Public water provides cash flow

Landowners with the right to take more water than they need are selling their surplus allocations and pocketing the cash.

There is nothing illegal about selling access to public water for private gain, but conservationists say it is a growing practice that could spell doom for rivers already under pressure, and raises the spectre of investors buying up rights to "water banks".

Only about 30 to 40 per cent of the water extraction allowed from Hawke's Bay's Tukituki River is taken, but every summer it and many other streams and rivers in the region are closed to irrigators as they drop to minimum levels.

Bruno Chambers, a farmer in Tukituki Valley near Havelock North, received an invitation a month ago to tender for the right to take 1.3 million litres of water a week from the Makaretu River, a tributary of the Tukituki. The consent is held by the Skagen Trust, 40 kilometres upriver in Central Hawke's Bay.

Mr Chambers said he had no intention of bidding for the water, which could irrigate about 100 hectares. He was concerned that if all the owners of surplus water rights began selling them, "it will lead to much heavier demand on rivers".

"It's a huge issue all around the country," he said.

The tender raised questions about whether anyone should have the right to sell surplus water rights. "Should they be able to sell something they don't own? They only have the right to use it," he said.

Environmental lobbyist Tom Belford said a private market for water rights was "slowly taking shape in Hawke's Bay", even though water-rights holders were only "temporary custodians".

Technically, there was nothing to stop anyone buying up surplus water rights and "water banking" them, Mr Belford said.

Skagen trustees Clint and Shelley Thomsen, of Takapau, are overseas. Their Waipukurau lawyer, Bridget Chrystall, said she had handled water-rights transfers before, but this was the first time she had been involved in a tender for them. She had no idea what price they might fetch.

The Environment Ministry said the matter of private sales was for Hawke's Bay Regional Council to address, as it was the agency responsible for water allocation and management in the area.

A council spokesperson said water transfers were becoming more common. It was monitoring them and could refuse to allow the transfers or require a formal hearing if the deals posed more than minor effects within a water zone.

Environment Minister Nick Smith said there had always been an informal, private trade in water rights.

The Skagen Trust's tender offer was "probably more in your face", but he had no plans to rein in the practice until there was evidence it was placing enough pressure on rivers to cause ecological damage.

LIQUID ASSETS

* Water is a public resource.

* The right to take it for commercial purposes is governed by regional councils, which have the task of ensuring rivers and streams are sustainably managed.

* Water rights are generally for fixed terms and must then be renewed.

* Applications for new or renewed water rights from Hawke's Bay Regional Council cost a deposit of $900.

* With rapidly increasing demand for irrigation water, particularly by dairy farms, many councils are now insisting on the installation of water meters.

- © Fairfax NZ News