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• Appendix C

• Water

• Waitaki Catchment

• Final Report
• Terms of Reference
• Model Scoping Report
• Project Aqua
• Media Statements

• C.1 Base Case
  • C.1.1 Social
  • C.1.2 Recreation and Tourism
  • C.1.3 In River Recreation
• C.2 Social/Recreation Impacts, Irrigation Sector Expansion
  • Costs
  • Environmental Existence Values - Expanded Irrigation
  • Recreation and Tourism
• C.3 Social/Recreation Impacts, Hydroelectricity Generation Sector
  • Social Impacts

C.1 Base Case

The "base case" scenarios for the social and recreation/tourism sectors at the regional level are linked closely to the environmental and land use trends within the study region. As noted above, some of these regional impacts are relevant at a national scale and others are not, due to substitution effects that are expected to occur within regions. The trend nature for these sectors and the values that are associated with them, are considered in the discussion below.

C.1.1 Social

The social impact of the proposed water allocation scenarios for the Waitaki Valley will be experienced by three District Councils, the Waitaki, Waimate and Mackenzie. Social impacts here are defined in terms of direct and indirect impacts to the local amenity of residents (at a personal and community scale) associated with changes to water allocation scenarios. While these impacts are not believed to be strictly relevant to the economic assessment of changes to water allocation at a national scale, they nevertheless represent an important element of the overall decision making framework

Although the population within the Waitaki Valley is quite small from a national perspective (some 3-4,000 people in total in the towns and rural areas) the net impacts of water allocation scenarios upon local communities²³ are nevertheless important to be acknowledged at a national scale, and to be studied in more detail at a local and regional scale to assess intra-national outcomes and impacts.

The net social impacts of different water allocation scenarios are not certain, nor quantifiable in strict dollar terms, due to the intangible nature of many of the "first-round" impacts themselves and because of ongoing discussions between landholders, District Councils and consent applicants regarding works and strategies designed to mitigate adverse outcomes. Additionally, since the specific development programs tied to some consent applications are unconfirmed (such as the nature and location of the Alliance workforce involved in construction of Meridian's Project Aqua hydro proposal), the social impacts from water allocations (and their resource development programs) cannot be described definitively.

The main townships in the Lower Waitaki Valley are Kurow and Duntroon, both of which are located on the southern bank of the Waitaki River on State Highway 83. These two towns between them represent some 2.5% of the population of the Waitaki District.

Today, Kurow (population 387) is the principal business centre for the Lower Waitaki Valley. Kurow enjoys a low unemployment rate of 5% (compared with 4.6% across New Zealand in the Dec 2003 Quarter). Employment in 2001 was spread over a wide range of industries, with the most predominant occupations being primary production (agriculture, hunting, forestry and fishery workers - 24.5%), followed by sales and hospitality industries (wholesale, retail trade, and restaurants and hotels) as well as community, social and personal services.

Duntroon township (population 120) lies approximately 44km to the east of Kurow and is immediately to the west of the Maerewhenua River. Although smaller than Kurow, Duntroon also supports several businesses with frontage to the State Highway and businesses in Duntroon provide for some of the core needs of the town's resident population and people travelling along the State Highway. The core services include the school, a hotel, a garage, a domain and café. In 2001 almost a third of the population in Duntroon was engaged in Agriculture, Hunting, Forestry and Fishing (29.4%) According to Statistics New Zealand, there was no unemployment in Duntroon Township at the time of the 2001 Census.

The largest town in the upper catchment is Twizel (population 1,011), which was planned and developed to house workers constructing the Upper Waitaki Power Development. The town was established in 1968 and the power scheme was completed 18 years later. Although designed for a total population of approximately 5,800 people, Twizel is today a service and tourist town, with its population more than trebling in the summer months as visitors come to Twizel as a base for boating, sailing, water skiing, hiking and mountain climbing. Although Twizel has lost more than 100 of its population since 1996, its current size is roughly equal to what it was in 1991 (1,020).

It is noted that Twizel has one of two national rowing courses at nearby Lake Ruataniwha, and experiences significant population influx for national rowing championship events.

The trends in resident population for the towns within the Waitaki Valley indicate a significant decline in local population over the recent past, with a reduction of some 10% across the lower Waitaki Valley area over the ten years to 2001 (shown in Table 20 and Figure 4) and a decline of some 27.4% across the upper Waitaki Valley²⁴ 8.2% across the Waitaki District Council.

The medium population forecast for the Waitaki District prepared by Statistics New Zealand anticipates that the population of the district will fall by a further 17% by 2021, or an annual average of just below one percent. (It is unclear whether Statistics New Zealand has incorporated any underlying trends in land use change in the district into these forecasts). Waimate District is expected to decline by a similar proportion, while the Mackenzie District is expected to remain stable in terms of population until 2011 and then decline by 5% by 2021. Regional and National comparisons are shown below.

Source: Statistics New Zealand (as reproduced for 2001 census).

Figure 4: Selected Population Projections, New Zealand (2001-2021)

Source: Statistics New Zealand (Population Forecasts, Published June 2003.)

Overall, the population of the Waitaki Catchment is in slow decline - in line with changes in the overall district, but is the reverse of the wider region (Otago and Canterbury) and the nation. Apart from an increase in the number of children (0-14 years) in Duntroon, the population across the district continues to age.

Agricultural, hunting, forestry and fishing industries are particularly significant for the workforce along the rural area of the canal alignment and although these industries are still important employers in the townships, community, social and personal services are also significant employers in these communities.

C.1.2 Recreation and Tourism

The lower Waitaki Valley (below Waitaki Dam) offers an extensive range of land- and water-based recreational opportunities that are utilised by a wide variety of user groups, including local residents and visitors from elsewhere (tourists). Much of this usage is centred on the Waitaki River, which dominates the landscape.

Previous surveys suggest a characteristic of recreational use of the lower Waitaki River is a high proportion of return visits, despite a wide user catchment. and is used by individuals from throughout New Zealand and, in some cases, internationally. More recent investigations also indicate a high proportion of use by local and regional residents.

