Dam Straight - Waimea Community Dam FAQs

This page answers to frequently-asked questions about the proposed Waimea Community Dam.

FAQs post hearings and deliberations

Consultation and Final Decision

Some submitters had asked for a vote or referendum on the Dam, this is not what the legislation requires.  Referendums are either yes or no as opposed to consultation which generates views, preferences, alternatives, ideas, and concerns.  As prudent decision makers, Council must focus on the reasons and logic.

There are a number of work streams occurring at the same time to ensure that Council can make a fully informed decision as to whether to proceed with the Dam project.  A final decision will only be made when we have the final construction tender price, have certainty about land purchase and access, and know the results of WIL’s share raising exercise.

Land Purchase & Access

All of the private land has been secured.  Compensation has been agreed with four of the five private landowners.  There are further settlements relating to: Treaty settlement land vested with Iwi, Crown land under the Dam footprint, and some land which is to be transferred from the Crown.  Agreements will be needed on these processes before a final decision can be made.

Dam Design and Size

Reducing the size of the Dam does not significantly reduce costs associated with its construction.  The capacity of the Dam is designed to meet predicted water supply needs for next 100 years and protect against a one in 60 year drought.

Irrigators on the Waimea Plains have undergone bona fide reviews by Council, with their new allocations reflecting their crop type and water use.  It is estimated that 85% or more of growers are already using the most efficient water technologies available.  Irrigation use peaks in summer, which is what the Dam will provide for – not the average use.  With climate change we can expect more extreme weather patterns to become our norm, with drier drys and wetter wets.

An augmented water supply is needed to supply our current and future urban water needs for Richmond, Mapua, and Brightwater.  During dry conditions and in a no dam scenario the following rationing steps will be put into place:

  • Step 1 rationing - the greater of 10% consumption reduction (average last 8 years) or 20% of consent.
  • Step 2 rationing - greater of 17.5% consumption reduction (average last 8 years), or 35% of consent.
  • Step 3 rationing - greater of 25% consumption reduction (average last 8 years), or 50% of consent.
  • Step 4 rationing – does not apply to community water schemes
  • Step 5 rationing – essential human health based on 125 litres per person per day (based on last 16 years this could occur every 6-10 years).

Any decommissioning of the Dam would be beyond the next 100 years and would not necessarily occur at that time.  If decommissioning was required, the costs are likely be attributed to the CCO Joint Venture partners on a similar basis as the ownership structure.

Hydro Power

Council has commissioned the development of a full business case that will be considered by Council and the Joint Venture Partners prior to Financial Close.  A hydro scheme would need to provide sufficient returns to cover its costs, and not significantly impact on the key outcomes or timelines for the proposed Dam.

Sedimentation of the Dam

Sediment flowing into the Dam has been thoroughly researched and documented.  The Dam has been designed to cater for the expected sediment loading to ensure that it has a 100 year life expectancy.  The design includes one million cubic metres of reservoir volume that could potentially be infilled without having any impact on the operation of the Dam.

Tonkin & Taylor consultants have also carried out modelling of the river system, which shows that sediment volumes will not be significant in terms of dam efficiency.

Seismic Issues and Earthquake Risks

The detailed design of the Dam will incorporate the latest GNS engineering standards, and will be designed to a level that can withstand a 1 in 10,000 year earthquake.  In a major event of that magnitude, it is expected that the concrete facing will be damaged and cracked, but that the Dam would not catastrophically collapse.  Concrete faced dams have a very good record worldwide for robust performance during earthquakes.

Subsequent to the Christchurch and Kaikoura earthquakes, the specialists have revisited the seismic predictions for the Dam site.  The seismic predictions for the site, including seismic shaking and vertical acceleration, are all taken into account in the detailed design.  The impact of earthquakes and flooding hazards are also considered under the resource consent conditions.

The Hikurangi subduction zone and the associated risk to residents of Lee Valley and Brightwater Community and School has been considered by the experts.

In the unlikely scenario of a catastrophic event occurring during Dam construction, Council’s intention is to have appropriate insurances in place. 

