4. Cost benefit results
4.1 Economic cost and benefits
The revised model was run under the set of seven scenarios used by SKM. The results are reproduced below, showing the national outcome, the regional outcome, and the outcome for the primary production sector and the energy sector. Full results are detailed in Appendix D.
Tables 9 to 11 show the outcomes against a baseline with only status quo energy infrastructure installed. In other words, they show the mutually exclusive outcomes of either adding New Hydro (based on Project Aqua), or one of the irrigation scenarios without New Hydro.
- The tables show that discounted at 7.5% New Hydro produces an additional net present value (NPV) of $300 million relative to the status quo in a national analysis, but $900 million at a regional analysis. This comprises gains in the energy sector of $950 million, and losses in the primary production sector of $50 million. Discounted at 10% the results are approximately half as large as at 7.5%, but still positive.
- At 7.5% irrigation takes mostly produce a positive NPV on a regional basis, ranging from a positive $111 million in the scenario where only takes with an internal rate of return >5% are included, down to a NPV of -$5 million for takes above Ohau. At 10% the results are all negative, apart from Benmore which is approximately neutral.
- At 7.5% the 'above Ohau' scenario is the only one to make negative returns at the regional level. This is positive under the assumptions used for primary production, but negative when electricity losses are included.
- At 7.5% the irrigation scenarios show substantial gains to primary production in the region, but these are offset by large costs in terms of lost energy production. At 10% only those scenarios with low capital cost assumptions (above Tekapo, Ohau and Benmore) are able to make a positive return to primary production.
Table 9. Net present value of New Hydro, (30 year period of analysis) ($million)
View net present value of New Hydro, (30 year period of analysis) ($million) (large table)
Table 10. Net present value of irrigation with New Hydro not installed (7.5% discount rate, 30 year period of analysis) ($million)
Table 11. Net present value of irrigation with New Hydro not installed (10% Discount Rate, 30 year period of analysis) ($million)
Table 12 and Table 13 outline a similar analysis, but this time with New Hydro installed. In other words, these show the combined outcomes of installing New Hydro and one of the irrigation scenarios. This is the same analysis as is contained in the fourth column of the SKM result tables (headed Project Aqua). In order for an irrigation project to add value it must have a higher NPV than that of New Hydro alone, because New Hydro is also contributing to the combined outcomes. To show this we have subtracted the outcome with irrigation from that with New Hydro in the right hand columns in the tables, to arrive at the net regional outcome. If the result is positive then the irrigation adds value overall despite the extra energy losses, and if the result is negative the irrigation does not add value overall.
Table 12. Net present value of options with New Hydro installed (7.5% discount rate, 30 year period of analysis) ($million) (irrigation minus New Hydro outcome)
Table 13. Net present value of options with New Hydro installed (10% discount rate, 30 year period of analysis) ($million) (irrigation minus New Hydro outcome)
The results show that:
- Without integration the irrigation does not add value nationally or regionally in the presence of New Hydro under any scenario. Only the scenario where irrigation is integrated with New Hydro produces a NPV greater than the New Hydro NPV, but again this is only at 7.5% discount rate. At a 10% discount rate relatively high capital costs of some schemes in this option result in negative returns to irrigation, which means that despite low energy losses it does not add value overall.
- Some of these results are well within the margins of error for the analysis, and the sensitivity testing below shows that small differences between scenarios should not be taken as an absolute indication that the project is not worthwhile.
- Losses in the energy sector which were observed in results without New Hydro are exacerbated by the installation of New Hydro. This results in many irrigation scenarios becoming negative relative to New Hydro on its own even at 7.5%.
The results of sensitivity testing are shown in Appendix E. The sensitivity results of the regional outcomes are:
- New Hydro - is most sensitive to discount rate changes, with the regional outcome varying from $182 million (12.5%) to $2,004 million (5%) (
- Table 49 Appendix E). The results were relatively insensitive to assumption changes about the impact of agricultural contraction and other losses. A separate test on the sensitivity to capital costs suggests that at 20% the national and regional benefits are still positive, but at +50% the results are positive at the regional level but negative at the national level. (Table 49 and Table 50, Appendix E, show that only with 12.5% discount rate will +50% capital cost produce a negative NPV at the regional level for New Hydro).
