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Community volunteers are "extremely upset'' diesel has apparently leaked from old underground tanks at Dunedin's Valley Community Workspace into Lindsay Creek.
"We are devastated ...'' The Valley Project chairman Ian Telfer said in a social media message yesterday.
Many of the valley projects had such a strong environmental focus, that discovering the apparent leak from the tanks "left some of our staff in tears''.
He confirmed last night the project's board was following Otago Regional Council advice and preparing to undertake rehabilitation work.
The old diesel tanks, beneath the workspace in Allen St, North East Valley, were discovered at the end of last year.
The project, which owns the building, was notified about the leak on July 9.
Mr Telfer reported the leak to the regional council and council staff visited the site later that day.
The council installed a diesel-absorbing boom in the creek which had apparently soaked up much of the diesel.
Council staff had said it was likely only a small amount of diesel - "perhaps several cups' worth'' - had entered the stream.
The project had had contractors ready to remove the diesel and fill the tanks with concrete, but had been waiting since early this year for approval from Worksafe New Zealand.
With the agreement of the regional council, the diesel removal was fast-tracked, and two days after the leak was discovered the diesel was pumped out of the tanks for disposal.
The leak had now slowed, but diesel was still entering the creek, despite the tanks having being removed.
This was likely due to the diesel that had already leaked into the soil between the tanks and the creek.
Regional council staff had told Mr Telfer that damage to stream life should be minimal.
However, the project board has decided that once the leak had stopped it wanted to undertake restoration work.