Meridian Energy, the state-owned power company, has converted a town-full of allies into enemies.
This could be its most notable achievement so far in the development of New Zealand’s biggest power project, a $1.2 billion canal diverting water from the Waitaki River into six power stations.
For Project Aqua, as is called, is turning sour on two fronts.
Growing opposition to the hydro project is miring Meridian in a resource- consents nightmare. Worse, the government is promising new laws on how much water it can use.
Meridian has admitted to the Listener that, for all practical purposes, Aqua is on hold.
A testy Keith Turner, Meridian’s chief executive, has even threatened to walk away from the project.
The little Waitaki town of Kurow will be worst affected by Aqua. In a declining village, many townspeople at first saw the project reversing their fortunes. Now they complain that Meridian is full of rhetoric, strong on muscle but short on detail. Whose homes and businesses would be affected? By what? Noise? Dust? Vibration? Where might they be moved to? For how long?
A packed meeting in a local hall last month voted, with only a crackle of dissent, to “totally oppose” the project until Meridian came clean. Meridian was no longer their new neighbour. The company was their foe. How Meridian swung this may form whole new chapters in community-relations manuals.
The rot is spreading: Alan McLay, Mayor of Waitaki district – one of four councils responsible for dealing with Aqua’s resource consents – notes that local politicians simply cannot ignore a hall-full of outrage.
Other groups alarmed by the proposed damage to the river and its valley are determined to stop Aqua altogether. One of them, Waitaki First, is going to court, trying to stall the scheme.
Whatever Meridian Energy’s slant, Aqua is going to blight the lives of locals for years during construction and of future generations who will see the Waitaki reduced to a trickle and replaced by a serpentine monolith running through one of New Zealand’s most scenic valleys. No amount of spin can make it into anything else.
Meridian cites benefits to the local economy (it likes to talk of “opportunities”) and the national interest. Alan Seay, Meridian spokesman, says, “Think back to autumn, the threat of rolling blackouts, huge economic and social disruption. We need more electricity capacity.” The subtext is that the end justifies the means. In the Waitaki Valley, the means has turned nasty.
Kurow, population 400.
Ahead of it, beneath the snowy ranges, lie lakes Aviemore, Benmore, all the canals and powerhouses of all the power schemes that have sucked away at the Waitaki to date.
The lower 60km of the river, where the new canal will run, is much the same as it always was. But not Kurow.
Betty and Skin Russell have been in the district all their lives. Skin, 80, can remember when there were four taxis in town (none at all for the last 30 years), there were rabbiters’ camps in every gully, and Kurow was a-bustle. “If we could get a decent lake out of it, it wouldn’t be so bad,” he says. Meridian is promising to put a small “amenities lake” – hydro lakes have proved popular in southern communities – but Russell echoes a common complaint: “They call it a lake – I call it a duck pond.”
Now the town is hanging on but looks as if it dreads a call from its bank manager.
The mighty Waitaki will be diverted into the canal at Kurow by a series of dams, or what Meridian calls “low-level structures”, literally on their doorsteps.
This is not some gentle rustic waterway meandering through the countryside. The canal will be up to 20m above the ground, as high as a six-storey building and wide enough for ships. The whole thing will be built in two stages, taking six to eight years to finish. Yet many locals were prepared to live with it.
The Kurow Aqua Liaison Committee (KALC) was formed to get the best deal they could out of Meridian, despite misgivings. Waitaki First and a host of other environmental and recreational groups opposed it outright.
The district was not flush enough to spurn the cheques that Meridian was dangling – money, “mitigation”, business. The power company constantly reminded local people that money wasn’t everything. But as far as locals were concerned, it was a good percentage of it.
Many, such as James Kerr, a shearing contractor who is the district’s biggest employer, weren’t opposed at the beginning. “Then I became aware of the destruction of quality farmland, and of the river. It’s in pristine condition.”
Kurow realised it was about to become the newest construction town on the Waitaki, a region whose previous hydro towns still have the shattered look of a hall after the ball. It also began to understand the realities of dealing with a corporate giant determined to get its way.
“We’re the most affected community on the river and we should get a fair say on what happens to the town. If it has to happen, we want to know if we can remain a village,” says Kerr. “Meridian pays us lip service, that’s all. People in the community are fearful of what’s ahead. We’re getting a rough deal. Meridian should be more upfront, more honest.”
You hear the same view everywhere.
“Even the constant bleeping of trucks and machines going backwards drives you insane,” says electrician Calum Reid. The town’s gentle lifestyle will be swamped by a workforce that even on present estimates is double its population, working around the clock.
Steve and Avis Dyson, butchers: “It’s the uncertainty. They say they’re going to dustproof, soundproof our shop. But it dates back to 1885. We don’t think it’s possible to stay here. But where are they going to relocate us? No one knows. I’m a survivor. But how do you survive when you’ve got a conglomerate like this breathing down your neck?”
