Hardest part out of the way

More than 70% of the pipes are in the ground for the North Otago Irrigation Company’s $57 million...
More than 70% of the pipes are in the ground for the North Otago Irrigation Company’s $57 million expansion programme. Photo: supplied.
The North Otago Irrigation Company has not hit its target of a September 1 commissioning for all shareholders, but chief executive Robyn Wells says the work programme for its $57million expansion is now progressing well.

With a staged commissioning of lines, Mrs Wells said all farmers on the expanded scheme would have their water turned on before Christmas.

Installing the large 1200mm pipe making up the "main spine" of the expansion had been "the most difficult", but was now complete.

Ten crews, or 138 workers, continued to work across a "significant area of North Otago".

The company had expanded its network since the project  began, including allowing for more off-take points, which had increased from 72  to 83; and it had negotiated 124 access agreements and three major river crossings, as well as creek and stream crossings and three railway crossings, as it continued to install 114km of pipes that would bring water to 195 shareholders.

"We’re over 70% — that’s what’s in the ground at the moment — but remember there was a big chunk of that that was harder to put in the ground," Mrs Wells said when updating the Otago Daily Times on the work programme this week.

"We’re not thrilled that it’s behind, but what we need to focus on here is ... long term, what this is going to bring to the community.

"The fact is this is a long-term infrastructure project, this is going to be here for the next generation and it’s going to bring economic benefits for the next generations and more to come. So in the long-term view, yes, we’re going to be three months, four months, it’s not all coming on September 1 — but we’ve got to build the best scheme, with the right quality, that’s going to be here for the next 80 to 100 years. That’s the real focus."

Despite some grumbling by ratepayers about the $17million loan from the Waitaki District Council, she said repayment of the loan was occurring as planned.

"We are a professional organisation that are audited to international financial standards, we have our debt strategy in place, and we have a financial model that says we are going to be paying back these loans. I’m not sure where the root cause of that concern is," Mrs Wells said.

"We are going to be having 195 shareholders that are farmers. We currently have about 100 and we don’t have a single outstanding debt from any of those farmers.

"We have just gone through two very big years in terms of water use and there have been some pretty significant invoices that those farmers have paid. They have been paid. There is nothing outstanding.

"Actually, the water and the value that brings to the property helps these farmers get through these difficult times when there’s drought and also helps them get through these tough times, because they have got to get the most they can from their property."

The council’s chief financial officer, Paul Hope, said the loan had proved a good investment for the district’s ratepayers.

"It has provided council a market return on the funds that we have lent to [the company] and there is also the wider economic development, economic benefits that flow from the development," he said.

"We’re certainly getting a better return on that than with funds we are investing in banks at the moment."

He did not have the figures at hand but said even at a conservative estimate of a 0.5% better rate of return, the loan had bettered the council’s financial position.


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