ANZ estimates the current dry spell will shave at least 0.5 per cent off GDP growth.

Drought throughout much of the South Island and dry conditions in parts of the North look set to add urgency to water storage and irrigation schemes that are either underway or on the drawing board.

The declaration by the Government that parts of the South Island have been affected by medium-scale adverse events has highlighted what a nor'wester can do, now that all the "easy" water has gone, says Irrigation New Zealand chief executive Andrew Curtis.

ANZ estimates the current dry spell will shave at least 0.5 per cent off GDP growth.

"This year has definitely highlighted what a nor'wester weather pattern does and how important the alpine rivers remain," Curtis said. "There are a few projects on the drawing board that need pushing forward at a more rapid pace."


Irrigation NZ, which represents irrigators and the companies that support the industry, said water was starting to become an issue for Marlborough, which produces 73 per cent of New Zealand's wine.

"Dry conditions in Marlborough are only worsening and, like South Canterbury, this highlights the need for sustainable water storage solutions in susceptible areas so that in a bad year no one has their water cut off," Curtis said.

Getting water storage up and running involves environmental challenges and there are issues of land-use change once a project is complete. Then there is the cost and the challenge of getting all the irrigators on board.

"All the run-of-river water has gone," Curtis said. "Water taken directly out of a river or from ground water - in those parts of the country where water is an issue - has been fully allocated.

"So the only way that we can create new water is through a storage and distribution network and obviously this comes at a cost," he said.

"When you start looking at that cost it always stacks up over the long term," he said. "Our challenge is the initial capital hurdle that is involved in putting these together," he said.

In the North Island, the controversial Ruataniwha Water Storage Scheme in Central Hawkes Bay is awaiting the outcome of a board of inquiry.

Irrigation New Zealand chief executive Andrew Curtis.
Irrigation New Zealand chief executive Andrew Curtis.

The Wairarapa Water Use Project, aimed at tapping into the tributaries of the Ruamahanga River, is still sitting on the drawing board.

In the South Island, the Lee Valley Dam in Tasman has gone to a consent process.

In the key grape-growing region of Marlborough there is a proposed Flaxbourne Community Irrigation Scheme.

Further south, in Canterbury, there is the the Hurunui Water Project near Culverden.

And in mid-Canterbury, stage one of the Rangitata diversion race is already under way.