Archives for posts with tag: Central Plains Water

The Minister of the Environment, Dr Nick Smith, today announced plans for the future governance structure of the Canterbury Regional Council, commonly known as ECan. The elected council was sacked in 2010, following a report that found they had failed to achieve the Government’s objectives of converting the entirety of the Canterbury Plains into dairying. In their place, commissioners were appointed. Despite having 5 years to achieve the Government’s aims, the Commissioners have comprehensively failed their goals. A recent study found that just 36% of Canterbury’s fresh water was unsafe to drink, well below the Government’s aspirational goal of “no fresh water by 2020”. Another report from Lake Ellesmere / Te Waihora said that it took more than 25 minutes for a red-band gumboot to fully dissolve in the toxic water – over 5 minutes longer than the Government’s benchmark for acidic fresh water lakes. The Minister reiterated that the Government had set clear benchmarks for environmental degradation, and that ECan had repeatedly failed to meet them.

Dr Smith appeared at the news conference with his preferred appointment to run ECan, a GARDENA Classic Oscillating Sprinkler Polo 2500. GARDENA Classic will take over the role, following a Cabinet vote next Monday.

GARDENA Classic, the newly appointed ECan commissioner

Dr Smith said that GARDENA Classic was the obvious choice for the role. “She can spray water over here, she can spray water over there. That means that she takes turns between watering the farmers, and watering the latte-sipping townies. But if the townies keep piping up with these spurious complaints about voting and democracy, I am not afraid to adjust her range, so that she only sprays the farmers.” The Minister also highlighted the new Commissioner’s appeal to the younger generation. “In summer, we can put her down in the garden, and the kids can take turns running backwards and forwards through her. GARDENA Classic is the new, child-friendly face of ECan.”

Murray, a spokesperson for the activist group “Hippies Called Murray”, was disappointed with the appointment. “How can the Government claim to be acting in our best interests, when this is clearly just a stitch-up on behalf of Big Domestic Irrigation. I bet Bunning’s is behind this”, he said, before trailing off into a rant about the TPPA and Monsanto butter beans. When approached for comment, Buzz Babcock of the Confederated Farmers, South Canterbury Branch, gave a brisk “yee-haw!” before jumping through the window of his John Deere tractor and attempting to launch it over the south branch of the  Rangitata River.

In a worrying development, the Press has joined up with the Taxpayers Union to push the latter’s asset sales agenda:

The Ratepayers’ Report found in the Canterbury region the Christchurch City Council was the worst-performing council in terms of operating expenditure, spending $3901 per ratepayer – well ahead of the national average of $3175.

“Worst performing” is an interesting term. I think they mean “spent the most money”. If a family of six spends $300 a week at the supermarket, and a retired couple spends $150, does that mean that the family of six are “worst performing”, or just that they have different needs? This is the sort of reductio ad absurdum rhetoric found in this piece. If only there was some major event that had happened in the city that had caused the council to increase it’s spending for some reason …

But wait! The CCC’s debt is set to increase as they take on the cost for the anchor projects of the rebuild. So to cut their cloth, the totally non-partisan Taxpayer’s Union recommends

The council data suggest that without more central government money, Christchurch City’s decision to keep assets such as the airport and Orion will need to be re-examined.

What a surprise. The CCC should sell off these assets, which produce a dividend that has kept rates in the city down, so we can build Brownlee’s egotistical anchor projects, like the Stadium and the Convention Centre – for which the business case remains non-existent.

The best-performing Canterbury council is Mackenzie District. It has the lowest average rates, the lowest operating group expenditure per ratepayer, the lowest group liabilities per ratepayer and the lowest staff to ratepayer ratio. “It appears to be a slick operation,” Williams said. “Ratepayers in Christchurch City and Waimakariri may want to consider why their councils do not appear to be providing the same value for money as Mackenzie District.”

The Mackenzie Country is a lovely place. It is also the home to a mere 4,000 people. So to compare the operation of New Zealand’s second biggest city to that of a district which has the same number of people as a well-attended speedway event is beyond a farce. Ratepayers in Christchurch City and Waimakariri may also want to consider whether they enjoy council services such as pools, gyms, kerbside recycling, cultural events and other such things which are provided in cities.

