Waimea Community Dam

Waimea Dam alternative funding model

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.

Total project funding

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 District-wide fixed rate remains the same as before the project price increase - rising to an estimated $29 a year at project completion
• The Zone of Benefit rate, based on capital value, remains the same
• A small extra increase in water charges - $23 to $25 a year for the typical urban residential water user

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.

That's because:

• It strengthens WIL's financial position having an investor with the financial resources to assist the company should an adverse event occur.
• The issue of convertible preference shares to the investor reduces the refinancing risk for WIL at year 15 when the CIIL borrowing needs to be repaid. That's because within 13 years the shares convert to normal shares and the shareholder then contributes to the finance and operating costs of the dam - the same costs are therefore spread over a greater number of shares and are much more affordable.

The site for the Waimea Community Dam is in the Lee Valley.

Map showing location of Waimea Community Dam and reservor

On Friday 30 November 2018 the Council made its final decision on the Waimea Community Dam project.

Voting 9-5 in favour it has confirmed its commitment to build the dam to provide for the growing needs of the community, safeguard the regional economy, and improve the health of the Waimea River.

View current progress

To view current progress on the dam's construction, visit waimeawater.nz

The revised funding proposal includes:

• An extension of the interest-free loan term for the $10 million environmental loan from Crown Irrigation Investments Ltd to the Council from 10 to 20 years
• Waimea Irrigators Ltd (WIL) to meet its $11.5 million share of increased project costs
• WIL also meets 50% of the servicing costs of the Council’s $11.5 million share of increased project costs (capped at $375,000 per annum)
• Inclusion of hydroelectricity in the project on the basis it is fully Council-led and managed and is fully self-funding (provided it does not impact on risk or primary purpose of the dam)

WIL is contributing effectively 75% of the servicing costs of the extra project capital required, reducing the impact on ratepayers.

Read more about the Waimea Community Dam in the special edition Newsline 405 - 11 August 2017. (pdf, 762 KB) (pdf, 762 KB)

Two letters from the Office of the Auditor General relating to the Waimea Community Dam development and complaints of conflict of interest.

Letter to CE Tasman District Council 21 November 2018 (pdf, 94 KB) (pdf, 94 KB)

Letter to Janine Dowding - Complaints of conflicts of interest (pdf, 124 KB) (pdf, 94 KB)

Our submission on the Tasman District Council (Waimea Water Augmentation Scheme) Bill.

• Tasman District Council (Waimea Water Augmentation Scheme) Bill Submission

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.

The report can be found here.

You can also view the full document library.

• PWC Letter on Institutional Investor 2018-09-13

Statement of Proposal

Waimea Community Dam Governance and Funding - Statement of Proposal (pdf, 1.5 MB) (pdf, 4.7 MB)

Submissions

• Summary of Waimea Community Dam Submissions 1 December 2017 (pdf, 4.5 MB) (pdf, 4.7 MB)
• Submissions - Waimea Community Dam Governance and Funding (pdf, 4.7 MB) (pdf, 4.7 MB)
• Summary of Waimea Community Dam WIN submissions (pdf, 557 KB) (pdf, 4.7 MB)

View the full consultation on our old website

Older consultations are archived on our previous website.

• 2015-2025 Long Term Plan consultation
• Waimea Water Management - Security of Supply
• Proposed Changes 54 to 56: Waimea Water Management (Security of Supply)
• Proposed Waimea Community Dam Funding & Governance Options