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Concerns Growing Over Waimea Dam

24/02/2018

Waimea Dam train wreck

My concerns over the proposed Waimea Dam continue to grow. Not helped by the two days of “deliberations” following the recent public consultation. We were asked to submit any questions that we had prior to deliberations where a panel of “objective technical and legal experts” would answer them. Unfortunately, although I submitted a list of questions (provoked from the dam submissions) prior to the deliberations most of them remain unanswered as they did not fit within the scope of each allotted expert so I was unable to ask them.

Following the question and answer sessions council moved to pass the motion on the agenda. Normally in the case of a deliberation councillors would take each of the points on the consultation and debate the results of the submissions. Only some councillors seem to remember this kind of deliberation taking place (oddly, they seem to be aligned with those who in general support the dam). Other councillors raised concerns over the process.

I have serious concerns about a board controlled by Waimea Irrigators on a Council Controlled Organisation working on a project the rate-payers are underwriting the lion share of. This despite when it was first raised that councillors would not be on the board I questioned the term sheet and was told it was not actually in the terms sheet that councillors were excluded from the board – contrary to the information released by the irrigators in their Statement Of Proposal.

I also questioned at that time the ability of WIL shareholders to be on the dam company board because they would share the same perceived conflicts that any council members might. I was given the assurance that this issue would be addressed. In the last full council meeting 22.02.18 I find out that it was not addressed and that we fully expect WIL shareholders to be on the board of the dam company.

This poses a problem because in the construction phase it is in the irrigators best interest to have a low quote with lots of overruns. A low quote (or on budget quote) ensures the project proceeds while cost overruns are not a concern for a partner with a capped liability.

An irrigator biased board poses a problem going ahead because irrigators will be controlling the release of the water to suit their best interests leaving the residential supply at higher risk during periods of extreme drought.

Of course, WIL board members are vastly more experienced than councillors some of them have prior experience with large companies such as the recently bankrupt Solid Energy.

Waimea Dam train wreck
Full Steam Ahead On Waimea Community Dam

I have other concerns which on their own may seem minor, but taken as a collective suggest that this project has a lot in common with people who in the past have been sold a great deal on the Brooklyn Bridge.

For instance, despite repeatedly asking about sedimentation infill rates I am still informed that in 100 years we expect the volume of infill to be 300,000 cubic meters. This indicates that a huge man-made reservoir is going to have zero impact in the levels of erosion upstream of the dam.  They assert that there is currently 3000 cubic meters of sedimentation flowing down the river historically, this figure multiplied by 100 years gives the figure quoted of 300,000 cubic meters. Obviously, I am not a qualified engineer nor a geologist so I am unable to dispute the logic used here.

There is a contingency figure of $143,000 built into the project office estimate for a total of $2.2 million. When I queried the interim project manager why there was such a high contingency figure on the project office I was informed that it was for the purchase of telecommunication equipment because it is cheaper than airfares.  This is slightly concerning that a $143k contingency be built in to the office management budget in case the purchase of telecommunication equipment spend overruns. Remembering that they have in excess of a $2million dollar budget for running an office for three years without it. To put it in further context the budget for land and access is a mere $2.9m and other sunk costs (could be anything) climb another $1.3m.

On a similar note council also signed off on overseas travel as approved by the project manager in his delegation authority. There is no specific budget limit allocated to this delegation.

Council also agreed to fully accept another $799k of sunk costs which no doubt includes the $12413.20 spent on a Dam Straight media campaign when it became apparent that submissions were coming in overwhelming against the dam proposal. Remembering that these growing sunk costs are increasing the over-all contributions of TDC to the dam over-and-above our share of the now $82.9m “core project Budget” as per the WIL PDS.

Other contracts quoted for engineering work to be done on behalf of council are coming in 15 to 100% over budget because of the huge amount of work in the district and the ability of the contractors to pick and choose the contracts that they accept.  This is not an isolated local issue as Fletcher Construction can attest to. I suspect that cost over runs already experienced on the project combined with inflation and contractor’s ability to demand a higher price have eaten well into the “P95” contingency figure before any earthwork begins.

As someone who entered the Council supporting the concept of a dam I have been left drowning in concerns over the proposed Waimea Community Dam and the effect it is going to have on rates if it proceeds any further.

My attempt at the last council meeting to have the Mayor’s right to a casting vote removed because I have lost confidence in his ability to use it in a prudent manner was deferred for a future report. A cynic might suggest that the report will not come back to council for a vote until after the dam has been signed off.

 

Filed Under: Projects, Spending, Your Say Tagged With: casting vote, concerns, Waimea Community Dam

Mayor Votes Rate Hike For Dam

15/06/2017

waimea dam

Mayor Kempthorne goes it alone and agrees to invest an extra $3 million in the Waimea dam project and to underwrite $25 million dollars of irrigator loan. Well, he voted alone using his Mayoral privilege to cast an extra vote in a hung council verdict, but the money comes from general ratepayers.

gold plated dam

A robust debate around the table followed a number of public speakers having their say on the dam.  The options presented to councillors were to vote for more money to take to the negotiation table or to walk away from the negotiation table causing the collapse of the project in negligence of our duty.

Councillor Wensley tried to present another motion where council remained at the negotiation table with the mandate to hold to council’s position as presented in the long-term plan 2015-2025. This was unable to be voted on without the failure of the tabled motion. A chance the Mayor scuttled.

Questions raised by this decision include:

  • Why is council around the negotiation table at the 11th hour trying to establish a business model for the dam?  It would have seemed to me to be good practice to have established Governance and funding responsibilities before spending millions of dollars of ratepayer money.
  • Now that council has over-committed itself in the business model negotiation phase of the dam, and the irrigators have been bled dry, who is going to pick up the tab for any inflation in quote price or construction over-runs?
  • Is there any point in this process where those pushing the dam would consider it too expensive as beneficial as it may be?

Ironically the last time council was deadlocked over a decision it was to do with setting the rates for the current year.  A number of councillors wanted a modest 1.5% percent rate increase this year to help pay down our mountain of debt. The Mayor and many of the others who voted for the extra dam spend said we had to hold the rates at the 0.6% because there are residents in the Tasman district who cannot afford to pay their rates, and Tasman is near the top of the rating table amongst our peer councils.

I asked where these poor people had gone, as over the next five years council will be struggling to maintain rate rises below the 3% cap — a total of 15% in five year’s time (actually 16% if you take the cumulative content into account). This is without any further overruns and assumes council has the ability to maintain the 3% cap.  I was not given an answer.

Those of us who voted against the motion were not voting against the dam. We were voting against the increasing of the council’s commitment over and above the increase that a percentage share would involve as per the business model presented to us when the current council was established.

The chance to vote yes or no on the dam is yet to come following a public consult. Theoretically, we will have more facts around the build cost of the dam, the level of contributions that all parties will be investing, and perhaps the cost of a viable plan B (however, inferior in benefit delivery).

I believe that all the facts should be on the table in order to make a fully informed decision. Inflated positions to persuade a decision one way or the other help no-one. If I am going to be held accountable for my decision (as I would expect to be) then it needs to be based on a lot more facts than have currently been tabled.

 

Filed Under: Projects, Resources, Spending Tagged With: casting vote, Mayor decides, more dam money, Waimea dam

Introducing Dean

Dean McNamara Husband, father, and a fourth generation local from rural Tasman. Now acting as your voice on the Tasman District Council (TDC). More about me.

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