HOUSE OF REPRESENTATIVES
TRANSPORT AND ENVIRONMENT COMMITTEE
Report on 1993/581 Petition of Graeme Collins and 26,000 Others
The petition requests that the House of Representatives recommend to the Government that any proposed flooding of the town of Beaumont by Contact Energy Limited be prevented.
Committee procedure
The above petition was referred to the Transport and Environment Committee on 29 February 1996. We received 14 submissions on the petition from interested individuals and organisations. On 9 December 1998, we heard evidence from representatives of the Friends of Beaumont, the Women's Division of Federated Farmers, and Contact Energy Limited.
Background
Proposal to build dam
The petition relates to a proposal to build a large hydroelectric dam on the Lower Clutha River. The Tuapeka Dam project was first proposed in 1965 and, although extensive consultancy work was undertaken on the viability of the project, the dam has never been built.
Purchase of land
However, land was purchased by the Electricity Corporation of New Zealand (ECNZ), in anticipation of the project. The land in question consists of 4,400 hectares, including two commercial properties, 15 residential sections, nine farms, 15 lifestyle blocks and 43 "small properties". These properties are situated between Millers Flat and Tuapeka Mouth, including properties in the township of Beaumont. The land was bought by ECNZ on the open market: none of it was acquired under the Public Works Act 1981. When Contact Energy Limited (Contact) was established in 1996, the land and the project were included in the assets received from ECNZ.
Dam project indefinitely deferred
Contact has stated that it is not purchasing or divesting any land in the lower Clutha area, and that it has no policy to sell land at this time. Contact notes the significant number of properties for sale in the area at the moment, which are proving difficult to sell, and claims that placing a large number of the company's properties on the market would exacerbate the problem.
- In August 1996, Contact issued a press release which announced that the dam project had been indefinitely deferred. However, Contact also noted that it could not make undertakings on behalf of other companies that may acquire the land and "that circumstances in the future could change". This remains the company's position. Contact has explained that, in using the phrase "indefinitely deferred", the company does not see the dam proceeding within the next 15 years. This period is seen as a reasonable limit in business planning terms, but creates uncertainty for the local community. We are concerned that there are differing interpretations of Contact's 15 year planning horizon, between local residents who believe the project will never occur, and those who have a more literal interpretation.
Petitioners' concerns
The principal petitioner represents a group called the Friends of Beaumont (Inc), which was formed in 1994. The principal petitioner and a number of residents of the affected communities disapprove of the Tuapeka dam project still being held over the heads of the Beaumont and Miller's Flat conununities after 33 years. The petitioner states that the indefinite deferral of the Tuapeka dam project by Contact continues the uncertain future of the local communities that would be affected by the project, and raises a number of concerns.
- Firstly, the petitioner emphasises the high level of stress this has caused on the people in these communities, which in some cases has resulted in deaths, divorces and breakdowns.
- Secondly, he believes that the negative impact on the community from the continued existence of the dam proposal includes a downturn in the local economy. The leasehold land that Contact inherited from ECNZ is not necessarily being put to the best use, due to a lack of long term investment. It was suggested that the land could be used for organic farming, which is a developing industry. However, he states that banks will not lend money for the development of leased land.
- Thirdly, the petitioner maintains that Contact has allowed the land to be degraded and has not maintained the properties adequately. This has also been observed by a number of other submissioners, who question whether Contact is meeting its obligation, under section 4(c) of the State Owned Enterprises Act 1986, to exhibit a sense of social responsibility by having regard to the interests of the community in which it operates.
- Fourthly, he argues that hydro-electric dams are being discouraged in other parts of the world, especially in the United States, because of the environmental damage they cause. In the petitioner's view, the proposed Tuapeka dam should not he built, due to the environmental impact it would have on the area.
Petitioner seeks sale of land
The main recommendation that the petitioner proposes is for the land to be released for open purchase, whether the Government proposal to privatise Contact goes ahead or not.
Consideration
Two issues emphasised by the petitioner and submissions are social damage to the local communities, and the run down condition of the properties owned by Contact in the Lower Clutha area. The petitioner asks that the land owned by Contact be sold to give people more certainty in the future of the area, and to encourage maintenance and development. We have considered these issues in light of the statements made by Contact that the Tuapeka dam project has been indefinitely deferred.
Evidence of social damage
Contact has admitted that social damage has occurred in the Beaumont and Miller's Flat area as a result of the uncertainty over the future of the proposed dam project. Community morale is low and the community itself is divided on this issue. A number of submissioners have also stated that the social fabric of the community is suffering. The Clutha District Council has observed that the local community is concerned about threats to their assets and lifestyle from flooding and inundation.
- In contrast, we note that morale in the nearby Roxburgh hydro-village is reported to be improving. This village consists of a cluster of 25 houses that were owned by ECNZ for the purpose of housing a workforce for the Roxburgh hydro-electric dam. Most of these houses have now been sold, which has provided more certainty for other property owners in the village.
Land and buildings not properly maintained by Contact.
A number of submissioners have reported that the properties owned by Contact have been allowed to fall into disrepair, lowering their value and discouraging people from moving to and investing in the area. Contact has stated that concerns regarding the condition of the properties have not previously been brought to its attention. The company maintains that it has tried to find suitable tenants for all the properties. It claims it has carried out normal maintenance on the properties, but has now undertaken to do a full audit of the management of the properties, and to carry out any work that is found to be necessary.
- We note the undertaking by Contact to audit the maintenance of the properties it owns in the Lower Clutha region. However, we are concerned that Contact was unaware of the community concerns regarding the condition of the properties. We trust that there will be opportunities for such community concerns to be raised with Contact in the future.
Resource Management Act 1991
Any proposal to build a Hydroelectric dam would be subject to planning processes under the Resource Management Act 1991. The Resource Management Act 1991 devolves control over such matters to regional and district councils, from whom consents would be required. Consultation procedures would also have to be followed, allowing input from the local communities.
Conclusion
Information received by our committee indicates that it is highly unlikely that a dam will ever be built in the Miller's Flat and Beaumont area. Accordingly, we see little reason for the continued land ownership in the area by Contact Energy Limited, as the company's continuing presence is undermining both the social and economic fabric of the wider Millers Flat/Beaumont area.
Recommendations:
1 .
- That the Government require Contact Energy Limited to develop a
- divestment strategy that would result in all land owned by Contact in the
- Beaumont/Millers Flat area being progressively sold in an orderly manner,
- and certainly within a ten year period.
2.
- That the sell-down provisions be included as a condition of sale in the
- forthcoming divestment by the Crown of Contact Energy Limited.
3.
- That, in the interim, Contact Energy Limited develop a maintenance
- programme for the land and buildings under its ownership in the
- Beaumont/Millers Flat region.