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Southern Alps Air Ltd (SAA) has lost an Environment Court appeal to establish a commercial jet-boating operation on the Wilkin River, near Makarora.
The hearing was held in Wanaka on April 12 and 13 by Judge Jon Jackson and commissioner John Mills, whose 42-page decision has been released by the court.
An earlier resource consent application by SAA, for 10 trips a day, was denied by the Queenstown Lakes District Council in 2004 and by the Environment Court the following year, because they could not be assured two operations could safely ply the river.
Wilkin River Jet (WRJ) Ltd already has the right to operate 16 jet-boat trips a day using two boats.
Last month's rehearing was ordered by the High Court, which found a material error of law in the earlier decisions.
The High Court's decision was subsequently upheld in the Court of Appeal.
In his decision Judge Jackson said the court had found the SAA application was likely to exceed the environmental limits of the Lower Wilkin River.
"... our predictions are that an increase in 10 commercial trips per day will cause a large increase in adverse effects on the amenities of other recreationalists in the river," the judge said.
"We accept, provisionally, that there are no adverse safety issues in terms of policy."
Judge Jackson said the court was concerned refusing consent would benefit WRJ as a trade competitor.
However, he considered the adverse effects on amenities were important enough to "outweigh the positive effects of SAA's proposal".
"If the Queenstown Lakes District Council wishes to increase competition on the Wilkin River, the remedy is at least partly in its hands - for future applications on other rivers anyway.
"It should give single operators fewer trips and make them both for limited terms and non-aggregative," he said.
Costs were reserved but should "lie as they fall" because while WRJ had been successful in opposing the consent, (a) it was a potential trade competitor and (b) it won largely on grounds that were not raised in its submission or initial evidence.