environment

$500k council investment stokes water wars

A small Canterbury council wants to invest $500,000 in a private irrigation scheme. But some ratepayers say it should sort out public drinking water supplies first. David Williams reports.

Since Colleen Johnson moved into her house in Leithfield, North Canterbury, four years ago, five water cylinder elements have been wrecked. One rupture was so bad the whole cylinder had to be replaced. Johnson, who runs a Facebook group called Hurunui Water Supply Issues, blames the “unpalatable, unpleasant” water.

“There’s a large section of community buying [bottled] water,” she tells Newsroom. “As a Kiwi, it’s so fundamentally wrong buying water, but we were having so many upset stomachs.”

Seven of the Hurunui District’s 19 water supply schemes are on permanent boil water notices, meaning residents have to boil water for a minute before drinking, brushing their teeth or preparing food. So it’s galling for Johnson that her council plans to spend nearly $500,000 buying shares in a planned $200 million irrigation scheme, Hurunui Water Project. The Council plans to borrow to buy the shares.

Johnson: “I don’t see drinking water getting any better, I don’t see river quality getting any better. Even considering doing the investment’s bewildering.”

(The Council’s draft long-term plan, to be discussed at a meeting this Thursday, estimates it’ll spend $152 million on capital works over the next 10 years, most of it on roads, footpaths and significant upgrades to drinking water supplies to meet new national standards.)

“If we give them $500,000 today, next year we’ll have to give them $500,000 more.”

– Sam Mahon

Johnson comes from solid North Canterbury farming stock, so it’s hard to write off her opposition to the mooted investment as NIMBY-ism. “I’m not some townie who’s moved out to the country. I’m actually from the Medbury area where this scheme’s going ahead. My father farmed there, my grandfather farmed there, my great-grandfather farmed there. I’m from that very community.”

Another opponent is Waikari artist Sam Mahon, who plans a mail-drop to Amberley residents later this week. Mahon made national headlines last year with a sculpture of a squatting cabinet minister Nick Smith plonked outside the Christchurch headquarters of the Canterbury Regional Council.

He says the Hurunui Council’s planned investment is a farming subsidy. “If we give them $500,000 today, next year we’ll have to give them $500,000 more. Once a council has committed money to a scheme, it’s very hard to write it off – they’ve got to keep on putting money in.”

Mahon worries that the cost of the scheme, installed at a cost of $10,000 per hectare, will force farmers to chase the highest returns – potentially dairy farming. He says farming in the district has already contributed to the decline in water quality of the Hurunui’s rivers.

“My main worry, yeah, is that the water’s going to get worse and worse.”

Good time for investment

The council’s potential investment comes amidst uncertainty over future Government support for large-scale irrigation schemes, after Prime Minister Jacinda Ardern announced last year there would be no new subsidies. Council investments in irrigation schemes have been a mixed bag. Last year, the Hawke’s Bay Regional Council’s investment arm wrote off about $14 million after the death of the proposed Ruataniwha dam project. Meanwhile, south of Christchurch, Central Plains Water’s $450 million scheme is progressing and it was able to repay a Selwyn District Council loan in 2016.

Water debates have raged in the parched hills north of Christchurch for years, many of them centred around the Hurunui Water Project. First mooted in 2000, the initial plan was to build a weir in Lake Sumner and a 75-metre high dam in the south branch of the Hurunui River. Now, the plan is to funnel water from the Waitohi or Hurunui Rivers into an off-river storage scheme holding about 6.5 million cubic metres of water near Hawarden. Irrigation water would be delivered to 21,000 hectares of farmland through a 190-kilometre network of pipes.

After 18 years, Hurunui Water Project’s farmer shareholders have little to show for the more than $11 million raised, other than some of the resource consents required for the scheme. The location and designs aren’t finalised, and some consents are still being pursued. (In November last year, the expectation was to deliver the first water from the scheme in spring 2020 – but by February that had leaked to “2021/22”.)

Yet the company expects to go on a major capital-raising and debt-funding drive in June, with the view to starting construction on the $200 million project early next year. A $500,000 injection from the Hurunui District Council would be a welcome boost to working capital.

