Meridian keeps quiet on risk level at leaky Tekapo canal

The 25km canal linking the two powerstations at Tekapo needs repairs. Photo / Grant Bradley

Taxpayer-owned Meridian Energy is keeping secret details of the danger posed by a leaky power scheme and repair options it had before selling it to another state-owned enterprise for $821 million.

The buyer, Genesis Energy, says it was forced to write down the value of the Tekapo hydro scheme by $101 million soon after the deal was done to account for repairs to parts of the 25km canal linking two power stations, which also require work.

The canal sprang a big leak in 2009 and neighbours downhill from it are worried they may end up "swimming" if the canal walls gave way.

Genesis says it was aware of the problem before the deal and the canal was stable but repairs are urgent.

"We don't see a risk of catastrophic failure but there have been some severe leaks which were hurriedly plugged," a spokesman said.

"There is some immediacy and urgency required to get on with the work and we're looking at long-term dam safety and compliance with building codes."

Meridian Energy commissioned two studies into the failure but initially refused to release them to the Business Herald under the Official Information Act, citing the need to protect commercially sensitive information relating to the "productive and storage capacity of the Waitaki power scheme", although information is available on its website.

It did relent - partially - following a complaint to the Ombudsman but the lengthy reports it released have large sections deleted, relating to the canal's deficiencies, the probability of its failure, options and costs of repair.

The Herald has lodged a further complaint with the Ombudsman.

Neighbours on a farm had water pour on to their property through a person-sized hole in the large earthworks supporting the canal about two years ago.

Bronwyn Murray, from The Wolds farm, said she and her husband John were worried about children and farmworkers on the residential part of their property. She had been told if the canal failed badly they "would have to swim".

The canal was built in the early 1970s and water flows through the earth-lined structure at 130 cubic metres a second - the equivalent of water to fill an Olympic-size swimming pool every 20 seconds.

Murray said the problem was complicated.

"All earth dams leak, it's just the impact of the leak," she said.

One of the reports by consultants Damwatch has details on the population at risk from a catastrophic failure but this has been deleted from what was released.

Murray said she had also struck problems getting information from Meridian but the new owners had been more helpful.

"It's a massive issue. Genesis is a delight to deal with and they appear to have stepped up monitoring."

Mackenzie District Council chief executive Glenn Innes said he was comfortable with the level of monitoring of the canal.

Big Canterbury earthquakes could be felt in the area but to his knowledge there had been no further damage.

The Genesis spokesman said the canal was "stable and being looked after in a safe manner and with the public interest in mind".

The company's board would decide within months on what was needed to ensure the canal lasted another 50 years.

"We did a lot of due diligence, we absolutely knew what we were buying when we bought them."

It was likely long-term work would be done during summer over several years and this could mean disruption for Mt Cook Alpine Salmon, which farms in the canal.

"We have the ability to move stock around ourselves. We're determined to farm around whatever comes our way," chief executive Geoff Matthews said.

The farm produced 400 tonnes this year and was looking to more than double production next year.