Dam Straight - Waimea Community Dam FAQs

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

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.

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.

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.

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 lost 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.