Waimea Irrigators chair Murray King said the dam cost blowout is a frustrating blow to the project.
The latest $20 million cost increase on the Waimea dam project has left Waimea Irrigators chair Murray King infuriated and frustrated by the project’s habitual budget blowouts.
Waimea Irrigators is a partner with the Tasman District Council in Waimea Water, constructors and operators of the dam project.
Originally estimated at $85 million in 2018 and commissioned in late 2019 for $105m, the project has experienced major cost blowouts on average every year since.
The latest $20m increase announced earlier in March takes it to $185m, with a caveat there are likely to be further increases announced come June.
Clearly frustrated with the doubling of the project’s cost, King said the dam had started with the best of intentions.
“Part of the reason irrigators were keen to maintain a shareholding was that we wanted to have control over how the project was built and operated,” King said.
At present about 3000ha of largely horticultural land in the Waimea Plains district was subscribed to be irrigated by the scheme. It has the potential to cover 5000ha.
The latest cost rises have been inflicted by covid delays and issues with unstable rock geology around the site that demands greater reinforcement. Further cost rises are likely to come as a result of additional spillway build costs.
“This is to some extent symptomatic of projects of this scale and type where no one ever wants to put seed money in from the start,” he said.
“More dollars should have been spent upfront – much of what could have gone wrong has. It is a massive hike and no one is more disappointed than us.”
He likened the project to other community-focused irrigation projects like Opuha that had struggled in their early stages.
“We started with a group of enthusiastic volunteers doing it for nothing – would anyone have stumped up $20 million to have put more resources into investigation at the start to have engaged even more qualified experts?” he asked.
He was heartened, however, by the construction metrics, with 70% completion and a timeline that has the dam due to be filled by next summer.
And unlike Opuha, the dam had not failed during construction.
“A significant amount of time and effort has gone into making it a safe dam,” he said.
On announcing the dam cost increase, Waimea Water chief executive Mike Scott said a highly fractured left-hand side had been “very unkind”, with rock shear zones in the worst possible places, bisecting the spillway.
“These geological issues were not known at the beginning of 2021 when they were under 50m of hill,” Scott said.
But the cost overruns have left two Tasman District councillors fearing the project could become a black hole that draws in more council debt and reduces other services across the province.
Councillor Dana Wensley ultimately voted against the project back in 2019. She said council has already had to revise its long-term plan, paring back some infrastructure projects on account of increased dam debt costs.
Council is expected to be liable for 100% of the latest $20m cost increase, with estimates total council debt exposure approaches $100m.
“I have been going to meetings and asking for some test to apply as to when this becomes too expensive, at what point can we no longer afford to keep going, but am not getting much traction on it,” Wensley said.
She pointed to a cycling/safety project to expand a road that has gone from 3000 cars a day to 11,000 in recent years and was now unsafe for children to walk to school along that has been postponed.
She maintains there was a lack of due diligence before and during the initial construction phase, with a council audit failing to ask the right questions.
“As a member of the dam negotiating committee, I was never asked any questions about the process behind the dam’s geology assessment. It was going to go ahead, come hell or high water,” she said.
Dean McNamara, another councillor opposed to the dam, said council is due to meet central government to see if it would be prepared to assume some of the cost blowout.
The dam was originally approved by National MP for Tasman Nick Smith.
“Some in council would like to see Three Waters take it off council’s hands,” McNamara said.
He had been aware of a report commissioned prior to the dam’s construction by opponents in 2019 that outlined the very geological issues now confronting the project.
That report had identified the project’s poor geology and the risks of cost blowouts as a result.
“We were told there was a 99% certainty of the cost at $104 million that it was as good as fixed,” he said.
King remains adamant the project offers the district strong inter-generational benefits, despite this generation being the one required to pay for it.
He anticipates operating costs to irrigators, excluding financing, lie between $500-$1000 a hectare.
“You could not justify milking cows there at that sort of cost,” King said.
