PROJECTS

Otago River Control Scheme, New Zealand

The problem

The Otago Regional Council in New Zealand believed residents in its area were paying more than their fair share for the Lower Waitaki River Control Scheme. This scheme protects communities on both the Otago and Canterbury sides of the Waitaki River from flooding and erosion.

How we helped

We developed an economic model and quantified the material benefits of the flood control scheme. We assessed the economic benefits and identified the cost of an alternative scheme. We determined that Otago residents paid 27 percent of the total costs and gained 24 percent of the benefits of the scheme. Canterbury residents paid 33 percent of the costs and gained 76 percent of the benefits. The remaining 40 percent was paid by Meridian Energy, that operates the Waitaki dam further upriver. Our analysis showed that Otago residents were contributing a disproportionate amount to the scheme’s costs.

Impact

The Otago Regional Council used our analysis to renegotiate the scheme’s cost allocation with Canterbury’s regional government. As a result, Otago residents will pay a fairer share of the scheme’s costs.