Investigations undertaken by Boffa Miskell in 2001 and 2002 (BM 2003a) indicate that the key recreational uses of the Waitaki River include: trout fishing, salmon fishing, whitebaiting, four-wheel-driving, rest stops or picnicking, viewing or checking the river, jet boating, swimming, walking and walking the dog (BM, 2003a). This range of activities has been confirmed by a more recent study commissioned by Environment Canterbury (ECan, 2004). The main recreational activities identified as being undertaken by the Waitaki Valley community include: hunting (game birds, rabbits, possums), walking, golf, tramping, picnicking, sightseeing, horse riding, gardening, bowls, squash and water-skiing. The following section describes the key recreational sectors in more detail.

C.1.3 In River Recreation

Fishing

Fish species recreationally fished for in the lower Waitaki River system include: trout, salmon , eels, whitebait, Kahawai, flounder, mullet, cod, and a variety of other saltwater fish species. A unique feature of the Waitaki is the presence of major fisheries for both trout and salmon in the same river, which adds to the breadth of its appeal. Although the flow and sediment transport regime is not necessarily optimal for exotic salmonids, the lower Waitaki River (and its tributaries) currently supports a recreational fishery for Chinook (quinnat) salmon, rainbow and brown trout of regional/national importance (CSI Fish and Game in BM, 2003b).²⁵

Fishing is undertaken along the entire length of the Waitaki River using jet boats, dinghies and by direct access along the banks. Salmon fishing tends to be split amongst mouth and upriver anglers, with fishing from anchored jet boats a popular option. Trout anglers tend to concentrate more effort in the upper and middle reaches of the river (Lakes Benmore, Aviemore and the Twizel river are noted for their trout fishing (ECan, 2004). Fish and Game New Zealand currently recognise 26 sites of public access to the river.²⁶

The 2002 Waitaki Community Recreation Survey showed that almost 17% of respondents visited the river for trout fishing, whilst just over 9% of respondents visited the river for salmon fishing and another 12% visit for mixed trout and salmon fishing.

The Waitaki River is also an important fishery for shortfinned and longfinned eels. The majority of eeling on the Waitaki is undertaken by jet boat and occurs on the north side of the river immediately opposite Duntroon and between State Highway One and the river mouth (ECan, 2004).

The salmonid population of the lower Waitaki River is the basis of a recreational fishery of regional-national significance. It has been estimated by NIWA that 34,500 angler days (± 3,145) were spent on the Waitaki River in the 1994/1995 year (F&G, 1998). This equates to an average of 162 anglers on the river every day of a seven-month season, or 113 for the extended ten-month season. A forthcoming update of this survey by Fish and Game New Zealand indicates that the extent of angling at the Waitaki River is similar to what it was in the past survey period (~30,000 angling days per annum in 2002/2003²⁷) and that the Waitaki enjoys the third highest number of angling days in New Zealand, behind Matuara River (50-60,000 angling days) and Waimakiriri (Mark Unwin, NIWA, personal communication Dec 2003).

During peak salmon runs, hundreds of anglers can be found on the river on any given day. This peaks for events such as the Waitaki Salmon Fishing Competition (in mid March each year) which normally attracts around 900 contestants each year. The Salmon run in the Waitaki River is known to occur later in the year than rivers further to the north (Waimakiriri and Rakaia in particular), which adds to its overall attraction.

The variety of species coexisting in the same river (rainbow and brown trout, and Chinook salmon) is a unique feature of the Waitaki. Another of its key attractions is the nature of its flow, which is faster, less predictable and "wilder" than most other rivers in the South Island, despite being controlled by existing hydroelectric development upstream. Local anglers and Fish and Game New Zealand speak of the "Big River" feel of the Waitaki River which attracts anglers who appreciate the force and wildness of the river, but discourages others (in comparison, the average annual flow of the Waimakiriri is 130 cumecs, Rakaia is 245 cumecs). Fish and Game New Zealand supported this opinion in a submission to the Project Aqua consent application (BM, 2003b):

As recorded in Fish and Game angler surveys, local anglers almost exclusively fish the Waitaki and don't need to experience fishing in other rivers. Their conscious appreciation of the big river experience of the Waitaki is likely to be much less than that placed on this feature by non-local anglers. Non-local anglers travel further to experience the fishing not offered to them closer to home and they would therefore rate the Waitaki more highly for those features.²⁸

The quote above from Fish and Game is supported by the Waitaki River Recreation Study undertaken by Boffa Miskell in 2002. Of those surveyed, 61% of Salmon anglers, 37% of trout anglers and 35% of trout/salmon anglers only fished the Waitaki River.

The national significance of angling in the Waitaki catchment is indicated by nature of the fishery itself on a national scale and the origin of the anglers that it hosts. NIWA (2003) note that the Chinook Salmon fishery in the Waitaki is of "national significance" and the trout fishery is of "regional importance" (p32-33) in terms of the size of fish stocks that are available. The Water Conservation order for the Rangitata River (MfE 2002) also notes the national significance of a group of four Salmon fisheries throughout the country, including the Waitaki.²⁹

The origin of the anglers themselves, is predominantly local and from elsewhere in the South Island, which is unsurprising given that angling is much more prevalent in the South Island than in the North.³⁰ The 2002 Waitaki Recreational Survey found that only 7% of salmon anglers, 4% of trout anglers and 7% of salmon/trout anglers were from the North Island or international (see Table 21 below).

Source: BM (2003b)

In terms of economic value, several studies have been undertaken in recent years of the value of fisheries (angling trips). A summary table of studies of significant fisheries from Kerr (2003), is presented below in Table 22.

Source: Kerr (2003)

Notes:
1. Contingent Valuation Method.
2. Travel Cost Method

The studies listed above provide an order of magnitude estimate of the economic value which is associated with angling in some New Zealand rivers of high conservation value. The economic value to users of the river range from $14 to $103 per angling visit, depending on the assumptions made. The Rangitata study (Greer and Kerr, 2000) found the value of angling per angler per trip to be between $40 and $103. Given the average trip length of 2.9 days (Greer, 2000) among anglers on the Rangitata, the value of angling per angler per day is between $13.8 and $38.3 If this amount were applied to the number of Waitaki River user days, it would equate to a use-value of the fishery of between $475,000 and $1.3m per annum (based on the NIWA 1994/1995 angling- day estimates).

