Waimea Dam cost balloons to $211m

Arbitration costs have now driven the cost of the Waimea Community Dam up to more than twice the $104.4 million cost forecast at the time of its approval.

The cost of the dam is now sitting at $211.3 million, up almost $4m from the $207.5m it was sitting at in September.

Legal costs for the council-controlled dam operator Waimea Water’s arbitration, relating to a dispute with the joint venture contractor who built the dam, were behind the increase.

Chief executive Mike Scott told Tasman District Council on Thursday that the disputes were the last remaining risk to the dam’s cost.

“We expect to have more clarity around that in the near future,” he said.

Councillor Mark Greening described the increase, when compared to an early figure of $75.9 million which had been said to have a confidence level of 95 per cent, as “staggering”.

Ancillary works, such as installing a new turbine, platforms, and bridges were ongoing and were expected to be completed in line with budgets.

“We’ve reviewed the costs through to completion,” said the council’s chief financial officer Mike Drummond.

“I have no concerns about further project costs.”

In contrast, the dam’s operating costs were coming in under budget, however Scott said more time was needed to “get a better feel” of what the costs would be long-term.

The dam, which is now operational, is largely complying with its resource consent conditions with only one of nine not being met. The non-complying condition was for the river water below the dam to have clarity of 5 metres. Water clarity is currently sitting at between 1 and 4.3 metres.

Scott said the dam was not the cause of the low water clarity.

“The issue really is about some sediments being washed into the reservoir during heavy rainfalls.”

In addition to turning over the water to try and combat the issue, Scott said the sedimentation was expected to settle over time.

The river water temperature is also “pushing” the 20-degree consent limit, but the dam will release cooler water from the bottom of the reservoir to address that issue. Water reaching that temperature was “not uncommon” for this time of year, and algae flowing into the reservoir and downstream was also described as “no different to natural flow”.

A “strict” testing regimen was continuing to be undertaken and was yielding positive results, Scott added.

Nutrient and chlorophyll levels were compliant, the risk of toxic cyanobacteria was no different to natural conditions, and the levels of manganese, nitrates, and nitrites were all well within drinking water standards.

In the run-up to the summer season, Scott also reassured residents that swimming in the popular swimming holes downriver of the dam was just as safe as before the dam was built. Water released from the dam to supplement the natural flow during dry drought periods would only be at the “barely noticeable” rate of two cubic metres per second and wouldn’t cause unpredictable surges to the water level or flow.

“If we do need to draw down the reservoir for some unforeseen reason, we would put notices up … and warn people.”