At a meeting on Thursday, September 6, it was decided The Waimea Community Dam project will continue, due to a revised funding proposal that reduces the cost and risk to ratepayers.
The Tasman District Council voted 9-5 to revoke an in-principle decision it made on Tuesday, August 28, not to continue with the dam.
Tasman Mayor Richard Kempthorne says the decision was overturned after new information was presented to councillors that showed the cost to ratepayers of a $23 million increase in the overall project price would be minimised. The information also showed the risk of the council’s credit support for a loan to irrigators through the Council-Controlled Organisation had significantly reduced.
“We’ve still got a lot of work to do to reach financial close and the final decision point for the dam,” Richard says. “However, today’s decision means we keep the ability to draw on $73 million in external funding for a project that will give us 100-year water security and protect the health of our precious water resource.”
After the August 28 decision, the council’s dam joint venture partners, Waimea Irrigators Limited (WIL), working with investors and central government, proposed a revised funding model that limits the impact of the price increase on ratepayers.
The revised funding model means:
The district-wide fixed rate remains unchanged at an estimated peak of $29 a year
The Zone of Benefit rate based on capital value remains unchanged.
A small increase in water charges for urban water users on top of the increase consulted on in 2017 – equating to about 50 cents a week for the typical residential user.
The council’s decision not to proceed with the project on 28 August came after the price of the dam increased by about $23 million.
Under the existing funding model, the council faced an increase in its contribution to the project of $11.5 million – taking its total share of the costs to $38.3 million.
Richard says the revised funding model meant irrigators would be effectively contributing 75% of the servicing costs for the $23 million price increase.
“That significantly limits the effects of the increased price on ratepayers, which was the council’s key concern on 28 August. There were also concerns about the level of risk the council was carrying, and that is significantly reduced as well because of the introduction of a reputable New Zealand institutional investor into WIL.”
The decision to go ahead with the Waimea Dam is the right thing for the future of the region, says Nelson MP Nick Smith.
“The big gains from this project are environmental and economic. It will enable the minimum flows in summer in the Waimea River to be lifted five-fold and fully meet the national standards for water quality. It will also enable another 1200 ha of horticulture, creating more wealth and jobs. It will help support the growth of housing on the Waimea Plains where the population has doubled from 10,000 to 20,000 in my time as MP. It will also make our region more resilient to climate change. The dam will increase summer flows and improve river health. We all want cleaner rivers and we all need to help fund this,” says Nick.