Friday, March 29, 2024

Crunch decisions coming for Nelson’s fruit basket

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Waimea Irrigation chairman Murray King knows that Ruataniwha feeling.
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After 20-30 years of trying to store water for Nelson’s Waimea Plains it all comes down to a group of councillors and the Department of Conservation.

Like the ill-fated Central Hawke’s Bay scheme, Waimea Irrigation Ltd (WIL) is wrestling with arguments about public good versus private benefit, the estimated $80 million cost and the chance of being tripped up by local and central government.

Rautaniwha folded partly because it couldn’t get enough regional councillors to back it and because DoC land couldn’t be released for the project.

There are striking similarities in Nelson’s Lee Valley, even though Tasman District Council (TDC) has signed up to underwrite the Waimea Community Dam with Crown lending.

TDC is responsible for water allocations and environmental policy in the region. WIL says summer flows on the river must be increased otherwise rural and urban landowners will face “severe summer shortages and radically reduced water allocations”. WIL predicted small and medium businesses would be forced to cut operations or shut.

King said if the dam didn’t go ahead TDC would simply re-allocate the area’s water for other uses. The scheme would give plains horticulturalists reliable water, especially during a couple of critical weeks in mid-summer.

Unlike other irrigation schemes, the dam would store water for release into Waimea River, supplementing the minimum flow and topping up aquifers.

Crop-growers and others drawing water from aquifer-linked bores would benefit from the re-charge. Urban water supplies across the Waimea Plains would get a surge too.

But first, some critical decisions. On June 28, TDC will consider a cost review and decide whether to include the dam in its long term plan. Nelson City Council is also in play, finalising its own long term plan and confirming an initial pledge of $5m for the dam.

King is cautious about late stumbles. 

“There are some councillors who are less than convinced it’s a good idea.”

WIL also needed DoC to sell 9ha to WIL for the dam. 

“Effectively we’ve nearly ended up in a slightly worse position (than Ruataniwha) to be honest … we’re at the beck and call of others at the moment.”

King said the dam would inundate “a small amount of land” and DoC had mostly supported the project because stored water from the dam would boost aquifers and help downstream conservation. 

However DoC told WIL it “couldn’t or shouldn’t” proceed without first doing a final cost assessment. A local bill has to go through Parliament for the land sale to happen and King expected it could be the end of the year before DoC made a final call on the land sale.

WIL has raised $16.5m through a share issue and Crown Irrigation Investments Ltd (CIIL) is lending it just over $22m through a low-interest loan to its under-writer, TDC.

CIIL is also directly offering WIL a $10m interest-free loan and a $7m grant from the Freshwater Improvement Fund – a legacy of the National government.

King said everyone was keenly aware WIL had “one shot at utilising the government assistance” now the Labour-New Zealand First coalition, supported by the Greens, had vetoed future CIIL applications. 

“If this doesn’t proceed, $40m in grants, no interest loans and low interest loans will be lost.”

Ongoing operating costs for the dam will be shared between WIL and TDC. The latter’s share of operating costs is about $715,000 a year, which will be funded from water rates, charges and targeted rates.

WIL says the capital cost of the dam is four times cheaper than the next alternative, a standalone urban water supply. 

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