16 Jun 2015

Water price for farmers not known yet

5:56 am on 16 June 2015

The man leading a project to build two new dams in Wairarapa says the price farmers would have to pay for the water will not be known until a feasibility study is completed.

Dry farm land in Wairarapa, east of Masterton.

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

The Wairarapa Water Use Project is weighing up the viability of reservoirs at Black Creek and Tividale, near Masterton, which it says could irrigate almost 30,000 hectares of land.

Black Creek is budgeted between $138 million and $205 million to build, and Tividale between $71 million and $105 million.

Economist Peter Fraser is criticising the proposal, saying the dams will cost significantly more than that, and the proposal will end up too expensive for farmers to buy into.

Water Use Project director Michael Bassett-Foss was confident the cost estimates were about right.

But he said that alone would not determine the price for farmers.

"There's other factors involved, including rates of finance and that depends on the funders or investors that are likely to be involved, [and there is] the amount of demand from day one.

"We've been quite clear in the information we do know, and the information we do not know. Suffice to say that as we enter the next stage of feasibility studies, the focus will be on the commercial model and the engagement with farmers to understand their appetite for water."

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