Shares in proposed dam tipped to cost Waimea water users $5000 per hectare
The dam project will need financial support from water users on the Waimea Plains.
Water users on the Waimea Plains and its surrounds are being asked to indicate if they will buy into the proposed Waimea dam at $5000 per hectare/share.
Dam proponent Waimea Irrigators Ltd is distributing a 32-page shareholder information document and survey to water users. It asks them to have the completed survey returned by February 24. While the indications of interest will not obligate the water users to buy shares, the requested information "will be critical in determining the feasibility of the project", the document says.
Waimea Irrigators Ltd says each share will convert to an entitlement of 30mm of water per week per hectare equivalent, noting that could be less depending on crop and soil type under the rules of the Tasman Resource Management Plan (TRMP).
Murray King, left, with Crown Irrigation Investments Ltd chief executive Murray Gribben, says it is "critical" that firm support for at least 3000 shares is received.
As well as the expected initial capital cost of $5000 a share, indicative modelling suggests an annual operating charge in the range of $500 to $550 per hectare for the initial year of operations.
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In a message at the front of the document, Waimea Irrigators chairman Murray King says it is "critical" that firm support for at least 3000 shares is received for the project to proceed to the next step.
The Lee Valley location of the proposed dam.
The document says it is likely that water users entering the scheme from year two onwards will pay a higher capital charge.
Waimea Irrigators Ltd is investigating a proposal for a joint venture with Tasman District Council "and possibly Nelson City Council" to construct a dam in the Lee Valley at an estimated cost of $82.5m. TDC has earmarked $25m in its Long Term Plan 2015-25 for the project. Waimea Irrigators Ltd proposes contributing $40m from the sale of shares. Any shortfall in that $40m – up to $25m – is tipped to come via a loan from Crown Irrigation Investments Ltd, which acts on behalf of the Government as a bridging investor for regional water infrastructure development.
The shareholder document indicates says NCC could provide $5m to $8m, a possible contribution for which it will "shortly begin consultation".
In addition to those equity investors, an application will be made to the Ministry for the Environment for a grant of $5m from its Freshwater Improvement Fund, the shareholder document says.
The $82.5m capital cost estimate for the dam does not include costs relating to infrastructure required to service potential shareholders in areas adjacent to the scheme area such as Redwood Valley, Lower Wai-iti and Mount Heslington.
"Work has commenced to determine these costs."
The document outlines the 14-year history leading to the proposed dam, new water management provisions in the TRMP, water permit reviews now under way and the potential effect on water users in dry summers of no-dam and with-dam scenarios, depending on whether they are affiliated to the dam or not.
If the dam proceeds and water users are affiliated to it, they "will have a very high security of supply," the document says.
Dam costs
The estimated capital cost of the proposed dam in the Lee Valley from Waimea Irrigators Ltd's shareholder information document.
Land acquisition, $2m
Forestry roads and power for site, $0.8m
Vegetation clearance and disposal, $1.2m
Construction, $49.8m
Fees for design, procurement and project management, $5.4m
Spent costs, $6.6m
Inflation, $3.2m
Risk – adjusted contingency, $13.5m
Total, $82.5m
- Stuff
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