“I’m neither for nor against,” says Reid. “I’m not going to stand in the way of progress. I’m not a tree-hugger or a river-lover.”
But Reid, and others, are incensed by Meridian’s offers of “mitigation”.
Here’s what Meridian is offering to compensate for years of disruption.
(A brief glossary: “Relocation” is the word used for putting people out of homes and businesses. “Mitigation” means compensation. “Borrow” – as quaint a piece of 90s corporate-speak as you could wish for – means the sites excavated for fill.)
Reid’s house is on the construction side of the main street. People on the other side get less.
He and his partner Ann-Maree Parker will get $5200 when the deal is done. Meridian will pay them $150 a week during construction, or $7800 a year. Because of the dust. Meridian will clean the houses inside and out, install air-conditioning and a clothes-dryer. They will replace a gate with another designed as a noise barrier. They may hire a landscape architect for planting to screen the construction work. Paltry? “The offers are fair and reasonable,” retorts Seay.
If things get too bad for the family, Meridian may relocate them to another house at the company’s expense. Where to? asks Reid, a common cry in the town. The company says it will try to ensure the substitute property is within the Waitaki district – a vast tract of land, reaching down the coast to Dunedin and curving inland to cruise up the river valley and into the mountains. Seay says, “We can’t provide answers, because we simply don’t know – and we won’t, until we get further into the consents process.”
In return, Meridian wants a caveat against titles, the ability to negotiate the mitigation sums downward if its experts reckon the construction impacts are less than expected (but it only agrees to “negotiate in good faith” if they are worse) and requires those affected to waive any right to further compensation.
Whatever Reid and other property-owners may feel about Project Aqua, the moment they sign the deal they will be silenced. Meridian forbids them to object (“directly or indirectly”), make opposing submissions, lobby against, oppose or impede any application for a resource consent.
In fact, Meridian insists that they give written approval to its project. To make quite certain, Meridian binds them to silence for two years after the agreement terminates.
Given the level of local misgiving, this seems especially harsh.
The lawyers acting for some 120 households are Michael de Buyzer and Paul Cassin. They will not speak publicly, but Cassin had no objection to being reported (at the KALC meeting) as saying that Meridian’s negotiating stance was “mischievous and perverse”.
Meridian says it has negotiated agreements over 65 percent of the canal’s route, implying that some farmers at least found its agreements “fair and reasonable”.
This is Jim Chapman’s experience.
The new canal will leave the river and occupy 65ha of border-dyked (irrigated) land on the Chapmans’ farm, owned by the same family for five generations. “They offered us quite a good price – in theory,” Chapman says. “But when you take into account the effect on the farm as a whole, it’s not good money.”
His son Tony, who now farms the property, is one of 29 households so badly affected that they will lose their homes altogether. The farm will be cut in half by a road to a borrow site. Huge earthmoving trucks will thunder along it during construction. “To cross the road with stock we’d have to give them 24 hours’ notice, agree to a three-hour time frame and undertake not to do it more than seven times a week. It would make the place very difficult to farm.” All included in the price. The Chapmans are still negotiating.
Why?
“They’re talking distinct threats about a requiring authority,” he says. “Just verbal, but they say they don’t have to be so generous. They tell us we’d get a lot less than what they’re offering now.”
“We can compulsorily purchase all of the property we need,” Seay confirms. “But we’d prefer negotiated settlements, willing buyer, willing seller.”
“If I thought I could tell them to bugger off and leave us alone, I’d cheerfully do that,” says Chapman. “But I don’t think I’ve got that option. This is the New Zealand Government in the end. I don’t think we can take them on.”
Much less Meridian’s new alliance partner, the US giant Bechtel, which also designed Manapouri’s original power station. With close links to the Bush administration, Bechtel won the first big “reconstruction” contract in Iraq. The company is currently controversial over its water-privatisation ventures, suing the Bolivian Government after being chased out of that country by a popular uprising. A large part of the Aqua story, note, will be about water allocation.
Meanwhile, wider opposition is growing. Environmental and recreational groups argue that taking two-thirds of the river’s water will ruin one of the world’s rare braided rivers, terminally damage its ecosystem including endangered native birds, flora, the river’s trout and salmon fishery, its water quality, damage many of the district’s farms and its emerging wine industry.
“You can’t sell a river,” says farmer Mike Bayley. “It’s too precious, not just for now but for future generations. We just don’t want it to happen. We’re totally against it.”
Waitaki First is taking the four councils involved – Waitaki, Waimate and the Otago and Canterbury regional councils – to the High Court, seeking an injunction to stop the public notification and processing of resource consents. Its chair, Helen Brookes – whose beautiful garden will be 50m away from the new canal – argues that the new Local Government Act, in cases where an action will have significant consequences for a community, requires councils to consult with it before embarking on the consents process.
