Hurunui Water Project Moving Forward

Hurunui Water Project successfully raises funds to take the project forward

Hurunui Water Project’s recent fund-raising drive has been successful, allowing the project to proceed with its next phase to bring the $180million scheme closer to construction.

On 27 July the project’s shareholders backed a proposal to raise shareholder loans to fund the next stage of the scheme to pay for full feasibility work required before actual construction could begin. The shareholders also endorsed the project reaching out to potential business investors and construction partners.

CEO Alex Adams said since then the shareholder loan, which was run over the peer-to-peer website LendMe, has comfortably passed the $750,000 minimum set by the HWP board.

Adams said that in December 2015, HWP obtained 10 consents to utilise water from the Hurunui River and place storage in the Waitohi River in North Canterbury.

“Early this year the board then made decisions around undertaking development and preparing to seek further funding. It has been great to see those plans come together in the last week.”

Rooney Group, construction contractors located in South Canterbury and specialising in irrigation infrastructure, has been contracted to manage the development project, undertake the feasibility engineering phase and continue on into the construction contracts.

Adams said the contract with Rooney Group is based on what is now quite commonly used for complex infrastructure projects under the Early Contractor Involvement model. This sees the contractor invest both funds and expertise in the development of the scheme.

“Within a couple of days of the contract signing, Rooney and HWP began working together on getting the next stage of development work underway. I’m very pleased to see the go-forward,” Adams said.

HWP has also been working with Crown Irrigation Investments Limited (CIIL) to give effect to the letter of intent held by HWP to provide up to $3.3million for the next phase of the work. The objective is to now make the formal application, which is quite a rigorous process, and have the contract in place by late October.

“This is the last piece of the jig-saw required to have everything in place to do the next phase of the project.”

The work going forward includes innovative design and value engineering, particularly related to the distribution system. There will also be a fresh round of engagement with landowners affected by the scheme. A shareholder survey undertaken earlier in the year showed that farmers are seeking a lower density scheme, with around a quarter to a third of land area irrigated.

“This provides opportunity to improve farm economics by, for example, finishing lambs and growing specialist seed crops. With the smaller water volumes now required, there will be less impact on farms from the distribution system. This also gives a good result for the environment aspects ensuring the scheme can operate comfortably within its consents in the Hurunui catchment, and provides opportunity to undertake low density irrigation in the other smaller catchments in the district.

“The shareholder support demonstrated by the loan take up gives the company a lot of confidence that there is a mandate to press ahead with the economic feasibility work and design optimisation. We’re now working toward having Water User Agreements to put before farmer shareholders in about 18 months, by which time we will also be construction ready for the early parts of the scheme.”

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