Central Plains Water Limited, the company developing a water enhancement scheme to provide surface water for community irrigation between the Rakaia and Waimakariri Rivers in Canterbury, has appointed four specialist firms to manage the project through the resource consenting phase.
Chair of Central Plains Water Limited Pat Morrison said the company had undertaken a thorough process to ensure it has selected the best team possible. GHD Limited has been appointed as Project Manager, working with Buddle Findlay, URS Limited and Deloitte in legal, technical and financial capacities respectively. “All four companies have worked with the Central Plains Water Trust and have extensive knowledge of the project, which is important to this next critical phase of work”, he said.
Central Plains Water Limited undertook a share offer late last year that succeeded in raising $4,700,000. Its shareholders are some 400 farmers within the Selwyn district who will take water from a scheme when the proposals come to fruition. These funds will be used to progress the proposals through the resource consenting process. Prior to this point, over the previous four years, scheme proposals have been largely developed with funding from the Selwyn District and Christchurch City Councils together with support from the Sustainable Farming Fund, Canterbury Economic Development Fund and the Canterbury Community Trust. The scheme proposes to take water from the Rakaia and Waimakariri Rivers, augmented by a reservoir in the Malvern foothills, to provide irrigation to an estimated 60,000 hectares. Resource consent applications are estimated to be lodged in early 2006.
Over 400 Central Plains farmers attended meetings in the area this week to hear about proposals for a water enhancement scheme providing surface water for community irrigation between the Rakaia and Waimakariri Rivers in Canterbury.
Early in November, Central Plains Water Limited announced its intention to raise money to fund the resource consent process for the proposals.
Chairman of Central Plains Water Limited Pat Morrison said strong support for the scheme is clearly evident.
“We held eight meetings and turnout at these exceeded expectations. Farmers are clearly interested. We now have to wait and see if this support translates into applications for shares. We will know that within the next ten days,” he said.
Central Plains Water Limited is seeking to raise $4,700,000 through the issue of 376,000 shares at an issue price of $12.50 per share, payable in three instalments to fund the resource consent process for the proposed scheme.
The shares carry rights to water, subject to the necessary resource consent being obtained and shareholders entering into a water use agreement. The issue is scheduled to close on Friday 17 December 2004.
President of North Canterbury Federated Farmers Harry Schat will be applying for shares in Central Plains Water Limited. He already irrigates and is keen to secure the right to take community scheme water for his 240 ha Te Pirita dairy farm, as well as the 180 ha run-off block he leases in Hororata.
“In our position it is an easy decision. Compared to what we pay to pump groundwater, the projected costs of taking water from the proposed scheme stack up very well. Most others who are irrigating already will see it the same way. They will be asking themselves how much they presently spend on electricity to draw water and how much that might be in the future if power prices continue to increase.
“By making a relatively small investment in Central Plains Water Limited now, those of us who already irrigate will help ensure we minimise our exposure to the risk of rising power costs in the future,” said Mr Schat.
He said many farmers are attracted to the flexibility and trade-ability of the shares offered by Central Plains Water Limited.
“Under this system, farmers are able to decide what level of reliability of water supply they are comfortable to farm with. Depending on their soil type, their intended land use and what other measures they choose to take to manage the risk of being short of water in a dry year, they can apply for a greater or lesser number of shares.
“While some will apply for a bare minimum, others will take more to ensure they have water available even in the driest times.
“The share offer also provides for yet another group, who will apply for shares out of all proportion to their property size. These people will be motivated to take up the offer so they can on-sell their shares once the consents are gained, or lease their right to water once the scheme is built. Either way, judging by previous schemes, this looks like a wise investment decision,” he said.
For those who do not already irrigate, there will be some more complicated decisions in the future, but according to Mr Schat, whether or not to apply for shares now is a simple matter.
“Whether or not to irrigate maybe a difficult decision for some to make in the future. Whether or not to apply for shares now, however, is not difficult. Finance is required to go through the resource consenting process. Assuming the consents are achieved, farmers will have time to work out exactly how this opportunity, once gained, can work for them.
“Any farmer’s greatest asset is his or her land. In the short term the decision is whether to make an investment that will increase the value of the land. Staying on the fence is an option, but may not be a wise one because if everyone stays on the fence the opportunity is lost, while if most people do make a decision, the last few to climb off the fence are likely to find there is insufficient water left,” said Mr Schat.
Central Plains Water Limited is seeking to raise $4,700,000 to fund the resource consent process for a proposed water enhancement scheme providing surface water for community irrigation between the Rakaia and Waimakariri Rivers in Canterbury.