Speaking of the Mackenzie Country and the Taxpayers Union, yesterday I received a response to my OIA about the businesses cases used by the Crown Irrigation scheme. I asked for them to provide me with a business case for their decision to invest in the CPW scheme. The papers released by CIIL have almost every single word of substance redacted.

Screenshot 2014-06-11 11.11.49 Screenshot 2014-06-11 11.12.05

It’s a joke. So the taxpayer is putting $6.5m into an irrigation scheme, and we have no way of finding out how it is being spent, what the business case was, what the returns might be. Surprisingly, the silence from the Taxpayer’s Union over this unaccountable spending of taxpayer money has been deafening.

It is three years and one day since Danyl wrote this blog post about South Canterbury Finance. I was re-reading it today, and something stuck out like a sore thumb:

December 2008: SCF undertakes a high risk loan strategy, losing an estimated $500 million dollars, the cost of which is borne by the taxpayer. (I would love to know who these loans went to. SCF refused to disclose the nature of the loans, telling journalists who asked about them that they should ‘go to the movies’. I’m guessing they were to PGG related companies or investments.)

January 2009: Cash pours out of SCF in secret loans to its parent and related companies. Treasury is not notified of these transfers which add up to at least $180 million dollars and which puts SCF in clear violation of the Guarantee Scheme. The Reserve Bank wants SCF ‘put on notice’. No action is taken. (I’m assuming that the cash transferred out of the company was that of debenture holders, so not guaranteed by the government.)

Danyl was wondering where those loans went. Well, we know there is a connection between SCF and Dairy Holdings Limited:

SCF’s late chairman, Allan Hubbard, had transferred a 33.6 per cent stake (In Dairy Holdings) to SCF in 2008 in a bid to shore up the company. The stake was said to be worth $75.7 million then but Reserve Bank documents revealed the figure was thought to be inflated.

Hubbard had a very strong connection to the irrigation industry in Canterbury. In April 2010, before the empire came crumbling down, he was given an award for his support of irrigation:

The public face of South Canterbury Finance, Allan Hubbard has been recognised for something completely different – irrigation. Also a director of the Central Plains Water scheme, he “put his money with his passion” and helped fund the project when it needed money, Mr Sutton said.

“If it wasn’t for Allan’s bailout, CPW would not have obtained its consents and be where it is today.”

Dairy Holdings, along with Fonterra, loaned money to CPW. In fact, Dairy Holdings was CPW’s biggest lender:

CPW’s biggest lender, Dairy Holdings, is also part-owned by SCF and many of its shareholder farmers have business ties to the company, although Crombie said its loan was not directly affected.

It’s not like Dairy Holdings was a small operation. This from 2012:

South Canterbury Finance’s (SCF) largest remaining asset, Dairy Holdings, will stay in New Zealand ownership after existing shareholders put in the winning bid of $56.4 million. Dairy Holdings is Fonterra’s biggest supplier and owns 58 dairy farms in Canterbury, Southland and the West Coast, covering 14,200 hectares.

Someone cleverer than me could try and fit this stuff into a timeline like Danyl did. However, this is what we do know:

– the government bailed out South Canterbury Finance to the tune of $1.7 billion dollars

– one of the largest assets that SCF owned was Dairy Holdings, a collection of farms that was Fonterra’s biggest supplier

– Dairy Holdings was also the biggest lender to Central Plains Water, a scheme that wouldn’t have gone ahead if it wasn’t for “Allan’s bailout”

I wonder if any of the high risk loans and secret loans to parent companies from December 2008 and January 2009 went to Dairy Holdings, and if so, whether they went from there to Central Plains. In any case, it doesn’t matter now, as CPW was using the money to try and fight legal objections to the scheme; instead of wasting money on lawyers, they were lucky enough to have a government replace the regional council with irrigation-friendly commissioners.

 

 

 

 

 

I guess that the effluent in the water after the Amy Adams saga has dissipated enough for the National Party to start throwing more money at irrigation. From this press release from the Minister of Primary Industries, Nathan Guy:

It’s great to see the first investment decision made. Central Plains Water will help irrigate around 60,000 hectares of land on the Canterbury plains once all three stages are complete, giving a real boost to the region’s economy.

Without this funding, it’s unlikely the scheme would be developed to the size and scale required.

