Winter newsletter

Update on ECan’s draft Land & Water Plan

Environment Canterbury (ECan) have released a revised draft of their Land and Water Plan [click here to read] now scheduled for formal notification on 11 August 2012.

Of interest to those considering the transfer of a water permit (or portion thereof) is the key rule addressing transfers (now Rule 5.101). The rule has been revised to reduce the amount of water that must be surrendered from between 33 and 66% to 25 and 50%.

This is certainly a move in the right direction, however this still means that a buyer would have to purchase an additional 25 to 50% more water than they actually need, which will obviously have a significant impact on the commercial viability of the deal.

Much better news is the fact that all reference to "unused water" has been removed from the Plan. This suggests that permits that have not been used, or where water use has not been recorded, can be readily transferred subject to the requirement to surrender a portion as outlined above, in addition to complying with existing regulatory requirements.

HydroTrader is pleased that these amendments have been made to the draft Plan prior to notification. However the provisions are still what we would classify as "anti-trading."

We are also still at a loss as to why the relatively small-scale practice of "water permit trading" has been targeted by a rule requiring such a large percentage to be surrendered. Given that ECan has expressed no interest in consulting with HydroTrader, despite our deep involvement in water permit trading and transfers over many years, we’re unlikely to find out the reason for this any time soon!

So, we’ll let you know what the transfer rules in the notified Plan look like after the 11 August 2012, and make some suggestions for those who would like to lodge a submission.

Permits available to trade now listed on HydroTrader website

As advised in our last newsletter, permit allocations confirmed as being available for sale and lease, and allocations wanted to buy or lease, are now available on HydroTrader’s website [click here to view].

Allocations are grouped into groundwater zones and river catchments, which will make it much quicker for us to put buyers and sellers in touch with one another.

Given the provisions of the draft Land and Water Plan discussed above we strongly recommend that those wanting to trade water allocations make use of this new facility before the Plan is notified on 11 August 2012, or at least before it’s made operative (second half of 2013?).

Adaptive management consents due to lapse

Adaptive management consents granted in the Rakaia-Selwyn Groundwater Management Zone that have not been given effect to (i.e. not been used by either the consent holder or a leasee) will automatically lapse by the date specified on the resource consent. In many cases this will be in 2013. We strongly recommend that the consents are either used as originally intended before the lapse date, or traded to someone who can do so. Your chances of obtaining an extension to the lapse date are considered to be "remote"!

In most cases an aquifer test will be required before these consents can be used. The aquifer tests must be carried out between irrigation seasons when well interference effects are minimized. Winter 2013 is the last opportunity to carry these out before the lapse date.

Ashburton – Lyndhurst special deal!

We have a client with just over 840,000m3/year for sale or lease in the Ashburton – Lyndhurst Groundwater Zone that must be transferred and used by December 2012, or it will lapse. This is a great opportunity to secure a large allocation of water at fire-sale prices to irrigate a dryland block, or increase your application rate in order to convert to dairying.

If you’re interested you’ll need to pick up the phone in a hurry, as any aquifer test that’s required will have to be carried out in the next couple of months before the 2012/13 irrigation season gets underway.

Questions?

If you have any questions about the contents of this newsletter or our earlier ones, or ECan’s Draft Land and Water Plan, make contact with us as follows:

Dr Anthony Davoren – Managing Director (0274) 336-552
Gus Walkden – Finance & Marketing Manager (021) 555-985
Warwick Pascoe – Technical Director (027) 358-6378
David Hendrikz – Senior Technical Advisor (027) 715-7064

HydroTrader Ltd
PO Box 3132
Christchurch 8140
0508 HYDROTRADER (0508 493768)
www.hydrotrader.co.nz