The offer is for 376,000 Shares at $12.50 per share with an initial payment on application of $6.25 per share. The shares carry rights to water, subject to the necessary resource consent being obtained and shareholders entering into a water use agreement. The issue is scheduled to close on Friday 17 December 2004.
Two Lincoln based independent experts in water resources have welcomed the proposals for an irrigation scheme that are the basis of the Central Plains Water Limited share offer, under consideration by Central Canterbury farmers over the next three weeks.
Dr John Bright, managing director of Aqualinc Research Limited, and principal engineer of the company Ian McIndoe, believe the proposals provide a practical solution to the water management issues facing the region and will give farmers a financially viable basis on which to increase productivity.
Dr Bright was project leader for the Canterbury Strategic Water Study, which was commissioned by Environment Canterbury and completed by Lincoln Environmental in 2002. The study demonstrates how the region’s demands for water can be successfully managed. He sees the Central Plains Water proposals as a natural progression from the Strategic Water Study.
“The Canterbury Strategic Water Study found that there is enough water to satisfy the environmental, social and economic needs of Canterbury, now and into the future, but that storage is required to meet long term demand. What Central Plains Water is based on is a practical application of that.
“Taking water from our large glacial rivers at high flows and storing it for the times when demand exceeds what is able to be supplied directly from the rivers is what the Strategic Water Study prescribed. Schemes such as this will enable Canterbury to maintain and build on the positive economic and social impacts of irrigation, while also protecting groundwater levels. This is essentially what the Canterbury Strategic Water Study found, and just what Central Plains Water is now aiming to put into practice,” he said.
Meanwhile, Ian McIndoe said the cost of accessing groundwater makes the Central Plains Water Limited share offer worthy of careful consideration by farmers in the area.
“With Environment Canterbury’s recently adopted water allocation policies, the Central Plains Water proposals may be the only option for farmers who are not already irrigating. Gaining new consents to take groundwater will become increasingly difficult.”
“For many who are already irrigating from groundwater, a surface water scheme such as this may be a better option anyway. Higher up the plains, I expect groundwater irrigators will be keen to stop pumping from the aquifer, switch to the community scheme and reduce their power charges. At the bottom end, it will be cheaper to keep pumping from the aquifers, which are considerably shallower down the plains. There is a marginal area around the Main South Road where farmers will have to make a considered decision. The cost of taking groundwater is higher than we had assumed, and will only increase further in the future. Those farming in this area will need to carefully assess how much they are paying for water, consider the reliability of their groundwater-supplied systems and decide whether what Central Plains Water Limited has proposed is a better option,” he said.
According to Ian McIndoe, the fact that investment is invited from outside the presently defined scheme area is also a plus for those farming east of State Highway One.
“People taking groundwater below the scheme area will probably find their wells more reliable once the scheme goes ahead. This will be caused by a reduced take from the aquifers further up the plains and better aquifer recharge from the new irrigation out of the scheme. Groundwater irrigators in this area could consider applying for shares to help ensure this effect occurs. Because of the way the share offer is structured, they will then either be able to lease their water entitlement or sell their shares, while benefiting from a better long term groundwater supply,” he said.
Central Plains Water Limited is seeking to raise $4,700,000 to fund the resource consent process for a proposed water enhancement scheme providing surface water for community irrigation between the Rakaia and Waimakariri Rivers in Canterbury.
The offer is for 376,000 Shares at $12.50 per share, payable in three instalments with an initial payment on application of $6.25 per share. The shares carry rights to water, subject to the necessary resource consent being obtained and shareholders entering into a water use agreement. The issue is scheduled to close on Friday 17 December 2004.
Central Canterbury farmers have been given four weeks to demonstrate their support for proposals that could see 60,000 hectares of farmland between the Rakaia and Waimakariri Rivers irrigated.
Central Plains Water Limited is seeking to raise $4,700,000 to fund the resource consent process for a proposed water enhancement scheme providing surface water for community irrigation between the Rakaia and Waimakari Rivers in Canterbury.
The offer is for 376,000 Shares at $12.50 per share payable in three instalments. The shares carry rights to water, subject to the necessary resource consent being obtained and shareholders entering into a water use agreement.
The Chairman of Central Plains Water Limited, Pat Morrison, said the share offer was the chance for those who stand to benefit directly from irrigation to make sure the plans become reality.
“Selwyn District and Christchurch City ratepayers, through their respective Councils, have made a considerable investment in these proposals. Now members of the farming community, along with others who believe in the scheme, must step forward to demonstrate their support.
