Plans for an industrial park touted as a ''game changer'' for Kaikohe could get a multimillion-dollar shot in the arm from the Far North District Council.

The council is consulting on a proposal to invest $6 million, via its trading arm Far North Holdings (FNH), in an industrial park near Top Energy's expanding power station at Ngawha, just east of Kaikohe.

The investment would allow FNH to buy the land, understood to be a dairy farm on the northern side of State Highway 12 currently owned by Top Energy, and gain the consents needed by industry.

Panoramic image of work under way at Ngawha for the expanded geothermal power station. Photo / Top Energy
Panoramic image of work under way at Ngawha for the expanded geothermal power station. Photo / Top Energy

If the proposal goes ahead it will bring the council's total investment in FNH to $19m, which includes the $1m spent expanding Bay of Islands Airport last year.

Advertisement

The $6m would be added to an existing ''perpetual loan'', used to fund previous investment in FNH, with FNH paying the interest of about $270,000 a year.

Deputy mayor Tania McInnes said the park could encourage energy-intensive businesses, and those benefiting from byproducts such as heat, to take advantage of low energy prices by setting up near the power station.

Industries that could benefit included sawmills, dairy factories, data processing sites and warehousing.

No private investors had come forward so far but the council and FNH believed it was a matter of creating the right commercial environment.

"Investors generally require some certainty before moving to a new development such as this. The site would be developed to be more attractive with the appropriate resource and building consents secured, followed by formal marketing."

Deputy Mayor Tania McInnes. Photo / File
Deputy Mayor Tania McInnes. Photo / File

The risk to ratepayers was small because the land could be sold if the park failed to attract investors. As a working dairy farm it was likely to hold its value.

The industrial park could rejuvenate Kaikohe and be ''a real game-changer'', she said.
''It's about us trying to help Kaikohe shine again.''

Earthworks are already under way for Top Energy's geothermal power plant expansion. Once stage one is complete, scheduled for mid-2021, the current 25MW output will be more than doubled.

Advertisement

A second stage could boost power production to just over 80MW, turning the Far North into an energy exporter.

Top Energy chief executive Russell Shaw welcomed the industrial park proposal, saying the company had been working with the district and regional councils to get the idea off the ground.

Top Energy had committed its resources to the power plant expansion so couldn't fund the park itself; in any case FNH had the skills to make it work.

''They really have the expertise to take ideas and turn them into consented reality.''

The park would be connected directly to the power station so Top Energy could set the price with the user, leading to power prices 30-40 per cent lower than via the national grid.

There was also potential for industry to use surplus heat from the power station though that would require the construction of pipelines. The infrastructure for power and fibre communications was already in place, Mr Shaw said.

In 2016 a proposal for a $300m, 200-job pulp mill at Ngawha, also making use of cheap power and heat, was shelved. It was to have been built by private enterprise with the Government pledging to find suitable investors.

It didn't get further than a pre-feasibility report due to concerns about Northland's future timber supply and an Electricity Authority plan to hike the cost of power in the Far North as part of a nationwide transmission pricing review.

The authority's proposal has since been revised, reducing its impact on the Far North. It is not clear if even the revised plan will go ahead under the new Government.

■ The council is seeking feedback on its proposal until February 16. It will consider community views, legal and tax advice, and due diligence outcomes before making a decision in March. If it goes ahead FNH will buy the site by the end of March, with designing, market testing and consenting of the industrial park expected to take two to three years. Go to www.fndc.govt.nz/fnhl2018 for more information.