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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?