Construction could begin this year on a water storage dam near Kaikohe thanks to a cash injection from the Provincial Growth Fund.

In April last year Regional Economic Development Minister Shane Jones announced a $18.5 million grant to investigate and, if feasible, construct water storage facilities in the Mid North and Kaipara.

Initially the water was destined for horticulture but as the drought began to bite across Northland early this year another $12.7m was added to boost Northland's resilience in extreme weather and expand the scope of the project to include supplementing stretched town supplies.

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Jones said the initial work had identified a number of suitable sites in the Mid North and Kaipara.

Depending on how Covid-19 affected timeframes, construction could start at the first site, near Kaikohe, next summer. Further sites would be explored as the project evolved, he said.

The plan was to build a series of small-scale reservoirs and a distribution pipeline.
It would not be a ''mega-industrialised scale of irrigation'', such as the abandoned Ruataniwha dam proposal in Hawke's Bay, but a ''durable, pocket-sized edition of water storage''.

Land for the Kaikohe facility had been lined up and the Government was working on the project with council-owned company Far North Holdings.

Later he hoped the same model would be rolled out in Kaipara and other parts of Northland.

''If there's anything I've learnt from the drought it's the importance of water storage.''

Jones said there was strong interest in the project from people working in the primary sector, who believed both the Mid North and Kaipara had potential for high-value horticulture if more water was available.

With droughts expected to become more frequent and severe due to climate change, a reliable water supply that stored rainfall during the wet months would become increasingly important to small rural economies.

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He was keen to hear from farmers and landowners who wanted to be involved, and was planning further engagement with potential water users as the Covid-19 alert level allowed.

Jones said a key focus was making sure the project delivered opportunities for Māori to develop their land. It also provided real opportunities to address municipal water supply issues.

Level 4 water restrictions are still in force in Kaikohe which has arguably been the worst affected town in Northland in the current water crisis.

In normal times about 70 per cent of Kaikohe's town supply comes from the Wairoro Stream with the rest from a bore at Monument Hill.

Kerikeri owes much of its success in horticulture to the Kerikeri Irrigation Scheme, which relies on two artificial reservoirs and an extensive reticulation network. It was built as a ''Think Big'' project by the Ministry of Works in the early 1980s and sold to a cooperative of local farmers and growers in 1990.