Matakitaki River dam shelved

Network Tasman's plans to build a dam on Murchison's Matakitaki River for a planned hydro scheme are over.

The head of the electricity trust, Wayne Mackey, said the land is for sale and the trust aims to invest in new projects, but it would keep an eye on other opportunities in the area in future.

News that the dam would not now be built has pleased members of the local community and conservationists who have fought the plans for several years.

"We are truly happy for the river, but extremely unhappy at the process," local business operator Mick Hopkinson said.

"We have had this sword of Damocles poised over our community for the past four years.

"I'm really happy but it would be nice if people could now see what they [Network Tasman] planned to do," said Mr Hopkinson, who co-owns and operates the New Zealand Kayak School in Murchison.

He said the whole process from the start had been "incredibly unfair" on stakeholders. The trust's failure to let the community know its plans had also made a mockery of the consultation process.

"We all got dragged into this and became junior lawyers," he said of the early discovery and attempts to find out what was planned.

Mr Mackey said the trust was selling the 288-hectare Murchison property, after announcing last year it had put on hold its plans to investigate building a hydro scheme on the Matakitaki River because of economic and environmental hurdles.

Network Tasman is a wholly owned consumer trust which owns and operates the electricity distribution network in the wider Nelson and Tasman areas (excluding Nelson Electricity's supply area in Nelson City).

Mr Mackey said this week that any scheme planned for the Matakitaki would have been at least 20 years away from development, but dramatic changes in electricity use over the past three or four years, and a predicted decline in future use had altered the trust's plans.

"The situation in New Zealand with generating capacity has changed dramatically. Demand is static, if not declining. Comalco [aluminium smelter] may close in the next five years and the prospect of any hydro scheme being built on that Murchison site was economically a long way off," Mr Mackey said.

He said reasons for the decline in use included increased energy efficiency, more efficient lighting, appliances and home insulation and higher power pricing. "Future options could still be hydro but it would be different to a dam.

"The option will remain and there's nothing to stop building something in future in a similar location. There are alternatives being looked at, but a different type of arrangement for hydro electricity," Mr Mackey said. He declined to comment further on what that meant.

Forest and Bird regional field officer Debs Martin welcomed the news the dam at least would not be going ahead.

"There are so many values along the length of the Matakitaki. The gorge in that area is an outstanding natural geological feature and the forest area would have been inundated, particularly riparian forest," she said. "It also adjoins really important DOC land and questions remained if the dam would inundate that. It's also an internationally important bird habitat."

Ms Martin congratulated the community for raising awareness and Network Tasman for listening.

"It is community owned and we vote members on the board," she said.

Ms Martin said dams were "antiquated ways of old".

Mr Mackey said proceeds from the land sale, expected to be in excess of $2.5 million, would go back into the company and the number of projects under way right now, such as its advanced meters scheme.

Network Tasman said in 2011 it was considering whether to invest up to $20 million to fit out homes in the Nelson region with so-called smart meters as part of a joint venture with other electricity lines companies.

Mr Hopkinson remained "deadly cynical" of the trust's plans for the area.

"It would be really nice if they could provide a 10-year plan and say ‘this is what we're likely to do'.

"We're clocking up 2000 visitors a year on the river and it would be nice to know the truth," Mr Hopkinson said.

Land agent Bruce Farquhar of Bayleys in Nelson said there had been reasonable interest in the land, which in recent years had supported dairy farming.

Interest had mainly come from within New Zealand but also from around the globe.