Hurunui Water Project to seek more shareholder and govt funding

Thursday, 28 December 2017

Water from the Hurunui River may be siphoned next year to irrigate the region if Hurunui Water Project obtains consents and more funding.

Shareholders in a north Canterbury irrigation company centred on the Hawarden and Waikiri communities are being urged to prepare for further investment in water shares early in the new year.

The $200 million Hurunui Water Project will cover about 21,000ha within the Hurunui and Waipara catchments north of Christchurch.

A view across north Canterbury's Hurunui district from Masons Flat towards Mt Tekoa.

Hurdles to be overcome include obtaining further resource consents from Environment Canterbury for nutrient discharges to take the catchment to its allowable limits under the district plan.

A farmer liaison committee member Tim Murdoch said chief executive Chris Pile had been talking with Crown Irrigation Investments about a loan and it appeared plans were on track despite the Government's lukewarm view of new schemes.

* Canterbury irrigation project applies for land-buying powers, worrying local farmers

* Hurunui shareholders cough up; Rangitata lake proposed

* North Canterbury dam project targets investment partners**

Lack of Crown funding, which is limited to about 10 per cent of the entire cost, would not kill the project, Murdoch said.

Murdoch said the project might be completed in stages but currently it was estimated the cost to farmers per hectare would be about $10,000.

Murdoch confirmed that original plans including a dam over the Waitohi River had been revised to a largely run-of-river scheme with a storage dam, and possibly two, to be created on flat land.

One of the foundation shareholders, Ngai Tahu Farming, sold a majority of its shares last year but still has a small stake and may be involved in creation of the storage lakes, Murdoch said.

The scheme would provide much-needed future proofing for the region, Murdoch said.

Meanwhile the company has relied on financial support from wealthy agribusinessman, Gary Rooney, whose company is carrying out the construction work.

The latest published accounts showing accumulated losses of $9.7 million also note the contribution of $2.4m from Rooney, whose company Rooney Farms also owns a large property at Masons Flat in the area to be irrigated.

Rooney has been a major player and funder of Canterbury irrigation schemes including Hunter Downs near Timaru which has recently obtained $70m in funding from Crown Irrigation and is poised to begin construction.

Hurunui Water Project issued shares to subscribing farmers in 2010 to help reach an investment-ready stage, and those shareholders will be asked in March to subscribe for water shares.

Hurunui District Council was also considering subscribing but at a recent meeting councillors baulked at committing ratepayer funds until more information was given about risks.

A timetable produced by the company shows the construction work would begin at the end of 2018 and the first water delivered to farmers in late 2020.

Rooney's contribution of $2.4m, tagged to construction, plus government grants of $1m provided nearly all the company's cash flow in 2017, along with a $50,000 loan from shareholding electricity company Mainpower.

The drawn down amount of $687,651 from Rooney plus the government grants gave total revenue of $1.7m for the year, outweighed by expenses of $2.2m to give a deficit for the year of $423,691.

The $2.4m from Rooney is treated as a contingent liability in the pre-construction feasibility stage to be repaid if the company is successful in raising funds for construction, otherwise 'no repayment is required'.