WAIMEA DAM

The Orchardist - - Front Page - By Anne Hardie

The Waimea Com­mu­nity Dam near Nel­son is not dead in the wa­ter yet, with a re­vamped pro­posal sway­ing coun­cil votes to get it over the line be­fore fund­ing from the Crown’s ir­ri­ga­tion in­vest­ment fund evap­o­rates.

It’s been a con­tro­ver­sial project since the beginning that has suf­fered from the ur­ban-ru­ral di­vide; of­ten viewed as an ir­ri­ga­tors’ project rather than a com­mu­nity so­lu­tion to wa­ter short­ages that will in­creas­ingly af­fect ur­ban and in­dus­trial sec­tors as well.

Nearly 20 years work­ing on the project came to a head at the end of Au­gust when the Tas­man District Coun­cil voted eight to six against the $102 mil­lion dam go­ing ahead. Re­cent cost­ings of the dam which had it in­creas­ing the price tag by $26m to $102m was the nail in the cof­fin for those coun­cil­lors who voted against the project.

But it’s an is­sue that the bulk of ir­ri­ga­tors on the Waimea Plains in­volved in Waimea Ir­ri­ga­tors Ltd (WIL), coun­cil man­age­ment and sev­eral coun­cil­lors could not let slide – not with $39m fund­ing from the Gov­ern­ment at stake which will evap­o­rate by the end of the year when Crown Ir­ri­ga­tion In­vest­ment Ltd (CIIL) winds down. And if a dam is not built, the coun­cil will still need a so­lu­tion for wa­ter sup­ply dur­ing dry pe­ri­ods to sus­tain not just ir­ri­ga­tors on the plains, but ur­ban and in­dus­trial wa­ter users in the area.

The coun­cil has to com­ply with na­tional pol­icy state­ments on wa­ter and that means a higher min­i­mum flow in the river which re­quires tighter re­stric­tions on wa­ter use than there has been in the past.

It’s so­lu­tion, af­ter years of in­ves­ti­ga­tion, re­search, re­ports and anal­y­sis, was a 53m-high dam in the Lee Val­ley which would pro­vide 13m cu­bic me­tres of wa­ter stor­age in a 70ha lake.

Long-term think­ing is needed when it comes to fu­ture wa­ter re­quire­ments.

That would aug­ment the flow of wa­ter in the river which in turn would feed the aquifers. One re­port car­ried out by the New Zealand In­sti­tute of Eco­nomic Re­search in July 2017 in­di­cated the GDP for the re­gion could in­crease by as much as $923m over 25 years if the dam is built. An­other re­port by Nor­thing­ton Part­ners said the re­gion could lose $1 bil­lion in GDP over 25 years if the dam was not built.

WIL chair­man Mur­ray King says the re­gion faces an acute wa­ter short­age and the dam is too im­por­tant to fail.

“Be­cause of that, we are do­ing ev­ery­thing we can for it to sur­vive.”

A week af­ter the dam was voted out, the coun­cil called an ex­tra­or­di­nary full coun­cil meet­ing with a re­vamped model that would lower the es­ti­mated cost for ratepay­ers to pay. It was made pos­si­ble by sourc­ing a New Zealand-based pro­fes­sional in­vestor to help cover the in­creased costs.

King says WIL has al­ready sold shares for about 3000ha at $5,500 per share (and per hectare) to ir­ri­ga­tors, with many over­sub­scrib­ing in a bid to en­sure the se­cu­rity of wa­ter. The com­pany now plans to is­sue con­vert­ible pref­er­ence shares for an­other 2000ha to the in­vestor who would buy them around the same price. At a fu­ture date they would have to con­vert those to wa­ter shares, with the ex­pec­ta­tion those shares would in­crease in value over time and they could be sold to peo­ple who had not bought shares at the out­set. A small div­i­dend would also be paid.

WIL also rene­go­ti­ated some of the terms with its fun­ders, such as CIIL, to meet ir­ri­ga­tors share of the ad­di­tional costs to the project.

The re­sult of last week’s closed meet­ing with the re­vamped model, was a vote of nine to five to pro­ceed with the dam project.

King says it has been a frus­trat­ing bat­tle to con­vince some of the coun­cil­lors about the need for long-term wa­ter so­lu­tions as well as the im­pact of a no-dam de­ci­sion.

“This is a 100-year project, so $100 mil­lion over 100 years. It’s in­ter­gen­er­a­tional,” he said.

“It’s re­ally im­por­tant to re­it­er­ate that this is a mul­ti­stake­holder com­mu­nity ben­e­fit project with only half of it be­ing for ir­ri­ga­tion and the bal­ance be­ing for ur­ban wa­ter and en­vi­ron­men­tal flows.”

