Q: What is the per unit cost of water expected to be under the proposed scheme and how does this compare with water schemes elsewhere?

A: Irrigation New Zealand has run the Waimea Community Dam’s proposed capital (share) and operational costs through the spreadsheet it uses to calculate the cost of irrigation scheme water supply to farm gate survey – this is done on a biennial basis. The report (that contains the assumptions used to normalise the data) is on the INZ website, click here to view the report. The Waimea Community Dam Scheme comes out at 26 cents cost per m3 which is at the upper end of the schemes surveyed – however it is comparable with other modern irrigation schemes like North Otago Irrigation Company (same price) and Barrhill Chertsey Irrigation and the Opuha Dam Kakahu scheme (3 cents more). It is cheaper than the Southern Valley Scheme in Marlborough on a per cubic metre basis – this is an important comparison given the high value production associated with the dam.

Q: Can I access an affiliated and unaffiliated volume of water from the same bore? 

A: No – it will not be possible to take and use an affiliated and an unaffiliated volume of water for the same ground water permit or surface water permit, unless the point of take services more than one landowner through a reticulated irrigation scheme (e.g. Waimea East Irrigation Scheme).

An affiliated permit can be obtained by purchasing water shares in WIL and obtaining a Shareholder Water Augmentation Agreement that enables you to apply to TDC to affiliate your water permit.

If you choose not to purchase water shares, your new water permit, when issued, will be an unaffiliated permit and your water allocation will be the volume stated as per TDC’s recent bona fide review.
 

Q: How much water does one share entitle me to?

A: A WIL Shareholder with a Shareholder Water Augmentation Agreement shall be entitled to apply under the TRMP to affiliate its groundwater permit or surface water permit for a volume of water represented by the number of Water Shares held by the Shareholder at a rate of 300m3 of water per week per Water Share.

Q: What if I’m on light soils that need more than 30mm per hectare per week?

A: You can take up more shares than your total irrigable area. As an example, for 10 hectares at 35 mm per hectare per week, you might wish to purchase 12 shares to enable you to access the full amount of water you need.

Q: How much is 30 mm/ hectare/ week as a volume?

A: 300 cubic metres per week

Q: I grow grapes and they don’t need much, if any, water. How many shares should I buy?

A: Analysis of water meter data for a number of grape blocks on the Waimea Plains shows that water usage varies between 22 – 75% of a block’s total water allocation. The analysis also shows that water use in the same block can vary considerably from one season to another – presumably this is a reflection of the season itself (i.e. how dry it is) and other vineyard management practices (such as watering newly planted vines). Grape growers need to ensure they have adequate security of supply for all scenarios.

Q: Can I access an affiliated and unaffiliated volume of water from the same bore?

A: No – it will not be possible to take and use an affiliated and an unaffiliated volume of water for the same ground water permit or surface water permit, unless the point of take services more than one landowner through a reticulated irrigation scheme (e.g. Waimea East Irrigation Scheme).

An affiliated permit can be obtained by purchasing water shares in WIL and obtaining a Shareholder Water Augmentation Agreement that enables you to apply to TDC to affiliate your water permit.

If you choose not to purchase water shares, your new water permit, when issued, will be an unaffiliated permit and your water allocation will be the volume stated as per TDC’s recent bona fide review.

Q: I’m a member of a water scheme already. Does this affect me?

A: It certainly does. Think of it this way – the scheme you are a member of (e.g. Waimea East, Redwood Valley) provides the infrastructure to get the water to your property, and manages the water permit on your behalf. Purchasing water shares in Waimea Irrigators Limited will enable you to access the volume of water your shares entitle you to. If you don’t purchase shares you will be subject to the same rationing steps that are applicable to an unaffiliated permit holder.

Q: Won’t more irrigation just cause more nitrate-nitrogen leaching?

A: Nitrate-nitrogen leaching is more sensitive to soil type than to whether a crop is irrigated or not (Fenemor et al, 2015). Therefore, there is little difference in leaching rates for the ‘no rationing’ vs ‘with rationing’ scenarios. For some irrigated crops, leaching is lower than for the dryland equivalent because of the efficiency of plant nutrient uptake in a fully watered situation. Leaching rates from highest to lowest are dairy, outdoor vegetables, grapes then apples.

