Call not to increase, extend NOIC loan

Alex Familton.
Alex Familton.
Former Waitaki mayor Alex Familton believes the Waitaki District Council should not today increase and extend its loan with the North Otago Irrigation Co.

Urging any decision be delayed until the council consults the community, he said he believed the existing loan, estimated to be about $12.7 million, should be settled when it fell due in January 2016.

The council decided to lend $10 million, with interest being accrued, to the North Otago Irrigation Co (NOIC) when the scheme was being built in 2005 and Allan McLay was mayor. Mr Familton was a Waihemo ward councillor and the year after became mayor.

That initial loan was to provide infrastructure for a second stage of another 10,000ha, which is now being promoted to farmers.

Last month, the council agreed in principle to loan up to $22 million to the company, including the existing $12.7 million, and extend the loan to 2022.

However, after further considering the loan, the council today will vote on offering up to $17 million until 2022 to help fund the second stage, subject to conditions.

Mr Familton has sent Waitaki Mayor Gary Kircher, councillors and senior staff at the council, after much gathering of information, ''a note from one of the strongest supporters, in Waitaki, of irrigation''.

The issue in front of the council was not about the value of water on land, but about whether the company should get a loan from banks or from the council, he said.

''These concerns are not related to the company and/or irrigation, both of which have made great progress to date - to the extent that NOIC can proceed without council funding,'' he said.

The council had subsidised and invested in the irrigation company - to the point where it was independent of council assistance.

The previous council established a template for approaching and participating in projects, such as Waitaki District Health Ltd, the North End business park and proposed Observatory retirement village on Hospital Hill.

That template excluded investment risks, particularly second mortgage risk; was designed to seed new innovative ventures in the district which might otherwise not have proceeded; and required comparatively modest investment levels and that the community was consulted legally and effectively.

A loan extension to the NOIC did not satisfactorily meet any of those criteria, Mr Familton said.david.bruce@odt.co.nz

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