Contact could fund scheme, mayor says

Central Otago Mayor Malcolm Macpherson yesterday floated the idea of Contact Energy as a possible funding source for new water supplies, like the $35 million scheme proposed for Tarras.

Dr Macpherson was speaking at the launch of a feasibility report on the Tarras Water Scheme and said although funding had yet to be determined, "there could be power companies who might see some benefits" in being linked with the proposal.

Contact's hydro project manager Neil Gillespie, later told the Otago Daily Times the company might consider investing in such a proposal.

However Mr Gillespie, who is also Cromwell Community Board chairman, said the timing of the proposal might be an issue.

Contact Energy is seeking feedback on plans for four hydro-electric projects on the Clutha River, ranging in cost from $300 million to $1.5 billion, with dams proposed at Luggate, Queensberry, Beaumont and Tuapeka Mouth.

Mr Gillespie said irrigation could be part of the equation, if one of the Upper Clutha hydro projects went ahead.

"If we chose to proceed with one of the Upper Clutha ones, then we'd be looking for things that the community would benefit from, and it's not a big leap to make to think of irrigation schemes like this [Tarras]."

All going well, the Tarras water scheme could be in operation by 2012 and Contact had indicated its hydro-electric proposals could be a decade or more away from completion.

"The issue in this case, is the timing. Tarras will be completed before our plans are finalised," he said.

About 60 people attended the meeting in Tarras to hear an update on plans for the new water scheme.

Tarras Community Trust chairman Peter Jolly said the next stage of the project was to investigate funding options and see if the scheme was viable.

"It would give a $32 million return to the local economy and create about 120 jobs," Mr Jolly said.

Dr Macpherson said successful irrigation schemes in dry South Island areas had four common elements: good local leadership, a long-term view, a local or regional government contribution and some outside funding.

"You have three of those four things already, but the funding still has to be determined," he said.

There were four irrigation scheme proposals within the Central Otago district, all at a similar stage, he said, and his council would be involved in those schemes, but its contribution had yet to be decided.

North Otago Irrigation Company director Leigh Hamilton outlined his involvement in setting up that irrigation scheme and said he believed the Tarras figures stacked up.

"Don't stop what you're doing," Mr Hamilton said.

He thought the North Otago proposal was "dead in the water" six times before the scheme was completed, but it had proved its value.

Water supply proposal

- A scheme providing water for irrigation, domestic use, stock, firefighting, light industrial uses and frost protection.

- Would cover 7772ha, using water from Clutha River.

- Cost between $33 million and $36 million ($4313 per ha-$4694 per ha).

- Annual operating costs$3 million-$4 million.

- Estimated to add $32 million a year to the local economy.

- Would create 124 jobs.

- Next stage is to look at funding options and determine viability.

- All going well, it could be operational by spring 2012.