ORC to consult on Tarras Water Ltd investment request

The Otago Regional Council (ORC) is seeking public comment on whether it should invest about $3.5 million to help develop a proposed irrigation scheme for the Tarras district.

ORC staff  have been working with the community in the water-short catchment on future water allocation issues and the setting of minimum flows.

To confront the water challenges facing the area, a group of Tarras farmers has recently formed Tarras Water Ltd (TWL), a co-operative company which plans to build a new irrigation scheme supplying water from the Clutha River/Mata-Au to about 40 families in the district.

The company has obtained resource consent to extract 4500 litres a second from the river, with a maximum take of 73.6 million cubic metres a year, to be taken between September 1 and April 30.

The area potentially covered by the Tarras scheme currently has limited access to irrigation. The reliability of new irrigation water sourced from the Clutha River will reduce drought risk and provide more certainty for local farmers. The scheme will promote more efficient use of irrigation water and has the potential to improve environmental outcomes for the Lindis River.

The scheme’s promoters say it would provide a more reliable and extensive water supply for the Tarras district and ensure sustainable development in the area.

Tarras Water plans to use the water generated by the scheme to irrigate up to 6232 hectares of farmland. This water would be available for domestic, stock, light industrial, firefighting, and frost protection purposes.

At its meeting on August 8, the council amended its investment policy to include the ability to invest in irrigation schemes. It also agreed to publicly consult the Otago community before making any such investment decisions.

TWL has asked ORC to invest approximately $3.5 million through the purchase of redeemable preference shares to ensure it can build the new irrigation scheme. The balance of the scheme costs will be funded through the sale of shares ($8.3m) to land holders wanting irrigation water, and bank loans ($27.4m).

The council has prepared a draft amendment to its 2012-22 Long Term Plan and is inviting public submissions on the proposal.

As a shareholder in TWL, the council would also be required to contribute up to $500,000 annually to the scheme’s fixed costs (comprising electricity line charges and the cost of servicing debt) for five years after the scheme is commissioned in September 2014.

ORC chairman Stephen Woodhead said the council did not want to proceed with such a major transaction without first getting public input, which was why the proposal to amend the Long Term Plan had been developed.

In addition, ORC would require TWL to meet a number of conditions before it made any commitment.

Cr Woodhead said it was a big step for council to consider such a proposal, and one which was not taken lightly.

“Tarras is a water-short area where farming is facing some major changes and challenges, including the expiry of the current system of water allocation (mining privileges) in 2021.”

ORC is committed to working with the community to set minimum flows for the Lindis River and this would also have an effect on the future reliability of irrigation water, he said.

Cr Woodhead said the Tarras Water proposal had sufficient environmental, economic and social merit to be considered by the council, and the potential to ensure farming was sustainable in the area, as the community transitioned through the associated water allocation process.

“These are complex issues which could have a major effect on the livelihoods of many people farming and working in this locality. However, if the scheme proceeds, it is expected to substantially improve the environmental and economic future for the whole Tarras district community.”

”We believe it is important to seek feedback on this proposal as we scrutinise it, and assess the risks and the benefits to the local community and the greater Otago population,” Cr Woodhead said.

Cr Woodhead said the draft amendment to the Long-Term Plan would be notified on November 10, with submissions closing on December 10. Hearings would be held in late January.