'The water wars': A council's proposal ruptures a divided heartland

Wednesday, 11 April 2018

Hurunui Mayor Winton Dalley is personally invested in the proposed Hurunui Water Project. As a result, he's recused from debating a council plan to put money into it.

The Government won't back it but an irrigation project that comes with a storage pond bigger than a nearby local town 'is going to happen'. CHARLIE MITCHELL reports on the fight for the Hurunui Water Project.

He would normally be here at this town meeting, the towering merino farmer who goes to every school gala, every public meeting in this sprawling region.

But Winton Dalley, the popular mayor of this district, is not here, because he is conflicted. So is Marie Black, the deputy mayor; so is Nicky Anderson, the new councillor who used to run the medical centre.

They don't hear the arguments ringing through the Waikari community hall, where there's shouting and swearing and scolding for the swearing, even though that's how people here talk.

About 50 or so people are jammed into the hall, under a large list of names of people who died in battles long ago, ringed by poppies. The attendees know each others' names and have hashed out issues here before, but it's not usually this fraught.

'For the life of me, I cannot understand why there's such a negative majority,' says one farmer, sitting in a small bloc near the back.

His is a lonely voice of support in a district built on agriculture, one that has long been run by farmers but has been pulled into a national mood that is drifting away from them.

Much has been made of an urban/rural divide, but in this community, there's evidence of a rural/rural divide.

And so the council makes its pitch. Tension hangs in the air like thick, invisible smoke.

* Hurunui council needs more information ahead of buying shares in water project

* Irrigation schemes to continue despite withdrawal of taxpayer funding**

It was just up the road, about 18 months ago, where the earthquake ruptured the earth and struck Kaikōura on the other side of the mountains.

The damage in Kaikōura got most of the attention on the news, but here, at the epicentre, the damage caused deep wounds. Dozens lost their homes, and the community rallied around the businesses who struggled in its wake.

The earthquake forms the distant background of this story. At a time when the community needs strength, and money, a council proposal has caused – or, perhaps, exposed – another rupture.

The Hurunui District Council wants to spend $500,000 on shares in a local business, an irrigation scheme called the Hurunui Water Project (HWP).

The scheme has been gestating for about 14 years. In its current iteration, it would irrigate 21,000 hectares of farmland south of the Hurunui River, taking water when the river's running high to store in a large pond from which water would be dispersed through underground pipes, stretching under the land like the tentacles of a jellyfish.

The water would be spread on the dry earth around Waikari and Hawarden, used by farmers when the dry spells hit. Some might be able to convert to dairy farming, or grow different crops.

Agriculture is the biggest industry in Hurunui by a long way, and the towns without access to water for irrigation are visibly waning. Hawarden has lost its general store, the milk bar, the post office, and the railway station over the years. The Waikairi community hall is next to an old, empty garage, paint stripped and a 'Caltex' sign in the window.

The visible signs of rural decline are everywhere, which is the essence of the council's pitch: Water will bring life to these towns, like it did to Culverden, north of the river.

'In our district, agriculture is the biggest business by far,' Hamish Dobbie, the council's chief executive, said in Waikari.

'It's bigger than any other business by a long degree. If we look at opportunities to grow our economy in this district, one of the big opportunities is investment in agriculture.'

It's a risky investment, by everyone's admission. The council would become a shareholder, just like the 190 farmers already signed up, waiting for construction to begin. It would not get any rights to water – its shares are 'dry' – and the council would have to buy wet shares if it wanted water rights to supplement its water supplies, which it has raised as a possibility but is far from a sure thing.

Then there's the opportunity cost. The council has a bill of $3.5 million for the earthquake damage, which has already led to rates rises. The district has famously poor drinking water; in Amberley, the largest town, the water is corrosive, and has damaged sinks, washing machines and toilets.

If the scheme failed, the council's money would be lost, along with everyone else's.

The risk explains why the mayor, his deputy, and another councillor can't be here: The project's success is their success, because they are already private shareholders.

With one third of councillors out of the picture, the decision must be made by a majority of just four councillors, representing a divided district.

In the absence of three of his colleagues, councillor Dick Davison is running the series of public meetings.

He used to be a farmer, too, but does not have shares in HWP – he is a trustee for Central Plains Water and was once involved in the Amuri Irrigation Company. He says he's not putting a view forward, but is an unashamed advocate for the social benefits of irrigation.

The Waikari meeting is the third of four, and the most adversarial. Almost all of those who speak are angry at the council for proposing to make a high risk, unsecured payment to a private business when there are other issues that need addressing.