- All irrigation - the outcomes for all irrigation scenarios are most sensitive to the assumptions regarding agricultural returns and capital expenditure. The outcomes range from $-177 million to +$514m (no New Hydro) (See Table 53, Table 57 and Table 58, Appendix E). The discount rate change to 5% does make these scenarios positive at the regional level (relative to New Hydro) with New Hydro installed, and the discount rate at 12.5% makes all outcomes negative.
- Irrigation >5% IRR - changing the discount rate to 5% makes this set of irrigation schemes positive, even relative to New Hydro with New Hydro installed. A change to 12.5% makes it negative with and without New Hydro. This scenario is strongly positive with the most optimistic agricultural assumptions, but negative (-$60m, Table 58, Appendix E) with the most negative set of assumptions.
- Takes above Tekapo - this scenario does not become positive relative to New Hydro with the change of discount rate to 5%, although without New Hydro it is strongly positive. Altering this scenario to use a similar amount of water to that of other scenarios results in a negative NPV of -$38 million (without New Hydro), a change from the base scenario assumption NPV of +$17 million. This scenario is therefore highly sensitive to the water use assumptions, and it is likely that other scenarios would show similar sensitivity. Independent demand modelling for each of the schemes above Waitaki would be worthwhile.
- Takes above Ohau - this scenario does not become positive at a 5% discount rate nor does it become positive with or without New Hydro under even the most favourable discount rate. However the high agricultural assumptions do result in a positive outcome for this scenario.
- Takes above Benmore - this scenario is positive in the 'no New Hydro' scenario at both the 5% and 12.5% discount rate, but is not positive relative to New Hydro (New Hydro installed) under either rate. The use of the least favourable agricultural assumptions results in a -$5.4 million deficit at the regional level in the 'no New Hydro' scenario.
- Takes below Waitaki - the results from this scenario are sensitive to discount rate (positive with and without New Hydro at 5%, negative with and without New Hydro at 12.5%), and similarly to agricultural assumptions.
The sensitivity to assumptions is summarised in Table 14 below, and shown in greater detail in Appendix E. The table shows the absolute level of outcome of each scenario, not the movement relative to the results under the core set of assumptions.
Table 14. Summary of regional net present values under sensitivity testing of assumptions (no New Hydro)
4.2 Domestic, commercial and industrial use
Several domestic schemes and private supplies are sourced directly from the Waitaki, and commercial use of water is an important component of the water allocation mix in the area. SKM undertook an analysis of the value of water for commercial manufacturing, which showed that its value for this purpose is an order of magnitude higher than for irrigation or energy production.
We have not included commercial, manufacturing and domestic supply directly in this study, effectively assuming its allocation will be equivalent in all scenarios. However we note the importance of its inclusion in any allocation regime, including any increases in requirements for water associated with any increased production, processing and population from irrigation development.
4.3 Tourism and recreational cost and benefits
4.3.1 Tourism
Tourism impacts from the various development scenarios are complex to assess, because the tourism flows in the region are changing rapidly, and there is limited information on which particular characteristics of the catchment are most valued by tourists as part of the visitor experience.
The Waitaki and Mackenzie/Timaru districts have grown strongly in terms of guests and guest nights, matching or exceeding national growth in guest nights and guest arrivals. These areas expect continued growth in tourism, and major initiatives are planned by district tourism organisations, including promotion of the area around an alternative route to and from Queenstown via the Lower Waitaki and Omarama.
SKM note the potential for negative regional effects on tourism with construction of New Hydro. These effects would be associated with the noise, dust and traffic disruptions on State Highway 82. There is also likely to be pressure placed on local accommodation facilities by construction activities with visitors being turned away. Loss of tourism business activity may be experienced by local operators from disruption of their business by construction activities, although it is expected this could be at least partly offset by mitigation, including careful relocation of businesses. If the mitigation is financial and a business closes there is no reason to expect it to stay in the region - both the capital and business skills are likely to be lost. There are some potential positive effects from the industrial tourism attraction associated with a large construction project.
For the operational phase of New Hydro, SKM note that the impacts are more varied and are associated with the changes in river flows and offsetting mitigation works. Negative impacts include those to jet boaters, the reduced 'big river' angling experience, issues with wetlands, increased conflicts between recreational users, and increased impact from recreational users on birds. Positive impacts are noted to include increased accessibility to the river for less experienced anglers, increased safety of river access, development of recreational lakes, an improved system of vegetation management, and riparian plantings.
