Governance, Funding, Design, Socio-Economic Impacts Water Enhancement Projects Friday Forum #8 14 March 2008 Terry Heiler

INVESTMENT IN CONTEXT Investment Opportunity 400,000 ha on the books Annual contribution to GDP -- $2 billion ++ This is 1.6 percent of GDP NZ’s Comparative Advantage

DEFINING WATER ENHANCEMENT PROJECTS needs a community of interest multi purpose but dominated by irrigation large scale water infrastructure costs high -- private capital needed high social and environmental impacts

WHO IS INTERESTED AND WHY ? 10 large proposals on the go Central to Wairarapa 400,000 ha investigations to date $6 million off farm costs $2,000 million on farm costs $1,500 million changing agricultural industry

WHY ARE THESE INVESTMENTS DIFFERENT ? High up-front capital requirements Long-term -- inter-generational in time scale limited customer base high social and economic impact need access to private land large RMA and user coordination issues

DEVELOPMENT PATHWAYS Genesis and Initial Planning Pre-feasibility and Feasibility Resource consents Marketing, Pre-sale and Funding Final design and Implementation Operation and Maintenance

BIG ISSUES FOR PROMOTERS Resource Quantification Funding the Early Stages Governance Structures Funding Models Sources of Funding Resource Consents Land Access

MAF-SPONSORED STUDIES Corporate and Financial Structures Equity and Funding Options Role of Central Government Role of Local Government International Experiences Socio-Economic Impacts

CONCLUDING REMARKS The strong interest in large-scale water enhancement projects is a reality Development of proposals has identified common problems The current policy environment may not be promoter or investor-friendly Interventions are called for

“ (do we)..attempt to cast reality into the mould of policy or do we do the opposite…..policy must match reality…”

ANY QUESTIONS ?