The Manuherekia River flows through the driest part of New Zealand and provides vital water to farms and horticultural businesses. The replacement of a key dam has been in the pipeline for over 10 years, with progress held back by disagreement over how low the river is permitted to flow.
After comprehensive study and debate, central and regional government together with iwi, water users and environmental groups have still been unable to agree upon a minimum flow level for the river.
The size of a new storage dam, to replace the aging Falls Dam near St Bathans, depends on the setting of a minimum flow as the more water needed, the bigger the dam must be. If a nine metre tall dam were required, conservation land would be affected. But if six metres proved adequate this would be avoided, according to Jeff Grant, chair of irrigation parent company Manuherekia River Ltd.
He says the costs and complexities of replacing a dam to secure long-term irrigation in the Manuherekia Valley may reach a point where the long-awaited project becomes unattainable.
The Central Otago District Council yesterday elected to pursue drafting a Parliamentary local bill aimed at facilitating the project, despite warnings from staff that controversy over ecological concerns is unavoidable.
Grant says the local bill will likely be the cheapest way to progress the project, but even then, there are legal unknowns and no guarantees of success.
The Manuherekia River and its tributaries supply water through more than 200 takes to sheep and beef properties, ten dairy farms, horticulture businesses, lifestyle blocks and two rural townships. It rises in the northern Maniototo and empties into the Clutha/Mata-Au River at Alexandra,
A voluntary minimum flow of 900 litres per second is currently in place, measured at a holiday park on the fringes of Alexandra. Because there are so many channels and tributaries along the 60km route, it takes 28 hours for water released at the dam to reach the park’s measuring point.
With an average rainfall of only 400mm, it is not unusual for the irrigation tap to be turned off due to low flows in late summer.
The Otago Regional Council previously told Newsroom that water quality and ecosystem health declines progressively along the river’s course. The regional body’s efforts to set minimum flows are currently stalled while legislation is updated at Central Government level.
Despite the uncertainties, Manuherekia River Ltd is forging ahead with pre-construction work for a larger dam using a $2M Regional Infrastructure Loan and an equal contribution from its customers.
Between 2012 and 2015 planning work was undertaken due to the existing structure aging and not holding enough water to meet demand through a typical long, hot Central summer.
Manuherekia River Ltd has now reviewed that design and will have updated costings, which could be $100 million to $130m, confirmed through quantity survey work by year’s end.
Yesterday’s council decision means the company won’t – for now anyway – have to pursue a fast-track application, which would have cost around $500,000 and was better suited for larger projects, Grant says.
It also negates the need to make an application under the existing Resource Management Act (at a cost of $500,000 to $1m), which is currently under review.
Grant, a former National Party MP who owns properties in the Ida Valley, says there is some confidence banks will see the construction cost as an investment in infrastructure with a guaranteed long-term return, as irrigators are always going to need water to operate their businesses. Users would also make a capital contribution to the project based on their landholding.
Issues around the ecology of the river were on the radar for Manuherekia River Ltd, which acknowledges views vary.
Recreational users like anglers wanted higher flows; mana whenua hold a strong interest in river health; and determining natural flows is complicated.
Most recently it has been Ngāi Tahu and the Central Otago Environmental Society who have voiced serious concerns about continued water quality deterioration and the potential for further degradation if irrigation capacity increased. Their concerns centre around a fear that scientific evidence on river health will be bypassed in decision making, and the enabling of further production that is better suited to wetter areas.
“The key issue is minimum flow,” Grant says. “The dispute is around the ecological stuff. I ask this question all the time, I say we currently have a minimum flow of about 1000 litres per second at the camping ground, can someone explain to me what’s dying because of it. That’s probably going to be quite a dispute.”
A balance had to be found between recreational use, environmental sustainability and economic benefits in the longer term.
“The question is who is right about where that balance is.”
He believes a larger dam would give greater sustainability through having water stored to supplement flows and to help flush out didymo – an invasive algae.
“We’re going to build a dam. I often say we’re going to build a dam because for the wider community the risk of leaving the dam as it is and hoping it might last another 30 years is too high. But somebody else might stop us from building a dam.”
If the process was stopped and the project sat for another 10 years it could become marginal.
“The risk every time they leave it for another generation, or another 10 years is that it’s going to get harder. The cost will be more, and it may get to a point where it’s unattainable.”
He says $50-100m in income would “disappear from Central Otago” without water security.
Council yesterday agreed to proceed with the Local Bill at a cost of between $190,000 and $250,000.
No funds had been budgeted for the engagement and legal work but $250,000 received from Matakanui Gold Ltd as a non-refundable payment toward access to council land at Tarras could be used, according to council chief executive Peter Kelly.
Matakanui Gold Ltd is a subsidiary of Australian company Santana Minerals, which wants to develop a large-scale open cast and underground gold mine 20km north of Cromwell
Council has an agreement for $1.25m to be paid annually by the mining company if it gains consent, from when production starts in 2028. Investing mining royalties into key infrastructure like Falls Dam had been discussed at Regional Deal negotiations, a council report stated, which meant using the company’s payment aligned with expectations.
The $1.25m annual figure is not, however, guaranteed every year throughout the life of the mine.
“From year six onwards if annual net profit after tax falls below $100m the payment to Central Otago District Council will be adjusted downwards on a pro-rata basis,” Kelly says.
The council’s regional deals lead, Dylan Rushbrook, told councillors this week that now was the time to attempt to resolve the water issue, despite a lot of change happening around government reform.
“We actually think with all that is going on, this is actually the best time to do it because with any further delays this opportunity may be taken away in the future”.
He cautioned the council that there was no guarantee of success and the chances of pleasing all parties involved was slim.
Councillor Stu Duncan supported the work, saying the district council was capable of making hard decisions.
“The whole time I’ve been involved in community board and council this has been one of the biggest issues in this valley. We have an opportunity to put a peg in the sand, as long as the process allows us… If we don’t do it properly the chances of Regional Deals and Falls Dam in the future just get delayed and delayed and delay or don’t happen.”
The Bill’s presentation and possible processing through Parliament would be supported by Waitaki MP Miles Anderson and Southland MP Joseph Mooney.
