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Wednesday
Sep032014

Opotiki Sea Mussels

There is something that does not quite add up regarding the article that has appeared in this week’s Listener - “Mussel Power” by Rebecca Macfie – a writer for whom I have enormous respect. (Note - the article cannot be accessed through the net) Her article two months ago on irrigation and dairying was a prize winner, and probably the clearest exposition we are likely to see this year on that particular industry.

This article on the stark reality of Opotiki, and the proposed development of a huge mussel industry, to be followed hopefully by others, does not quite ring true. There is almost desperation in the attempts to prove the veracity of the facts that underline the article, and that are evidently meant to inspire hope, if not confidence in the prospect of this industry succeeding.

I am not convinced, and I doubt if many others will be taken in by what on balance appears  wishful thinking rather than reasoned, rational analysis of the facts that Ms Macfie has been able to glean from local hopers and boosters. It seems on first glance, a valiant attempt on her part to justify the proposal as a means to overcome what admittedly are abysmal social conditions arising principally from the outrageous Government response to the 1865 Rev Volkner murder.

Whakatohea’s six hapu suffered grievously, and to this day Government appears anxious to do whatever it can to ‘square the books.’ One can only hope that whatever is done, it is for the right reason and not simply lead to further failure and despair amongst the tribe that stands to benefit should all the pieces fit together.     

First and foremost, and before anything else is examined in depth, is the proposal that this industry be based on 3,800h of open sea off Opotiki because it is said by Cawthorn Institute aquaculture scientist Kevin Heasman to be “about as good as it gets for such a venture.”

Heasman bases this conclusion on the fact that “it is away from shipping lanes, it is in the path of a nutrient rich current, and mussel spat occurs naturally in the area.” But here is the rub – the lines and floats are to be submerged several meters below the surface in order to avoid the wave action that would otherwise likely destroy them in time. The method involves anchors being “screwed into the sea-floor” and it is suggested that it has the side advantage of providing a habitat for “multi-species marine farming systems in which the growth of each species benefits form the other.”  No evidence is provided in the article of this system being successfully used anywhere else, and therefore it must have a substantial experimental element.

So far so good, but on the other hand, huge delays have occurred since the proposal was first mooted several years ago, and it would appear that there has been a break-down in confidence on the part of the original partners that included Sealord and NZ Sea Farms. Sealord is apparently pulling-out from the venture, in fact from all aqua-farming ventures, and, one would have to question whether this departure may have been bought about by the new Company – Whakatohea Mussels (Opotiki), formed to raise local capital to fund stage one, having appointed our own Peter Vitasovitch onto its Board.

It is not so long ago that the Tuaranga based joint venture processing company – North Island Mussel Processors that included Sealord broke up in acrimony after fellow partner Vitasovich’s company failed to meet debts to NIMP and went into receivership. The new Company (quoting Manager Ian Craig) “values his 30 years of industry experience,” but one would have to question the wisdom of commencing this new and untried method of operation without the benefit of major industry players. Vitasovich’s Greenshell Mussel Processors more recent history included unsuccessful if innovative marketing ventures.

Be that is may, the situation at Opotiki is made even more fraught by the push to get 33km of rope lines into the ocean this year following four years of trials. There seems almost an atmosphere of desperation about the need to get “push ahead” as expressed by Chairman Robert Edwards (80) – his Trust Board is the controlling shareholder, and apparently the main provider of capital for the new venture (stage 1), leading to further capital raising and expansion.

But all this is dependent on a parallel development that appears to need $25m of Government funding to succeed – that is the re-development of the Waioeka River entrance with two huge 500m groynes, and substantial dredging. The figures in Ms Macfie’s story are far from clear, but it appears that the BoP Regional Council have pledged $18m of the $45m cost, Opotiki ratepayers a further $5m with $2m from “other regional sources’. The balance adds up to $20m, but in the subsequent paragraph it is indicated that Economic Development Minister Stephen Joyce “is reluctant to step up with the $25m balance.”

With an election round the corner one can understand his reluctance “we are looking at it pretty carefully,” but it appears that he is anxious to hand the funding decisions over to Crown Irrigation Investments, that may act as a bridging financier until “other investors come in,” – something that appears unlikely to happen in a hurry. Certainly CII may well have un-used funds at its disposal following the Tukituki debacle, but funding groynes instead would appear a pretty long stretch.

It is absolutely essential that this and other regional projects are foundered on sound business practice. Despite all the testing and enthusiasm reported in Ms Macfie’s article, there appears to be a general reluctance for real players to get in behind the scheme with real finance.

It is all very well for university academics and others without ‘skin in the game’ to throw their considerable weight behind the venture, but it must be recognised that open sea ventures of any kind require massive understanding and technical expertise before public funds are thrown at it - no matter what the social justification may be for getting people into real work and rejuvenating the local economy. Failure only leads to far worse, and without venture capital one would have to question its whole basis.

May all of Whakatohea’s enthusiasm pay off and this venture become in time the shining light of aquaculture in this country, but I suspect that there is a great deal of water to go under their ropes before this succeeds. And the Government would be wise to carefully consider the situation before providing half of the funding for what may well be a bottomless pit.

Mr Cunliffe’s ‘off the cuff’ comment last week that this is “the ideal project for the  proposed ‘Regional Development Fund,” is designed simply to garner votes – it does not auger well for any future Government led by him, but it is no worse than the present Government’s addiction to funding dairying irrigation.   

Ms Macfie may well be the expert commentator on the dairy and irrigation industries, but it remains for her to present a convincing case that this particular venture has legs.        

 

 

 

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