Meridian's Aqua land values more than double

Meridian Energy Ltd could more than double the money it invested in buying land in the Waitaki Valley for its Project Aqua power scheme.

Meridian estimated it spent $95 million buying land and investigating the 62km-long canal-based hydro-electricity scheme it cancelled in March 2004. Land purchases were estimated to have made up about $50 million of the $95 million.

About 3100ha of land it owns in 29 properties could now be worth up to $130 million.

The state-owned enterprise announced in September 2006 that it would sell land it bought for the proposed $1.2 billion power scheme between Kurow and the State Highway 1 bridge on the south side of the Waitaki River. It said it would progressively dispose of the properties over a number of years so as not to cause a glut on the market and depress land prices.

It has already sold two properties - totalling 549ha - during the past year and is preparing to put a 340ha dairy farm at Papakaio on the market. Other properties are likely to become available within a year, although there is no fixed schedule for sales as yet. Meridian would not reveal the prices it had received for the properties. Valuation figures for fully developed dairy farms with Fonterra shares sold between Culverden and the Waitaki Valley during the period from October to February averaged $42,000 a ha. Bare land is selling for about $25,000 a ha.

That would put a value of up to about $37 million on the two properties sold and the one about to be advertised.

About 2250ha of land remains and could be worth up to $94 million.

* In 2005 Meridian made a $652.5 million gain on the sale of its Southern Hydro business in Australia for $1.5 billion.

COST-EFFECTIVE
Project Aqua land:

Cost: About $50 million.
Now worth: Up to $130 million.

- OTAGO DAILY TIMES