Changes to tourism from irrigation development are less comprehensively studied than those from New Hydro. Issues associated with construction of New Hydro would be expected to occur with irrigation scheme infrastructure development, although at a smaller scale. Some changes, such as enhanced river flows associated with the Aoraki Water Trust proposal to take water into South Canterbury may be positive although unproven, and others may be negative, associated with adverse water quality impacts. Other issues, such as landscape changes in the Mackenzie from a barren brown to green associated with irrigation development may be positive or negative depending on visual expectations of visitors. It could also be that irrigation development enables the development of gastronomic tourism such as occurs with winery development. However, in the absence of firm information on the impacts of these proposals on resources and on the resulting development, this is largely speculative. No conclusion is therefore drawn about the impacts of irrigation on tourism at a regional level and this issue warrants further analysis for specific proposals.
The net tourism impacts of New Hydro and of irrigation development are difficult to determine. Overall SKM have concluded a combination of no impacts and that the issue needs further consideration. At a regional level there is insufficient information on which to determine how the local tourism industry will be affected. However it should be noted that impacts from local loss of visitor nights, which may not be important at the national level because of substitution effects, are costs at the regional level. To the extent that decision makers accept that local tourism arrivals will be adversely or positively impacted, these impacts are likely to be disproportionately higher at the regional level.
4.3.2 Fishery
The fishery is an important part of recreation on the Waitaki River. This comprises the trout and salmon fishery, with the trout fishery including both rainbow and brown trout, which is relatively rare in the New Zealand situation. The salmon fishery is considered to be of national significance, and some consider the river to be of international significance in this regard.
SKM (2004, p. 112) estimate the use-value of the Waitaki River's fishery as between $475,000 and $1.3 million per annum (based on the NIWA 1994/5 angling day estimates). Thus at least two-thirds of this use value is attributable to anglers from the region (ie. between $317,000 and $867,000 pa).
The impact of the New Hydro and irrigation proposals are both considered to be minor on the fish populations per se. There may however be impacts on the fishing experience associated with lower flows, both positive and negative. These were summarised by SKM as neutral or unknown for the upper Waitaki under both irrigation and New Hydro, and for the Lower Waitaki a loss under irrigation and a significant loss under New Hydro. There is also the potential for water quality changes from intensification to adversely impact on the fishery, particularly with the spring fed streams in the Mackenzie and Hakataramea.
Proposals to take water into South Canterbury could significantly alter the flow regimes in several lowland rivers of South Canterbury. This may have positive impacts on the fishery in that area, although no firm studies have been undertaken on these impacts and this aspect is unproven.
In the lower Waitaki the users of the fishery are predominantly from the local region (55% in respect of the trout fishery and 45% for the salmon fishery). Impacts on the fishery will therefore be disproportionately [Disproportionate to population.] regional impacts. Importantly 61% of salmon anglers and 37% of trout anglers fished only the Waitaki River. We can deduce that a high proportion of these will be local, and damage to the Waitaki river fishery would be considerably more important to those people because of a lower potential for substitutability of similar fishing experiences.
4.3.3 Jet boating
The jet boat experience on the Lower Waitaki river is considered important because it offers a 'big river' opportunity on a large, fast flowing braided river over considerable distance. It is expected that New Hydro would impact adversely on this experience, although this would be mitigated somewhat by flushing flows released down the river. The irrigation takes are not expected to have a significant impact on jet boating.
Both national and international jet boating events are regularly held on the lower Waitaki. SKM (2004, p. 113) note that without a New Zealand study of the recreational value of boating it is difficult to quantitatively assess its level of significance. Thirty-three percent of jet boaters are local, indicating again that the impact would be disproportionately local. However the substitutability of the jet boat experience may be higher, with a low proportion of users reporting exclusive use of the river. A decline in the number of jet boaters using the river from other parts of New Zealand and overseas may reduce turnover for accommodation and other businesses in the region.
4.3.4 Shooting and hunting
The lower Waitaki is considered an outstanding publicly accessible game bird hunting and waterfowl habitat. SKM note that hunting is a major non-river use of the Waitaki, and that it appears to attract a higher proportion of non-local hunters than the regional average. The Waitaki River accounts for approximately 31% of all game bird and hunting activity in the Central South Island region. Of licences issued, approximately 28% are issued in the Oamaru/Kurow/Waimate area.
SKM indicate that any impact on the hunting and shooting activity is likely to be neutral or unknown, although reduced river flows and variability will reduce the overall wetland area, diversity and distribution which may affect the populations and distribution of wetland bird species. This is likely to adversely impact on the hunting experience, and the data above indicates that any impact will fall disproportionately on the regional community.
