Article written by the MCWSG for the Mirror newspaper, November 2014

Article posted on 15/11/2014

Dam costs clarified

It’s likely a proposal to upgrade the Falls Dam scheme to provide reliable irrigation in the Manuherikia Valley can be “fine-tuned” to reduce costs, Manuherikia Catchment Water Strategy Group deputy chairperson Gary Kelliher says.

Specialists Golder Associates are doing a feasibility study of a proposal to raise Falls Dam and upgrade the existing irrigation schemes, to provide a reliable supply for up to 25,000ha of Manuherikia Valley-floor land.

It could also ensure the Manuherikia River is higher year-round, providing a healthier habitat.

Kelliher said Golder Associates’ initial estimate of the cost to raise Falls Dam by 27m was $194 million, significantly higher than that anticipated by Opus, which did the prefeasibility study.

However, Golder Associates said the design could be improved, reducing the cost, and it was working on this, he said.

For example, hydrologists said the dam could store 114 million cubic metres, as opposed to the original estimate of 100 million, meaning the height could be reduced.

“We don’t accept the existing dam design and its costs are viable, and we’re confident the changes will reduce the price tag,” Kelliher said.

The Mirror last week misreported the capital and annual operating costs of the proposal.

The prefeasibility study found the one-off cost of upgrading Falls Dam and the scheme would be $2500 per hectare for existing irrigators and $5700 per hectare for dryland farmers wanting to join.

“The full feasibility study indicates this may rise, but we won’t know by how much until changes to the dam design are complete,” Kelliher said.

The prefeasibility study also indicated the annual operating cost of the upgraded scheme would be similar to what landowners paid for the existing scheme, $50 to $90 per hectare, and Golder Associates was analysing this estimate.

Operating costs could rise if the upgrade was partly funded by a loan taken out by the umbrella company. While landowners would pay lower capital costs, they would pay an annual loan servicing fee, Kelliher said.

“Landowners were going to vote in February whether they wanted to go ahead. Extra work on the dam design means we’ve extended that, but hopefully not by more than three months.”
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