Hurunui Water Project halts development of Waitohi Irrigation Scheme

The Board of the Hurunui Water Project (HWP) has halted project development on a North Canterbury irrigation scheme while awaiting a final ruling from the Environment Court.

HWP is behind the $400 million Waitohi Irrigation Scheme that will supply water to the drought-stricken areas of Hurunui, for which nine consents were granted almost two years ago in August 2013.

HWP chief executive Alex Adams says the scheme is a sound future model for sustainable water and agricultural development, which has been unreasonably impacted over its 13 year history by various legislative and regulatory changes and delays beyond its control.

“The current situation is frustrating as we now have to halt project development to reserve the funds we have for operational and potential legal costs,” says Adams.

“Over $10 million has been invested in the scheme and it remains a very long-term, 100 years-plus benefit to the region and the economy. However, in the short term, the delays outside our control, serious drought conditions and falling dairy revenue, will mean that we need to access finance and manage project development differently,” he says.

In 2013 there were only two appeals to the scheme, these were from the Amuri Irrigation Company and Ngai Tahu Property. On 10 February 2015, the two appellants along with Environment Canterbury (ECan) and HWP filed a memorandum with the court signed by all four parties agreeing to a set of changes to the conditions of the consents.

The Environment Court has now taken the unexpected step of advising it is considering the appointment of an Amicus Curiae to become involved in hearings. The legal counsel from each of the four parties have been providing information. This has further extended the timeline of the project. It is not known when the Environment Court process will be concluded.

Although HWP still has access to about $1 million of unused monies from the Government’s dollar-for-dollar Irrigation Acceleration Fund (IAF) that could be used for project development, the Board has made the financially prudent decision not to spend any more of its current funds while awaiting the outcome of Environment Court process.

With $1 million HWP equity at hand, the Board believes it is prudent to reserve available funds for general company operations and unforeseen legal costs associated with finalising the consents. The IAF monies cannot be used for consents-related costs,

“Because HWP funds have been ear-marked, a further $1 million of non-Government project development monies is required to unlock the remaining $1:$1 IAF monies, which would allow us to complete the engineering feasibility work and economic modelling to get to a commercial-ready stage,” says Adams.

“Every effort is being made to raise the funds that would allow project development to continue, while ensuring the financial viability of the company is not compromised by the consenting-related delays.”

“The drought conditions suffered in the region during the summer are a stark reminder that the original principles of the scheme are well founded,” says Adams. “HWP consulted extensively with the community, particularly within the Zone Committee process, to achieve a well-balanced outcome. This highlights our commitment to the environmental issues and health of the river, while providing economic benefits to the regional and national economies,” he says.

The initial scheme represents a significant economic contribution regionally of $100 million and 680 jobs.

“The fact that there were no appeals of a direct environmental nature on the nine consents that were granted is evidence of the meaningful consultation undertaken and that the scheme represents a sound future model for sustainable water and agricultural development in New Zealand,” says Adams.

ENDS

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