“At present there is sufficient water allowed to be taken from the two rivers to build a scheme capable of meeting the needs of the area. If this opportunity is not taken at this time, it will probably not be open to this community again in the future.
“Those farmers who are interested must make this relatively modest commitment now so we can seek the resource consents. Further decisions will be made if and when the consents are gained. A successful share offer will ensure this community has that opportunity,” said Mr Morrison.
The proposals are for the scheme to take peak flows from the Rakaia and Waimakariri rivers into a storage reservoir to provide irrigation to hundreds of farms between the Rakaia and Waimarakiri Rivers on the Central Plans.
According to Mr Morrison, a farmer wishing to fully irrigate should consider applying for approximately 6.25 shares per hectare – an investment at present of $78 per hectare to be irrigated.
“This is an indication only. We expect some farmers will seek more rights to water and some will seek less. There is flexibility for farmers to apply for any number of shares above the minimum subscription of 200 shares, regardless of property size, soil type or farming system.
“Those who do not own land may also subscribe. Assuming the resource consents are obtained and the scheme is built, such investors will have the right to on-sell or lease their rights to water. If past experience from other schemes is a guide, such early investment confidence is well rewarded,” said Mr Morrison.
Mr Morrison farms 310 hectares between Sheffield and Darfield and has extensive experience in the agricultural sector as well as on the boards of large commercial and community organisations. The other directors of Central Plains Water Limited are Christchurch management consultant and company director Doug Marsh and Geraldine based farmer and dairy farm consultant John Donkers, who also has interests in farms on the Central Plains.
The shares on offer are payable in three instalments over approximately three years with an initial payment on application of $6.25 per share. The issue is now open for public subscription and is scheduled to close on Friday 17 December 2004.
Many Canterbury farmers will be able to take the first step to secure the long term viability of their farms when shares in Central Plains Water Limited are offered for public subscription next month.
Central Plains Water Limited has been formed by the Central Plains Water Trust to fund the resource consent process for the proposed surface water scheme between the Rakaia and the Waimakariri Rivers in Canterbury.
If resource consents are obtained, farmers will benefit from the irrigation provided by what will be the largest community water enhancement scheme in the country.
According to Chairman of Central Plains Water Limited Pat Morrison, a budget of $4.7 million is required to progress through the consenting and appeals process and to cover associated expenses before the design concepts can be finalised and the scheme built.
"The budget covers various environmental impact studies, hearings, appeals and the provision of information to farmers considering the merits of joining the scheme
"We believe the consents required for the scheme can be obtained. We also believe the value of the scheme can be demonstrated to farmers, showing how their businesses will be significantly and sustainably enhanced, justifying the investment they will need to make to access water," said Mr Morrison.
According to Mr Morrison, Central Plains Water Limited's registered prospectus and investment statement will offer a total of 376,000 shares at an issue price of $12.50 per share, payable in three calls with the first instalment being $6.25 per share.
The shares will carry rights to water, subject to the project being successful in obtaining the necessary resource consents and shareholders entering into a water use agreement. Calculations for the scheme are based on a maximum water demand of 376,000,000 cubic metres per annum for a total irrigable area of 60,000 hectares.
"If farmers wish to fully irrigate their farms, they should consider applying for approximately 6.25 shares per hectare. This equates to an investment of $78 per hectare to be irrigated.
"This is an indicative level of investment only. We expect that some farmers will opt to take more rights to water and some will opt to take less. There is flexibility for farmers to apply for any number of shares above the minimum subscription of 200 shares, regardless of property size, soil type or farming system.
"Some farmers will choose to take more water than they require for their own needs and look to on-sell or lease their surplus water entitlement.
"Investors who do not own land within the scheme area are also entitled to subscribe to the share issue. Assuming the consents are obtained and the scheme is built, they will have the right to on-sell or lease their water entitlement. If past experience from other schemes is a guide, investment at this early stage will be well rewarded," he said.
Early investors in other water schemes have seen the value of their rights to water rise. The value of tradeable shares in Waimakariri Irrigation and in the Opuha schemes escalated when the schemes became a reality and their share prices have continued to rise since.
The Central Plains Water Trust proposals would provide surface water for irrigation between the Rakaia and Waimakariri Rivers, while also enhancing ecological and recreational values in the area. Scheme proposals are based on a storage reservoir in the Malvern Hills and takes from each river to irrigate an area of the Selwyn District approximately between State Highway One and the foothills.