The seismic reports completed by Opus and GNS in 2017 are available on our website:  http://www.tasman.govt.nz/policy/public-consultation/recently-closed-consultations/waimea-community-dam-governance-and-funding/

Rivers & Aquifer Hydrology

Landcare Research have reviewed the river, aquifer and climatic data for the area for the last 50 years, and have concluded that the proposed Dam design will provide the water supply needed for both urban use and irrigation.  Under the Dam proposal, a certain amount of water released from the Dam will recharge the aquifers in response to pumpage, and a certain amount will stay in the river to provide sufficient flow for environmental and recreational purposes. 

The proposed Dam will have a positive impact on the Waimea River system as it will maintain minimum flows during dry conditions providing for both instream flora and fauna and recreational use.

A similar dam example in the Region is the Kainui Dam, which works in the same manner using released dam flows to recharge the aquifer.

Alternatives to the Proposed Dam

As part of this process a number of alternatives to the proposed Dam have been investigated.  At a Council meeting on 27 July 2017, Council resolved that after reconsidering all the alternative options “the proposed Waimea Community Dam in the Lee Valley was the best solution for meeting the community’s need for good quality local water supply”.

Some of the alternative options considered included installing water tanks at residential properties and reducing water leakage in the system.   The analysis showed that although there would be benefits, these options alone could not provide enough water for our urban water drinking needs, and would be less cost-effective.  Council will however continue to support and promote water conservation and continue its programme to reduce water leaks.

The main alternatives to the proposed Dam are outlined on page 14 in the Waimea Community Dam Governance and Funding - Statement of Proposal available on our website.  In summary, none of the alternative water solutions suggested by submitters or assessed by Council provide the range of benefits that the proposed Dam would.  Many of the alternatives Whole of Life costs would be more expensive to Council and/or the community than the proposed $26.8m Council contribution.

Economic drivers

The long-term economic impact of not having an augmented water supply for the Region is estimated at a total GDP loss of between $859 million and $1,132 million over 25 years (NPL Report July 2017).  If the water needed during times of extended droughts was not provided, this would mean growth would be significantly constrained and crops requiring irrigation could be forced off the land.  In a no dam scenario, Council would still need to provide a water supply solution for urban water users, with many of the alternatives being significantly more expensive than the proposed Dam.

Governance and Capital

The Dam project is designed to be a joint venture between the public and private sector to reflect the range of benefits to residents, businesses, and the environment.  The community rejected a fully Council funded Dam in 2014 and this proposal has been developed as a joint venture to spread costs and benefits.

All Dam users are contributing capital to the project and sharing ongoing operating costs under the arrangements being proposed in the Long Term Plan 2018-2028 on a basis that is deemed to be in line with proposed benefits. The Dam also provides benefits to the urban water users, the community and the environment.  These benefits are reflected in the proposed joint venture partnership structure.

To prevent large cost overruns, Council is doing all it can to keep risks to a minimum including:

  • using a p95 level for construction costs, meaning that there is a 95% probability that the project will come in at or under budget;
  • using modern engineering and risk management approaches and external professional advice; and
  • $13.5 million contingency for changes in scope and other unforeseen eventualities.

 

Let’s clear up some myth-understandings about the Waimea Community Dam

We know there’s a lot of information floating around about the dam project. We know it can be hard to weigh up the different points of view. A key question to ask is why would the Council want to build a dam in the first place?

The reason is pretty simple and it’s fundamental to what we are here for. It’s not just about irrigation, the benefits are for everyone.

In dry summers, we don’t have enough water to reliably supply our urban and rural communities on the Waimea Plains. Plus, we must protect the health of the Waimea River for future generations.

You might have heard That there is plenty of “extra” water in our groundwater aquifers...

It’s true that there is a large volume of water in our groundwater aquifers. However, much of that is not available for us to draw on. If all the water in the aquifers was used to meet projected demand, the Waimea River would be dry most summers, because the flow of water in the river is strongly affected by pumping from the aquifers.

Much of the “extra” water in the aquifers is also below sea level, and can’t be drawn on without risking salt-water intrusion – and yes, salt-water intrusion is real. We have permanently closed four water bores in the past because they became contaminated with saltwater, both prior to and during the 2001 drought.

Without some way of supplementing our water supply, our urban communities face significant water rationing nine years out of 10 from 2018.

You might have heard there is high risk of seismic failure of the proposed dam...

