Waimate council to decide on irrigation investment

A decision on whether the Waimate District Council will continue to financially back its shareholding in a proposed irrigation scheme will be made on today, after hearing from the company wanting to build it.

The council in April decided to subscribe to 1250 out of 40,000 shares at an issue price of $200, being offered by Hunter Downs Irrigation Ltd, which would operate the Hunter Downs scheme, costing up to $357 million and irrigating up to 32,000ha in the north of the Waimate district.

The council paid a first instalment of $25 a share and now has to consider whether to pay a second instalment at $87.50 a share, a decision it has delegated to its environmental services and finance committee, which meets today.

If the council paid that, and a third instalment at $87.50 a share, its total investment would be $250,000.

Before a decision is made, company representatives would brief the committee on the scheme's progress and next stage.

Latest feasibility studies have concluded the scheme is economically viable and estimated its cost at between $313 million and $357 million.

Chief financial officer Graham Durston, in a report for the meeting, said the council's original investment was because the scheme would create significant economic and social benefits for the district.

Should the scheme be built, there was also the possibility of capital gains on the council's shares, he said.

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