De­spite the anti-ir­ri­ga­tor sen­ti­ment among a sec­tor of the com­mu­nity, the ir­ri­ga­tors would pay the high­est pro­por­tion of the dam’s con­struc­tion cost – close to $40m which in­cludes a loan from CIIL that was ap­proved be­fore the Labour Gov­ern­ment de­cided to cease funds for ir­ri­ga­tion projects. The coun­cil has pro­posed to un­der­write up to $29m of loan fund­ing from the Gov­ern­ment to ir­ri­ga­tors be­cause it

wants to make the project more af­ford­able to ev­ery­one and while that car­ries some risk, it al­lows the project to ben­e­fit from zero and low-in­ter­est loans, while be­ing able to re­cover costs from af­fil­i­ated wa­ter per­mit hold­ers.

To date, the Tas­man District Coun­cil planned to con­trib­ute $25m to the dam con­struc­tion cost if it goes ahead and that in­cluded a $10m in­ter­est-free loan from the CIIL, on top of $6.5m spent to date.The neigh­bour­ing Nel­son City Coun­cil which has a con­sent to take wa­ter from the Rod­ing River in Tas­man has of­fered $5m to­ward the project and the Fresh­wa­ter Im­prove­ment Fund has of­fered up to $7m.

King is not alone when he ques­tions whether coun­cil­lors have the ca­pa­bil­ity to make sig­nif­i­cant de­ci­sions for a re­gion.

“In the past, the peo­ple who sat on the county coun­cil were local busi­ness­peo­ple who would spend half a day a month in a coun­cil meet­ing and the rest of the time they’d go off and do their nor­mal job,” he said.

“There wasn’t as much bu­reau­cracy or com­pli­ance they had to ad­here to. So you had log­i­cal peo­ple mak­ing log­i­cal de­ci­sions. Now we’ve got all this other stuff and it’s days on end, so why would some­one put them­selves through it for what they are paid?

“There was a very clear rec­om­men­da­tion from man­age­ment that this (dam) is the best thing to do. Ev­ery­thing else will cost more and cost ratepay­ers more and yet (some) still go and vote against coun­cil man­age­ment rec­om­men­da­tions. For any board to do that, is not good.”

Op­po­nents to the dam have ar­gued the project was too ex­pen­sive for ratepay­ers and that cheaper op­tions needed to be con­sid­ered, with many say­ing it was a prob­lem for the ir­ri­ga­tors to re­solve.

If the dam didn’t go ahead, the re­gion would en­ter a new era of wa­ter con­sents to meet coun­cil re­quire­ments and King says that would mean about a third of ir­ri­ga­tors would face cuts to their wa­ter take and ra­tioning would be far more se­vere – oc­cur­ring more fre­quently and last­ing longer.

It would also mean tougher wa­ter re­stric­tions on local towns like Rich­mond and in­dus­trial wa­ter users, in­clud­ing ma­jor em­ploy­ers such as Nel­son Pine In­dus­tries, Al­liance and Fon­terra.

“We’ve been look­ing at this for nearly 20 years and we still firmly be­lieve that large-scale com­mu­nity multi stake­holder wa­ter stor­age projects are by far the cheap­est meth­ods of stor­ing wa­ter,” King said.

With­out a dam, an al­ter­na­tive for ir­ri­ga­tors on the plains is pri­vate stor­age ponds, but it would cost in­di­vid­u­als sig­nif­i­cantly more, take up a con­sid­er­able area of prime hor­ti­cul­ture land and have is­sues such as wa­ter ta­bles and health and safety around height.

“A cou­ple of big­ger growers would do that be­cause wa­ter is so crit­i­cal to their busi­ness, but all the lit­tle growers and landown­ers would be left with­out any­thing,” he said.

“And it also means those big­ger growers won’t be fund­ing any com­mu­nity project be­cause they would have done their own.”

Hor­ti­cul­tur­ists have said ponds re­sult in poorer wa­ter qual­ity, need more fil­tra­tion and re­quire con­sents that could take years. Plus, ponds would not ad­dress the min­i­mum flow in the river for the Na­tional Pol­icy State­ment for Fresh­wa­ter Man­age­ment.

In the no-dam sce­nario wa­ter re­stric­tions would be greater and ir­ri­ga­tors would not have any al­ter­na­tive in place for this sea­son.

In the now more likely sce­nario of the dam go­ing ahead, WIL will be re­spon­si­ble for 49 per­cent of the dam’s cap­i­tal cost as well as on­go­ing op­er­at­ing costs, with the Tas­man District Coun­cil be­ing a 51 per­cent share­holder.

“It’s re­ally im­por­tant to re­it­er­ate that this is a mul­ti­stake­holder com­mu­nity ben­e­fit project with only half of it be­ing for ir­ri­ga­tion and the bal­ance be­ing for ur­ban wa­ter and en­vi­ron­men­tal flows.”

Waimea Ir­ri­ga­tors Ltd chair­man Mur­ray King – re­search has shown the dam is the cheap­est op­tion for the wa­ter-short re­gion.

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