“We’re about to go into the construction-phase capital raise and now’s a good time for HDC to get involved,” Hurunui Water Project chief executive Chris Pile says.

In February, Hurunui district councillors – who make decisions on behalf of 12,700 residents – voted in favour of spending $476,000 of ratepayers’ money to buy shares in the Hurunui Water Project, which has 196 shareholders. Public submissions close on April 12.

‘Risky business’

The Council first considered the shares purchase in April last year. A report written by the Council's chief executive Hamish Dobbie justified the idea by saying it was investing in the district’s largest economic driver and it might be able to tap into an alternative water supply. The report said: “Investment in irrigation infrastructure is essentially a risky business and the proposal to invest in HWP carries significant risks.”

During the Council’s last annual plan hearings, 62 submissions opposed the investment while 40 were in favour.

Dobbie and the Council’s chief financial officer, who carried out due diligence behind closed doors, said in November they were “not aware of any impediment” to the share buy-up. Councillors agreed to pursue the share buy-up after questioning Pile at a workshop in December.

Many opponents of the potential council investment don’t like the fact Mayor Winton Dalley, Deputy Mayor Marie Black and Councillor Nicky Anderson own shares in the scheme. But they’ve all declared a conflict of interest. Dalley and Black didn’t vote at February’s crucial council meeting and Anderson was absent. Dalley tells Newsroom his shareholding “totally disqualifies me from any conversations” and passed on the phone number of Councillor Dick Davison.

Davison is chairing a quartet of public information evenings, the first of which was last night at Hanmer Springs, about the proposed investment. The Council has voted to include in its budget the money for the share purchase, he says. A final decision will be made after public consultation.

Substantial benefits

Davison is careful to say he can’t indicate his preference or predetermine the outcome of the council vote. But his experience, and initial support for the plan, has been shaped by living in the Amuri Basin, near Culverden, which has had irrigation development for 40 years.

“Across the road from where I’m standing now is a farm of about 1500 acres, 600-700 hectares, it used to have two families living on it. It’s now got 13 families living on it. And the people who’re living there have largely come from outside this district, many of them from overseas. That’s the change in the community that we’re looking for.”

The benefits of irrigation to his area, north of the Hurunui River, are substantial, he says, and will probably be repeated over the Hurunui Water Project area.

“Our school has now got probably at least 100 more pupils than it would have had otherwise. Our medical centre has gone from 1200 registered patients to nearly 2000. And that’s in a community of around about 2000 people. We’ve got people coming into the district every day – and they’ll be on the road now – out of the south, from Amberley, Rangiora and so-on, to service the industry in this district.”

Davison was on the Council in 2013 when it rejected a $6 million loan request from Hurunui Water Project. (In 2016, the irrigation project received $3.4 million from Crown Irrigation Investments and was allocated $520,000 under the then-government’s Irrigation Acceleration Fund.) Davison says the public can now have more confidence in the project since it has been restructured – away from dams and into off-river storage.

He’s “pretty certain” the council won’t put more money into the scheme. Rather, the proposed investment, if confirmed, is a signal, Davison says – “an indication of the support from the wider community”. It’s realistic to think the Council could access the scheme for drinking water supplies, he says, as the proposed pipes cross its water supply pipelines in about six places.

Water is ‘gold’

Newsroom asks Hurunui Water Project’s Pile about his message to the public through the public meetings. “Water is the gold of our future. Getting secure access to reliable water with the infrastructure already built and maintained by HWP is an opportunity that, I suggest, should be looked into seriously [by the Council].”

What happens if his scheme only raises half the required money? “We’ll reconfigure and deal with that as it arises. We’ll wait and see what happens.”

Mahon, the Waikari artist, has his own perspective. He points to other councils that might rue investing millions of dollars in ambitious irrigation schemes. Even farmers are worried about passing the debt from irrigation investments onto their children, he says. “Basically, I come to this from the fact that the commons belong to all of us and our children. We’ve already lost so much of it already.”

Public information sessions are planned for Waikari on April 3 and Cheviot on April 4.

* An earlier version of this story incorrectly referred to Dick Davison as Dick Davis.

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