This value presents the likely order of magnitude of fishing in the Lower Waitaki river, based on the number and length of visits of anglers that the river currently attracts. In view findings presented in Appendix B.2.2.7, and since it appears that the fishery in the Waitaki is stable (overall) the level of recreation value from this activity is expected to remain steady throughout the study timeframe.

Jet Boating

Jet boating on the Waitaki River occurs from Kurow Bridge down to the sea, with formal boat launching ramps provided at Kurow Bridge, Duntroon, and on the south bank immediately downstream of the South Highway 1 Bridge. Jet boats are used for both dedicated motor boating and as a means of accessing mid-river angling locations. ECan (2004) notes that jet boating does take place in Lake Tekapo, Lake Benmore and Lake Aviemore.

At times of higher flows, the Waitaki River downstream of Kurow is considered to offer a rare "big-river" jet boating experience by providing an opportunity to boat a large, fast-flowing braided river over a considerable distance. While it is possible to jet boat on much lower flows than the Waitaki (the Waimak River hosts a regular competition with a flow of 30-40 cumecs) the size of flow at Waitaki is its defining charcteristic. The rarity of this experience tends to bring jet boating enthusiasts from further afield within New Zealand than angling. Only 33% of jet boaters surveyed in the Waitaki River Recreation Survey were from the local area (BM 2003b). The busiest months for jet boating the Waitaki are from October to April.

Jet boaters surveyed tended to be less loyal to the Waitaki River than anglers, with only 33% of those surveyed in the Community Recreation Survey jet boating exclusively on the Waitaki River.

Each year over this period the New Zealand Jet Boating Association organises an average of six to eight events on the river which cater for both recreational usage and national and international sporting events. Membership of the Waitaki and Otago Branches of the New Zealand Jet Boat Association is approximately 130, compared to 800 in Canterbury. Many jet boat members enjoy the sport with their families and friends who are not members and there is therefore a significant body of boaters who are not affiliated to a recreational body. This lack of any affiliation coupled with the lack of any formal regional licensing system for jet boating has made estimation of the number of jet boating days on the Waitaki River impractical.³¹ Without a reasonable estimate of the extent of jet boating activity on the Waitaki (in terms of user days) and without a New Zealand case study of recreational values for jet boating, it is difficult to provide a quantitative or dollar description of its level of significance.

Shooting and Hunting

Fish and Game representatives from the Central South Island (CSI) consider the Lower Waitaki River and associated wetlands are outstanding publicly accessible gamebird hunting and waterfowl habitats of at least regional importance.

Hunting or shooting was the main "non-river" recreation activity reported in the 2002 Waitaki Community Survey for 14% of respondents.³² The majority were duck shooting, hunting rabbits, pigs and possums. Hunters have above average success compared with the remainder of the region and there are a higher proportion of non-local hunters using the river compared to the regional average.

Waimate Rod and Gun Club members have estimated that there can be as many as 200 licensed game bird hunters (mostly local to the Valley or from neighbouring districts) on the river at any one time during opening weekend at the start of the shooting season. Central South Island (CSI) Fish and Game reports that it issues approximately 1700 to 1800 whole season gamebird hunting licences annually, although it is not know how many individual hunting trips are made by those carrying licenses. Of these approximately 490 (28%) are issued in the Oamaru/Kurow/Waimate area. The Waitaki River and its associated wetlands account for approximately 31% of all gamebird hunting activity in the CSI region. Central South Island Fish and Game also reports that over the period from May 5 to July 29 2001 gamebird season hunters spent just under 9,000 hours on the Waitaki and that 16,400 waterfowl were harvested (BM, 2003b). The ability of hunters to access large parts of the river without requiring landowner permission and the diversity of game contribute to the river's popularity. In the upper part of the catchment, the Tekapo River is noted as the most frequented are a for waterfowl hunting (ECan, 2004).

The Waimate Rod and Gun Club distinguish three distinct shooting grounds within the Waitaki River: the central backwaters and islands of the riverbed, the willowy riparian margins at the river's edge and the distinct ponds and wetlands scattered up and down the river valley. The terraces and hills surrounding the lower Waitaki River also provide additional hunting opportunities for rabbits, possums, quail and chukar. All access to hunting on private land is conditional on landowner consent.

The valuation of the recreational value from water fowl hunting is difficult, due to both the lack of firm numbers of the number of hunting trips which take place in the Waitaki through an average year, and the lack of any suitable New Zealand based studies of the recreational values elsewhere from waterfowl hunting.³³ While several studies have been undertaken of waterfowl hunting overseas (Rosenberg and Loomis, 2000, note 13 separate studies which have been undertaken in the US alone) transfer of the valuations from these studies to the New Zealand and Waitaki context is inappropriate without fuller information about use levels and the range of substitutes present in the Waitaki Valley.

Swimming

Safe swimming holes are often limited on the Waitaki River due to its fast and variable flow. Three percent of respondents to the 2002 Waitaki River Recreation Survey reported swimming as their main activity, while 7% of respondents to the 2002 Waitaki Community Survey reported swimming in the river as their main reason for visiting it. Bathing occurs in quieter and more stable locations typically located along the river's edge and the quieter back braids. While an important pastime to those who swim in the river, the nature of the river and the small number of swimmers is not believed to give rise to a significant extent of recreational value at a national scale.

Camping

There are currently four formal campgrounds sited along the lower reaches of the Waitaki River. The largest campground within the Valley is the Kurow Holiday Park, located on the south side of the river, immediately north of Kurow township. From January to December 2001 there were 11,167 recorded overnight stays at the campground. Others are the Duntroon Domain Recreation Reserve (owned and maintained by the Waitaki District Council), the Waitaki Mouth Motor Camp (on the south side of the river mouth) which caters for recreational anglers during the annual salmon run and the Glenavy Motor Camp, on the north side of the river mouth, which also caters for the influx of recreational anglers.

Inland from the river and further to the south of Duntroon is the Dansey's Pass Camp Ground. Offering similar services as the Kurow Motor camp, the campground can accommodate around 200 visitors a night. In 2001 there were approximately 20,000 overnight stays at the Dansey's Pass Camp Ground.³⁴

Canoeing and Kayaking

Canoeing and kayaking are not as popular as other activities on the Waitaki River, mainly due to the risks involved and the lack of "interesting" white water. Canoeing and kayaking were, however, reported as activities in the 2002 Waitaki Community Survey the activity was largely confined to minor lakes by the river and minor braids. ECan (2004) also note that canoeing/kayaking occurs on Lake Waitaki with a medium level of frequency. The Waitaki river is not mentioned in New Zealand's the national whitewater guides.

