A pre-feasibility study into raising Falls Dam estimated the project would cost about $70 million but the latest estimates were $194 million, Manuherikia Catchment Water Strategy Group chairman Allan Kane, of Wanaka, said yesterday.
About 70 people attended a meeting at Omakau this week to hear an update on the project.
The $1.5 million feasibility study into water management in the Manuherikia catchment was almost completed and included capital costs for both the dam, 10km east of St Bathans, and the distribution system, Mr Kane said.
''We've placed a hold on the next phase of our work as we're working through some issues.
Seismic strengthening standards which had been introduced since the completion of the pre-feasibility study were one of the key factors in the increasing costs, he said.
It would take at least three months for engineers to refine the options, so the original timeline for the project had been pushed out.
Originally, it was hoped to go back to landowners in February with final costs to seek their response, but no date had been set for that now.
''We're not in a position to give an accurate indication of when we're ready to go back to farmers, as we have to get that work completed first,'' Mr Kane said.
He described the increase in costs as a setback, as it would slow the start of the scheme.
''However, it's certainly not a knockout blow.
''I'm sure every other irrigation scheme in the country that gets off the ground goes through this phase of refining the options.''
Mr Kane was confident the group could come back to landowners with a capital cost that was ''realistic'' for the scheme, which would irrigate an extra 25,000ha in the Manuherikia valley.
''That's what we need to get the buy-in from farmers.''
The group was set up in 2011 to represent the interests of the six irrigation companies and water users in the Manuherikia and Ida Valleys.
As well as raising the Falls Dam, by up to 27m, the group is also investigating the viability of constructing dams at either end of the Ida Valley, to boost the area irrigated in that valley.
Becks farmer and Vincent Community Board member James Armstrong told the board this week 23 centre pivots were either operating now or planned this year on farms from Chatto Creek to St Bathans.
Each one was worth about $600,000 and some had been installed in anticipation of the upgraded irrigation scheme coming to fruition, he said.
Group deputy chairman Gary Kelliher, of Springvale, told the board if the upgrading of Falls Dam and the two new dams went ahead, a construction workforce of about 200 would be needed.
Funding for the scheme's feasibility study has come from the Government's Irrigation Acceleration Fund, the Otago Regional Council, the catchment irrigation companies, private water right holders and dryland farmers.
