Hurunui irrigation company bullish but farmers fall short on the money

Wednesday, 8 August 2018

Patrick McFadden fishing on the Hurunui River in North Canterbury - local farmers would like some of the water too.

It's back to the drawing board for a North Canterbury irrigation scheme after a poor response from farmers who subscribed for just one third of the 21,000 water rights offered by Hurunui Water Project.

But Chris Pile, chief executive of the company driving the proposed $200 million scheme is determined it 'must and will continue'.

A photo of drought conditions in the Hurunui District in 2015.

The investment offering to the farmers closed three weeks ago and Pile held the first shareholder meeting to announce that only 5200 water rights at $3000 each had been taken up.

Pile said it was an issue of confidence in the absence of central and local government funding. He would be go back to potential investors, and also look at reconfiguring the already downsized scheme.

The braided Hurunui River, North Canterbury.

Chris Pile, chief executive of the Hurunui Water Project.

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The $63m sought from farmers would have been a sufficient level for banks to lend the balance of the money.

'Although this is below the threshold necessary to build the current design at an affordable cost, it demonstrates the understanding of those who've chosen to invest of the real need for a reliable, sustainable water supply.

Potential sources of funding may include rich lister Gary Rooney's Rooney Group which has already loaned money for the design of the scheme and is the preferred contractor for a man-made lake beside the Hurunui River above Hawarden.

Pile was disappointed the Labour Government's regional growth fund was not prepared to fund large new irrigation infrastructure projects.

'Droughts aren't going to go away. Longer term they are likely to increase. In Hurunui we have great soils, lots of sunshine, all we need is the missing ingredient.'

Another source of minor funding may be Hurunui District Council which was considering contributing $500,000, although this has been described as more of a morale booster than circuit breaker.

Originally the scheme was proposed to irrigate 58,000 but was downsized to 17,500ha on the basis of likely demand, and after the Labour-led coalition Government pulled the plug on new large schemes funded by Crown Irrigation Investments.

'It is wrong to think this is only about agri-business – water is the lifeblood of our community and the frequency and severity of droughts in our region are only likely to increase.

'Australia is suffering through a six-year drought and the impacts of climate change are factors in the high temperature and dry winds fanning the devastating North American forest fires.

'This is the important bigger picture, and such conditions impact harshly not only on agricultural productivity and alternative land uses, but the stability and sustainability of our communities,' Pile said.

The scheme was designed to use on-plains storage, not take low-flow river water, and ensure farmers managed their water supply efficiently and sustainably through the latest monitoring technology, Pile said.

Kaikoura National MP Stuart Smith was also disappointed and said the same issue faced a proposed Flaxmere scheme scheme in Marlborough, and Hunter Downs in South Canterbury.

Crown Irrigation Investments funding was intended to help get irrigation schemes over a funding hump and his party would reinstate it if elected in future, Smith said.

An opponent of the project, Ben Kepes said it was clear the scheme wasn't economically viable.

'The writing is on the wall and Hurunui Water Project should be put out of its misery before it costs even more money and, perhaps more importantly, divides the community further,' Kepes said.