CIF Project - Waihao Downs Irrigation Scheme

Grant No: 09/04 Generating investor and community support

Grant No: 11/08 Scheme design

Last updated: August 2013

Contact details

Name of Applicant Group: Waihao Downs Irrigation Limited
Contact person: Brendan Sheehan –Project Manager
Address: 3 McLellan Place, Albert Town, Wanaka 9305
Telephone: (03) 443 5159, 027456 0022
Email: brendan.sheehan@xtra.co.nz

Project details

Grant no: 09/04

Status: Finished
CIF funding: $93,000
Total project funding: $185,000
Proposed start date: 2009-07
Proposed finish date: 2013-06
Region: South Canterbury

Grant no: 11/08

Status: Finished
CIF funding: $98,500 excl GST
Proposed start date: 2011-07
Proposed finish date: 2011-12

Project description

Generating investor and community support: The project will establish a project management process for Waihao Downs Irrigation Limited that will mange the generation of investor and community support both financially and socially for the development of the Waihao Downs Irrigation Scheme.

Scheme design: Waihao Downs Irrigation Scheme obtained its water consent in May 2010 to take 3 cumecs from the Lower Waitaki River. The scheme has until May 2015 to exercise the consent. The Waihao Downs Irrigations Scheme is summarised as follows:

  1. It comprises of two possible intakes from the Waitaki River with a water distribution system that pumps water up pipelines to the top of the terrace and into the Waihao Basin located West of Waimate. The scheme will provide irrigation water to 6,800 ha of farmland within a larger command area which has a total of around 14,000 ha (only about half of the command area is irrigated).
  2. Scheme type and design – In order to supply water to this scheme the following design has been developed based on two possible separate intake locations. WDIL will either utilise the existing Morven/Glenavy irrigation intake or open race for an alternative pump supply from the Waitaki River or, it will utilise an alternative intake design based on pumping supply directly from the Waitaki River below Pub Road at Ikawai.
  3. Methods of distribution – The irrigation system will be fully piped and pressurised from the pumps and will be automatically controlled to match irrigation demand. There will be no open races and therefore no by-wash.
  4. Reservoir storage – the design will consider storage options to maximise the schemes reliability.
  5. Proposed area – The proposed are to be irrigated is 6,800 ha which comprises 43 properties.
  6. Land Use – Currently the area is used for sheep, beef cattle and some dairying. The intent of the irrigation is twofold; to drought proof some farms and to allow other farms the capability for expansion for alternative future uses such as intensified cropping, dairying, grazing and other appropriate high value utilisation of the heavy soils that evident in the area.

This scheme is a totally new scheme, however as mentioned previously may utilise and share the resources of the existing Morven/Glenavy irrigation intake to access water from the Waitaki River if appropriate.

The issue/opportunity

Drought has been a perennial issue for the Waihao Downs community since farming started in this district, in the 1860s. Sustainable farming is becoming increasingly more difficult within this district and the predicted drier conditions are going to require a reliable water source to enable viable farming to continue.

The proposed irrigation scheme objectives are to:

  • Reduce pressure on existing water sources
    b) Waihao River. Expected outcome is a more balanced ecology within this waterway.
    c) Groundwater (bores)
  • Allow ongoing irrigation of existing irrigated land with fewer restrictions imposed during dry periods
  • Allow the irrigation of additional areas of the Waihao Downs area that would otherwise not have access to irrigation water

Improve farming practices by requiring each farm to have a Farm Management Plan tailored for the catchment and specific farm use.

The context/background

The Waihao Downs Irrigation Scheme will provide irrigation water to 6,800 hectares of farmland within a larger command area of around 14,000 hectares in the Waihao basin, west of Waimate. The proposed area to be irrigated covers 43 properties.