It begins with a pitch by the irrigation company itself, via chief executive Chris Pile, who joined the company less than a year ago. He is the fourth person to lead the project, with a single pipe yet to be laid. Pile hopes to get it across the line.

He explains it is much smaller than originally envisaged, and won't lead to mass dairy conversions. At one point he calls it a 'new age' irrigation scheme to help farmers deal with an increasingly dry climate.

The scheme would add $60m to the economy and create hundreds of jobs, one of his Powerpoint slides says, based on a study commissioned by Irrigation NZ, the lobby group. It is quickly pounced upon.

'Is there any macro-economic modelling that isn't provided by an irrigation lobby group?' asks Ben Kepes, who lives in Waipara.

The answer is no. There has been no independent economic analysis of the scheme, let alone one for the council's proposed shareholding.

Sam Mahon, a local artist known most recently for his detailed sculpture of Nick Smith poised to defecate in a drinking glass, interjects to say Environment Canterbury had received a competing economic assessment several years earlier.

'It turned your numbers completely upside down,' he said. 'Where is that report? It's not in this room.'

That report, by Professor Geoff Kerr, indeed questioned the economic benefits of HWP. It said the company's analysis did not look at external costs such as environmental damage and took the optimistic view for the likely range of costs involved.

Most of the people here aren't angry at Pile, or the scheme. They want to know why the council believes it should become a shareholder in a private business. They bring up the drinking water issues (Dobbie, the chief executive, says the council is spending $20m on upgrading the schemes) and the earthquake damage.

There's also the fact this is the second round of public consultation. The first was last year, during the annual plan process, which asked if the money should be put in the budget for the share purchase. The council got 116 submissions in total, 102 of which were about the share proposal. More than 60 opposed, but it went ahead anyway. The people have already spoken.

'If we make our submissions, and you find that 60 per cent of us still don't want you to go ahead, will you go ahead anyway?' Mahon asks.

'It's not a vote,' Dobbie says. 'At the end of the day, they're making a submission to their councillors with their view about the proposal.'

The other issue is that there's very little documentation to look at. Dobbie undertook due diligence for the council. He and the council's financial officer went to the HWP office and looked at confidential documents. They signed a non-disclosure agreement and agreed not to take any paperwork away with them, which means there is not much to look at, apart from the already publicly available information. Dobbie did, however, leave with the satisfaction there were no impediments to the deal going ahead.

From there, the meeting quickly derails. Although the mayor and deputy mayor are recused (there's no suggestion they've had any involvement in the process), they would benefit if the deal went ahead.

Winds blowing topsoil from a farm near Hawarden.

Kepes points out that Dalley and Black are both on the chief executive performance committee, meaning they effectively employ Dobbie, who recommended the share purchase.

'The CEO is making a recommendation tainted by their pecuniary interest,' he says. 'That's a pathetic thing to say, that I'm tainted by their pecuniary interest,' Dobbie shoots back. 'At the end of the day, it doesn't matter if they're my employer or not.'

There are questions about the touted economic benefits, given the dearth of evidence presented. 'There's been a major leap made that economic benefit in a region all of a sudden makes everyone better off, and it's going to pay for doctors and nurses – I don't believe there's any modelling that shows that,' one person says.

A brief silence. A farmer pipes up.

'Are you going to let a vocal minority hijack this meeting tonight?'

There is no response. The meeting continues and the sky goes dark.

Some in this community have called the period since about 2009 'the water wars'. Tensions have been high in the Hurunui over the changes to the physical and social landscape, and the river that bisects the district, in more ways than one.

The Culverden Fete is an example of the town's revival.

North of the river, near Culverden, the sun-tinged landscape was turned green through irrigation. The dust bowl became a salad bowl and the community grew – the town was on the decline, but now it's thriving.

The environmental impact has grown, too. In Hurunui, like elsewhere in the country, this has resulted in a public reckoning about whether the pursuit of milk is demanding too many environmental compromises.

For two summers in a row, popular swimming spots on the Hurunui River have had warnings for cyanobacteria, a toxic algae linked to nutrients from farming. Every year, some of the nearby streams dry up.

At the point where the river flows out of the mountains, the river's nitrogen levels are about 50 tonnes per year. After it flows across the plains, past the big dairy farms, it increases 14-fold, to over 700 tonnes per year.

Most of the water wars have centred on the HWP. In past iterations, it would have dammed the river and led to mass dairy conversions, which caused a rift that involved intimidation, bullying and death threats, according to a thesis by Dr Amanda Thomas, who studied the politics around the river.

