Meridian in line for Aqua land profit

Meridian Energy Ltd could more than double the money it spent buying land in the Waitaki Valley for its Project Aqua power scheme.

Meridian estimated it spent $95 million buying land and investigating the 62km-long canal-based hydro-electricity scheme it cancelled in March 2004. Land purchases were estimated to have made up about $50 million of the $95 million.

About 3100ha of land it owns, covering 29 properties, could now be worth up to $130 million, on current prices.

The state-owned enterprise announced in September 2006 it would sell land it bought for the proposed $1.2 billion power scheme between Kurow and the SH1 bridge on the south side of the Waitaki River.

It said it would progressively dispose of the properties over several years to avoid causing a glut on the market, depressing land prices.

It has already sold two properties - totalling 549ha - during the past year and is preparing to put a 340ha dairy farm at Papakaio on the market.

Other properties are likely to become available within a year, although there is no fixed schedule for sales.

Meridian will not reveal the prices it received for the properties sold to date or what all the properties could be worth.

Meridian's external relations manager, Claire Shaw, said the figures were commercially sensitive.
Valuation figures for fully developed dairy farms with Fonterra shares sold between Culverden and the Waitaki Valley during the period from October to February averaged $42,000 a hectare. Bare land is selling for about $25,000 a hectare.

That would put a value of up to about $37 million on the two properties sold and the one about to be advertised.

About 2250ha of land remains and could be worth up to $94 million, depending on how much of it is fully developed dairying land with Fonterra shares.

The properties are either leased or sharemilked. They range from lifestyle residential blocks to developed dairy farms.

One of the dairy farms, on Eastern Rd next to the Otekaieke River, was used by Meridian to develop and showcase energy-efficient technology.

Some of the properties were purchased with buy-back clauses offering first right of refusal to the original owners if Project Aqua did not proceed.

Meridian was in exercising those first rights of refusal, which existed over about 250ha of the land, Miss Shaw said.

None of the land is subject to the Ngai Tahu Claims Settlement Act 1988, which gives Ngai Tahu first right of refusal to buy Crown and state-owned enterprise land when it is sold, because the land was purchased after 1988.

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