The Tilverstowe Extension has been described by company chief executive officer Robyn Wells as "another milestone in expansion plans".
The company, which already delivers water to 10,000ha on the downlands and in the Waiareka Valley, in May last year received Ministry for Primary Industries irrigation acceleration funding for design work and started construction this week.
To get a grant, the project had to demonstrate requiring irrigators to achieve high standards of environmental performance and water-use efficiency.
Irrigation fund support at the earlier stages of the project allowed the company to go through a rigorous contract procurement process and it chose a relatively new entrant to the irrigation industry with which to partner.
Eden New Zealand, a subsidiary of Total Eden, the largest supplier of water products and services in Australia, won the contract to supply 12km of pipeline and two pump stations to complete the project.
"It is great to see trenching begin and pipe being laid," Ms Wells said.
The company and Total Eden introduced some innovative solutions in the design, including electronic water meters and flow control plates that had no mechanical parts, alternative pipe materials for tricky spots and running the line at two different pressures to ship water at relatively low pressure before boosting the pressure for clients at the end, thereby reducing the overall cost of the main section of pipe.
"We are looking forward to assessing the outcomes of these trials, so we can incorporate what works well into the design of our next projects," North Otago Irrigation operations manager Phill Dodds said.
The extension is being financed by company borrowing and shareholder equity.
