Plans for intensive dairy farming in the Upper Waitaki have been put on hold, with the companies saying consent application costs are too high.
Southdown Holdings, Williamson Holdings and Five Rivers, which had planned farms that would house nearly 18,000 cows in cubicle stables for much of the year, have withdrawn their applications for effluent discharge.
But they will continue seeking water rights to irrigate the land they already farm in the Ohau-Omarama area.
The companies had already invested $4 million in clearing the land, and in hearings and scientific analysis, and expected to invest another $500,000.
A director of two of the companies, Richard Peacocke, says they were told on Thursday they would also have to pay consent-related Environment Ministry costs of at least $2.6 million, which he says is way over the top and "absolutely extraordinary."
The costs were a consequence of the Government calling in the applications to be dealt with by a special board of inquiry.
Still keen on the idea 'in principle'
But Mr Peacocke told Morning Report that he's not backing away from the idea in principle. He says the huge costs associated with a hearing should be borne by the Government, not the investors, because they benefit all New Zealand.
There have been thousands of submissions, most of them opposing the plans to develop the 16 farms.
Mr Peacocke says the companies will have a better chance once the Government and the public are better informed about what they're proposing.
The Canterbury Regional Council is still considering water rights applications for the Upper Waitaki. The three companies have submitted alternative options for using the land and water, including growing "cut and carry" feed for beef and sheep production.
Applicants 'must pass environmental tests'
Environment Minister Nick Smith, says the operation would have earned $30 million a year, and it wasn't too much to ask applicants to pass environmental tests.
"I make no apologies for wanting to subject this 18,000-cow proposal in that iconic Mackenzie Country to a very robust process with some of New Zealand's top water quality experts, to be sure that those systems would work," he says.
Dr Smith says 18,000 cows are equivalent to a city of 250,000 people and that amount of effluent could damage a fragile environment.
Consent process 'stymies development'
Business leaders say development is being stymied by resource consent processes, which they are calling slow and expensive.
Canterbury Employers' Chamber of Commerce chief executive Peter Townsend says some of the processes make it complicated to do business, and costs must come down.
Resource Management Law Association president Helen Atkin says however that resource consent policies are based on wide public consultation.
She says the 5000 submissions on the application clearly showed it was controversial, and the project had broader implications.
Ms Atkin says changes to the Resource Management Act that came into effect on 1 October already seem to be streamlining the process.
Federated Farmers' dairy chair Lachlan McKenzie says the resource management process is continuing to disrupt development in New Zealand.