This is an important step towards unlocking the major opportunities that water storage and irrigation can provide for New Zealand.

Minister Adams has recused herself from decisions around Central Plains, on the grounds of a pecuniary conflict. In doing so, she has made it clear that she does stand to benefit from the CPW scheme. This release from MPI shows that not only are the government throwing $6.5 million at the scheme, but the very viability of the scheme itself would be in question if it weren’t for the interventions of the government of which Minister Adams is a member.

 

An investigation late last year by the Herald and Keith Ng showed that a number of MPs, mainly National MPs, happened to own a lot of farms. This isn’t anything new – National has always been the party that represents farmers. The head of Federated Farmers just happens to be the finance minister’s brother. However, the Minister of the Environment Amy Adams’ significant land holdings in mid-Canterbury may by affected by some of the decisions that her government has made on the environment.

Adams owns a number of properties, but the ones of most interest are in two blocks. The first is in 9 titles, at Charing Cross. It totals 1,992,440m2, and has a rateable value of $4,700,000. The second is at Darfield, is in one title of 502,154m2, and has a rateable value of $1,050,000. What is interesting about these two blocks is that they are both within the area to be covered by the Central Plains Water (CPW) scheme. This is a controversial project that will take water from the Rakaia River and use it to irrigate an area of the Canterbury Plains between the Rakaia and Hororata Rivers.

Water has been a controversial issue in Canterbury for most of the last decade, due to the rapid expansion of dairying, and the pressure this has placed on limited water resources. This of course boiled over when the newly-elected National government sacked the democratically elected ECan (Canterbury Regional Council) in 2010. The reasons given for this were that it was “dysfunctional”, but documents obtained under the Official Information Act by the Press show that this wasn’t about so-called dysfunction, but vested interests lobbying for greater access to water.

Further to this, when the bill went to parliament to replace the ECan council with commissioners, it also made it much easier for the Minister to amend a Water Conservation Order (WCO) in Canterbury. A WCO is often compared to a “national park” for a water way – it recognises the environmental, cultural and recreational significance of the body of water, and makes it more difficult for it to be exploited. WCOs are the domain of the Ministry of the Environment – not the regional council; by tacking this clause onto the bill which was nominally designed to resolve the “dysfunction” at ECan, the government showed what they were really trying to do. A WCO was placed on the Rakaia River in 1988 – the river which CPW needed to draw from to ensure the viability of their scheme. This was lifted in 2013.

Work on the CPW scheme is only just about to begin. One of the problems getting the scheme off the ground has been a lack of funding – this is a very expensive project. Luckily, the government decided to take $400 million from the “Future Investment Fund” (aka asset sales) and put it into an Irrigation Acceleration Fund, administered by the Ministry of Primary Industries. Crown Irrigation was launched by the former Minister, David Carter. The MPI says that Crown Irrigation was set up to fund “community irrigation”. Central Plains describes itself as “community irrigation” – despite it having a $375 million price tag. It’s also worth noting the similarities between the CPW and CII websites.

crown irrigation central plains

In September 2012, David Carter (Minister of Local Government) and Amy Adams (Minister of the Environment) fronted the press to explain that they were extending the reign of the ECan commissioners until 2016 (the 2010 bill said that there would be elections in 2013). They argued that it was needed because of the earthquakes, but Adams went on to talk about freshwater management:

”It is critical for New Zealand that the planning governance structure for Environment Canterbury is stable, effective and efficient. To keep the freshwater management work on track, we intend to retain the limited appeal rights on decisions made by Environment Canterbury on plans and policy statements relating to freshwater management.”

The 2010 share register of Central Plains Water Limited shows that a company called AMDON Farms Limited owned 801 shares in CPW, doubling to 1602 shares in 2011. Amy Adams is a director and co-owner of AMDON, along with her husband Robert “Don” Donald Adams. The CPWL register also shows that there are 7 other people with the surname Adams who have shares in the scheme and live in and around Greendale, some of whom are related to Amy and Don.

The Central Plains Water scheme would not have been viable if the National government had not passed the ECan bill in 2010. The value of land with access to water for irrigation is greater than land which does not. Adams owns a large amount of land which is within the CPW water scheme, and also owns shares in the scheme itself. It is difficult not to conclude that the actions of this government, including Adams and Carter, have benefitted their farming portfolios.