Nelson Mail - Nelson, Tasman councils to enter negotiations over Waimea dam funding

Written by Cherie Sevignon

Nelson city and Tasman district councils are to enter negotiations over proposed funding from the city council towards the Waimea dam project.

The city council in May agreed to allocate $5 million in year 3 of its Long Term Plan 2018-28 to the $102m dam project. That grant is conditional on agreement by Tasman District Council for the continuation of Nelson's ongoing rights to access 22,000 cubic metres a day of water from the Waimea aquifers and the opportunity for the grant to be transferred to a shareholding in the dam company.

TDC supplies water to Nelson residents and businesses in the Saxton area including the Alliance Nelson plant.

City council chief executive Pat Dougherty on Tuesday said there seemed to be "some doubt" about whether that $5m was committed but an agreement could be negotiated to address those concerns before financial close.

Dougherty's comments come after TDC financial boss Mike Drummond on August 28 told councillors that negotiations were yet to start with the Nelson council.

"As soon as we know that council's going to reconfirm its decision to proceed with the dam, we'll start those negotiations with Nelson city," Drummond said. "They will include a request about increased funding, given the costs are up but the modelling I've done for the project assumes that Nelson sticks to the current indication in their LTP, which is a $5m contribution to the project in year 3."

The controversial dam project derailed for a few days in late August when Tasman district councillors voted 8-6 to effectively stop it after the estimated capital costs jumped about $23m.

However, in a behind-closed-doors meeting on September 6, the councillors voted 9-5 to revoke their August decision and proceed with the joint-venture project in which TDC is a partner.

Dougherty attended that confidential session and Cr Dana Wensley said his comments were a "pivotal" for her. She was one of three councillors who voted no to the dam project on August 28 and yes on September 6.

The Nelson City Council boss said he was not sure which of his comments might have been key for Wensley. Dougherty said he spoke about the city council's water supply and the possibility of providing some water to TDC, which was one of the listed alternative options to the dam.

Dougherty stressed any decision to provide TDC with water would be for the city council to make; he was simply outlining what would likely be in a staff report for his council to consider.

The city council could provide about 5000 cubic metres a day to Richmond. However, if that supply was to be on a long-term sustainable basis, the system would need to be upgraded, which a "quick, provisional guesstimate" indicated could cost $20m to $25m.

If that upgrade was brought forward, the recommendation was likely to be that TDC carried the lion's share of that cost, Dougherty said.

Also, in the case of a severe drought, Nelson residents would get the first call on water; Richmond would be the first to be turned off. In addition, if the dam did not proceed and there was a moratorium on growth on the Waimea Plains, Nelson city might expect its growth rate to climb.

"Fifteen years [provision of water to Richmond] could turn into 7½," he said.

Any supply of water from the city council to TDC could be expensive "and wouldn't be assured", Dougherty said.