Tasman District Council is investigating options to address projected cost overruns for the Waimea Community Dam. This will include engagement with Waimea Irrigators Limited, the Government and other project funders.
Waimea Water Limited has advised that the estimated cost to complete the dam has risen to $185m. This leaves a $20m shortfall from earlier estimates.
Drivers of the cost increases include the location’s geology, inflationary and construction pressures along with supply chain issues arising from the pandemic.
Council has included in its Draft Annual Plan for 2022/23 interest applied to the loans drawn to cover the $20m shortfall currently estimated to be $783Kpa.
This will be partly offset by a decrease in budgeted dam operating costs in 2022/23 as these will only commence partway through the year. This will be funded through increased water charges and local and district-wide targeted rates.
Council is also utilising income from its Enterprise Activities to cover the interest related to irrigator’s share only for 2022/23 year as it investigates other funding options.
Group Manager Finance, Mike Drummond said it was important that appropriate funding channels were used to share the costs appropriately until a clearer picture the impact the impending Three Waters Reform may have.
Council noted that with identified but unquantifiable risks remaining, further cost increases through to project completion cannot be ruled out.
A further update from Waimea Water Limited is expected in June 2022.