Ratepayers in Tasman may have to cover the cost of the Waimea Dam's latest $20 million overrun.
Work begins on Waimea Dam in 2019. File photo. Photo: RNZ / Tracy Neal
The Tasman District Council is investigating its options for the latest projected budget blowout.
Waimea Water's mid-year report for 2022 has revised the dam construction costs to $185m, $20m over the $164m estimate in 2021 and up $80 million from the cost when the decision was made to proceed with the project in 2018.
Global supply chain issues, inflation, construction pressurs and the location's geology risks have been cited for the most recent rise in costs.
The Tasman District Council has included in the interest on loans to meet the shortfall, estimated to be $783,000 per year in its 2022/23 annual plan.
The cost will be partly offset by a decrease in budgeted dam operating costs in 2022/23 that will commence partway through the year, funded through increased water charges and local and district-wide targeted rates.
The Tasman District Counci is also using income from its enterprise activities to cover the interest related to irrigator's share in the 2022/23 year as it investigates other funding options.
Finance group manager Mike Drummond said it was important the appropriate funding channels were used to share the costs until there was a clearer picture of the impact the impending Three Waters Reform may have.
Council noted further cost increases through to the project's completion could not be ruled out, as identified but unquantifiable risks remained.
A further update from Waimea Water Limited is expected in June 2022.