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Sutton Speech: Meridian Irrigation Announcement

Hon Jim Sutton
Speech Notes 10 May 2002
Meridian irrigation announcement,Oamaru

Meridian Energy Chief Executive Dr Keith Turner, Waitaki Mayor Alan McLay, ladies and gentlemen: thank you for the invitation to speak today.

As you know, these irrigation projects for this region have a long pedigree. There has been quite a lot of tension from time to time. But I am delighted at the level of consultation and co-operation that appears to be going on now.

I see today's announcement that Meridian Energy proposes an option to deliver water from its proposed Aqua canal to the areas covered by both Downlands' and Gravity's plans as a significant step forward for the supporters of all three schemes.

I cannot stress enough the value of private and local government partnership in the development of water resources in the region.

There is an opportunity to share the risks of development through equity shareholding. Those risks include slow takeup of water entitlements, in the expectation that more landowners will invest as development proceeds. Benefits include efficiencies of scale which provide for future opportunities.

I have been asked by some people involved in irrigation in this area for a guarantee for a viable irrigation development.

While there is no current government policy for such guarantees, such a concept is being investigated as part of a wider study into the funding of large scale water enhancement projects. This study is looking at all stakeholder interests and opportunities for the funding of large developments.

There are five parts to that study.

The first part is a review of international models and experiences, to assemble relevant information as to the international approach to funding large-scale water enhancement proposals for the rural sector, and to analyse the implications for the New Zealand situation.

The second study reviews equity investment options, to identify a feasible range of equity arrangements for the financing and development of large-scale water enhancement projects.

The third and fourth studies look at the role of local and central government, to determine if there is a role for them in assisting with the development of large-scale water enhancement projects and if so, to make recommendations as to what those roles should be.

The fifth study looks at socio-economic issues related to irrigation investments. This study aims to establish the economic returns from a national, regional and individual viewpoint, and the social changes that occur with community irrigation developments. The study will provide a framework for analysis.

The five reports will be pulled together in one summary report, and will identify the issues for the three levels of stakeholder - central government, local government and the private sector.

The main work on those five individual has been done, and they are currently being peer-reviewed. I expect to get the summary report by the end of next month. Policy advice on the role of central government in irrigation will then be prepared for ministers.

I'm optimistic that these studies and reports will fill the gaps in knowledge on the promotion and analysis of large rural development projects and I know they have required more work than anticipated.

Water management is going to become a significant issue for New Zealand agriculture, particularly as we grapple with the realities of climate change. I believe it is actually a highly significant issue now.

While the Government has initiated those studies to try to formulate policy to deal with this, a lot will depend on industry and local communities, and how they choose to handle all the issues around local water supplies.

I am encouraged at how this project and the proposals associated with it have been handled. Meridian seem to have consulted with most people who might be affected by this project, socially, economically, and environmentally, and I commend everyone involved.

If New Zealand is to manage its water resources properly in the next century, that sort of co-operation is going to be vital.

Thank you.

Office of Hon Jim Sutton

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