Without the minimum uptake the proposers of the $110 million Hunter Downs irrigation scheme have indicated they would be forced to pull the plug.
The project, which had been 12 years in the making, was 10% short of the minimum uptake needed to proceed.
“We are making a final appeal to farmers and other key stakeholders to invest in this project,” Hunter Downs Water chairman Andrew Fraser said.
HDW has been holding water share funds in trust since April 2017.
Fraser said the board had come to a point where it needed to make a decision on whether to proceed or return funds to those who had already made the commitment to take water.
The date for that decision would be December 14 at the company’s annual meeting.
Fraser said Hunter Downs had secured a unique set of features that meant water could be delivered at a viable cost while securing future land use opportunities.
They included a highly reliable water take and use consent from the Waitaki River, nutrient rights capable of seeing the region into the future in both a sustainable and environmentally friendly manner and the ability to augment the Wainono Lagoon to a help achieve community water quality aspirations – all in an innovative design that used the existing Morven Glenavy irrigation infrastructure.
“It is the combination of all the above features that makes this scheme viable at this time.
“However, there are critical time constraints around a number of these aspects,” Fraser said.
Financial support and funding from Crown Irrigation Investments had been secured but with conditions.
It had agreed to provide $70 million term debt funding to make water affordable while not creating significant subsidisation between farmers.
But, as part of the funding conditions, HDW needed 9500 shares sold and 7000 water shares (equal to 7000 hectares) issued.
HDW had fallen short of that required minimum water share uptake having secured commitments from 50 shareholders for just over 6000 water shares.
Fraser made one last plea for investment in the scheme.
“I would urge anyone who has an interest in the scheme to contact us directly, ensuring that we have a viable scheme to take forward and ensure the future prosperity of the region.”
Initial investment remained at $2650 a water share payable in thirds.
Given the delays in securing support the further payments would be delayed and were now likely to be late 2018 and mid-2019.
To be so close and not to succeed would be a lost opportunity for the region, HDW project manager Stacey Scott said.
It would also have significant economic impact on the growth in the region and onfarm wealth, including the loss of a unique and highly valuable water take consent.
“Key relationships would be lost and would be unlikely to be repeated in the future which makes this scheme affordable and possible at this time,” Scott said.
“We would welcome the opportunity to meet with anyone who might reconsider supporting the scheme to ensure we get it across the line.
“We would like to hear from you in the next few days so we can develop protocols for the board’s recommendation at the annual meeting.”
When complete the scheme would meet the water demands for farms and the wider community between Waimate and Timaru.
