CIF Project Summary: Waimakariri Irrigation Ltd Scheme Storage

Grant No: 11/05

Last updated: August 2012

Contact details

Grantee: Waimakariri Irrigation Limited
Contact Person: Brent Walton - General Manager
Address: Waimakariri Irrigation Ltd, PO Box 556, Rangiora
Telephone: (03) 313 8103
Email: wil@kollerhassall.co.nz

Project details

Status: Finished
CIF funding: $23,750 excl GST
Proposed start date: 1 July 2011
Proposed finish date: 31 December 2011
Region: Canterbury
Related website links: www.wil.co.nz
Other links:

Final Report

Project description

The WIL scheme is run-of-river so inherently has a lower level of reliability than schemes with storage. The company has explored investing in scheme storage by the construction of some 7Mm3 of dams on land which the company owns. The dams have been proved at the feasibility level - this project is designed to achieve shareholder, community and council support to enable the project to proceed.

The issue/opportunity

While WIL already holds consent to take water into storage and some shareholders have built on-farm storage, WIL does not have scheme-wide storage available to all shareholders. To enable the storage facility to be built 75% support is needed from WIL shareholders (the cost makes the Project a “major transaction”); the land use and building consents need to be obtained after community consultation has occurred; and funding sources need to be secured. Discussions have already commenced with a construction contractor and these costs need to be finalised. This Project is intended to satisfy all these requirements prior to entering into a construction contract.

The context/background

The storage reservoir has the potential to reduce demand on the Waimakariri River, particularly in the spring and early summer months, as shareholders can irrigate more efficiently in these months due to the increased reliability of the scheme. They irrigate “just in time” rather than “just in case”.

The reservoir will provide just over seven days of storage if no allowance is made for re-filling during the irrigation season. The additional storage would have made the scheme fully reliable for 23 of the past 42 years (i.e. 2.7 years in five). At the present time, without storage, the WIL scheme is fully reliable one year in 42 (i.e.0.02 years in five). Fully reliable is taken to mean that water can be supplied at the full rate it is demanded over the entire irrigation season.

If surplus consented water is used to refill the storage reservoir throughout the irrigation season then the scheme would be fully reliable 27 of the past 42 years (i.e. 3.2 years in five). This number can be compared with the current no storage situation with a scheme reliability of one year in 42 (i.e. 0.02 years in five).

Methods

To progress the Project, WIL intends to:

  • Assess the farmer and investor benefits arising from increased scheme reliability
  • Undertake a theoretical dam break analysis for community consultation
  • Develop funding options
  • Consult - Community Board and Council
  • Consult - neighbours and community
  • Develop a prospectus
  • Consult - shareholders

The above steps are intended to lead to the issuing of construction consent and the approval of shareholders to proceed with the investment.

Project Update:  June 2012

WIL received the final detailed engineering design from Damwatch in early May. The complete design process including external peer review took seven months in total. The communications strategy and public engagement/consultation was based on the assumption that the design process would be completed by the end of February; therefore the delays did cause some issues.

On 30 April a public meeting was organised on the premise that we would be able to present the detailed engineering design to the public for their comment. There is a lead in time of two weeks to organise a public meeting in order to notify the affected parties by mail and to place advertisements in newspapers. The engineering design was not complete for the 30 April meeting which created discord among the affected residents and as a result WIL agreed to hold a third public meeting once the engineering design was completed. A final public meeting was held on 21 May with a Damwatch engineer present to answer any questions. The design and engineering documents were posted on our website on 17 May giving the affected parties' time to study the plan.

The concerns raised in the 30/04 and the 21/05 meetings were similar to those raised in the February meetings (refer to February report). It would be fair observation that within some Cantabrians there is a general mistrust in the capability of engineers post the February 2011 earthquakes; therefore much of the opposition toward the proposed ponds is targeted at the credibility of the design and engineers. There is a general sentiment that irrigation and storage for the region is required but there is a very much "not in my back yard" attitude towards the Wright's Road pond proposal.