A lot of work has been done on the seismic conditions at the dam site. The dam’s design is required to meet the newest engineering standards - updated after the Canterbury, Seddon and Kaikoura earthquakes.

Tonkin & Taylor Ltd have recently commissioned updated research from GNS, and this has been independently peer reviewed by OPUS. The proposed concrete-faced rockfill dam design has a very high level of resilience to seismic loading.

Detailed design of the dam will take the risk of an earthquake and seismic activity fully into account.

The risk of an earthquake large enough to damage the dam is relatively  remote. The risk of water shortages without a dam is almost certain.

You might have heard that ratepayers are subsidising irrigators...

Irrigators are responsible for 49% of the dam’s capital cost, and 49% of its ongoing operating costs. An individual irrigator who wants a secure water supply and chooses to buy shares in the project would pay an estimated:

  • $5000 - $5500 per share (one share equals one hectare of irrigation)
  • Annual water user charge of $550 - $600 per share
  • The Zone of Benefit rate based on the capital value of their property
  • The $29 District-wide fixed rate
  • If connected to the Council’s reticulated water network, a 10% increase in water charges.

The Council proposes to underwrite up to $29 million of loan funding from the Government to irrigators. We have done so because it makes the project more affordable for everyone.

Yes – there is some risk but there are also benefits especially the zero and low interest loans.  We have the means to recover these costs from affiliated water permit holders.

You might have heard that there is no need for the extra water to be made available as demand for irrigation has remained static or is dropping.

The demand over the last decade or even longer has remained static due to the restrictions placed on irrigators and other water consent holders. No new consents have been granted on the plains since 1996 due to the issues over allocation.

However, overall demand is not the primary issue - it is the lack of security of in the times of dry weather. These are the times water is needed most as produce that is readied for market is placed at further risk due to dry weather restrictions.

The security of supply sought by irrigators is the reason why they have partnered the Council to the tune of 49% of construction and operation of the Waimea Community dam.

You might have heard if we all conserved water by using private tanks and other measures we would not need the dam.


Conserving water is part of the Council’s overall approach to water management. Measures are in place to ensure households and businesses save water. More needs to be done.

The problem is, even if everyone has storage tanks there will still be a shortfall in the amount of water that needs to be saved unless there is a dam. The other issue is the cost of providing home water storage tanks on the community. The cost is higher than the Council’s contribution to the dam.

Storing water at home does not reduce the cost to the Council (that means ratepayers) of providing for firefighting or when the inevitable happens – the tanks run dry. Nor does it directly address the environmental issues in the river or bring the benefits of the partnership with irrigators, Central Government funders and Nelson City.

Conserving water is a must do, but it is not a solution.

You might have heard it is natural for the river to go dry every so often.

The Waimea River is a living thing. There is no rational basis for letting it run dry. The system would be destroyed. Fish, plants and other living things would be put under stress and harmful and toxic conditions would develop. Without a sufficient flow the risk of irreversible saltwater intrusion into groundwater is real.

The impact on aquifers, groundwater and those that rely on those sources for their water is not short term. The effects of the 2001 drought, which saw the river run dry in some parts, took years to overcome.

Yes the situation is exacerbated by our settlements, but if we have a way to avoid our river drying up why wouldn’t we use it? In the dam we have the means to ensure we have water when we need it.

 You might have heard Fixing leaky pipes will solve our water shortage ...

Unaccounted-for water does include some leaks from pipes, but is also made up of water used to fill public swimming pools (such as the Richmond Aquatic Centre) and water taken from hydrants for fire-fighting purposes, as well as flushing of pipes/systems for public health reasons and maintenance.

Currently real water loss in Tasman District is around 24% of system input volume which is not unusual by either New Zealand standards.

Unfortunately pipes do break sometimes, and older ones may leak. We have a programme of maintenance and replacement of pipes that aims to keep the network in good condition overall. Pipe improvements will not solve our
summer water shortages.

It is not practical to eliminate water loss from a network. It would take tens of millions of dollars to get a marked improvement. Even then rationing to stage 3 will still occur nine out of 10 years.

You might have head climate change means we can expect more rain in future ...

The 2015 NIWA (National Institute of Water and Atmospheric Research) report for the Tasman District actually indicates an increase in temperatures, (especially summer and autumn), drought frequency and sea level rise.

