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Three companies planning 16 dairy farms in the Omarama and Ohau areas are withdrawing from a Government-instigated resource consents process that could have cost them more than $3 million.
Southdown Holdings Ltd, Williamson Holdings Ltd and Five Rivers Ltd announced last night they were withdrawing the 15 resource consent applications "called in" in January under the Resource Management Act by Minister for the Environment Nick Smith and handed to a board of inquiry for decisions.
The applications covered the farms' effluent discharges from storage ponds through to spraying diluted effluent on to land. Without those consents, the dairy farms cannot be developed as proposed.
However, it does not mean the developments cannot go ahead at some stage, as the three companies can reapply for the effluent consents.
At issue is the companies paying the costs of the call-in process without knowing if they will have water resource consents granted by the Environment Canterbury (ECan) panel at present hearing them. The ECan process has already cost the companies $1.8 million.
Without the water, the dairy farms could not have gone ahead and the effluent discharge consent applications would have been redundant.
It was the "extraordinary cost of the call-in process, combined with the premature consideration of effluent consents without certainty of gaining water" that led to the decision to withdraw effluent applications, Southdown Holdings director Richard Peacocke said.
The Ministry for the Environment's preliminary estimate of the board of inquiry costs was $2.63 million, which would be added to the companies' costs of $550,000.
"The applicants simply are not prepared to fund these further significant costs associated with the call-in that is premature in the overall process," Mr Peacocke said.
The companies had set about developing "a world-class proposal" to minimise and mitigate any potential environment effects of dairy farming and remained committed to having that assessed through the RMA process, he said.
The three companies last month asked Dr Smith to delay the board of inquiry until the ECan panel had made decision on the water applications. The minister declined, giving the companies the choice of continuing with the board of inquiry process or withdrawing their applications.
If water is granted for the properties, the developers have the option of developing the farms for other uses or they could relodge the dairy effluent consent applications later.