Concern over water investment

The Tarras water race, which carries water from the Lindis River to irrigate land in the area. Part of the Tarras district has no access to this irrigation scheme and the new scheme would be supplied from the Clutha River, a more reliable water source. Photo by Mark Price.

A proposal for the council to invest $3.5 million in redeemable preference shears in the $39.2 million scheme, through changing its long-term plan, was put out for public consultation last year.

Sixty-seven individuals, families and organisations made submissions on the proposal, about 77% of which were against the council contributing funding to the scheme.

Some of those views will be heard by the Otago Regional Council at hearings in Dunedin and Cromwell next week. The panel comprises Crs Sam Neill (chairman), Doug Brown, Louise Croot, Gerry Eckhoff and council chairman Stephen Woodhead.

Federated Farmers which, while it supports irrigation in Otago, believed investment in a commercial enterprise was not a ''core'' council function.

''We are concerned at the precedent that this proposal sets for council involvement in other areas of the private sector,'' its submission said.

Fish and Game Otago also opposed the council's involvement, raising the issue that it represented a ''serious conflict of interest'' and should be avoided, chief executive Niall Watson said in its submission.

The conflict of interest argument was one used by many of those who submitted, including Emeritus Prof Alan Mark, who said the council must be objective and impartial in its decisions on allocating water.

''Having a ... investment in an irrigation company ... would be highly inappropriate.''

Artist Grahame Sydney said logically, the council could not be both investor and regulator.

Other submitters, including cartoonist Garrick Tremain, said the council should not be looking to invest ratepayer money in a private enterprise.

''The ORC is not a bank and this is not what we pay our rates for,'' Lynne Stewart said.

Submitters, including the Central Otago Environmental Society, also believed the scheme would have no wider benefit for the region and others thought it would only increase dairying in an area not suitable not for such industry.

Those that supported the proposal did so believing it would provide long-term social and economic sustainability for Tarras and benefit the wider region.

The hearings will be held on January 31 in Dunedin and February 1 in Cromwell.

Mr Woodhead has welcomed the Government's announcement this week that it will establish a company to act as a bridging investor for regional infrastructure development.

However, he did not believe it would impact on the council's consideration of the Tarras proposal, as the scheme was ahead of the Government's funding round and was probably not of the size to qualify for it.

The council was due to make its decision on Tarras at its February 20 meeting and Tarras Water Ltd would then issue its prospectus.

It was possible future Otago schemes, such as one in Manuherikia, could qualify.

It was a ''wait and see'' situation as to whether the Government's plans would take the pressure off the regional council for funding requests, Mr Woodhead said.

-rebecca.fox@odt.co.nz