A company associated with Sir Russell Coutts has a fight on its hands to replace century-old water permits feeding the five-time America’s Cup winner’s sprawling property near Queenstown, which sports a private golf course.

In April 2019, BSTGT Ltd, of which Coutts is a shareholder and director, applied for a regional council consent to bundle five historic water takes from two creeks on the Crown Terrace, above Arrowtown. The joint applicant is the family trust of Coutts’ neighbour, Queenstown tourism industry veteran Tony McQuilkin.

Most of the water is funnelled to Coutts’ property, Barley Station, via a network of weirs, channels, pipes and water races. The existing permits are due to expire in October.

The bundled consent has been framed as an environmental win, as the applied-for volumes were far lower than previously permitted, under consents dating back to old mining permits.

But frustrated neighbours, once they caught wind of the application, were aghast the proposed takes were still higher than the creeks’ mean annual flow. They worried creek beds below the takes would be left dry, as often happens now, especially over summer, to keep Coutts’s golf course green – and that these takes might affect their own water takes.

Consent documents state 160 hectares – about the area of Christchurch’s Hagley Park – of Barley Station’s land is irrigated, and the existing golf course, which may soon be extended, covers 53 hectares.

Barley Station, on the Crown Terrace, near Queenstown, takes millions of litres of water a day for irrigation. Photo: Google Earth

It’s not just Coutts’ and McQuilkin’s entities under scrutiny. The regional council is being asked how well it’s policing a water-take regime that, at least intermittently, leaves creek beds dry, and doesn’t appear to protect the rights of downstream users.

Many Crown Terrace properties rely on one of the creeks, the north branch of the Royal Burn, for domestic and stock water. High-profile residents in the area include Rich Lister Mark Ching, a part-owner of vehicle shipping firm Armacup, and former MediaWorks and NZX boss Mark Weldon, who founded Terra Sancta vineyard and was an Olympic swimmer. Ching didn’t respond to a message from Newsroom, while Weldon declined to comment.

The regional council decided in July last year, more than a year after the application was lodged, that notification would be limited. Confronted with opposition, BSTGT asked for a time extension to consult downstream water users. (There are two water intakes on the Royal Burn, and one on New Chums Creek.)

Amendments were made to lower the water volumes originally applied for. The application was notified to a wider group, and submissions closed in January of this year. In February, BSTGT asked for the application to be suspended again. Now, the firm’s consultants have signalled the volumes will be lowered further. Submitters are expected to be notified of the latest changes today.

Last month, the application was suspended at BSTGT’s request. However, the Otago Regional Council (ORC) says the consent’s status may change this week and parties will be advised of a hearing date as soon as possible.

Newsroom asked Coutts how much water is used for Barley Station’s golf course and turf-growing operation, as opposed to farm operations, and whether the takes might be responsible for reduced flows to some downstream users, and sludge in water tanks.

Ahikā Consulting senior consultant Hilary Lennox confirmed Coutts had seen our email but she responded on behalf of the applicants.

“The applicants have pre-existing legal water rights and have followed the correct processes in their application for renewal of those rights,” Lennox said by email. “We have completed a comprehensive survey of ecological values for the relevant waterways and submitted this report to ORC. Historical flow rates used by the applicants have been metered and, of course, ORC has that information.

“The application has recently been amended such that the maximum volume sought is significantly less than the modelled mean annual flow, and with a low flow cut-off condition to protect the Royal Burn and other users’ rights.

“ORC has notified a number of parties, some of whom have made submissions.”

“Whether they would be up in arms to the same degree if it wasn’t Russell Coutts, who knows?” – Peter Clarke

One submitter is Peter Clarke, who has owned property on the Crown Terrace for 28 years, and lived there fulltime for two decades. The Royal Burn passes through his Crown Range Rd property, which neighbours Barley Station, but his primary source of water is a spring.

“There are a few people who are up in arms,” he tells Newsroom. “Whether they would be up in arms to the same degree if it wasn’t Russell Coutts, who knows?”

