Dam funding claim queried

The basis for some of the key decisions on the controversial Waimea dam project has been called into question.

Tasman district councillor Dana Wensley on Thursday told her fellow elected representatives that some ‘‘crucial’’ council decisions had been based on a claim that Waimea Irrigators Ltd (WIL) – Tasman District Council’s joint-venture partner in the project – had reached its ‘‘limit to pay’’. However, WIL had since ‘‘openly and publicly’’ declared it had another $11.5 million.

The Richmond ward councillor said she had gone back over council decisions ‘‘based on the fact that the irrigators are at their limit to pay’’. She had asked herself if she had relied on that information ‘‘to reach some crucial decisions around credit support, cost overruns, sunk costs’’.

‘‘My answer was yes,’’ she told the full council meeting.

A second question Wensley asked herself was: ‘‘Have those decisions impacted on the ratepayers detrimentally – and the answer to that is yes.’’

In a June 2017 report, when councillors were asked to increase TDC’s contribution to the project, former council chief executive Lindsay McKenzie said WIL was ‘‘at (or near) the limit of their ability to pay’’.

‘‘Unless the council steps up and carries more cost and provides strong credit support, the project is over,’’ he said.

Tasman Mayor Richard Kempthorne used his casting vote to push through the corresponding resolution that increased the council’s capital costs by up to $3m coupled with a hike in expected operating costs. The resolution also provided a council underwrite for a planned $25m loan from Crown Irrigation Investments Ltd to WIL.

Towards the end of 2017, under the heading ‘‘Credit Support’’ in a council public consultation document on the dam proposal, it says TDC ‘‘is the only party that has the financial strength to provide that support’’.

In addition, minutes of a confidential session of an extraordinary council meeting held on September 6 say WIL strategic adviser John Palmer told the meeting that ‘‘WIL had no more scope for raising additional capital’’. The minutes were released after a request from The Nelson Mail.

In July, it was revealed that an additional $23m was needed for the project after expected costs were updated. On August 28, councillors voted 8-6 against proceeding with the project. However, at a behind-closed-doors

meeting on September 6, they voted 9-5 to revoke the August 28 decision after a new funding model lowered the expected costs for ratepayers.

Under that revamped funding model, WIL was to provide the bulk of its share of the increased costs via a New Zealand-based investor, whose identity was not revealed. However, in October WIL announced that a new ‘‘investor vehicle’’, made up of local family businesses on the Waimea Plains, would provide $11m of that additional capital. They were not named, but the statement says four are on the WIL board of directors.

Wensley was one of three councillors who voted ‘‘no’’ on August 28 and ‘‘yes’’ on September 6. On Thursday, she said she made her September 6 decision ‘‘based on information given to me by WIL’’.

‘‘In WIL walking away from that private investor and openly and publicly declaring that it has another $11.5m that it can bring to this for its own purposes, that to me is actually making quite a mockery of my decision-making so far,’’ she said. ‘‘Our jointventure negotiating partner has really just shown that it didn’t have clean hands throughout this – that it did have capacity.’’

She called for a staff report before a final decision was made on the dam, ‘‘because we haven’t had a report to us since WIL walked away from its private investor’’.

Council corporate services manager Mike Drummond said it was difficult for him to comment in an open meeting on the matters raised by Wensley.

A final council decision on the dam project is scheduled to be made on November 30.