15 Jun 2015

Doubt cast on proposed Wairarapa dams

2:15 pm on 15 June 2015

An economist is casting doubt on the viability of two proposed Wairarapa dams, saying cost projections have not taken critical factors into account.

Dry farm land in Wairarapa, east of Masterton.

Dry farm land in Wairarapa, east of Masterton, earlier this year. Photo: RNZ / Alexander Robertson

The Wairarapa Water Use Project believes the dams, at Black Creek and Tividale near Masterton, believes they could irrigate almost 30,000 hectares and is conducting a feasibility study on them.

It believes Black Creek would cost $138-$205 million to build, while Tividale would cost $71-$105 million.

Ropere Consulting economist Peter Fraser, who has been critical of similar projects in the past, including Hawke's Bay's Ruataniwha Dam, said the cost projections for these latest proposals had not factored in the cost of distributing the water, which would increase building costs and make it too expensive for farmers to buy in.

"If you want to do regional development via irrigation into primary industries, the critical thing is customers being able to buy the water, and those customers are farmers," he said.

"If you look at the Wairarapa report, which the Water Use Project has put together, they actually state that so far they have not asked whether farmers can afford to buy the water. I think that's a pretty critical question, and they need to get an answer to that very, very quickly."

The Ruataniwha project had showed buying water was not viable for dairy farm conversions beyond $0.10 a cubic metre, Mr Fraser said.

"Given that [with] the Wairarapa projects, all the economic analysis so far assumes a doubling in the area contributed to dairy, a $0.10 price I think is a pretty reasonable sort of assumption to start working with."

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