Beware of False Profits

In a long winded and meandering media release (IrrigationNZ, 17 June 2015), Andrew Curtis, Chief Executive of IrrigationNZ, hit back at recent criticism of the Wairarapa Water Users Project’s (WWUP) proposed Tividale and Back Creek water storage schemes by Rōpere Consulting principal Peter Fraser.

Mr Fraser has previously stated “the bottom line seems to be Tividale is a dud and Black Creek is barely marginal” (Wairarapa Times Age, 12 June 2015).

Mr Curtis responds “Peter Fraser’s view that the Wairarapa Water Use Project and other water storage developments are unviable, doesn’t stack up with the significant amount of research already done on these projects”.

Mr Fraser responds “In a case of lots of smoke but not much fire, Mr Curtis has provided precisely no evidence to contradict my analysis. The central question therefore remains unanswered: can Wairarapa farmers afford to pay for the water from the proposed projects, because if they can’t then one must question the need to continue to poor millions of dollars into what increasing looks like a make-work scheme for dam lobbyists. I therefore stand by my original claim the neither the Tividale nor Black Creek proposals are remotely viable without a substantial local or central government subsidy” Mr Fraser said.

Mr Curtis further states “these developments respond to a range of needs. They augment rivers and top up aquifers, they tackle the environmental legacies of farming, industry and population growth by boosting water supply and ensuring consistent river flows. In many areas water storage provides recreational opportunities like new kayaking, boating and fishing destinations.”

Mr Fraser responds “Mr Curtis’ attempts to bolster economically marginal projects by appealing to broader objectives such as fishing, rather than addressing the core question of project viability, is akin to putting lipstick on a pig – it may look a bit better but it’s still a pig. And being five years into a project and not yet gotten round to asking basic questions like whether the farmers can afford the water is a travesty.”

Mr Fraser concludes “I think it is important to distinguish between schemes that are viable and ones that are not. For example, Opuha is often quoted as the poster child for storage – and so it should be as it has been an extremely successful scheme. However, it is increasingly clear that the Opuha situation can't be replicated – at least not in the Wairarapa. The issue is simple and goes back to the relationship between project build costs and water costs to farmers. Opuha provides about 70M m3 of usable water – so is over twice the size of Tividale (about 30M m3) and slightly bigger than Black Creek (about 65M m3). However, Opuha cost less than $60 million to build in today's money. In comparison, Tividale has a midpoint cost estimate of $82 million whereas Black Creek's midpoint is $138 million.

So cost wise, neither project is even remotely comparable to Opuha – so Opuha is an invalid and misleading comparison.

If Tividale can be landed for about $30 million and Black Creek for about $100 million then WWUP are onto a winner. If they can't, then there's not much point going further as we have a pretty clear off ramp that you would need to be Stevie Wonder to miss”.

ENDS

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