The proposed scheme will improve the ability of the farming community to access reliable water. Currently irrigation water is from the Waihao River (constrained by low flows) and a limited number of groundwater bores. Previous investigations to identify a reliable groundwater source within the proposed irrigation scheme have been undertaken with minimum success. Initial estimates are that the proposed irrigation is expected to double the average production achievable for dry land farming in the Waihao Downs area.

The scheme comprises of two possible intakes from the Waitaki river with a water distribution system that pumps water up pipelines to the top of the terrace and into the Waihao basin.

The scheme will either utilise the existing Morven/Glenavy irrigation intake and open race for an alternate pump supply from the Waitaki river or it will utilise an alternative intake design based on pumping supply directly from the Waitaki river below Pub Road at Ikawai

The irrigation system will be fully piped and pressurised from the pumps and will be automatically controlled to match irrigation demand. There will be no open races and therefore no by-wash. This scheme is a totally new scheme, however as mentioned above may utilise and share the resources of the existing Morven/Glenavy irrigation intake to access water from the Waitaki River if appropriate.

Methods

Generating investor and community support: Our project management process will include the development of a business plan, governance training for the Directors, preparation and promotion of an investment proposal and promotion of the irrigation scheme to the wider community.

Scheme design:

The following outlines the key work streams;

1. Pre Design Meeting

  • Initial briefing meetings between the Design Team Leader (Steve Agnew), the Project Manager and WDIL representatives.
  • Project Manager to define contractual arrangements including scope of services, relationship and reporting requirements, QA requirements, H&S requirements and environmental concerns.
  • All relevant information to assist with the design project will be exchanged at this time e.g. RMA consent conditions, pipeline alignments, land access issues, farmer’s irrigation requirements, etc.
  • Physical inspection to be undertaken of proposed intake structures, pump stations, pipeline alignments, etc.

2. Geotechnical Investigations

  • On site geotechnical assessment of intake(s), canals, pump station sites and pipeline alignment(s). The geotechnical investigations will include test pitting and laboratory testing (where necessary to confirm soil properties).
  • Prepare a geotechnical report of findings.

3. Preliminary Design:

  • Survey the preferred alignments. Levels and distances are used to accurately calculate pipe alignment, pipe lengths, earthworks, etc.
  • The technical assessment may identify localised areas that require geotechnical investigation. This will be determined by the pipeline alignments.
  • Farmer consultation to confirm water requirements and irrigation supply points.
  • Review design information available for other irrigation projects with similar design characteristics e.g. piped schemes.
  • RMA consent conditions are to be considered in design development.
  • Complete a preliminary design in enough detail that enables confirmation of irrigation scheme costs. This design will evaluate the following:
    • Intake (currently two options).
      - Utilising the existing Morven Glenavy irrigation and canal, or
      - Pumping direct from a new intake structure below Pub Road;
    • Pipe – size, length, type
    • Siphons
    • Road crossings
    • Canal – length, depth, lined/unlined
    • Storage pond – size, depth, lined/unlined
    • Pump – number, size, type
    • Power – source, power requirements, type
    • Automation – options
  • Prepare a Preliminary Design Report.
  • Peer Reviewer’s feedback will be incorporated into the final Preliminary Design Report prior.
  • Presentation to the WDIL Board.

4. Prepare Cost Estimates

  • Develop spreadsheet costing models of different options.
  • Prepare cost estimates that review; capital costs and operating costs & revenue to assist with understanding life cycle costs of this scheme.
  • Prepare engineer’s estimates summary document.
  • Peer Reviewer’s feedback will be incorporated into the final cost estimates.

5. Peer Review

  • Complete a peer review of the Preliminary Design and Cost estimates.
  • Prepare a Report of Findings.
  • Presentation to the WDIL Board.

Project Update:  February 2013

The primary focus of the WDIL Board during this period has been;

1. Shed meetings held in the week of 19 Nov 20912 with all prospective and interested farmers. Board members shared the responsibility of running these meetings with the main focus being on seeking firm commitment to the proposed irrigation scheme. These meetings were supported by Robin Murphy (Chairman MGIL) and Gary Rooney (Owner of Rooney Group).