'As I learnt more about Hurunui River debates, it was clear that there were intense divisions between people and groups characterised by passion, anger and upset,' she wrote. There was talk of someone threatening to burn another's house down, of tyres being slashed.

Locals who opposed water storage felt they could not speak up in public, intimidated into silence by a majority invested in the expansion of farming. 'They use the economy to destroy people,' one interviewee told Thomas.

There is a physical separation in the Waikari hall. A small bloc of farmers on one side, vocal opponents on the other. The opponents are certainly not afraid to speak, if anything, the power dynamic is reversed.

One of the farmers stands as a lonely voice of support.

'I'm not sure what you're opposed to, because this is something really positive,' he says.

'I'm fortunate that my family has been farming in this district for 150 years and the opportunity that's presented to our children now is the greatest opportunity to have for a long time. It's really exciting, and I commend the council for showing the initiative.'

The council spends money on tourism, he points out, which is a smaller industry than farming. So why not invest in agriculture?

The following night, at a meeting in the Cheviot school hall on the north side of the river, farmers are again outnumbered. Investing in the scheme is a tough sell in Cheviot. HWP will not deliver water here, meaning these ratepayers will be funding a project they will get no direct benefit from.

For more than a year after the earthquake, Cheviot was effectively a cul-de-sac. The heavily damaged State Highway 1 was closed between the town and Kaikōura, all but all but eliminating the passing tourist trade. It happened as the community finally left nearly three years of drought, which had been a painful experience for the area's farmers, one disaster following another.

One person says the money would be better spent on earthquake repairs, to murmurs of agreement.

The audience is less hostile than in Waikari, but some are clearly unhappy. Councillor Dick Davison, again running the meeting, makes his pitch for the social benefits of irrigation, as seen from his home near Culverden.

'The school I think has probably got 100 more pupils. I go down the road, there were 22 children catching the school bus in the 10km between me and Culverden,' he says.

'That would not happen if we didn't have an irrigation scheme – I'm not trying to promote the thing, I'm just trying to explain the social change that happens in a district when you fundamentally change the rules.'

'What about the environmental damage that has occurred?' a woman in the audience responds.

Waikari and Hawarden are predominantly sheep farms.

'You can say the population has increased, but you can't swim in the river, and that belongs to all of us. Everywhere I see, intensification of farming is helped by irrigation and followed by degradation of the environment.'

Chris Pile from HWP jumps in to say the scheme will not damage the environment: 'If this was another old school irrigation company that didn't give a stuff about the environment, I wouldn't be here.'

But it's clear some people are still unconvinced. The scale of the scheme, although much smaller than past iterations, is hard to conceptualise. The storage pond will be around 150ha in size, Pile says, on farmland owned by Ngai Tahu in a cleared section of Balmoral Forest.

A rugby field is about 1ha, so the pond will be 150 of those. It'll be 2km long, 700m wide and about 20m deep. It can hold 28 million m₃ of water, about 11,000 Olympic sized swimming pools. The pond will be nearly the size of Christchurch's Hagley Park.

'It'll be bigger than Cheviot township,' one person whispers, accurately.

As in Waikari, the lack of documentation is a sticking point, as are the financial interests of the three councillors. 'There's just not a lot of trust about it all,' one person says. Again, a solitary farmer stands up to say he is an investor in the scheme, and took a huge financial risk to back something the whole district would benefit from. Why shouldn't ratepayers do the same?

As the meeting closes, after a long fortnight discussing this topic with the community, Davison sounds exasperated.

'The thing that I really worry a little bit about in this community is the fractiousness and the unhappiness that come around with these sorts of projects,' Davison says.

'I understand that, but I'm not very happy about it. We are a community. Whether people like it or not, we have to live together, and these schemes will help our community.'

The day after the Cheviot meeting, the Government announced it wouldn't be backing large irrigation schemes, as planned by its predecessor. While the water wars in Hurunui raged, the national mood changed, too.

It meant money proposed for HWP would be gone, which was a 'kick in the teeth', the company said in a statement, but wouldn't stop it from going ahead. It already had some Crown money, and a planned capital raising in the coming months would get it over the line.

'HWP is going to happen,' Chris Pile assured the crowd in Waikari.

'How big it is, and who we serve, that's still a question mark, but the scheme's going forward.'

After about an hour and a half, no closer to a resolution or a common understanding, the meeting closed. Davison ended with a plea: 'Please, be kind to each other,' he says. 'That's my only request.'

They spill out of the memorial hall and into their cars to drive home, past the frayed and empty buildings in a town on its last legs, over the fault line deep beneath the dry grass, splitting the district in two.