Other Activities

Aside from the main recreational pursuits listed above, a number of other activities are also undertaken within the general study area but are either undertaken by a smaller number of people (gliding, skiing, 4WD driving) or are regarded as generally passive, such as sightseeing.

Level of Conflict between Users

Aside from the level of recreational activity which takes place on the Waitaki, the quality of that recreation is also an important indication of the value that it brings to users. The level of conflict, or congestion that is experienced is one potential indicator of this quality. Increased congestion with the extent of resource held constant and higher use may result in an overall higher level of recreation benefit from increased use, whereas increased congestion with the number of users held constant and the available resource reduced would likely indicate a reduced level of recreation value overall.

Boffa Miskell (2003b) found that at the time of their survey (Jan-March 2002) that the Waitaki River was characterised as a "low conflict river" indicating that it was likely below its social carrying capacity. Respondents to their survey were asked whether they saw or interacted with other visitors to the Waitaki River on this or other visits. A total of 85 people (21%) said they had no interactions with other visitors. Table 23 shows the main activity being undertaken by the remainder and how they felt about other visitors (n=496 and includes multiple responses). Trout and salmon anglers were largely positive or neutral towards other visitors while only 2% of all responses described negative experiences with other visitors.

Note: Survey period did not coincide with Shooting/Hunting Seasons, and is therefore not completely representative.

Source: Boffa Miskell (2003b).

Statistics gathered by the Kurow Community Information Centre, located on State Highway 83, indicate that approximately 5,000 individuals visited the centre each year in 2000/2001 to 2002/2003 (Tourism Waitaki, personal communication 2003).³⁵ The visitor information centres in the upper valley receive much higher numbers of visitors, with the Visitor Information Centre at Lake Pukaki receiving 98,000 visitors per annum.³⁶ (No aggregate visitor numbers for the information centres at Twizel or Lake Tekapo are available³⁷). According to the Mackenzie Tourism Development Board, the Mackenzie region makes up 22.3% of the total tourism income of Canterbury (excluding Christchurch) and given the size of incomes to the region, the Mackenzie district is expected to receive a gross visitor spend of $124.4m in 2004 (Brian Tierney, Mackenzie Tourism Development Board, Personal Communication).

The difference in the number of visitors between Kurow in the lower valley and Lake Pukaki in the upper Waitaki valley indicates that the lower Valley remains off the main tourist trail between Queenstown/Wanaka and Christchurch.

At the bottom of the catchment in Oamaru, the local visitor centre attracts some 70,000 visitors per annum.³⁸ Of this total, just over 85% were identified as international visitors. On the basis of a random visitor survey of 900 people, 20% were day visitors and 75% of visitors were staying one or two nights.

Winter months attract fewer visitors and there is less recreational activity compared with the summer period in both the lower and upper catchments. The main fishing season (salmon/trout) occurs over summer, and passive recreational activities such as camping and swimming are prevalent throughout the Valley during warmer months. While the upper valley has some developed winter snowfields, it cannot compete effectively with the infrastructure in Queenstown/Wanaka and hence there is little activity at that time of year.

Early to mid winter is a time where activity associated with the river tends to be related to waterfowl (e.g., duck shooting) and discussions with user groups. The level of visits to Visitor Information Centres throughout the Valley indicate that overall recreational use on the river is lower in the months of June and July.

The comparison in terms of numbers visiting respective Visitor Information Centres between Oamaru, Omarama and Kurow is presented below in Figure 5.

Figure 5: Visitor Counts Oamaru, Omarama and Kurow VICs 2002/2003

Source: Tourism Waitaki. (Tania Pacey, Information Manager Personal Communication)

There are no reliable tourism data for tourist activity in the Waitaki Valley itself (in terms of employment, accommodation etc) but there are some data which relate to the Waitaki District generally (Tourism Waitaki).³⁹

In the year to September 2003, Tourism Waitaki⁴⁰ accounted for 1.02% of the New Zealand total guest nights, down from some 1.17% in the year to Sep 1997. Mackenzie/Timaru was similarly stable over the past 6 years. As shown in the chart (Figure 6) the proportion of tourist activity in the Waitaki District has largely remained stable over this time period.

Figure 6: Proportion of National Guest Nights (1991-2003)

Source: Statistics New Zealand (2003).

The Waitaki and Mackenzie tourist districts have grown in terms of the number of guest arrivals⁴¹ and guest nights.⁴² Tourism (as measured by overnight guest arrivals) within the Waitaki District (average of 5.2% per annum) has almost kept pace with growth at the national level, but has not kept pace with Queenstown-lakes/Central Otago. The number of overnight guest stays in the Waitaki Tourist District (2.6%) has not kept pace with growth elsewhere in New Zealand (5.7%) or Queenstown-lakes/Central Otago (6.5%).

Note: ¹AA is Average Annual

Source: Statistics New Zealand (2003).

The proportion of overnight guest nights purchased by international visitors to the Waitaki Tourist District has been fairly steady at 29% over the past seven years (see below).

Figure 7: Average Proportion of Guest Nights Sold to International Visitors

Source: Statistics New Zealand (2003)

It is important to note that the statistics for the Waitaki District at large are unlikely to be closely representative of the situation in the Waitaki catchment per se, since the tourist activity within the Valley represents a small fraction of the tourist activity within the District (as shown in Figure 7, above) and since it is largely day-visit based, is not captured in the above analysis which relates to accommodation.

The relative size of the tourist market in the Waitaki Valley compared with the Waitaki and Waimate District Councils is shown in the Table 25.

Source: New Zealand Business Register Statistics

Note: 1) Lower Waitaki - Waitaki District, Upper Waitaki - Mackenzie District.