In addition to holding the various public meetings and responding to questions from the public, WIL also created a website posting all available information onto the site. From the onset of the project WIL has adopted a completely transparent approach with the strategy that the public are entitled at the very least to see all information available. In addition to the http://www.lyndesresource.co.nz/project43/wil/ website the company through the General Manager has been contributing to a facebook page setup by opponents to the pond proposal http://www.facebook.com/groups/WaimakIrrigation/. One of the potential negatives adopting a completely transparent strategy including an extended public consultation process is that it gives opponents time to rally support against the proposal. One group circulated a letter clearly designed with the intention of inflaming residents both in and outside of the inundation zone. WIL responded with a letter highlighting their inaccuracies. The opponent group then circulated a 2nd letter and WIL responded with a media release.

On 4 July WIL lodged a resource consent application with ECAN and a building and resource consent application with the WDC. ECAN and WDC will jointly notify the consent application towards the end of July.

Shareholders will be approached in mid-July and encouraged to put in submissions 'for' the proposed storage pond proposal. It is expected, including time allocated for a hearing that the consenting process of the storage ponds will take 3 months.

WIL engaged PriceWaterhouseCoopers to assist with capital funding options. This was a lengthy and detailed process and in May the Board was presented with 5 funding options. These were in the form of a tender with each bank offering 100% debt financing based on a BOOT proposal. The Board will nominate the successful lending institution on 23 July.

Further to the concept of 'banking stored water' and/or trading 'storage capacity' WIL has just completed running three separate tender processes. The first tender was for the development of a new website to include a public and member website. Within the member website irrigation information on both the scheme and individual farms will be presented in real time. The 2nd aspect to the page will be the trading page which will operate in much the same way as Trademe. We expect the first part of the new website to be running by the end of August. To enable trading and banking of storage a number more flow meters are required on farm to measure water takes. These flow meters will be installed on all takes >20lps and <40lps. There are 80 flow meters installed on all takes >40lps. The final tender is for the Datalogger, telemetry and data hosting function. All up 94% of the scheme water will be captured through telemetry.


Project Update:  February 2012

The project met its first delay when the original draft of the dam break analysis was released in late October 2011.  Part of the analysis is to look at the potential impact of a dam breach and to identify a flood pattern.  Due to the uniformity of the local landscape, flooding would occur across a wide plain, therefore potentially impacting on more than 250 properties and 212 homes. 

Given the large number of potentially affected parties it was agreed between WIL, WDC and ECAN that following the public notification route was going to be the best choice to obtaining the relevant consents to build and operate the ponds.

The Potential Impact Classification (PIC) of the ponds is Medium.  The main implication to this is that a higher design and construction standard is required relative to a Low PIC for earthquake design of the embankments.  The impact on this project is that the time required to design the ponds and prepare the material for the consent application has taken five months.  At the time of writing the design is undergoing an independent peer review and it is programmed for the consent to be lodged with WDC and ECAN in mid-April.

WIL engaged Convergence (a communication company) to assist with a communications strategy for community and council engagement.  The strategy included a series of public meetings within the potentially impacted communities along with the publication of supporting materials.  The tactical plan was thorough with a wide range of stakeholders being provided with detailed information about the proposal.

It was a decision of the Board to adopt a completely transparent approach to the community engagement.  The Dam Break Analysis is a technical report and by nature is designed to describe the potential impact of a breach in its worst case scenario.  In the case of the Waimakariri Irrigation storage proposal a number of properties would be highly impacted. 

The group of potentially impacted parties fall into two groups.  Immediately adjacent to the ponds are property owners who are also WIL shareholders.  We are in discussions with these businesses and are looking at ways in which the company can practically mitigate some of the potential impacts the ponds might have on these properties.

The much larger group are the property owners to the East of the ponds.  Of the 212 property owners 20 are WIL shareholders and there are approximately another 10 farms.  The remaining 190 properties are small run holders.  This group voiced a number of very valid concerns at the drop in and public meetings, they will ultimately rely on the resource consent process to assess the perceived risks so they can make a decision as to whether they will support, oppose or remain neutral about the proposal.

The only reason the ponds will breach is if the detailed engineering design is poor, assuming they are not then the second reason for a breach will be through poor construction, and finally the ponds may breach if sub-standard maintenance is carried out.   The engineering standards required and the consent conditions that will be imposed ensure the likely risk of a breach is remote.  However we must agree this argument does not hold much traction with Cantabrians who have witnessed all forms of property and infrastructure failure through the earth quakes.

