Plan fails to get enough support

Ambitious plans to pipe the country's largest co-operative irrigation scheme are heading back to the drawing board after the $135 million project failed to gain enough shareholder support.

Mayfield Hinds Irrigation Ltd hoped to improve the efficiency of the scheme by piping the water, which irrigates about 33,000ha in Mid Canterbury.

Agreement of 75% was needed for the proposal to proceed but at a special shareholders' meeting last week the numbers were short, with 64.12% voting in favour. A total of 96% of shareholders voted.

Those supporting the proposal own 21,000ha of the land.

Chairman John Nicholls was disappointed with the result.

''In principle, it seemed the point of view of everyone was that they were reasonably comfortable with the costs,'' he said.

''But there is a little bit of economic uncertainty at present and a lot of environmental concern around the Hinds water plan.''

There had also been an incredible amount of development in irrigation on farms in the scheme area.

''This was that little bit more on top of that.''

The board would now have to regroup and revisit where it was at, Mr Nicholls said. The project would be the main agenda item at next week's board meeting.

''We have got to drive the efficiency of the water we use and provide good stewardship.''

It had taken four years to get to the stage of presenting proposals to shareholders and company management and the board had been working on it almost full-time since January.

Mr Nicholls said at times people had a vision of a one to three-year period, but the proposal was an intergenerational one where it was expected to be 2053 before it was paid off.

''There was a 50-year guarantee of pipes. Some are lasting 80 years and they could even last up to 150 years,'' he said.

''What we were presenting was good quality, so that there was longevity. We wanted to do it properly. Now we just have to stand back and take another look at it.''

Costs for shareholders would have increased if the project had gone ahead. On average, they were paying $70 a hectare at present, including servicing debt on the three massive irrigation ponds being installed next to the Rangitata River, downstream of the Arundel bridge.

This would rise to $263 a hectare but some costs would reduce, leaving a net variance of just under $100 a hectare, Mr Nicholls said.

He paid tribute to partners in the proposal. The company had engaged Fulton Hogan Ltd as the preferred contractor to develop a plan that was cost-efficient and practical.

''We are very appreciative of our partners. It was a hard journey, as we had to do all the work to get it to shareholders.''

The company had proposed issuing 25,000 new shares at $1000 each. The company had also been offered a bank facility of up to $125 million.

- by Maureen Bishop 

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