New fund may save irrigation schemes

The Government yesterday announced a surprise new multimillion-dollar infrastructure fund that could safeguard irrigation schemes in drought-prone Central Otago.

Irrigation New Zealand welcomed the $80 million investment in a new Crown-owned company that will act as a bridging investor for regional water infrastructure projects.

Groups in Central Otago have been striving for years to progress new irrigation schemes, many of which have reached the pre-feasibility or investigation stage but need more than $100m to progress to development.

Irrigation New Zealand chairman John Donkers said it was early days but new schemes would create jobs and ensure the viability of farming, horticulture and viticulture.

Water projects in Central Otago, Canterbury, Tasman and Hawke's Bay "all stand to benefit".

Manuherikia Catchment Water Strategy Group chairman Allan Kane welcomed the announcement but said the potential infrastructure cost for Central Otago alone was much more than $100m.

He said options for the Manuherikia and Ida valleys include raising the Falls dam by 27 metres to fully irrigate users' land and a further 14,500ha of farm land or a smaller scale scheme.

Development was some time away "even if funding was available". Feasibility would take a year, followed by consent applications and the design and construction phase.

However, the biggest challenge for irrigation groups was raising capital.

Mr Donkers said a Government startup fund, which involved repaying investment capital, was a surprise and unexpected development. It was a monumental announcement and could get many regional projects "over the line into development".

In Central Otago irrigation groups have been working for years to secure funding for feasibility studies and preliminary development. This month the Manuherikia group completed a pre-feasibility study, which showed there was enough water to sustain a modern scheme, but not enough storage.

Meanwhile, the Otago Regional Council will hear submissions on its proposal to invest in the Tarras Water scheme next week.

A co-operative of farmers plan to build a new irrigation scheme supplying water from the Clutha River/Mata-Au but need to secure funding.

The Southland Times