1. RELIABILITY & 2014/15 DEBRIEF

2014/15 has been a challenging season for irrigators and farmers. The Waiau reliability was lower than most shareholders are accustomed to, while the Hurunui River held up relatively well, although irrigators on that scheme still faced restrictions.

We recently engaged Aqualinc to update their reliability analysis in light of the dry summer, and to see whether they could offer any explanation as to why the Waiau seemed to be more affected than the Hurunui this season. I have attached their analysis and report. The key supply reliability figures are summarised below. The report also models storage volumes required to enhance reliability if the Regional Plan minimum flows take effect in the future.

Flow Reliability

I attended a forum with other irrigation schemes recently, and it helped put the 2014/15 season into some perspective. Aqualinc has included a comparison of other schemesreliability in their analysis, which is reasonably positive reading for AIC shareholders. However, we are not resting on our laurels. We know that shareholders have invested in AIC for the reliability that is currently enjoyed. We are currently working on a number of fronts to address risks to our current reliability:

  •  AIC has already secured a delay in implementation of new minimum flows until 2018 at the earliest.
  •  AIC is currently investigating storage opportunities within the Hurunui and Waiau River catchments.
  •  AIC is preparing for the 2018 plan review process to re-establish the link in the original notified plan that meant minimum flows did not increase until a large-scale storage facility is available.

2. PIPING THE SCHEMES

The work on a preliminary design by Beca is close to complete and I intend to distribute an information pack to shareholders in early July. We will hold a meeting in mid-July to outline the piping concept and to map out the process for engagement with shareholders and dryland neighbours over the coming months.

We look forward to receiving your feedback so we can work up a proposal to bring to shareholders to vote on, hopefully at the end of the year. Our objective is to bring existing shareholders a proposal that:

  •  provides the optimal reticulation network for timely and efficient water supply;
  •  keeps irrigation costs to about the same as current (i.e. pumping costs are swapped for principle and interest repayments), and  provides an opportunity for dryland farmers to become shareholders by introducing the equity to fund the project.

3. AIC N LOAD

AIC is still preparing further information for ECan. This work will be completed by the end of the month, and it is hoped that will be sufficient for ECan to make a decision on our applications in July.

4. EMU PLAINS

AIC has funded a preliminary design for a piped scheme on the Emu Plains. This was a minor cost because Beca had all the costing spreadsheets and models already established. The scheme could become another AIC scheme in the future and would assist us with having the scale for investment in storage and would provide operating cost efficiencies. We are also investigating whether the scheme could be extended further downstream to offer our Waiareka shareholders with a piped pressurised supply.

The concept of the scheme is to pipe water along with Emu Plains to supply new irrigators and existing irrigators. New irrigators would introduce the equity required to fund the project, while all irrigators would service the debt for the scheme. The indicative costings indicate the scheme is feasible. However, the water supplied would be Waiau B water (84% reliable), meaning some storage will be required.

There is a lot of further work to be done. AIC’s seed-funding is hoped to stimulate interest sufficiently on the Emu Plains to see a structure formed and funding raised for a scheme to be developed. There is a meeting tomorrow (Tuesday 23/6) to outline the concept to potential Emu Plains irrigators.

EMU Plains

5. DEPUTY CHAIRMAN

At the June Board meeting David Croft was appointed as Deputy Chairman for AIC. Our business is coming more complex, and your Board is responding accordingly, with the establishment of sub-committees and creation of the Deputy Chair role.

6. INTAKES

This year we have inspected the Balmoral and Waiau intakes. David Crofts initiation as Deputy Chair was to crawl through the Balmoral intake. David found that a few minor repairs were necessary, which have taken place. We engaged divers to assess the Waiau intake. Both intake barrels appear to be in good order, but we are getting the video footage reviewed by our engineer to make sure.

The Hurunui River bed is dropping around the intake and diversion, making management of the diversion more challenging. The Waiau Riverbed has changed course in the last two years, which is bringing more shingle into the intake, resulting in at least day of shut down per season to clear.

We have engaged URS to model our intakes so that we can better understand changes to the rivers since the intakes were installed and plan for the future so that the integrity of our intakes are protected. We are also modelling potential development scenarios so we can understand the potential for more water to be taken through these intakes, and how the intakes may behave if irrigation offtakes are established upstream (e.g. HWP and Emu Plains). HWP is contributing to the cost of the Hurunui modelling. The modelling requires accurate bed level surveys, which were conducted using a drone. The Balmoral intake area survey image is shown below.

balmoral-intake-area

7. SHARE SALES

AIC has also recently issued 105 shares to Longbrook Dairy for the Eudunda property on Waiau main race at Mouse Point. Longbrook purchased a Waiau River water permit for 63 L/s and transferred it to the AIC intake. AIC has purchased the water permit from Longbrook and Longbrook has purchased the further A shares from AIC. The additional 63 L/s increases the rate AIC can take through the Waiau pond intake to 11,063 L/s.