expressing a lack of confidence in the process followed by TDC regarding the dam and disapproval of the ‘‘misinformation’’ campaign and the ‘‘unfair proposed allocation of costs and risks to the general ratepayer’’.
Other meetings are scheduled for Brightwater, Motueka and Golden Bay.