Nutrient losses from livestock farms and horticultural and arable farms can be mitigated through the adoption of farm management options, especially once the causes of N leaching are identified. These nutrient mitigation options could range from management changes to large capital investments and significant system changes.

For example, N leaching in vegetable growing operations might occur due to:

• High use of applied N as a result of sparse root systems for the crops (particularly when they are immature)
• Poor N use efficiency
• Short growth periods and therefore (in some cases) multiple crops in one year
• Grown over winter when leaching rates are high due to high rainfall and saturated soils
• Large amounts of crop residue left in the paddock after harvest, which is worked into the soil.

In this example, the mitigation options would be mainly focused around fertiliser management and crop rotation.

Q: I have an adequate water supply. I was even able to get through the dry times late last year. What has changed? 

A: While this summer you might have been able to get through with your existing allocation, that allocation of water is likely going to change from November this year. Many water users’ allocations will be reduced to help meet the sustainable allocation limits for the Waimea River in the Tasman Resource Management Plan (TRMP), which come into effect on 1 November 2018. Sixty-one percent (61%) of Ground Water Permit and Surface Water Permit holders will have a reduction of between 50% and 99% of their former allocations if there is no Dam. Not only will water takes be significantly reduced for many permit holders on the Waimea Plains, the new rules mean that rationing in dry periods will happen earlier and be more severe.

Last winter, TDC sent 329 water permit holders on the Waimea Plains allocation assessments, giving irrigators an indication of their likely reduced water allocation if they choose not to buy shares in WIL or if the Dam doesn’t go ahead. (You may wish to locate this information as you consider the WIL PDS document.)

The outcome of this review is that in dry months when the Waimea River needs to have a minimum flow of 1,100 l/s in the with-dam scenario, the water available for landowners who haven’t affiliated their water permits will be drastically reduced and rationing will be more severe. From November, Step 2 restrictions (2,300 l/s at the Irvines/Wairoa Gorge recorder) will mean a 50 percent cut to water use and Step 3 restrictions will mean complete cease take for unaffiliated permit holders. Based on historical flow data, the Wairoa river falls to 2,300 l/s most years.

Water Shares in WIL secure the opportunity to affiliate your water permit under the TRMP and thereby improve reliability.

See the TRMP for more information.

Q: What if I'm retiring or selling the land in a few years?

A: Historical evidence shows that land with a secure water supply increases in value. Dryland without a secure water supply is likely to see a decrease in value over time, particularly given the ongoing extreme weather patterns facing the region.

Regardless for how long you may personally benefit, irrigators who support the Waimea Community Dam are leaving a legacy for future generations of land owners on the Waimea Plains. The benefit of affiliation runs with the permit and is available to future purchasers.

Q: Can we buy more shares than we have hectares?

A: Yes, you can – we encourage you to seek advice and consider if that investment is right for you.

Q: Do you need to be a permit holder to purchase shares?

A: No. You can purchase shares and then apply to TDC for a permit once you have been issued a Shareholder Water Augmentation Agreement (SWAA). The definition of who can apply for Water Shares is broad, allowing non-landowners or non-Ground Water Permit and/or Surface Water Permit holders to apply for Water Shares. (See page 22 of the PDS document for more information.)

Q: Can I sell/ transfer my shares if I have surplus?

A: Yes. Water shares are transferable (can be sold) privately, with or without the sale of your land or lease. See section 6 of the Product Disclosure Statement and section 6 of the Constitution for more information.

However, WIL does not intend to quote the water shares on a market licensed in New Zealand and there is no other established market for trading them. This means you may not be able to sell your water shares as easily as you would on a licensed open market.

Q: Who will manage and govern the Dam?

A: Once the Dam has the final sign-off from TDC, TDC has agreed to form a Council-Controlled Organisation (CCO) in partnership with WIL that will be a limited liability company known as Waimea Water Limited (WWL). WWL, not Council, will have complete responsibility over governance and management of the Dam construction and operations.