Note there are three accommodation providers in Glenavy (Waimate District Council)

Overall the tourism market in the lower Waitaki Valley is quite small on a regional scale, and is quite small on a national scale, with only the upper catchment capturing a significant number of day visitors. Current trends for the region do not indicate that a major trend of higher value or volumes of tourists will come through the Lower Valley in the forseeable future.⁴⁵

C.2 Social/Recreation Impacts, Irrigation Sector Expansion

The development of irrigation within the valley would be expected to have a positive impact on the demographics of the local area and arrest some of the expected population decline in the region. On the basis of past experience in other catchments throughout the South Island (as noted in Taylor, et al., 2003), the introduction of irrigation brings with it a changes in work practices and perspectives on farm management (rather than a mere perception of reduced drought risk) which encourages changes of ownership as a new generation of enthusiastic land holders comes to an area to pursue new technologies. This has been the case on the Waitaki in the past as many established dry land sheep farmers sold their farms when community irrigation schemes arrived and were replaced by young families from the North Otago down lands (McCrostie and Taylor, 2001).

A number of case studies have shown that new irrigation development will bring an increase in population, employment⁴⁶ and output (MAF, 2002) as well as a younger resident and working population, higher household incomes and more viable schools and other community institutions.

MAF (2003) estimated that from previous observations, the introduction of irrigation to a previously unirrigated area would create 7.5 equivalent full time jobs (EFT) per thousand ha (net) developed at the farm level and 17 EFTs at the district level (p.28). The low unemployment in the Waitaki Valley suggests that each additional job created from irrigation would bring a new employee (and their family of three other people) to the district. Therefore with each 1,000ha of development some 17 x 4 = 68 new residents come into the area. (Note that from a national economic perspective, the new employment in the Waitaki Valley from irrigation may be expected to be developed elsewhere as investment funds for irrigation or other employment generating infrastructure are put into place. Hence there is not a demonstrable national impact from a population shift to (or from) the Waitaki Valley, but rather a significant local and regional impact).

In region terms, irrigation development would thus be expected to have an impact on the total resident population as it develops over time. Between 6,000 and 14,000ha of irrigation development is considered to be probable for the Waimate District over a period of 20 years if current consents for the District are granted. On the basis of the ratio (and family member) assumptions above, this would indicate a net population increase of between 408 and 952 people. If this were to occur, the estimated population decline in the Waimate District would be arrested to 13% instead of the underlying trend figure of 19% (Appendix C.1.1 above). If all of the irrigation proposals for the Mackenzie DC are implemented, the districts population will increase significantly. Estimated population impacts for Other regions are as follows:

Source: MAF (2003), Statistics New Zealand (2003), SKM estimates

As noted above, the increase in population from the implementation of irrigation brings with it a broader reinvigoration of social infrastructure and networks, with schools and other community services becoming renewed as young families move into the region (McCrostie and Taylor, 2001).

The introduction of irrigation may also bring with it a broader sense of reinvention at a district scale, particularly where it leads to horticulture with spin offs such as viticulture-related tourism or speciality fresh produce. Examples of this form of social and economic development include the Waipara Valley (Glenmark Irrigation Scheme).

Costs

As well as social benefits, irrigation brings with it the potential for resource conflict and social disharmony. This can occur at least over the medium term, as the traditional model of generational change in a community is accelerated and many new families move into an area over a short space of time (McCrostie-Little and Taylor, 2001).

Conflict may also arise from labour shortages at particular skill levels or from the disappearance of traditional low skilled on-farm or factory processing employment within the local area in favour of higher skilled jobs (McCrostie-Little and Taylor, 2001).

There are also direct impacts on communities as the irrigation schemes are constructed, with disruption of local amenity from noise, dust and congested roads during construction which causes stress to nearby residents (Talyor et al. 2003). Short term placement of construction workforces within small rural communities may also become an issue for the short term, which may be mitigated with appropriate planning. Other longer term impacts from development of irrigation include noise and vibrations associated with heavy truck movements (more frequent from dairying).

Overall, however, the (local and regional) social benefits from installation of irrigation development are likely to be significant as population decline is slowed or reversed and communities are able to produce higher value products which increase their own disposable incomes.

Environmental Existence Values - Expanded Irrigation

At the present time, it is unclear how the development of further irrigation within the catchment would affect the environmental existence values of the catchment. Irrigation development can have a major impact on the appearance of rural landscapes, particularly in regions which were previously dominated by dryland agriculture such as the Mackenzie Basin. While the "greening" of previously arid environments may give rise to an increase in existence values for some sections of the community, others may feel a loss of value from the transformation of a region from one state to another by the application of "unnatural" irrigation water, (even without any other offsite environmental degradation). Neither the significance nor the direction of this issue can be determined definitively without primary research of existence values within the catchment.

Recreation and Tourism

As noted above, recreation in the Lower Waitaki catchment is focused upon the Waitaki River, and in the Upper catchment is focused on the Mackenzie country "hydro lakes" of Tekapo, Benmore, Aviemore, Ohau, Pukaki and Waitaki, where pastimes include trout fishing, sightseeing, boating, canoeing or water skiiing and rowing.

The irrigation consent applications which are presently being considered represent only a small proportion of the available river flow for the catchment, and are not expected to have an adverse impact on current recreation levels by reducing the quantity of water available in the streams and rivers or by changing operating levels of the recreational lakes through the catchment.

As noted in Appendix B.3 there are nevertheless risks to recreation from more intensive land use enabled through irrigation. While these impacts are perhaps generic of farming enterprises across the country, the high value placed on water-based recreation in both the upper and lower reaches of the Waitaki Catchments highlight the need for careful mitigation and management of any adverse impacts from land use change.

Both increased nutrient and microbial concentrations in water bodies and water from increased stocking rates have the potential to damage recreational values via lowering the aesthetics of the water or by causing a health hazard to users. As noted in the environment section, A proportion of these environmental effects can be mitigated or reduced through appropriate farm management practices, such as controlling nutrient discharge rates in sensitive areas and at sensitive times of the year, fencing riparian margins and using biodegradable or environmentally friendly fertiliser, herbicides and pesticides.

If chemical and effluent runoff and seepage to waterways from intensively farmed land can be managed, then there are unlikely to be any significant effects on the main recreational activities within the Waitaki Catchment.

In terms of benefits to recreation, it is unclear whether the supression of dust in the dry Mackenzie country in the upper catchment will encourage wider types of recreation, or may encourage sightseers to enjoy green pastures in favour of the previously dry, bare earth typical of the Mackenzie high country. It is also unclear whethe new irrigation infrastructure (channels, dams) will provide a significant new recreation opportunity for local residents.