In the coastal plains near Tasman Bay projections indicate slightly more rain in most seasons, except spring, through to around 2040. More rainfall is projected on the plains by 2090, especially in winter.

So yes, there will be more rain, these will be shorter higher intensity events, but we will also experience longer drier periods as well. In short, we need to cater for more extreme weather events.

You might have heard those outside the Waimea area shouldn’t have to contribute...

The money we spend on providing water to people and communities is separately accounted for. We call this the Urban Water Club.

The proposal is for everyone who is a member of the Urban Water Club in Tasman District to pay an increase in water charges of about 10%. The cost of every water infrastructure project in the District is spread across all the users in the Urban Water Club to reduce the burden on any one community.

That means when pipes are upgraded in Murchison, or a new water treatment system is installed in Collingwood, people in Richmond, Tapawera and so on all contribute to the cost of that. The same would be true of the Waimea Community Dam.

FAQs in the Statement of Proposal

QuestionAnswers

Why do we need a Dam?

Water security is a vital for urban water supply, economic and environmental sustainability and growth.Water rationing has occurred in dry months in urban areas most years since 2001, we lack water security for irrigators and other businesses in Summer, the health of the Waimea River is declining, and we face constraints on growth.

 

If we do not build the Dam there would be significant new water restrictions for businesses, irrigators and residential users most years.

What are the water rationing rules under the Tasman Resource Management Plan?

Details of these can be found in the Tasman Resource Management Plan (TRMP).

 

Step 3 rationing – which according to the MWH study could occur 9 out of every 10 years (based on the last 16 years of data) – would require the greater of a 25% reduction in urban water consumption and a 50% reduction in water for those with consented takes.

Step 5 rationing (which could occur one out of every 6-10 years based on last 16 years of data) allow for water takes of only 0.125 m3 per day for essential human health.

 

 

Do we really have an urban water shortage problem?

Council engaged consultants MWH this year (2017) to provide an update on their 2011 work on our 100-year water demand and supply modelling.

 

The MWH report concluded that of the areas reliant on Waimea water supply for urban use, including Richmond, Waimea basin, Brightwater, and Hope, in nine out of every 10 years there would be significant water rationing.  This is based on Step 3 rationing where there would need to be a 25% reduction in urban water consumption and a 50% reduction in any consented take.

Who will benefit from the Dam?

  • Current and future households and businesses who would have their water supplied through the Waimea urban water scheme including Richmond, Brightwater, Hope and Mapua
  • Irrigators on the Waimea Plains
  • Businesses and homes in Nelson South (as Council supplies 2150m3 / day to Nelson)
  • Water users in the wider Nelson Tasman region in the case of an emergency
  • The Waimea River with increased flows improving and protecting the life supporting capacity of the river.  
  • Recreational users of the river and its environs with the improved river flows and river health

What happens if there is no Dam?

  • A less stable, less healthy river
  • Less water for urban use and more frequent and greater water restrictions
  • Less water for irrigation, reduced security of supply
  • Future growth would be constrained in the District
  • The New Zealand Institute of Economic Research (2017) report suggests that the Nelson-Tasman economy would $20 million smaller each year on average with water allocation cuts of 20%, and $49 million smaller with cuts of 35%. Of this total, an estimated $29m was the lost opportunity cost of environmental improvement in the river system.
  • The Northington Partners Report (November 2017) estimated the potential financial and economic loss from a no dam option at $859m for a 20% water take cut and $1,132m for a 35% water take cut
  • Council would need to find an alternative water augmentation method. The alternative methods reviewed are more expensive and would take many years to develop.
See Supporting Information

How did we decide that the Waimea Community Dam was the best option?

There's been research and debate water augmentation since 1993. Following the drought of 2001, the Waimea Water Augmentation Committee (WWAC) was established to find a solution to the acute water shortage in the Waimea plains.

 

Many alternatives have been explored and evaluated against water demand needs, engineering, social and environmental concerns, consentability and impact on affected residents.

 

Council has concluded that the most affordable solution for the community and funders is the Waimea Community Dam.

Can we solve the problem by being more efficient with our water use?

