The Council has agreed to a revised funding proposal for the dam that reduces the cost and risk to ratepayers of proceeding with the project after a $23 million increase in the overall dam price.
The final decision by all parties on whether to proceed will be made at the point of financial close, likely to be late November 2018.
The revised funding proposal includes:
WIL is contributing effectively 75% of the servicing costs of the extra project capital required, reducing the impact on ratepayers.
The diagram below shows how a $23 million increase in the project's cost will be funded in order to minimise the impact on ratepayers.
|WIL capital raising||26.5 million|
|WIL servicing Council debt in CCO||5.75 million|
|CIIL loan to WIL||22 million|
|Nelson City Council||5 million|
|Freshwater Improvement Fund grant||7 million|
|Total external funding||66.25 million|
|Tasman District Council - enterprise activity||2.91 million|
|CIIL loan to Tasman District Council||10 million|
|Environmental flow - rates||6.6 million|
|Water account rates and charges||13.4 million|
|Total Tasman District Council funding||32.91 million|
Of the total project cost ($102m) for the Waimea Community Dam,
$71.5m of the construction price is fixed,
$22m is estimated and not fixed, and
$8.55m ($6.55 + $2m) remaining contingency or risk float
Given $71.5m is fixed and therefore not open to going over price, that leaves $22m of costs that could escalate.
The available contingency of $8.5m is directly related to the $22m estimated and not the fixed sum.
Of the unfixed $22m, we plan to have at least another $5.6m of electrical and mechanical costs fixed by financial close in mid-December. This reduces the unfixed costs of the whole project to approximately $16.4m.
In that case, the contingency represents 52% ($8.55m/$16.4m) of the unfixed costs.
The revised funding proposal means:
The table below shows the estimated rates for example property types under the revised funding model, and compared with the previous model both before (2017 CD Proposal Cost) and after (Old Proposal 28 August Report Cost) the project cost increased. You can click on the table to see a larger version in a new window.
The introduction by WIL of a New Zealand institutional investor has greatly reduced the financial risks for the Council.
The site for the Waimea Community Dam is in the Lee Valley.
Our submission on the Tasman District Council (Waimea Water Augmentation Scheme) Bill.
The Council is releasing the confidential Waimea Dam revised funding report of 6 September.
The report was discussed in the confidential section of the meeting in light of the ongoing commercial negotiations with our joint venture partners who were present at the meeting.
The decision to release the report was made after very careful consideration of the commercial sensitivity of the negotiations between the dam’s funding partners and the need to provide information to ratepayers. Council has sought and gained the consent of the other joint venture partners to the release of the report containing the principles underlying the funding offer. The finer details of the offer are still subject to ongoing commercially sensitive negotiations and must remain confidential.
The Council has always been aware of the high level of public interest in the Waimea dam project and continues taking steps to share whatever information it can.
Older consultations are archived on our previous website.