Tourism within the Waitaki Catchment is divided between the reaches above and below the Kurow bridge, with little tourist activity in the lower reaches and significantly more activity (albeit largely day-visits) in the upper catchment as tourists make their way along the trail from Queenstown/North Otago back to Christchurch via the Mackenzie High Country.

As with the case of recreation, irrigation development is not expected to harm the tourist attractions of the picturesque waterways of the Upper catchment, provided that off-site effects more intensive land uses are contained.

The question about whether irrigation is likely to provide a tourism benefit, in terms of supporting and extending the number of tourist visitors, is more difficult to estimate, since it would depend on both the type of crops which are irrigated (dairy, pipfruit, viticulture, etc) and the trends in the various tourist markets affiliated with these products.

While there are tourist markets associated with a range of horticultural crops (berry picking, fine produce stores) the land use with perhaps the closest affinity with tourism is viticulture. Certain regions such as Central Otago and the Waipara Valley have become nationally recognised wine tourism regions in a relatively short space of time, following successful introduction of irrigation to areas that were previously dryland. The epicentre of wine tourism in New Zealand is in Marlborough, however, with over 60 wineries and nearly half of the national area under vine.

Since 1993, the number of wineries in New Zealand more than doubled from 175 to 421 and the area under production has more than trebled from 6,100ha to more than 19,400ha.⁴⁷ To capture the growth in wine tourism, several tour operators have developed specialised coach tours to wine growing regions, spanning the entire country. Wine tourism is also increasingly popular among international tourists. In 1997, less than 1% of international tourists to New Zealand visited a winery, yet by 2002, this had increased to 5.7%⁴⁸ (TRCNZ, 2003).

The likelihood of the Waitaki Valley following the lead of some of the recent viticulture tourism successes will be dependent on the scale of viticulture development in the Valley, the quality of the wine produced and the proximity of existing touring markets or routes to the which may provide leverage for a shift in tourist image for the Valley.

Although the Waitaki Valley has already planted some 30ha to grapes, there is the possibility of significant growth over the next 20 years (see Appendix E.2). However accurate estimates regarding the degree of growth in the Waitaki Catchment, or supplied from the Waitaki River to other catchments cannot be made on available data.

C.3 Social/Recreation Impacts, Hydroelectricity Generation Sector

The social and recreational / tourism implications of the energy development option (Project Aqua) have been documented extensively in the Assessment of Environmental Effects - Project Aqua prepared by Meridian Energy (MEL 2003) and in subsequent submissions to the Meridian Consent Application prepared by various stakeholder groups.

In November 2003, SKM also held a number of workshops in the Waitaki Valley to obtain further clarification of the most significant expected impacts to social, tourism and recreation as a result of the development of Project Aqua.

The outcomes for the natural environment and social/recreation/tourism are highly interdependent in all three scenarios (base case, energy, irrigation) and hence the expected impacts in these sectors is directly influenced by the latest consensus of forecasts of environmental effects both instream and outside of the river.

As a result of several factors, however, there is still a significant level of uncertainty regarding the likely extent of social and recreational impacts from Project Aqua. This is due to a combination of factors, including:⁴⁹

• The inherent uncertainty of the impact that large scale construction activity will have on the level of commercial activity within townships in the Valley from both short term demographic and environmental changes
• residual uncertainty about the specific size and nature of the construction workforce which would develop the project and where it will be sourced from and housed
• the unfinished state of negotiations for mitigation plans between Meridian Energy and various stakeholders
• uncertainty regarding overall community and visitor satisfaction with specific mitigation measures which have been proposed (such as the recreational lakes at Kurow and Duntroon in compensation for reduced river access at those towns)
• the unfinished state compensation negotiations payable to affected parties (directly or indirectly affected parties) which apply to foreseeable impacts unable to be mitigated by Meridian Energy
• residual uncertainty about some physical impacts to the natural environment and how fully adaptive management during the operations phase will address these
• uncertainty regarding net community and visitor satisfaction with expected changes in resource quality (especially fisheries) which may favour some groups and disadvantage others.

In view of these uncertainties, the following sections attempt to describe the significance of the social and recreational/tourism impacts arising from the project Aqua proposal.⁵⁰

Social Impacts

The effects of Project Aqua may be divided between those occurring during construction and permanent impacts. While the permanent social (and other) impacts from Project Aqua are more significant from a temporal perspective, the proposed seven year (84 month) construction period for the project is expected to bring with it the most acute disruption to social and community life within the valley, due to a number of demographic (generally related to the influx of construction workers into a small rural community) and physical (dust, noise, congestion, loss of recreational outlets) impacts.

The local community and individuals within it will experience significant changes to their daily lives and activities as a consequence of the project. The necessary land requirements and construction phase will directly affect a significant number of properties and people within the lower Waitaki Valley (MEL, 2003).

Noise and Dust Impacts

The significance of the social impacts from Project Aqua will vary across members of the community. Perhaps the most severe social consequences of the project will be felt by those households and business operators who are forced to relocate as a result of noise during construction. (At the time of writing, the number of households requiring to be evacuated in Kurow and Duntroon had not been confirmed, however Boffa Miskell noted (BM, 2003c) estimated that some 27 dwellings in Kurow and Duntroon are likely to require relocation and a further 70+ are between the "inner and outer" noise buffers). Many others throughout the Waitaki Valley will remain in their homes suffer from loss of amenity due to the dust and noise and traffic congestion during construction, or will suffer loss of business due to the adverse impacts of noise and dust and from haulage roads bisecting their property. Due to the small size of the communities involved, the relocation of up to 15% of their long term residents may also have an impact on the remaining residents, particularly if they fill positions of influence within their communities.

Meridian Energy is currently negotiating with directly affected parties (at both individual and District Council levels) to come to arrangements regarding mitigation arrangements and compensation payable to their offset loss of amenity.

In terms of national economic significance, the impact of dust and noise on the local communities in the Lower Waitaki is unlikely to be numerically significant due to the relatively small population involved. The economic value of the amenity lost is best considered in terms of the cost of the corresponding mitigation measures and compensation paid at the individual and collective levels, which is assumed to be mutually satisfying. Since these payments/measures have yet to be made public, they cannot be included in explicit dollar terms in this analysis.