Council staff and external analysts have studied the benefits that could be achieved by greater water conservation efforts. While there are savings to be made with such efforts, they are not enough to solve the Region’s water problems.

 

Savings from implementing water saving devices have been included in calculations for future water demand. 

What are the costs of the Dam?

The current estimate of capital cost to complete the Dam is $75.9 million, including Dam construction costs of $50m. Total annual operating costs for the dam company have been assessed at $1.4 - $1.5m per year.

What is the final price to build the Dam?

The budget for the base construction of the Dam is around $50m. There is an additional $13.5m contingency in the budget for changes in scope and unexpected costs. This sets the overall construction costs at the P95 confidence level which means there is a 5% probability that the Dam construction would exceed estimated construction costs and a 95% probability that the Dam construction costs would be at or less than estimated. We expect to have a more accurate indication of the construction cost early in 2018.

Why is Council’s contribution greater than $25 million in the Long Term Plan 2015 - 2025?

Estimated costs have increased and Council is now funding all costs attributed to benefits received to the environment and community generally.

Why should Council provide credit support for the WIL loan from CIIL?

Credit support is critical to securing the CIIL funding of up to $25m to the dam company.  Providing credit support significantly reduces interest costs and assists irrigators to pay back the loan quicker. 

Have enough irrigators committed to paying for the project?

WIL has obtained expressions of interest from irrigators over the 3000 shares required. These figures have been independently verified.

 

WIL is due to issue a Product Disclosure Statement (prospectus) in November 2017 to formally seek irrigator interest.

What happens if irrigators can’t pay their way?

 

 

In the event that WIL does not raise the full $15m in subscriptions from irrigators (current and potential), then Council, WIL, and CIIL would need to fully re-evaluate the project economics. Without the minimum 3000ha irrigator support the entire project is at risk. CIIL’s support for the project is also unlikely to continue.

 

If irrigators default on the loan from CIIL, Council would be required to pay the outstanding balance to CIIL plus any CIIL costs.  Council’s preferred option would be to recover the amount through a targeted rate on all WIL affiliated property owners.

Do we have a resource consent for the Dam?

Yes, the resource consent was granted on 26 February 2015.

 

The consent covers the construction, operation and maintenance of a dam and associated infrastructure on the Lee River in Tasman District, as part of the Waimea Water Augmentation Project.

 

How does the Dam work?

The Dam scheme involves capture of river flows into storage in the reservoir behind the Dam but leaving a required residual flow in the river below the Dam at all times.  The stored water in the Dam reservoir can then be released in a controlled manner, during periods of high water demand and/or low natural river flows.

 

This flow release augments both the river flows to meet instream requirements all the way down the river to Appleby and the sea, with water also available to recharge to the aquifers connected to the river. Water abstraction can either happen from the aquifers connected to the river, or directly from the river.  Most current users are from the adjacent aquifers.

What is the risk of Dam failure?

Extensive work has been carried out on the seismic conditions at the Dam site. Dam design is required to meet new engineering standards following knowledge gained after the Canterbury, Seddon and Kaikoura earthquakes.  Tonkin & Taylor Ltd have recently commissioned an updated research from GNS, and this has in turn has been independently peer reviewed by OPUS. Detailed design would take the risk of an earthquake and seismic activity into account. The proposed concrete faced rockfill dam design has a very high level of resilience to seismic loading.

How would the Dam affect river habitat?

The Dam would mean that some of the river and its riparian habitat would be submerged. The resource consent conditions for the Dam require regular monitoring of water levels and quality in the lake as well as in the river downstream of the Dam. There are also requirements for restoration and re-establishment of various native plant-life in the area.

Would the Dam negatively impact water quality and swimming sites?

The Dam would improve water quality and swimming sites by maintaining regular flows that flush water through the river system. The minimum river flow requirements would mean an improved river and ecosystem which is healthier and better able to be used and enjoyed by recreational users. Improved flows in the river would also better protect against salt water intrusion into the aquifers, the risk of which could increase with our changing climate.

Does building the Dam increase nitrate levels from more intensive land use?

Building the Dam would mean current water users would have improved security of water supply.  There would also be the opportunity to increase the scale of irrigation.  This may impact on nitrate levels, but this risk would be managed through nutrient management plans provided for in the Tasman Resource Management Plan.