To date development of proposals has been funded by Christchurch City and Selwyn District Councils, the Community Trust and Agmardt. Funding has also been received from the MAF Sustainable Farming Fund, the Canterbury Economic Development Fund and a group of investors facilitated by the Ritso Society, which was established by farmers and community leaders in the area where irrigation will be provided from the scheme.
The prospectus and investment statement are scheduled to be sent to farmers and others in the scheme area in early November.
Canterbury farming leader Pat Morrison has been appointed to chair the newly formed company that is to raise the funds to finance the resource consenting process to establish a community irrigation scheme for the Central Plains.
Central Plains Water Limited has been formed by the Central Plains Water Trust to seek investment from farmers and others. At present, Central Plains Water Limited is jointly owned by the Christchurch City and the Selwyn District Councils. Funds raised through the share issue will be used to gain resource consents for the proposed surface water scheme between the Rakaia and the Waimakariri Rivers.
Central Plains Water Trust chairman Doug Marsh said the appointment of Mr Morrison is an important step forward for the scheme.
"The company is the appropriate vehicle to attract investment to fund the resource consenting process. If the resource consents are granted and the scheme proceeds, those farmers who subscribe to the public share issue will benefit from irrigation. Farmers have much to gain if the scheme proceeds. It is therefore appropriate that one of the most respected farmers in the region has agreed to chair the company. Pat Morrison's commercial experience, profound understanding of rural business and firm advocacy on behalf of farmers will provide great impetus to gain the funds needed to obtain the consents necessary to ensure the scheme is established," he said.
Mr Marsh said the Central Plains Water Trust and Central Plains Water Limited would remain closely linked.
"The Trust will ultimately own the consents on behalf of the wider community, thereby ensuring that the potential recreational, social and environmental benefits associated with water management will be achieved. The consents, if granted, will be exclusively licensed to Central Plains Water Limited, whose shareholders are likely to consist mainly of farmers taking water from the scheme," said Mr Marsh.
Pat Morrison said that after 50 years of discussion about a community irrigation scheme for the district, he is delighted that real progress is now being made.
"Proposals for community irrigation are the best thing that has ever happened to the Central Plains. Plans to use water from the Rakaia and Waimakariri to irrigate this area were first suggested in the 1880s. On several occasions similar proposals have been explored - but put forward by central government rather than the local community. At least twice, plans even went as far as pegging out the ground to show where the water would go.
"Farmers understand better than ever the value of water on the land. Irrigation schemes south of the Rakaia and north of the Waimakariri have provided great benefit to rural communities in those districts. Central Plains farmers know that, while water remains able to be allocated from the Rakaia and Waimakariri, we have an opportunity to create a lasting legacy for the future of the Selwyn District - but if we do not take it now, this opportunity will be taken by someone else.
"A scheme built around a storage reservoir will provide a higher degree of reliability than any comparable scheme in the country.
"By subscribing for shares in Central Plains Water Limited, and subject to the resource consents being granted, farmers will have the opportunity to secure the financial viability of their properties for themselves and for future generations. Land is too valuable to leave returns to the vagaries of a dry year. Water minimises risk and helps guarantee a good yield. This scheme will ensure water reaches farms that it would not otherwise be possible to irrigate. A community surface water scheme will not only irrigate farms that cannot access underground water, but will also maintain aquifers for those who pump from them," he said.
Pat Morrison farms 310 hectares between Darfield and Sheffield, land that has been in his family for three generations and has been irrigated from groundwater since 1999. His service to the community has included presidency of the Young Farmers Clubs of NZ, and of North Canterbury Federated Farmers. He is a director of the Ashburton-based Mackenzie Charitable Foundation. At a national level he served as a director of the Bank of New Zealand from 1977 to 1987 and as chairman of the New Zealand Wool Board from 1986 to 1996. He is currently chairman of Christchurch-based New Zealand Wool Services International Limited, which has an annual turnover of $150 million. Mr Morrison is a graduate of Lincoln College (now Lincoln University), an AC Cameron Medallist (forerunner of the Young Farmer of the Year) and recipient of a Nuffield Scholarship. He was awarded the CMG in 1994 for services to agriculture and the community.
Doug Marsh and John Donkers have also been appointed to the board of Central Plains Water Limited.
Christchurch-based professional director, chairman and business advisor Doug Marsh also chairs the Central Plains Water Trust and chaired its predecessor the Central Plains Water Enhancement Steering Committee.
Geraldine-based dairy farm consultant John Donkers has interests in a number of irrigated farming operations located on the Central Plains. He helped establish the Dunsandel Groundwater Users Group, is a member of the executive committee of the New Zealand Irrigators Association, and was also on the Central Plains Water Enhancement Steering Committee.