Influx of Workforce into the Region

Further social disruption is expected to be incurred with the influx of a large workforce into the local area, bringing with it inevitable social disharmony as community and social resources are overrun by the sheer numbers of workers entering the region. The precise nature of the workforce is yet to be determined, and until it is finalised the geography of the impact will be unclear (impacts on upper or lower catchment) as will the cost of appropriate mitigation measures and compensation for impacts which cannot be mitigated. The Assessment of Environmental Effects report (MEL, 2003) indicates that the Alliance⁵¹ construction workforce will peak at approximately 700 with an average of 260 additional construction staff working in the district. It is also estimated that at the peak there will around 500 additional non-construction jobs in the district while over the life of the project there will be an average of 440 non-construction jobs in the district (Section 8-13).

The population effects of Project Aqua have been estimated to be related to the size of the workforce which moves into the area with the project. If a total of 1,500 people are involved in the construction project (only a peak of 700 construction and 500 non construction workers has been estimated in the Project Aqua Consent applications) and 10% are already living in the region (as per AEE assumptions), then if 10% of the workforce decides to settle in the area with their families, this would represent a net increase in population to the Valley of some 310 people.⁵² If all of this new employment and their families settled in the Waitaki District and remained by 2021, it would not be able to entirely arrest the expected population decline anticipated by Statistics New Zealand for the region (decline of 16% over 20 years to 2021, rather than 18% under the base case).

In addition to these population impacts, many local residents have expressed concern about the ability of current community facilities and clubs as well as health and other shared specialty services (schools police, ambulance, health care) to deal with additional demands for their services from a large incoming workforce. Still others have noted concern about how a major new employer in the region will affect the existing conditions in local labour markets for semiskilled and trades labour in particular. As noted above, the composition and nature of the workforce is as yet undetermined and until it is defined with more certainty it will be unclear how many of these impacts will occur at either a local or a regional level.

From a national economic perspective, the disruption to local community life is significant (however perhaps not in terms of quantity), since it represents a loss of amenity for the townspeople who currently enjoy their lifestyles as they are.

The regional effect of the construction workforce (Waitaki, Mackenzie, Waimate District Councils) is more complex, since the residents within these regions are expected to benefit in terms of higher employment and spending by the temporary workers⁵³ but incur costs in terms of increased scarcity of social and community resources due to the influx of workers.

L of Community "Identity"

Further to these impacts, further social loss is expected from changes to one of the defining characteristics of local communities and region. The communities of the Waitaki River Catchment identify closely with the river - despite its degraded state, its "big river" flow brings with it a host of local recreational and amenity benefits, as well as a unique sense of identity. Changes to the mean flow in the Waitaki River, (while mitigated via various means including an enhanced management program which is designed to improve its long term health and appearance and two recreational lakes), will nevertheless mean a tangible loss of part of this special identity for the local community. L of this sense of identity is another local effect of national consequence, but perhaps not numerical significance, which is best quantified via the cost of mitigation and compensation arrangements between Meridian Energy and affected parties.

Recreation and Tourism Impacts

As with the social impacts, recreational/tourism impacts from the allocation of water to energy (project Aqua) in the Catchment are separable into those which will occur during the construction and operation phases of the project.

Construction Period

During two-stage, 7 year construction period, out-of river recreation within the Lower Waitaki Valley is expected to be impacted by the presence of a large construction workforce which will have an impact on local sports, recreation, social and cultural clubs. Access to some communally significant recreation resources (such as the Duntroon Domain) is also expected to be limited during this phase. The noise and dust associated with the construction activities are also expected to interfere with recreation, limiting the overall recreational value of many in river and out of river activities by disturbing the amenity of the area and disturbing some pursuits at particular times (such as certain types of construction noise affecting game bird behaviours).

Tourism affects during the construction phase are difficult to measure, since there will be both negative regional effects (dust and noise affecting tourist establishments, increased heavy road traffic discouraging passing traffic from travelling on State Highway 82) as well as some positive effects from the creation of a potentially significant industrial tourism attraction (Frew and Shaw, 1998).

The economic cost of lost tourism opportunities is a further issue which is most appropriate to consider via the cost of mitigation/compensation payable to affected parties, which is assumed to provide a reasonable measure of the value lost during the period. the As noted above, tourism effects are not expected to be relevant at the national level due to substitution effects between tourist regions within New Zealand.

Operational Stage

The ongoing recreational impacts of the operation of the proposed energy scheme in the Lower Waitaki are likely to affect a greater number of people within the region than during the construction phasein a more complex manner, due to the combined impact of

• changes to the river flow (which benefit some user types or groups and disadvantage others) and
• offsetting mitigation works for negative impacts (which benefit some user groups and not others).

As noted in Appendix C.1 the most significant recreational activities in the Lower Waitaki River are angling, jet boating and hunting. Other recreational activities include swimming, canoeing, birdwatching, sightseeing, picnicking and walking. The net impacts to the significant recreational resources within the lower catchment are summarised as follows:

Reduced River Flows and variability will:

• limit the use of the river by high skill level jet boaters to those times when flushing flows provide opportunity
• reduce the "big river" angling experience associated with the current fast flowing, highly variable river environment⁵⁴ increase the overall level of dust entrainment from the riverbed
• likely reduce the overall wetland area,⁵⁵ diversity and distribution which may affect the populations and distribution of wetland bird species.
• Likely lead to increased conflict between humans using riverbed for recreation and riverbed breeding birds, as well as increasing the potential for conflict between recreational user groups themselves, thus reducing the quality of their recreational experience.
• Increase the accessibility to the river for less experienced anglers who don't appreciate the big river angling experience
• Increase the safety of river access for some activities (swimmers)

As a means for compensating for the perceived net loss of value from these changes, Meridian Energy has proposed a number of specific and general measures, including:

• The development of recreational lakes at Kurow and Duntroon which will be available for swimming and non-motorised boat access⁵⁶
• A series of annual "flushing flows" between spring and summer designed to coincide with the requirements of jet boating groups and anglers
• An improved system of vegetation management within and beside the river fairway
• Improved management of fish numbers (identified by increased monitoring) within the river
• Riparian plantings to mitigate the impact of unsightly canal works and other structures

Beyond these proposed mitigation practices, Meridian Energy is also negotiating with compensation packages with community representatives (District Councils).

