Irrigation funding stream cut

Finance Minister Grant Robertson announced late last week the Government was winding down its funding for large-scale irrigation projects. Photo / Mark Mitchell

The troubled Hunter Downs irrigation scheme is facing another crisis.

The original plan to use water from the Waitaki River on 21,000ha of land towards Timaru failed to gain enough support from landowners last year, so the scheme was reduced to 12,000ha.

That, too, was on the brink of being scrapped because of a lack of share sales, but was rescued in December by an offer from South Canterbury businessman and landowner Gary Rooney.

Hunter Downs Water Ltd chairman Andrew Fraser said in January the company was working with Crown Irrigation Investments Ltd (CIIL), Rooney Group, Morven Glenavy Irrigation, shareholders, and other stakeholders and interested parties to develop the project.

Hunter Downs Water Ltd chairman Andrew Fraser. Photo / Supplied

CIIL has now pulled out, Finance Minister Grant Robertson announcing late last week the Government was winding down its funding for large-scale irrigation projects.

Hunter Downs Water, which already holds resource consent to take the Waitaki River water, received a $1.37million government development grant last year. CIIL had agreed to provide $70million term debt funding, as long as 9500 shares were sold and a total of 7000 water shares (equal to 7000ha) were issued.

Mr Fraser said on Friday Hunter Downs Water was preparing a statement to be released early this week. One of three irrigation developments that would continue to receive CIIL funding was an upgrade and expansion planned by the Kurow-Duntroon Irrigation Company, which uses water from Lake Waitaki on land south of the river.

Its chairman, Geoff Keeling, said on Friday the scheme's directors, staff, and shareholders had already committed a good deal of time and effort to a robust and environmentally sustainable project.

"We need the scheme infrastructure to meet the efficiency standards expected by regulators and the community.

"Our scheme brings significant benefits to the local community through job creation and providing resilience to the local economy — beyond the farmers receiving the water from the scheme. This investment recognises that.

"The funding will be repaid, with interest, just as a private loan would be, so the taxpayer benefits from this investment, as well as the local community."

Existing irrigators would use water more efficiently and take less from river tributaries.

Construction was expected to start later this year.

Funding was also withdrawn to two other large schemes, Hurunui, in North Canterbury, and Flaxbourne in Marlborough.