4.3.5 Swimming
SKM does not consider that swimming constitutes a nationally significant recreational value for the river. Three percent of respondents who participated in the 2002 Lower Waitaki River Recreation Survey reported swimming as their main activity, while 7% of respondents from the 2002 Waitaki Community Survey stated that swimming was their main reason for visiting the river (SKM 2004 p. 115). No impact is expected on swimming under irrigation scenarios, but New Hydro will have both negative and positive impacts. Negative impacts arise as a result of loss of swimming holes in the river associated with the intake structure. Positive impacts should occur as a result of the establishment of lakes at Kurow and Duntroon, and because the lower flows may make the river safer for swimming. The lakes, however, were a design component of Project Aqua, and may not arise with other New Hydro developments.
It is expected that these impacts will be largely local impacts since it appears unlikely that the Lower Waitaki river is a destination swimming area.
4.3.6 Camping
There are four commercial camp grounds along the lower river - Kurow Holiday Park (11,167 overnight stays in 2001), Duntroon Domain Recreation Reserve, Waitaki Mouth Motor Camp and Glenavy Motor Camp - and the Dansey's Pass Camp Ground (some distance from the river - 20,000 overnight stays in 2001). Freedom campers also use the upper hydro lakes in significant numbers over the summer. These campers are predominantly drawn from Waitaki, wider Otago and South Canterbury.
Any decline in recreational use of the Lower Waitaki River is likely to affect occupancy rates at these camp grounds and other accommodation facilities in the Waitaki district. In turn this would have negative effects on local employment at these facilities and reduce the supplies they purchase locally. These costs would be more significant at the regional level than nationally as both visitors from outside the region and local residents may choose to fish, hunt, or jet boat or shoot in other places outside the region.
There may also be a further cost at the regional level as these negative effects on recreational activities, and on the amenity values of the river from hydro-electricity development or water quality degradation associated with irrigation, could restrict future tourism growth in the Waitaki Catchment.
4.3.7 Canoeing and kayaking
SKM notes the potential for canoeing/kayaking to be adversely impacted by New Hydro, although also note that the Waitaki is not considered a high value resource for these activities. No information is available regarding the local impacts of any changes to these activities, but it is expected that any impacts will be disproportionately experienced at the regional level. A rowing course was proposed as part of the mitigation package for Project Aqua, and were this to occur it would offer recreational benefits to the region.
4.3.8 Value of recreational activities
Kerr (2004) reviewed the recreational use of the lower Waitaki, and concluded that the value of recreation on the river was in the order of $1.7 million to $1.9 million per annum. Converted to a NPV the values in this part of the river are likely to lie between $17.2 million (lower bound estimates, 10% discount rate) and $30 million (upper bound estimates, 7.5% discount rate).
Table 15. Summary of recreational impacts
View summary of recreational impacts (large table)
4.4 Environmental cost and benefits
Values associated with the environment can be divided into three main types:
- use type values - where the environment provides some service which itself is valued by the community, such as water services, recreational opportunities, amenity values etc
- option values - where the environment does not provide a service at the moment, but it provides the option of uses or services which the community may need in the future. We include bequest values in here as an intergenerational option value
- existence values - where the environment is valued independently of the use or service it provides or may provide. Thus people who may never see or use a particular part of the environment value its retention for its own sake.
In this analysis we have regarded the use type values accruing primarily to the regional community, and to a lesser extent the national community. With option values [Some environmental option values may accrue at the regional level in a different manner to the national level, but these are difficult to foresee at this stage and so are largely speculative.] we have regarded the resource as being preserved for non-specific future users, so the benefits are national. For existence type values the benefit is to the whole national community, since the benefit is independent of the individual and their location.
4.4.1 Irrigation sector expansion environmental impacts
Irrigation sector expansion environmental impacts include:
- water quality - this may be affected primarily through increased nutrient and microbial run-off, and leaching to groundwater. While some mitigation is possible, intensification has been associated with degradation of water body water quality elsewhere in the country. Loss of water quality has both regional and national costs through impacts on recreation and other amenity values, human health and vulnerable ecosystems
- visual character - irrigation of the dry Mackenzie country to create greener landscapes may be seen by some as detracting from the general appearance and visual character of a nationally significant landscape. More intensive land uses will continue to change the landscape character of rural North Otago and South Canterbury. Regional impacts will be greater by virtue of greater exposure of the local population to the change in amenity, but changes in the Mackenzie are primarily national costs experienced by visitors and non-visitors.