As noted at the outset of this section, there is still residual uncertainty regarding the final nature and cost of mitigation works and how completely the affected communities and visitors will feel they are compensated for their cumulative loss of amenity from the broad changes expected to occur in the valley.

Existence Values

It is important to note that aside from the "use values" associated with local recreation within the catchment there will still be a further loss of recreational amenity among non-local users (visitors) and potentially further nationally significant loss of existence values for the catchment compared with the circumstances under the base case. As noted above, it is recommended that a study of the economic quantum of these existence values be undertaken in order that the full picture of impacts can be made.

²³Net impacts in this case means impacts post mitigation or compensation

²⁴Upper Waitaki Valley as represented as the sum of Otematata, Aviemore and Omarama townships. Based on Statistics New Zealand Census 2001 counts.

²⁵The abundance of salmon and trout varies between years, particularly for salmon, which spend most of their life at sea. The numbers vary between 3,000 and 6,000 per annum due to variability in rearing conditions in both the freshwater and marine environments. Approximately 1,000 rainbow trout spawn in the tributaries and live mainly in the mainstem. Brown trout spawn in the mainstem and tributaries, while there are sea-run and estuarine brown trout living in the lower reaches of the river. The proportion of rainbow to brown trout is estimated at 35:65, although this will be variable.

²⁶According to the community and recreational surveys undertaken in 2002 (BM, 2003a) some 19 of 50 recreational river access points were noted by 10 or more people. P.49-50).

²⁷Fish and Game New Zealand, Survey of Angling Activity 2002/2003 (forthcoming).

²⁸Fish and Game New Zealand Comment in Addendum to BM (2003b).

²⁹The Water Conservation Order Application for the Rangitata River states, "All of the four major salmon rivers in New Zealand (Rangitata, Waimakariri, Rakaia and Waitaki) are considered to be nationally and internationally outstanding salmon fisheries. These four rivers differ in size, profile and other characteristics but the fishery in the Rangitata is considered to be no less significant or outstanding than the others." Part III, Page 23.

³⁰Mark Unwin (NIWA) noted in a personal communication that more angling licenses are sold in Timaru, Ashburton and Oamaru than in Auckland (Dec 2003).

³¹Wendy Hamilton, Secretary Waitaki Branch New Zealand Jet Boating Association, Personal communication Dec 2003.

³²The 2002 Community Recreation study, prepared for Meridian Energy Ltd, ran from October 2001 to March 2002 and was largely outside of the hunting season.

³³The only two published studies of hunting activity in New Zealand (Kerr, 1996 and Nugent and Henderson, 1990) deal with deer hunting rather than waterfowl and are not believed to be appropriate for benefit transfer. There are no studies of waterfowl hunting values in New Zealand (Kerr, personal communication Dec 2003).

³⁴The Dansey's Pass Camp Ground falls outside of the lower river valley area.

³⁵The Boffa Miskell Recreation Report (BM 2003b) noted that that a majority of the visits to the Kurow were classified as having been made by locals i.e., residents living between Otekaieke and Otematata, but significant numbers were classified as having an origin outside of the Valley. Tourism Waitaki confirmed that this was likely the case, since the Kurow VIC also served as a local community service centre (accepting rate payments, etc).

³⁶Glennis Marshall, Manager Lake Pukaki Visitor Information Centre, personal communication Dec 2003.

³⁷Karen Mullaly, Marketing Manager, Mackenzie Tourism. Personal Communication, Dec 2003.

³⁸A further 3,500 "locals" also passed through the centre in 2002 (Tourism Waitaki Personal Communication, Dec 2003).

³⁹It is understood that Otago University has proposed comprehensive study of visitor perceptions is proposed for the 2003/2004 peak tourist season. A direct survey of visitor intentions and preferences for the Valley would assist in the process of assessing its trends and significance.

⁴⁰Tourism Waitaki includes the town of Oamaru (population 12,700)

⁴¹Guest arrivals refer to the number of people who presented at a registered provider of accommodation and stayed for at least one night.

⁴²Guest nights refer to the total number of person-nights that were sold to visitors. Two persons staying in the Mackenzie for three nights represents six guest nights. Guest nights/guest arrivals indicates average length of stay.

⁴³RTO is a regional tourism organisation

⁴⁴Tourism Waitaki includes the area from Lake Pukaki to Oamaru.

⁴⁵See Appendix E.2 for a description of the likelihood of viticulture development following further irrigation development in the Valley.

⁴⁶Both in absolute EFT terms and in terms of the number of full time vs part time jobs (MAF 2003, p.6).

⁴⁷Quoted from statistics provided by The New Zealand Wine and Grape Industry [external link].

⁴⁸There were an estimated 11,220 tourists who visited wineries from a total of 1.3 million visitors in 1997, and 102,982 visitors to wineries from a total of 1.8 million visitors in 2002. Since visitors undertake multiple activities during their stay in New Zealand, the number of activities undertaken will be larger than the number of visits (TRCNZ, 2003).

⁴⁹Some of the issues listed here have been raised within Section 92 Requests for Further Information by various parties, including local District and Regional Councils. It is understood that provision of this additional information (via direct response and commissioning of further research) is ongoing.

⁵⁰This section is not intended to rewrite nor critique the various impacts of social assessment which have already been completed through the project consent process to date. Its purpose is rather to summarise the main anticipated effects and highlight particular areas of uncertainty in the overall assessment process.

⁵¹The Alliance is the term given to the consortium which has been

⁵²Assuming an average household size of 2.3 people.

⁵³However it is acknowledged that the location of this workforce is yet not finalised and they may travel from outside the region.

⁵⁴It is assumed that the fish populations in the Waitaki River will not be significantly affected by the Project Aqua proposal

⁵⁵As noted in MEL (2003) Section 7.3.3

⁵⁶Community-based surveying of the response to the lake proposals has shown a very favourable response in Duntroon, with a large majority (95%) in favour of the lake (80 completed replies). No corresponding survey has been undertaken for Kurow as far as can be determined.