2. Amended Water User Agreements and Water Application for Irrigation Supply Form Water Application for Irrigation Supply Form were distributed with a requirement that shareholders respond by 12 Dec 2012.

3. Shareholder response to this offer was approximately 3,000Ha.

4. Meetings held between the working group (WDIL, MGIL and Rooney Group representatives) to discuss the implications of the shareholder response and design options for making this scheme viable. Dry shares uptake are still an option being considered by the respective parties.

5. The outcome of the Working group meetings is an agreement with Rooney Group to design and re-price the scheme based on confirmed shareholder uptake. Cost of construction will confirm the viability of the scheme. Dry shares will also be considered in this design review.

6. Working Group is planning on meeting late March 2013 to make their final decision about the scale of the proposed irrigation scheme.


Project Update:  October 2012

The primary focus of the WDIL Board during this period has been:

1. Issued an initial proposal to the Shareholder which includes a scheme funding and ownership package proposed jointly by Morven Glenavy Irrigation Ltd (MGIL) and Rooney Group.

Shareholder response to this initial offer was a 3,500Ha uptake of water shares.

2. Further negotiations between WDIL, MGIL and Rooney Group.

Joint agreement between the parties that the scheme needed to have a minimum uptake of 5,500Ha to be financially viable.

MGIL agreed to take up 1,000Ha dry shares.

t this time, WDIL was requested by MGIL to explore options for selling the remaining 1,000Ha.

3. Rooney Group was approached by WDIL to seek advice based on Rooney's previous irrigation development experience of new and existing schemes (e.g. most recently, Acton, Mayfield Hinds and Rangitata Irrigation Schemes).

The outcome of this meeting was that Rooney Group has offered to take up the remaining 1,000Ha dry shares. In addition, Rooney Group will fund the design, build and commissioning of WDIS, subject to the following conditions:

  • WDIL Shareholders commit to the 3,500Ha uptake by signing the MGIL 'Water User     Agreement' and a 'Water Application for Irrigation Supply Form'.
  • Rooney Group and MGIL sign a contract which commits MGIL to buying the WDIS post commissioning for a fixed construction cost (estimated at $38M; Cost to be confirmed at the final design stage)
  • Rooney Group has first option to sell its 1,000Ha dry shares when the opportunity arises.
4. Respond to queries from Shareholders


Project Update:  June 2012

Generating investor and community support

The primary focus of the WDIL Board during this period has been:

1. Approved the 'final' Preliminary Design and Cost Estimate Report prepared by Rooney Earthmoving Ltd (REL). Approved scheme design and costings have been independently reviewed by Damwatch Services Ltd, on behalf of the WDIL Board.
2. Prepared a Heads of Agreement which has been signed between WDIL and Morven Glenavy Irrigation Ltd (MGIL). 
3. Five banks were approached to provide scheme funding options.
4. Three shareholder meetings have been held to update the shareholders on the proposed design, construction costs and funding options/scenarios.
5. An alternative scheme funding and ownership package has been offered jointly by MGIL and REL.
6. WDIL Board arranged for farm consultants to speak to the shareholders outlining the options and benefits of utilising irrigation water to improve farm income.
7. Preparing a Water User Agreement (draft)
8. Respond to queries from shareholders.

Scheme design

The primary focus of the WDIL Board during this period has been;
1. Approved the 'final' Preliminary Design and Cost Estimate Report prepared by Rooney Earthmoving Ltd (REL). Approved scheme design and costings have been independently reviewed by Damwatch Services Ltd, on behalf of the WDIL Board.
2. A shareholder meeting has been held to update the shareholders on the proposed design and construction costs.