Therefore the company will spend a considerable amount of time and effort over the next four weeks providing the public with factual information on the pond design and keeping them informed of insurance and other developments.  This information will include the preparation of digital clip showing how the ponds will perform under different events including earthquakes.  The effected parties will also be provided with a range of engineering methodologies to help them better understand how the ponds are designed not to breach.  The company is realistic that it will receive a number of submissions against the proposal; however it is of the view that the effected parties should be provided with all the information available so that their submissions are informed and educated.

Presentations have also been made to the WDC Councillors, ECAN Commissioner's and Directors, and the Waimakariri Zone Committee.  In addition we have continued to give regular updates to DOC, iwi, Fish and Game etc.  The company has written several press releases and run adverts in the local papers advertising the various meetings.  Following on from the public meetings all stakeholders and effected parties were mailed a newsletter summarising the various points made.  Just prior to submitting the consent application a final public meeting will be held along further information being disseminated to stakeholders and effected parties.

At a company level two focus group meetings were held with shareholders to investigate the concept of (i) banking stored water, (ii) trading and (iii) transferring storage capacity within the ponds.  The meetings were very productive and as a result modeling was carried out to demonstrate that all three activities were possible.  In conjunction with the storage development the scheme will invest in the technology to enable greater flexibility of water transfer with the aim of better utilising and maximising the resource.  The company will also invest in developing forecasting models based on climate, river flow modeling, storage availability, soil moisture data and on farm requirement.  This will enable the farmer to make informed decisions as when to irrigate to make efficient use of the water.


Project Update: October 2011

A number of significant milestones have been achieved with the Waimakariri Irrigation storage pond project for the reporting period ending October 2011.

In June 2011 an Information Memorandum was presented to the shareholders. The purpose of the IM was to seek a minimum of 75% shareholder approval to enable the Board to continue to invest shareholder funds for;

  • securing a commercial contract with the proposed contractor (REL)
  • completing a Dam Break analysis to identify the level of community consultation
  • investigating and securing capital raising options and,
  • obtaining the various technical reports for Resource Consents required to build the storage ponds.

On 27 July 2011the abovementioned vote received 92% shareholder approval.

WIL has an existing consent to store up to 57Mm3 of water, and in addition the 'development of storage ponds' for irrigation purposes is a permitted activity under the RMA meaning that consents might be potentially granted without the need for public notification. On this premise a timeline was established on the basis that all approvals would be granted by December 2011 at which point the Board would return to the shareholders for final approval before Christmas.

A design sub-committee of the Board was established to address design and engineering issues while the planning sub-committee of the Board deals with the consenting process and capital raising. Both committees had to address issues raised by shareholders when giving their approval in principle.

Based on scheme reliability modelling, the design sub-committee worked closely with REL engineers to sign off on a final approved pond design in early September.

The design was then passed onto dam engineering specialists DamWatch Ltd in Wellington where they completed a dam break analysis to establish a Potential Impact Category (PIC). The PIC determines the construction standards required under the dam safety guidelines and it also provides (using 2 dimensional mapping) an indication of potentially affected properties. Obtaining the dam break analysis in late October was a significant milestone in this project.

In conjunction with the engineering design aspects of the project the planning sub- committee contracted PWC to carry out further financial analysis and modelling to assist with the capital raising process. PWC is in the final stages of preparation.

The planning sub-committee is responsible for community and stakeholder engagement. In a break away from tradition a site meeting was convened not only for the purpose of keeping immediate neighbours and potentially affected parties informed but it also included all the parties that would be involved in the consenting process. This meeting enabled WIL to clearly outline the storage proposal in detail and it also gave both consenting authorities (WDC & ECAN) a chance to talk to the engineers and to listen to the ideas and thoughts of the surrounding property owners, DoC and iwi.

By establishing these relationships early on in the consenting process WIL has been able to approach both councils to test 'theories and assumptions' before submitting the final consent application thus avoiding lengthy and expensive delays.

 

Last Updated: 13 May 2014

Contact MPI

for general enquiries phone

0800 00 83 33