- braided river ecosystems- little impact is expected on the braided river ecosystems from irrigation development other than as a by-product of increased farm productivity and incomes affecting demand for catchment works to reduced flooding, and increased food sources for native and game birds. Where impacts occur they are largely national impacts
- soil erosion - irrigation can have positive impacts in preventing soil erosion and building up soil organic matter. This has both regional value (use values) but also national values (option value).
- wetlands - impacts are expected to be mixed and depend very much on where water is abstracted. Losses include increased nutrient levels and lower river flows. Ecosystem impacts are largely a national benefit, while recreational impacts are discussed elsewhere
- indigenous grassland ecosystems - unprotected grasslands could be developed and lost under irrigation development, representing a national cost
- salmonids - little impact is expected on salmonids although large consents from rivers and tributaries in the upper Waitaki could create additional pressure. Irrigation could impact on a number of tributary streams such as the Hakataramea and small streams along the Tekapo River in particular, which are an important brown trout fishery. Any impacts are largely recreational, as discussed elsewhere
- indigenous fish - little change is expected in relation to indigenous fish under irrigation scenarios, although significant abstraction from rivers and tributaries will reduce habitat for native fish. The effects are very dependent on where the water is abstracted.
4.4.2 Hydro sector impacts
For hydro sector impacts only, the New Hydro scenario (based on Project Aqua) is considered in detail here. It is accepted that a smaller hydro scheme using a different design and technology is a possible option for the future but it is difficult to assess such an option without clear project parameters in a specific proposal.
- lake levels and river flows - under the New Hydro scenario there is the potential for more frequent lower lake levels and lower flows in the upper Waitaki (although still within the resource consent conditions of the existing consents), and lower flows will definitely occur in the lower Waitaki, with a similar minimum flow but lower median flows and reduced variability in flows. Flows of 900m3/s are expected to occur less often, and maximum daily flood flows will reduce by 45% from 2649m3/s to 1458m3/s. This will result in a reduction in the number of braids in the river, with channel morphologies and positions becoming more stable. There will be reduced supply of gravel from tributaries, and a reduced rate of bedload transport. Chronic bank erosion will increase and there will be an increased likelihood and extent of northward extension of the river outlet channel. Overall there is likely to be no noticeable change in water clarity. These impacts as largely regional since the key issues of erosion and change in the outlet will be local effects
- water quality - this may be affected primarily through decreased flows and ability to dilute nutrient and microbial contaminants. This may cause some costs for private potable takes from the river, but municipal takes have planned treatment upgrades, so no additional costs are likely to be incurred. Any impacts would largely be regional impacts
- braided river ecosystems- while some changes will potentially occur through increased predation and conflict between birds, stock and human usage, and a reduction in bird species diversity, these are expected to be mitigated as part of the management programme for the river. Impacts here are likely to be national impacts
- wetlands - of the 190 hectares of river terrace wetlands, 30 hectares of locally significant wetlands will be destroyed by the construction of the canals, and 50-84 hectares will be affected by groundwater changes associated with construction and changed river flow regimes. The ecosystem values lost are largely national costs
- dryland turf - the construction will destroy approximately half the remaining turf land in Kurow and while some mitigation will occur there will be a loss in ecosystem values. These are largely national values
- salmonids - the changes in flow and the change in invertebrate species may have a minor impact on trout populations, but overall there is not anticipated to be major change. There may be a change to the balance of numbers between brown and rainbow trout, and salmon are more likely to be affected adversely by reductions in spawning habitat, although there should still be sufficient habitat for successful spawning. Any other impacts are discussed in the recreational section
- indigenous fish - overall total indigenous fish numbers are likely to be unchanged, although density may increase. Favourable flow changes will compensate for any loss associated with a reduction in riparian and wetland environments. Any impacts would be national impacts.
These impacts are summarised in Table 16 (adapted from SKM 2004).
Table 16. Summary of environmental impacts
View summary of environmental impacts (large table)
4.5 Social costs and benefits
The basis for determining social impacts varies on a case by case basis, with criteria necessarily established from research in the impacted community as well as from comparative cases and the general literature. Social assessors have some well established variables that they utilise on a regular basis. See for instance the list of 28 variables developed by Burdge, 2004. These variables provide a basis for developing data and assessment criteria in different contexts.
The hydro and irrigation proposals will have significantly different levels of social impact at the regional level.