Project Update:  February 2012

Generating investor and community support

The primary focus of the WDIL Board during this period has been:

  1. Rooney Earthmoving Ltd (REL) was engaged to prepare a Preliminary Design and Cost Estimate for the proposed Waihao Downs Irrigation Scheme. This design package is programmed to be delivered at a presentation by REL to the WDIL Board on the 20 March 2012.
  2. Project progress is being monitored on behalf of the WDIL Board by project manager (Brendan Sheehan, Mt Aurum Engineering Consultants Ltd).
  3. Respond to queries from Shareholders.

Scheme design

  1. Design progress meetings with Rooney Earthmoving Ltd (REL) and WDIL Board members were held on 16 December 2011 and 22 February 2012. This is an initiative to assist the WDIL Board understand the design process, for future discussions with shareholders, interested parties and lending providers.
  2. Five pipeline alignments were considered in the design process. Different pipe types and pumping alternatives were assessed and a preferred alignment has been nominated. All of the design information has been presented to the WDIL Board along with the design decisions used to nominate a preferred alignment.
  3. Nigel Connell (Damwatch Services Ltd) has been engaged by WDIL to independently peer review REL's preliminary design and cost estimate.
  4. REL is on programme to present.

Project Update: October 2011

Generating investor and community support

The primary focus of the WDIL Board during this period has been;

  1. Formally engage Rooney Earthmoving Ltd (REL) to prepare a Preliminary Design and Cost Estimate for the proposed Waihao Downs Irrigation Scheme This is required to give WDIL Board certainty of the overall cost of this irrigation scheme.
  2. Project progress is being monitored on behalf of the WDIL Board by project manager (Brendan Sheehan, Mt Aurum Engineering Consultants Ltd)
  3. Respond to design queries from REL.
  4. Respond to queries from Shareholders.

Scheme design

Status of Waihao Downs Irrigation Scheme's Preliminary Design and Cost Estimate Project;

  1. Rooney Earthmoving Ltd (REL) have been engaged to prepare a Preliminary Design and Cost Estimate for the proposed Waihao Downs Irrigation Scheme
  2. REL has completed consultation exercise with Shareholders and other interested parties e.g. power company, District Council, etc.
  3. Topographical surveys have been completed along potential irrigation alignment routes within the scheme. Aerial survey information provided by Meridian Energy Ltd is being used to priorities preferred irrigation routes
  4. Alignment designs are being assessed and pipelines sized. This information is being provided to suppliers for pricing.
  5. A design progress meeting with REL and WDIL Board members is planned for December 2011. This is an initiative to assist the WDIL Board understand the design process, for future discussions with shareholders, interested parties and lending providers.

Project Update: June 2011

The primary focus of the WDIL Board during this period has been:

  • To engage an independent project manager (Brendan Sheehan, Mt Aurum Engineering Consultants Ltd)
  • Prepare a submission seeking funding from Shareholders and MAF to prepare a Preliminary Design and Cost Estimate for the WDIS. This is required to give certainty to the overall cost of this irrigation scheme.
  • Advise Shareholders of progress at the company AGM (13 June 2011)

Project Update: February 2011

The appointment of a scheme manager at WDIL is a pleasing milestone for the company to have reached. After eight years of mostly farmer input into the management of the scheme's development the move to a professional level of operation will see progress being made a more timely and rigorous fashion.


Project Update:  October 2010

Waihao Downs Irrigation Scheme obtained its water consent in May 2010 to take 3 cumecs from the Lower Waitaki River. The scheme has until May 2015 to exercise the consent.

Work on the scheme had been on hold until we had some certainty on getting water.  Since obtaining the consent we have appointed a technical adviser to review the existing scheme design to get an estimate of the cost of the work required to take the design to a level where farmers can be given an accurate per hectare cost to consider. This estimate should be presented to the Board in late November.

Waihao Irrigation Scheme Directors attended the Governance Essentials Training Course in June organized by Irrigation NZ.

 

Last Updated: 05 August 2013

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