Kurow-Duntroon Irrigation Company | About the company

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About the company

About

The Kurow and Duntroon Irrigation Company Ltd (KDIC) is seeking to update and expand it’s existing irrigation infrastructure. To do so will involve the capital expenditure of $xxxxxx in a new piped scheme which will run from Waitaki Dam to Duntroon.
The project will see the existing canal scheme piped throughout, to provide water on demand through the irrigation season, from September to mid- April each year. Key features of the scheme will be controllability, efficiency of water distribution and an expansion of the command area through pumping, water optimisation and new technologies. Similarly, the design and construction materials will ensure the scheme will exceed the design life of 80 years. The present water race is leaking badly and requires significant investment.
The Company is seeking to raise capital from the sale of additional shares to existing shareholders and near neighbours who wish to benefit from an expanded command area, which will rise from 2000 ha to 6000 ha. All shareholders will be wet, on a one share per ha basis.
It is intended that once finance and shareholder approval have been concluded, that the Company will engage contractors to commence work in February or March 2017. It is expected that the project will take up to 14 months to complete.

Kurow Duntroon Irrigation Company (KDIC) is a community owned irrigation scheme that is currently upgrading their scheme from an open channel delivery network to a fully piped scheme. This upgrade is a result of years of planning, consultation and engagement and will provide us with a modern, cost effective, environmentally focused irrigation scheme that will deliver guaranteed water to 4000 hectares of productive land, with a further 1500 hectares of capacity in the pipe for future expansion.

Our new scheme will give our community, future generations of farmers and community sports clubs the access to reliable water through a modern, safe and efficient GRP and HDPE underground pipe network.

We are a diverse region with many enterprises using the water resource we provide; Sheep, Beef, Deer, Orchards, Horticulture, Dairy, Grazing, Life style blocks and sports fields. We cater for everyone, no matter how big or small.

Our scheme upgrade has been funded by an issue of new shares, and a commercial loan from Crown Irrigation Investments Limited and Waitaki District Council.

The work undertaken to install the new pipe is being performed by Monadelphous Engineering New Zealand (MENZ) under the oversight of GHD and numerous other subcontractors. The job is nearing completion with the intake from Waitaki Dam completed and the process of testing and commissioning of the pipe is well under way.

There has been delays and problems with the pipe installation and we still have some issues to work through, but we are confident that with open communication and collaboration we can resolve these issues.

The KDIC irrigation scheme is a major community asset, that gives assurance to the locals that water will be there when they need it. The KDIC board, under the chairman Geoff Keeling are proud of what we have achieved, it has been a long and braided road, but we now have a scheme that is robust, modern and vital to the region.

Community Based

KDIC is a community based scheme, which originated in 1965 when the existing canal scheme was installed by the Ministry of Works, working with the local farming community to bring water to 1600 ha, from the Waitaki dam, in an open water race.
The scheme was limited, by the siphon at the dam, the unlined water race and physical geography which meant that the wider agricultural potential was beyond the technology of the time. Effectively the height of the canal, as it contoured through the area, became the high point for irrigation. Almost all farmers installed flood irrigation, and a system of by-washes and strict rostering ensured that water was managed as effectively as possible.
An extension of the scheme was established in 1971 when a pump was installed at Waikaura to lift water into a new canal that ran to Duntroon via Racecourse Road. This pump station remained the only one on the scheme. An additional 400ha of irrigated land was added to the scheme. Since then the scheme has remained the same size, with 58 shareholders presently owning shares in the scheme, on a one share per hectare basis. There are no dry shares.
The scheme passed into community ownership in 1989 when the Upper Waitaki Irrigation Company was formed, and acquired the scheme for $1 from MOW. The recent name change to KDIC occurred in 2015 to avoid confusion with water irrigators in the Upper Waitaki catchment above Waitaki Dam.

Significant Change

From 1965 to the present the agricultural scene in the area has gone through significant change. Orchards, dry land farming and forestry have given way to pastoral activities like dairying, dairy followers, beef and sheep. Dairy is now the predominant land use industry, conversions have been ongoing since 2002 and reached a peak in 2014. Demand for an additional command area has been driven by new entrants and established business alike.
Vineyards have been established in several locations and the availability of water has enabled growers to frost fight. Orchardists remain, with apricots, plums and nectarines grown at Waitaki Orchards for over 40 years.
The application of water has also changed, with spray irrigation largely associated with dairy units, the overall use of flood irrigation has diminished to less than 40% of all units. There is still a strong core of flood irrigators which is recognised in the ECAN Resource Consent, but long term these methods will be superseded by new techniques, due to water efficiency savings and good management practice and the likely adoption of Plan Change 5 relating to nitrate losses.
Ongoing scheme development has been one of maintenance with several sections of water race lined with PE liners to reduce water loss. This has been a sticking plaster approach because the measured loss of water between Dam and paddock exceeds acceptable levels. The water race was never fully lined, with MOW relying on silts to naturally seal the earthworks. The combination of soils and rock type contain little clay content which would be effective in other areas.

Careful Consideration

The Company have been considering the asset for some years, being fully aware that ECAN were concerned at water wastage and that the scheme is/was so inflexible in use. In 2015 the Board crystallised the earlier work and commenced the project to establish and upgrade and expansion. Simply put, the expanded area would aid the funding though share sales and effectively improve the cost per ha for development.
The Company sought Expressions of Interest from existing shareholders and neighbouring owners seeking a reliable source of water. These included an initial contribution of $20 per share from a total of $50 per share to pay for feasibility studies. In addition, applicants were also asked to agree to enter Easements to facilitate access. Supported by a positive response the Company embarked on the project on a stage by stage basis.
The concept of a wider scheme command area was straightforward, up to 4000 ha above the existing water race is suitable for irrigation. If the Company were to invest in upgrading the water race or piping the scheme, then it was considered important to cast the net as far as practical. The Company was advised on a procurement strategy that included the specimen design and contractor selection/pricing of the construction project.

Construction

GHD are the retained engineers. The Company would seek a design and build contract, where the construction companies could use their expertise to improve on the specimen design to produce an affordable and cost effective scheme. The Company has run a competitive tender to establish who should work with GHD on an Early Contractor Involvement (ECI) basis toward the design and built contract.
It is likely that the ECI process will be completed in December, pending contract award in 2017. The Company will launch it’s PDS in late October to secure the capital funding required to meet the minimum lending/capital threshold.

Resource Consent

The Company holds a resource consent from Ecan that expires in 2048, for 26.3 million litres. Additional water to supply the wider command area has been secured from the Mackenzie Irrigation Co. Acceptance and payment will be subject to conditions and approval from KDIC shareholders.
As a community scheme the shareholders will be voting on the total project, with a 75% mandate required to ensure that the project proceeds. In turn, providing the vote is successful, the shareholders will then confirm approval to purchase 1600 shares in MIC, borrow such funds as are required to undertake the scheme and approval to sell the shares requested during the PDS process.