An ambitious $28 million plan for a pipeline to deliver Oamaru drinking water to 10 communities as far south as Palmerston is likely to be abandoned by the Waitaki District Council.
But one issue which has not been resolved is who will pay the $2.5 million that went into the $12 million upgrade of the Oamaru water treatment plant to provide the extra water for the pipeline.
The coastal pipeline plan, using water meeting new drinking water standards, would have provided a secure supply to southern areas in the Waitaki district, particularly around Palmerston, which had to have water brought in by tankers during one dry period.
But a study recently completed by the council showed the pipeline to Palmerston would cost about $28 million compared with $7 million to upgrade individual water supplies.
"It was a no-brainer," council chief executive Michael Ross said yesterday about the proposal to drop the pipeline.
However, when the council upgraded the Oamaru water treatment plant to new drinking water standards, about $2.5 million was spent to provide the extra water for the southern communities.
Oamaru consumers are repaying about $9.5 million through their rates.
The other $2.5 million was kept separate, to be paid for by development levies over the southern communities' water supplies.
However, now the council faces the problem of how to pay the extra $2.5 million for the additional capacity built into the Oamaru plant.
Asked how that would be done, Mr Ross said that had yet to be decided.
Part of the extra cost could be met if Weston and Enfield connected to the Oamaru supply.
How to recover the rest of the $2.5 million would be considered as part of the process the council would work through in implementing its district-wide water study.
That would also include identifying and returning development levies already paid to the individual water committees.
Mr Ross pointed out the extra capacity could be used as Oamaru developed, particularly with demand for industrial and commercial development.
Water and wastewater assets manager Martin Pacey said the study looked at future demand for water as far south as Palmerston and how schemes would comply with the new drinking water standards.
The study was presented to Waitaki rural water scheme committee representatives on Monday and the proposals would be included for public consultation as part of the council's Waitaki community plan next year.
"At this stage, we are favouring the $7 million [individual upgrade] option because it will comply with the standards at a far cheaper cost and will also provide for expected growth in the affected areas," he said.
That option was more likely to attract government subsidies.
Although the cheaper option had been identified, it still needed a lot more detailed investigation.
"For some supplies, upgrading them will be fairly straightforward.
"However, others will require much more detailed engineering investigations and proposals," he said.
Water schemes affected include Weston, Enfield, Kakanui, Herbert-Waianakarua, Hampden, Moeraki, Palmerston, Goodwood, Stoneburn and Dunback.
Upgrades for other schemes, except Oamaru, would also be included in the community plan.