4.5.1 Irrigation social cost and benefits
Irrigation should have a positive effect on the demographics of the Waitaki Valley as it would arrest the expected population decline. The additional population and employment will not only stimulate economic growth in the region by increasing the value of production, but also strengthen its social structure and networks through ensuring that voluntary organisations and essential services such as health and education are more viable. The potential costs of this irrigation development, however, could be resource conflicts over the use of land and water, and possible social disharmony between long term residents and newcomers. Canals and any reservoirs could affect amenity values for existing residents. During the construction period there could be noise, dust, traffic congestion, disruption to farming systems, and pressures on local accommodation facilities from construction workers.
Social impacts in the longer term are driven largely by land use change. Under the 'all irrigation demands' scenario it is projected that 124, 250 hectares presently used for dryland grazing (112,350 ha) and arable (11,900 ha) production will become irrigated. The additional irrigated area under this scenario would almost triple the number of hectares irrigated in the region from 65,120 in June 2002 to 190,000 hectares.
These irrigation schemes are projected to change land use patterns in the region by adding irrigated grazing 64,270 hectares (52% of the additional irrigated area), dairy 38,410 hectares (31%), 8,300 hectares dairy support (7%), deer 4,120 hectares (3%) and arable 9,150 hectares (7%). Almost all of the conversion to dairying is expected to occur in the Aoraki Water Trust area (8,400 ha), the North Otago Downlands area (20,000 ha), the North Bank-Elephant Hill (4,200 ha) area, and the Waihao Downs (4,760 ha) area.
Under this type of scenario for land use change the following social impacts can be expected in the region:
- more intensive use of existing grazing and arable properties by some current owners
- other current owners converting their predominantly dryland grazing production systems to dairy or dairy support
- some older farmers, particularly of smaller dryland grazing properties, selling to purchasers who will convert the properties to dairy production
- an inflow of newcomers to the district to purchase properties and work on farms, particularly for dairying
- the arrest of rural population decline in non-irrigated areas and strengthened viability of educational, health and other community services in nearby townships
- the age structure of both the residential population and the farmers and farm workers occupational group is likely to become more youthful overall
- conversion to dairying will create more expenditure and employment in the region, provide greater access to higher quality jobs and improve household incomes relative to the rest of the country
- value conflicts between dryland farmers and dairy farmers because of their different lifestyles, work routines and rates of community participation
- participation in community activities and membership of voluntary organisations and clubs may decline in the short term, as newcomers adjust to their new circumstances, but strengthen in the longer term
- value conflicts between some urban residents (Oamaru and Timaru) and farming communities over the environmental impacts of intensive farming systems.
Previous research showed that there can be a lag effect as the service sector in rural areas adjusts to the supply of new irrigated farming systems. They can even miss out altogether as farmers look further afield for farm sales and farm supplies (including building contractors, irrigation equipment and vet supplies), potentially reducing the regional benefits derived from increased agricultural production. While this may prove to be a local issue, particularly for business development in the Mackenzie basin, we do not assess it as a regional issue as the region already has substantial irrigated areas and service sectors have largely adjusted. The region also has major meat works and a dairy processing factory. Some grapes are likely to leave the region in the early phases of viticulture production.
These social costs and benefits are all experienced regionally.
4.5.2 Hydro social costs and benefits
Hydro-electric development is only likely to arrest population decline in the Waitaki Valley over its seven year construction period. The influx of construction workers will put pressure on accommodation in the district, but increase turnover and employment in some local business enterprises. There will also be social disruption to rural communities from the stress of change and as they adjust to the different values and lifestyles of construction workers and their families. The physical impacts of construction (eg dust, noise, traffic, congestion, relocation of farms and impacts on farming systems, and loss of recreation activities) will disturb the everyday lives of residents of the Lower Waitaki, and some households and business enterprises in Kurow will be forced to relocate (with associated psychological impacts). These social costs of construction will have a significant impact on rural communities in the Lower Waitaki. Offsetting these costs will be benefits from direct and indirect employment generated by hydro-electric development, but the magnitude of those benefits will be reduced at the regional level if a large proportion of the workforce comes from outside the region (the actual effect will depend on employment strategies such as training for regional employment, and on the constructor's hiring policies). There could also be benefits from mitigation activities targeted at households, farms and businesses but these would be reduced if the recipients left the region. Mitigation activities targeted at the community level would most likely remain a regional benefit.
These social costs and benefits from hydro development are all experienced regionally.
These impacts are summarised in Table 17 below.
