“This Government has now raided $100 million and effectively pulled the plug on any lifeline for rural communities,” Guy said.
“These projects, such as Hunter Downs and Hurunui, are about rural communities providing for much wider regional development and what needs to be remembered is that this Crown funding is not a grant. It’s a loan and it’s all paid back.
Farmers had invested time, energy and cash, much from their back pockets, to benefit regional economies, knowing they would have the Government partner them for support.
“These schemes have met their environmental obligations to get this far and gain that support – now they have been left high and dry.”
While there is a suggestion the gaps could be filled through the Government’s new provincial growth fund, it would pay only for the crumbs.
Last week the Government said it will begin winding down public funding for large-scale irrigation through Crown Irrigation Investments.
Finance Minister Grant Robertson said the announcement followed an extensive review of how to wind down the funding.
“Large-scale, private irrigation schemes should be economically viable on their own without requiring significant public financing,” Robertson said.
Guy said questions in Parliament had Agriculture Minister Damien O’Connor embarrassingly correcting the official record.
“He conceded that he has never met with CII officials in his capacity as minister.
“I find this extraordinary given three proposed irrigation schemes, Hunter Downs in South Canterbury, Hurunui in North Canterbury and Flaxbourne in Marlborough have had their funding cancelled.
CII chief executive Murray Gribben confirmed O’Connor had not personally engaged with CII.
“But he did advise us that consultation would be undertaken by the Primary Industries Ministry and Treasury to understand existing commitments and arrangements,” Gribben said.
Guy claims the Crown has legal and moral obligations to many of the projects, especially Hunter Downs where $40 million was raised locally and investment term sheets had been offered by CII.
“This Government is scrambling and panicking to satisfy their election commitments they now realise they can’t meet,” Guy said.
Robertson said existing CII commitments for development contracts will be honoured to the close of the current phase of each contract.
The three commitments are for completion of Central Plains Water stage two, construction of the Kurow-Duntroon scheme in South Canterbury and the construction of the Waimea Community Dam in Tasman.
Hunter Downs project manager Stacey Scott said the announcement was devastating and it is a case now of asking shareholders to be patient while conversations with the Government continue.
“We believed we had a committed term sheet with CII and that we would be supported by the new Government – we were reliant on that for our future.
“It’s not just about farming. This project has been packaged to be able to provide for the wider community. We had options to supply water to both the Waimate and Timaru District Councils plus augmentation of the Wainono Lagoon.”
Scott expects to know more on a future direction in the next week.
Likewise, North Canterbury Federated Farmers president Lynda Murchison said the Hurunui Water Project is equally about the region.
“Hurunui has a much bigger problem than a few farmers wanting water for dairy conversion.
“We are drought prone – this is a district-wide project and we are absolutely pushing hard for the benefit of the whole Hurunui District,” Murchison said.
“We have an abundance of water resources, more than enough to go around, but we have to be really smart how we manage this.
“This project is about that management and somehow we have to find the way to keep pushing on.”
Marlborough District Council confirmed provision is in place for the Flaxbourne scheme to go ahead.
The cost of the scheme will be fully met by subscribers with existing commitments to fund the investigation and early design phases to be honoured.
Wairarapa Water project director Michael Bassett-Foss said a contract with the Crown would expire in August and given Crown funding had never been a certainty so Wairarapa’s programme was planned for the next 18 months without Crown funding.
