A Business and Economic Research Ltd (BERL) report commissioned by the Central Otago District Council shows the direct and indirect net impact of irrigation increases the district's Gross Domestic Profit (GDP) by $93 million each year while hydro electric generation adds a further $15 million-$20 million each year.
The GDP of Central Otago in 2007 (the latest figures available) was estimated to be $664 million.
Net employment generated by irrigation was about 1156 full-time equivalents (FTEs) and hydro generation accounted for a further 140 FTEs.
Those figures represent more than 15% of those employed in Central Otago in 2007.
The council approved a payment of $10,000 plus GST last September for an economic assessment to quantify the value of water to the Central Otago economy.
The BERL report will be presented to Central Otago District Councillors at their meeting this Wednesday.
Councillors will be asked to approve the development of a Central Otago Commercial Water Use Strategy which would be completed by the business development manager Jonathan Gadd by October 2009.
The strategy is expected to provide a comprehensive and defensible overview of the current and potential impacts of water on the economy and communities of Central Otago.
A framework or model will be set up so council can evaluate the economic and social impacts from the commercial use of water.
The strategy will state the nature and expectations of council involvement in water initiatives and have a clear context and basis for the role of council as a financial contributor, investor, or other role, for commercial water opportunities.
All current and potential commercial users of water, both for consumption and irrigation, will be looked at.
Commercial is defined as an activity that requires a consent for take or use, or the equivalent-deemed permit under mining privileges.
"While this is most predominantly irrigation used for horticulture viticulture and agriculture, it does not preclude other commercial and industrial uses of water such as generation, hydroponics, mining, heavy industry and other users not yet thought of," Mr Gadd said.
The scope of the strategy will also include competing non-commercial or community interest uses of water such as recreational users or habitat preservation.
Residential and town supply and associated issues as well as wastewater would also be looked at.