 

The increased flow in the river would also improve river water quality. Ongoing monitoring of groundwater would also better inform impacts of increased recharge to groundwater due to Dam flow releases.

 

The environmental effects of the Dam were considered during the resource consent process and consent conditions address these issues.

How can I make a submission?

You can make a submission online through our website or by filing out the form in our Summary Document

http://www.tasman.govt.nz/feedback

Why don’t we reduce the size of the Dam to save money?

Reducing the size of the Dam does not significantly reduce costs associated with constructing the Dam (see page 12 SOP). The design capacity of the Dam is designed to meet predicted water supply needs for next 100 years and protect against a one in 60 year drought.

Is my property in the Zone of Benefit?

Check the Zone of Benefit Map on page 32 of the Waimea Community Dam Governance and Funding - Statement of Proposal

How much are irrigators paying?

Irrigators are paying 48.9% of the capital costs to complete the Dam project. This equates to $37.12 million which would be funded through a loan of $22.12m from CIIL (which must be paid back in 15 years), and $15m of irrigator equity.

Why don’t irrigators pay for the whole cost of the Dam project?

Only a proportion of the Dam’s water is required for irrigation, the rest is needed for urban water supply and to augment the flows in the Waimea River.

Who would control the Dam company?

Under the proposal Council has the majority shareholding and would appoint the majority of the Board directors of the Dam.

Will the Dam provide water in all drought conditions?

The Dam is designed to secure supply in a one in 60 year drought.  This means that during those droughts our urban water consumption would be restricted and there would be potential cut-backs in water supply.

Why don’t we extract water directly from the Dam and/or Waimea River?

To do this would involve installing new infrastructure to extract the water from the River.  The plan is to use existing groundwater bores to take the water from the aquifers, therefore avoiding the need for new pipes, pumping stations etc.  Using existing bores also avoids the need for further water treatment costs, as river water would need a higher level of treatment. The water in the river would still need to be augmented by the Dam.

 Additional Answers

The answers below are additional to those included in the Statement of Proposal.

 

What is the National Policy Statement for Freshwater Management 2017?

This is a central government policy statement which requires Council to meet river health standards through provisions in their resource management plans.

What is the National Policy Statement for Urban Development Capacity 2016?

This is a central government direction to local authorities requiring them to provide sufficient development capacity in their resource management plans for housing and business growth to meet demand.

 

Council’s growth modelling has assumed high growth in Richmond for the next 10 years. Water supply capacity will be a constraint on this growth.

Why do we need more consultation, didn’t Council consult in 2014?

Council previously consulted on the funding for Waimea Dam for its Long Term Plan 2015-2025.  A maximum of $25 million was allocated.

 

Original funding and governance discussions and consultation took place in 2014.  At that time, the ratepayer funding model was rejected. Since then stakeholders have been working on a partnership model addressing funding and a new ownership/governance structure.

Why has the Dam project been so controversial?

Large infrastructure projects are complex and raise many questions in the community. They take time to develop and cost a considerable amount of money.

 

The Dam is designed to meet several demand needs and to address demand and supply over 100 years. At the same time, it must meet Council’s obligation to provide good quality infrastructure to meet the current and future needs of the community in the most cost-effective way (section 10, Local Government Act 2002).

 

Understandably, people in the community want to see that investigation has been thorough and that the split of funding the cost of the Dam is fair.

 

The proposal that Council put the community in 2014 was very different to the one we are asking for feedback on now. The earlier proposal had ratepayers paying for the whole project; the 2017 proposal is a joint venture project with lower costs to ratepayers as they are only funding part of the total cost.

Is Council still proposing to establish a Council Controlled Organisation?

Yes - the Council will set up a joint venture company that will be a Controlled Organisation (CCO).

 

The CCO model allows Council to retain overall control and be responsible for representing Council interests in relation to flows for community benefits including environmental flows and reticulated water supply networks. Under the CCO, Council appoints the majority of the Board and holds the majority shareholding (51%).

Who will the directors of the CCO be?

There will be seven board members:

 

  • Four Council appointed directors (one may be jointly appointed by NCC if NCC becomes a shareholder)
  • Two WIL appointed directors
  • One iwi representative

The directors will be professional directors, and in the case of Council, they will not be elected members.