Government tasks MPI and Crown Irrigation to review funding commitments

The Ministry for Primary Industries and Crown Irrigation Investments Ltd (CIIL) are reviewing the previous administration's mechanism for funding water storage schemes to figure out what the government is on the hook for.

MPI investment programmes director Justine Gilliland told Parliament's primary production select committee it is working through the terms of existing contracts and commitments, on which it will report back to the minister. That includes what phase of delivery each programme is at and what commitments have been made to the counterparties, being irrigators and construction companies.

"We will need to work with CIIL to understand the obligations then provide advice to ministers," Gilliland said. "It will a couple of months to get through all of them."

Gilliland said it was too early to consider whether any compensation would be needed, and that was a secondary issue.

National Party primary sector spokesman Nathan Guy, the former minister, questioned officials about how they understood the coalition agreement between Labour and NZ First, which says existing Crown Irrigation investment commitments will be honoured.

Crown Irrigation chief executive Murray Gribben told MPs there were currently 10 development contracts, one construction contract with Central Plains Water in Canterbury, and three other schemes close to a financial close, which would mean the government entity would provide construction funding within the next six-to-nine months.

"My understanding is that the briefing paper going to ministers is designed to make sure that there's a fully transparent process around what commitments have been made to all the various schemes - legal as well as non-legal," Gribben said. "It's a really important point to understand is we've got constitution which has got a purpose in it and we are doing what we did six months ago today - we are still writing checks, we are still funding schemes, we have not stopped until we get new advice from ministers and shareholders."

The government released its briefings to incoming ministers today, and Crown Irrigation's report to Finance Minister Grant Robertson and Agriculture Minister Damien O'Connor on Oct. 31 showed $46.3 million out of a $65 million funding line for the Central Plains Water scheme, which will be advanced in the period to September 2018. In its developing funding programme, some $14.1 million has been contracted while $42.1 million wasn't contracted.

(BusinessDesk)