Firm revises prospectus for dam

Dam proponent Waimea Irrigators Ltd (WIL) is revising its prospectus for the Waimea dam project.

WIL strategic adviser John Palmer on Monday said its revised project disclosure statement (PDS) was still being finalised. However, it was expected to be released this month.

WIL is changing the PDS it published in February for the sale of water shares in the dam project after changes were made to the financial model for the multimillion-dollar proposal.

Tasman District Council and WIL are likely joint-venture partners in the project, earmarked for the Lee Valley, near Nelson.

Changes to the financial model for the dam come after it was revealed estimates for the project had blown out.

Once finalised, the updated pricing took the remaining capital costs for the project from an estimated $75.9 million to about $99m, leaving the council and WIL to find an additional $23m between them.

The hike in expected costs derailed plans temporarily when councillors voted in August to effectively end the project.

However, in September, they agreed to revoke that decision and proceed. The U-turn came after a revised funding proposal was presented that would lower the expected additional costs for ratepayers associated with the blowouts.

Initially presented and discussed by the council behind closed doors on September 6, the confidential section of the agenda for that meeting was later made public. It outlines how the $23m funding gap will be filled.

The council’s share, of $11.5m, is tipped to come from the Local Government Funding Agency – $5.75m as a loan to the council and another $5.75m that will be onlent to a proposed council-controlled organisation (CCO), which will operate the dam.

Of the $5.75m to the council, $3.44m is to be covered by increased costs to urban water users, which is estimated to be about $25 a year for a ‘‘typical urban household’’.

The remaining $2.31m is to be loan funded over 30 years with repayments covered by income from the council’s enterprise activity – predominantly forestry – which will also be used to repay a $10m interest-free loan to the council from Crown Irrigation Investments Ltd (CIIL).

As part of the changed funding model, the term of that CIIL loan will be extended from 10 to 20 years.

WIL is expected to service the $5.75m loan to the CCO up to a limit of $375,000 a year.