A multi-million dollar investigation into water storage and water use options in the Far North and Kaipara has reached the pre-feasibility demand assessment and design stage.

Two initial studies, co-funded by the Northland Regional Council and the government, have identified approximately 6300ha, some of which may be suitable for conversion to high-value horticulture, in the Kaipara, along with 1600ha south of Kaikohe and 1700ha west of Lake Omapere.

Northland Regional Council chief executive Malcolm Nicolson said initial indications were that with the availability of a secure water supply, horticulture and supporting industry could ultimately create hundreds of jobs and boost Northland's economy by tens of millions of dollars annually, which had been recognised with an $18.5 million investment from the government's Provincial Growth Fund.

The regional council was leading the project, in collaboration with Far North and Kaipara District councils and Northland Inc, while Kumeu-based Williamson Water & Land Advisory Ltd had been contracted to undertake the prefeasibility assessment.

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Contact would be made with major landholders to gather the information to answer some key questions, including what water could be used for given local soil types, land profiles and climate.

"Another important consideration is, if water was available, would people use it and what for. Key to this is what the on-farm costs might be. These would be relatively small for something like a market garden, but could run to hundreds of thousands of dollars per hectare for kiwifruit or avocados," Mr Nicolson said.

The assessment would also look at where and how water could be collected, stored and distributed.

"This work needs to fit with the principles for the funding agreement that promote local economic growth, but it needs to be done in an environmentally and culturally sensitive way," Mr Nicolson said. "Northland has a lot of water, but not always at the right time, and a lot of it comes at once. This project is about collecting water and making it available when it's needed."

The work would also rank the viability of various areas, so by the end of March officials should have a much better idea which, if any, of the areas could be progressed further.

As well as the governance steering group, a separate advisory group had also been set up to provide advice on cultural, community, farming/growing and environmental matters.

That group would provide feedback on work as it developed through the project, guidance on engagement with the wider community and helping to ensure that the right people were being informed or involved.

Group members include Kaipara and Mid North, hapu and iwi, and representatives from Lake Omapere,DoC, Fish & Game, Horticulture NZ, Irrigation NZ and Federated Farmers.

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Community and land owner representatives had been selected, and the Integrated Kaipara Harbour Management Group had been included.

While some of the funding would be spent on feasibility and commitment phases, the rest would be made available as a construction loan should viable water storage and distribution networks be identified.