No deal: Government dams flow of funding to over-budget dam
Finance Minister Grant Robertson has effectively closed the door on any further Government funding for the over-budget Waimea Community Dam project.
In a letter to Tasman District mayor Tim King, Robertson says any further funding to complete the project is expected to be borne by Tasman District Council, ‘‘as set out in the initial contract, unless there are compelling reasons for further Government funding’’.
The correspondence from Robertson is in response to a letter from King, seeking central Government support to meet escalating costs with the dam build, which is under way in the Lee Valley, about 36km southeast of Nelson.
King went cap in hand to Robertson and Economic and Regional Development Minister Stuart Nash on February 23, the day after the council and Waimea Irrigators Ltd – as shareholders in the project – received news of the latest forecast $29 million blowout with the project.
‘‘From an estimation of $129.4m to complete, it is now projected that the final costs will be between $148m and $164m,’’ King said in a letter to the ministers, adding that the effects of the Covid-19 pandemic were a major contributor. The mayor also said that the escalated costs may also mean an
option for hydropower will be forfeited.
‘‘On behalf of the council and the residents of the Nelson-Tasman region, I ask that you urgently consider assisting the council to respond to the escalating costs of the dam and the opportunity to provide hydro-electricity for what is a critical infrastructure project.’’
However, after that letter from King was sent, the elected members voted to approve an additional council contribution of up to $400,000 for the project ‘‘to provide for outlet works and bifurcation for a future hydropower option’’. The additional funding for the hydro option is included in the council’s draft budgets with the estimated cost of completion for the dam sitting at $159m.
That total is $600,000 higher than the $158.4m forecast cost to complete the build provided by Waimea Water Ltd, which is responsible for managing the construction, operation and maintenance of the dam.
In his letter of response, Robertson says he appreciates the ‘‘significant impact’’ of Covid-19 on infrastructure projects including the dam. ‘‘As a result, shareholding ministers of CIIL [Crown Irrigation Investments Ltd] approved an additional $18m of support for the TDC in late 2020,’’ Robertson said. Councillor Anne Turley said she was disappointed with Robertson’s response and King agreed.