Locals already feel let down by “their” local council and Mayor McLay was even more unpopular at KALC’s meeting than Meridian. When he protested that they should be uniting against their “common enemy”, he was reminded that he had publicly supported Aqua previously. Poor McLay evidently doesn’t know what to think. “We’re a district that has been in decline for nearly 30 years,” he groans. “We’re in growth mode now and along comes Aqua and it’s causing us more grief …”
When cardies fight suits, the suits usually win.
Kurow has a little history on its side. Public outcry succeeded in stopping Lake Manapouri being raised. (Alan Mark, who led that fight, wrote in the Otago Daily Times that he was surprised by Meridian’s hard line on Aqua, given its excellent public relations over the second Manapouri tailrace [Listener, 15/6/02].)
But that was a historic last. Popular opinion favoured a series of low dams on the Clutha River, avoiding flooding Cromwell and much of the gorge; instead, Prime Minister Rob Muldoon foisted the hugely expensive Clyde high dam on them.
Meridian has already spent a lot of money downplaying the effects of its scheme on this valley, on trying to prove that it can improve upon nature.
But nature is already doing pretty well around here.
Meridian applied for its resource consents in May, hoped they would be “notified” (the public is given notice so that people can make submissions and have their say) by August and a date set for hearings by the end of the year.
Instead, Environment Minister Marian Hobbs “called in” some critical resource consents – that is, she decided they were so important that central government rather than local councils should deal with them. That left about 300 resource consents to be dealt with by local councils.
A week earlier, though, Hobbs had announced that resource-consent applications would be put on hold while she introduced special legislation on water allocation, deciding who gets what in the Waitaki Valley.
This is a critical issue. Farmers in the upper Waitaki are already bitter about Meridian’s monopoly on water, which they want for irrigation. Meridian says it can’t operate its existing power stations on the upper Waitaki without its water, much less build new ones.
Despite its SOE’s opposition – Seay says the company “actively advised” against it – the government is stepping into the fight.
Then Hobbs, evidently overlooking her earlier promise to put resource- consent applications on hold, announced her intention to notify the ones she had called in on December 6. She urged local councils to follow her lead.
So far, none of the four councils has shown any inclination to get in behind. “The government is floundering. We’re floundering,” says Waitaki Mayor Alan McLay.
The council is refusing to notify the applications until the new water allocation laws are revealed and the government irons out some of the problems with the consents process, such as its huge cost. So Waitaki says it won’t go any further until these matters are sorted. Two other councils, the Waimate council and Otago Regional Council, are likewise dissident. The last, Environment Canterbury, has yet to decide.
Groups such as KALC and Waitaki First are outraged at Hobbs notifying the applications over the Christmas holiday period, which they see as a cheap trick. “I believe she has been pressured by Meridian,” says Brookes.
But Meridian is scarcely happier.
The mess has led to a stalemate. It’s the reason that Seay says the hydro project is effectively on hold. “Almost 300 resource-consent applications are left in the hands of local bodies and we have no idea when they’re going to notify them. We don’t see a path. Delays can be fatal to Aqua.”
Despite the talk of other options, such as wind and solar power, Aqua remains the only readily accessible alternative on the books.
It even has some positives.
Meridian proclaims the proposed irrigation spin-off from the canal, “potential” for 60,000ha to be irrigated, $80m in extra farm production a year, 1800 more jobs; a real carrot in this area. McLay positively drools over its boost to the local economy. But the water will be pumped up after passing through three power stations first, so it will be costly. “It’s not going to happen,” says Brookes. “Yes it is,” says Fraser McKenzie, chair of Irrigation North Otago, the body involved in the scheme. “It’s going to be expensive. But the land is very difficult to farm without it.” This country is no stranger to droughts.
Turner, Meridian’s chief executive, promises a net economic benefit from Aqua of around $600m, half a percent on the GDP, around $500 per household.
Aqua will supply about eight percent of New Zealand’s electricity needs on present figures. Both sides point out that power use in New Zealand is rising faster than almost anywhere else. But Aqua opponents say that figure makes the project a stopgap only, and an unreliable one, given that it will be little use in a dry year such as this one, which caused the autumn crisis. Aqua supporters say the figure makes their project even more critical.
At the beginning of this year, the chances of stopping this project, or even getting in its way, seemed around zero. A tiny town, a sparsely populated district, little groups of anglers and environmentalists, a river already weakened by hydro projects, a valley so remote as to be almost unknown north of, say, Christchurch. Stack that against a government embarrassed by a power crisis exacerbated by an abortive 90s attempt to create electricity markets whose many faults included an almost total lack of forward planning. Something had to be done, and Meridian’s Project Aqua was nearest to hand.
Meridian’s complaints of its project being on hold, its threats of walking away, are probably no more than levers against a vulnerable government. Is Hobbs, by notifying the applications just before Christmas, coming to heel?
That doesn’t change the fact that Aqua is going bad.
Yet the betting is that the hydro project will go ahead, although perhaps the design will be modified.
The end justifies the means. In Aqua’s case, it’s just as well that something does.