Meridian says nation could be better off with water 'trading'

State-owned electricity generator Meridian Energy says the convoluted year-long regulatory process to allocate water from the Waitaki catchment suggests the nation would be better off with a system of water trading.

Meridian chief executive Keith Turner said yesterday that given little appeared to have changed in the final allocation plan -- compared with the present system -- he questioned the value of the long and costly process.

Dr Turner said Meridian had spent $5 million -- without counting staff time, and in addition to scientific research done for its aborted Project Aqua -- on supplying the Waitaki Water Allocation Board with information it needed.

"What we have now is a plan which does not materially change the existing situation on the river," he said at a news conference in Wellington late yesterday. "I can't help but wonder why all this was necessary.

"It has been a very long, complex and expensive process," he said.

"Market mechanisms might have been a more successful way of coming to the same conclusions. We should look at letting market mechanisms work better.

"Economic instruments for transactions may be somewhat more efficient than the process we've just been through".

Asked whether introduction of tradeable water rights would effectively give Meridian a bonanza in terms of the water it held in its dams, Dr Turner said it would be "very speculative" to suggest what policy framework might arise.

What Meridian wanted was certainty in terms of water supply, because water was the "fuel" for its hydro-electricity generation.

- NZPA