‘The decision has been driven by a series of commercial uncertainties, which make the risks of continued spending on the project unacceptable,’ said Meridian chief executive Keith Turner yesterday. ‘The simple fact is that in the current circumstances, Project Aqua is no longer achievable.’

Announcing the suspension of the Lower Waitaki river scheme, Turner gave the following reasons for Meridian’s decision:

• Significant uncertainties around the nature of water rights, which would take years to resolve and could affect the availability of water in the Upper Waitaki river as well as for Project Aqua,

• The scheme cannot come on stream fast enough to meet electricity demand growth within the next five years,

• Uncertainties concerning the resource consents, in particular whether Meridian would secure a consent; the conditions of the consent; when the consent would be available; how much water the consent would provide,

• A need to be decisive for the people of the Waitaki valley, who have had three years of uncertainty,

• Substantial expenditure on the project including costs for the completion of preliminary design and compliance with consent requirements,

• Given the uncertainties, financial reporting standards require all costs to be seen as expenses, and cannot be capitalised towards the costs of the project,

• Growing indirect costs, including community and environmental mitigation,

• Necessary design changes for the project, which would have an adverse impact on project economics,

• The Resource Management Act creates a difficult process for large projects dependent on water.

Meridian now intends to focus on schemes that can be put in place more quickly, added Turner.