Despite a loan guarantee worth about $20 million less than hoped for, developers of a Tarras irrigation scheme are pleased and grateful the Central Otago District Council is "breaking totally new ground".
Tarras Water Ltd chairman Peter Jolly said the board had not met to discuss the council's commitment but "from a personal point of view, I think it's very good".
"They're showing support for economic development in the region, which is exciting, because the spin-offs will, potentially, be huge throughout the region.
"They have bit the bullet there and shown they are prepared to support this, which, in turn, has got to be of great encouragement to the [Otago] regional council, who are helping to get this thing over the line."
The company had asked the regional council for two lots of money totalling $5.3 million and had asked the district council to act as a guarantor for an almost $27 million bank loan.
The regional council asked the company to provide more information, and the district council resolved to guarantee 20% of the capital value of the scheme - about $7 million worth - which would be refunded through targeted rates if there was ever a call on the guarantee.
In doing so, they created a policy under which any further such application could be considered.
"This is a positive step forward, not just for Tarras but for all irrigation schemes.
"We recognise that, for the council, it's breaking totally new ground, which makes it even more exciting and encouraging, because there's other schemes in the pipeline, like Maniototo and Manuherikia."
Mr Jolly declined to say how the lesser loan guarantee would affect the project.
He said the board was working through the questions asked of it by the regional council and hoped to present its answers at the council's next meeting.
One of those questions was where the district council stood on the matter.
The board is "working towards turning ground in October" to begin operating in spring 2013, though Mr Jolly admitted that was "getting tight".