WIL’s shareholding in WWL will evolve over time, starting at 27.9% and moving up to 48.9% over the first 15 years while WIL is paying off the CIIL loan. From the start, WIL will have two seats on the seven-person governance board. In addition, its initial position as a minority shareholder is protected by the requirement that certain key decisions require approval of both shareholders.

Governance structure

The Board of WWL will include two WIL – appointed directors, one iwi director, and four TDC – appointed directors, one of whom may be a joint appointee with Nelson City Council (still to be determined). The Chair will be elected by the directors. By agreement, the TDC appointed directors cannot be councillors; they must be people with appropriate governance experience. All governance decisions will be made by simple majority, except the key decisions that require shareholder approval.

Shareholder approval required for specific matters

There are 13 reserved matters in the agreement between WIL and TDC that require written consent from both parties. Some of the key matters requiring consent are:

• Any variation to the construction contracts related to additional costs other than those agreed to
• Adoption of WWL’s annual budget
• Incurring any unbudgeted debt greater than 20% of WWL’s annual operating budget
• Granting a security interest in WWL
• Issuing additional equity other than where already agreed
• Any variation of the Water Augmentation Agreement for WIL or TDC.

The full list of reserved matters can be found on page 51 of the Product Disclosure Statement. WIL has confidence that, although it is the minority shareholder, it still has a significant contribution to key management and governance decisions where they might affect irrigators.

Q: What is Early Contractor Involvement?

A: In December 2017, Tasman District Council and WIL selected the preferred contractor – Fulton Hogan and Taylors Contracting – to enter the Early Contractor Involvement process for the Dam project.

Early Contractor Involvement or ECI brings the client, designer and contractor together to complete the final design with a focus on constructability and risk minimisation, to achieve the best value for money for the investment. The process has been shown to save significant time and costs over a traditional tender process.

Find out more about how this process is working for the Waimea Community Dam here.

Q: How are urban residents playing their part in conserving water?

A: Tasman District Council's Engineering Services Committee agreed in May to consult the public on a new Water Restrictions Protocol to ensure it meets its obligations under the Tasman Resource Management Plan.

Under the Plan, the Council must introduce rationing measures to customers connected to Council-provided community water supplies in times of drought. The draft Protocol proposes a wider, more stringent range of restriction measures that would apply across the whole district including over 20,000 residents in Brightwater, Hope, Richmond, Redwood Valley and Mapua. It aims to achieve two key objectives: guide the Council when making decisions about what restrictions will apply and how they will be escalated, and help the wider community better understand and plan for water restrictions during times of drought.

TDC will engage with the community on the Protocol as part of changes to the Public Water Supply Bylaw 2016 that will go out for consultation, with the date to be confirmed. 

View the proposal in the Engineering Services Committee Agenda from page 9.

Q: How would last year’s ‘big dry’ have affected me if the pending rules had been in place?

A: We mentioned this in our last newsletter but it’s so important, we want to mention it again: some people are not aware that water take rules are changing for permit holders from November this year (2018).

One way to understand what may be in store is to cast your mind back to the end of last year – the ‘big dry.’ Water restrictions were in place throughout the region.

What if the new water take rules were in place during the big dry of 2017? See the figures below, which were presented to Tasman District Council's Environment and Planning Committee on 8 February.

Rationing was in effect for 28 days and irrigators were cut to 35% of their existing allocation for 14 of those days.

Under the new rules, the cut would have been 50% of the bona fide allocation for 19 days, for unaffiliated permit holders in a with-dam scenario. The flow at the Wairoa at Irvines gauging site was 2,200 l/s on 26th of December – had it dropped to < 2050 l/s a cease take would have been in place.

Without the dam, under the new rules all permit holders would have been cut to 50% of their bona fide allocation for 4 days.

Under the new rules, the takes can only recommence when the 7-day moving mean flow at the Wairoa at Irvines site rises above 6000 l/s. In other words, a substantial fresh (i.e. more than 10,000 l/s) would need to occur in the Waimea River before taking could resume.