Councillors’ ongoing support depends on dam’s final proposal

Wed, 4 Oct 2017

Golden Bay ward councillors have defended their decision to support Tasman District Council’s increased financial contribution to the Waimea Community Dam project. The resolution to commit additional funding was passed at June’s council meeting, but only by virtue of the Mayor’s casting vote.

Sue Brown and Paul Sangster say they voted to enable negotiations to continue and will wait until the council’s final proposal is published before deciding whether to back it further.

Sue says it’s important to recognise that there is a serious problem. “The first thing we have to acknowledge is that Waimea needs water – for urban use, irrigation and environmental flows.” And she believes that any delays or quick fixes will prove to be false economies. “We could end with a situation where, if a short-term view is taken now, Golden bay rate payers could end up paying more to supply Waimea water in a decade’s time.”

She is satisfied that the proposed scheme provides the best guarantee for Waimea’s water supply. “When you compare the different options, I’m comfortable that the dam provides us with the cheapest way of providing urban water by far. I absolutely see the need for the dam.”

Paul admits that the dam offers “absolutely no benefit to Golden Bay”, but says it’s too early to write the project off. “I voted yes, only because I felt that it’s wrong to pull the plug until we actually know the facts.”

Hydro scheme and rainwater tanks

One of the things Paul wants to know is whether the dam will incorporate a hydro scheme – something he says would provide a tangible gain for Golden Bay. “If you take the dam and put a power station on it, like the Cobb, my theory is that in 30 years’ time our $30 million will be redeemed back to the ratepayers – or quicker if it generates more.”

Paul is also urging council to reconsider complementary solutions, such as installing domestic rainwater tanks in urban areas. “Straight away that stops your stormwater flows and you have water to wash your car, water your garden and flush your toilet.”

According to the council’s own figures (Newsline, 11 August 2017, p3) common domestic tasks for which non-potable water could be used – including those mentioned above – typically account for a large proportion of total household consumption. But despite easy gains from urban rainwater harvesting, TDC is reluctant to support it, says Paul. “They can’t do it in Richmond apparently – there’s no legal reason – they just say they can’t.”

Funding model

Arguably the most important facts yet to be determined are those relating to who pays what of the estimated $82.5 million capital cost. The current funding model incorporates a three-way partnership between TDC, Waimea Irrigators Limited (WIL) and Crown Irrigation Investments Limited (CIIL), plus support from Nelson City Council (NCC) and Ministry for Environment (MfE). With the latest tweak, TDC has upped its commitment from $25 million to $30 million, while WIL’s contribution remains at $15 million, raised through a proposed share buy-in, plus $25 million to be borrowed from CIIL. Minor party MfE has just chipped in with a $7 million grant, but NCC has yet to sign off on an anticipated $4 to 5 million.

Although the funding split needs to be agreed prior to November’s public consultation, serious doubts remain over WIL’s ability to access funding. Normal banking practice requires lenders to secure commercial loans against borrowers’ assets such as land title, but this is not possible for WIL. Consequently, TDC proposes to underwrite the irrigators’ loan, a move that significantly increases ratepayers’ exposure to financial risk. Richmond ward councillor Mark Greening questions the Council’s largesse.

“Why can’t irrigators secure their own debt, rather than using TDC? Does CIIL not have confidence in WIL being able to repay the $25 million loan?”

Paul Sangster says he would support TDC underwriting the loan – with provisos. “I would vote in favour, but I would insist on clauses in there to guarantee that they [WIL] will pay back a large proportion every year.”

If it decides not to underwrite the WIL loan, TDC will still be committed to financing around 34 per cent of capital cost, plus 52 per cent of ongoing operating costs, in return for receiving 18 per cent of the additional water security benefit expected to flow from the scheme. Mark Greening believes such evident inequality could result in the public scuppering the project. “I appreciate the Mayor has driven this disproportionate level of funding and irrigators have sat on their hands. But irrigators need to ensure the deal is fair – if the Mayor won’t – or risk the public rejecting it.”

Paul predicts that rejection is a distinct possibility should costs escalate beyond $82.5 million. “If it came to a vote where the cost was $100m and we were underwriting $30m, and NCC were only putting in $4m and the Government decided they weren’t going to do any more, I think you’d find that it would fall over.”

Central government’s role may prove to be decisive, especially if the upcoming general election produces a change. As well as the prospect of irrigators facing as-yet-unspecified royalty payments for water usage, a new administration could also significantly alter TDC’s triangular funding partnership, according to Sue. “There’s a good chance that CIIL won’t exist. That would cause a major tweak to the model because we’d lose one party.”

Next stage: Consultation – and referendum?

Details of the funding model, the governance system and the actual tender cost will be published in time for November’s public consultation exercise.  Paul encourages everyone to fully digest the information before they have their say. “We will have these public meetings and that’s when people need to gear up. If they can’t be there, they need to write. But I would really like them to make sure they know what they are talking about and won’t just go on what the next door neighbour said. They’ve got to read and form an opinion.”

Some in council consider that a district-wide public referendum might be a useful tool in the decision-making process. From a GB Weekly survey of TDC councillors and the Mayor, six of the eleven who responded said they would consider supporting a referendum. Mark Greening hopes the planned consultation process will do its job, but is open to a referendum debate should it fall short. “The public will be paying the bill, so it’s important the public voice is heard.”

Mayor Richard Kempthorne rules out such a plebiscite. “A referendum for whether to construct the Waimea Dam is not part of council process. The council is the organisation that needs to make a decision on all matters and has to weigh up the pros and cons of a project, rather than making key decisions a matter of public opinion, sometimes based on misinformation that is provided.”

Whatever changes emerge from the public consultation and subsequent deliberations, Sue says the underlying issue will remain the same.

“What isn’t going to change is the need for water on the Waimea Plains, and we’re going to need to solve that one way or the other. To get the best deal for ratepayers is my focus – not dam or no dam.”


Jo Richards

The Golden Bay Weekly

Friday 18th AUGUST 2017