Clarke’s primary concern is the ecology of the Royal Burn. He has some expertise – he monitors, maintains and controls water in two races at nearby Gibbston Valley.

In recent months, Clarke’s been checking the flow of the north branch of the Royal Burn, above the confluence with the south branch.

“There are periods where they take it all,” he says. “You talk about the ecology of the creek, well, if you’ve stopped the water flowing in the creek then everything dies.”

It’s ludicrous, he says, for water takes to persist when they leave nothing in the creek.

Being a realist, Clarke is sure BSTGT and McQuilkin’s family trust will get some water – “but to be taking it all is pretty unreasonable – fairly outrageous, really”.

A minimum flow for the creeks should be agreed and enforced, he says. “If there’s nothing in excess then people get nothing. That’s how it should be – we should be prioritising the health of the creek.”

(A hydrological report completed for ORC by consultants Pattle Delamore Partners in September last year called for further assessments of effects on groundwater and surface water takes, and potentially the creeks’ ecology. It said flows could be restricted when groundwater was at critical levels.)

Here are the nuts and bolts of the consent.

BSTGT says the current allocation between both creeks is 27,603 cubic metres of water (that’s 27.6 million litres) a day, and 5.27 million cubic metres over a year. The original application would have reduced that to an average of 8889 cubic metres a day, a reduction of about a third, and 1.8 million cubic metres a year.

A total flow of 160 litres per second was requested – compared with the mean annual flow of Royal Burn north branch is 33.7 L/s and New Chums is 19.8 L/s. The mean annual low flow, combined, is 15.4 L/s. (Before this proposal, the Arrow catchment, in which the creeks sit, was over-allocated by 1623 L/s. ORC has set no minimum flows for waterways in the Arrow, “although one is proposed in the near future”.)

The BSTGT application says: “Clearly the maximum rate of abstraction sought from each creek exceeds the mean flow for both of these creeks, however, the instantaneous rates of take sought will allow the applicants to harvest higher flows when they are available and store this water in onsite ponds as required.”

The amended rate sought in November 2020 was 89.5 L/s – “only 28 percent of what is currently allowed” – while the annual allocation remained the same.

Environmental effects ‘substantial’

Crown Terrace residents Jef Desbecker and Robina Bodle are part of the LOFTS water scheme serving nine properties. Their written submission says they consider the environmental effects of the takes by BSTGT and McQuilkin’s family trust are “substantial”.

“This application blatantly flies in the face of current ORC policies which are directed at reducing human usage of precious water supplies in favour of enhancing natural environments.”

The proposed regime, of taking more water during high-flow periods and storing it, “provides for the applicant’s ability to run both creeks dry at any and all times”. There’s no guarantee of water past Barley Station being available “by the large number of people who rely on the Royal Burn to provide domestic and stock water”.

There’s a popular walking track near New Chums Creek, and brown trout in the Royal Burn – yet the effect of drying up creeks was stated as “no more than minor”. The couple say since the installation of weirs and pipes to the existing Royal Burn creek and water races, there’s now a “permanent and omnipresent alga” in the creek below the intakes.

The Department of Conservation provided written approval for the BSTGT and McQuilkin family trust’s consent after the completion of a fish survey, which found trout in the Royal Burn below the confluence of the north and south branches, and ORC suggested “50m residual flow” downstream of the take points.

Desbecker and Bodle ask: “Is this to be interpreted as a trickle so small that it can visibly disappear into the ground or evaporate after 50m?”

Several submitters have scoffed at the idea an alternative water supply, through digging a well or drilling a bore, is “cost prohibitive” for Coutts’ company. (The main house at Barley Station is flanked by a tennis court, complete with pavilion building, as well as a subterranean swimming pool. Coutts owns several properties around New Zealand, including a sprawling, beachfront mansion built at Tindalls Bay, on the Whangaparāoa Peninsula, north of Auckland.)

Another question is, is BSTGT being fully transparent with councils about its water use? The application to the ORC makes little reference to Barley Station’s golf course and turf-growing enterprise – the extent of which is clear from Google Earth photos.

“I suggest it would be more transparent for the applicant to supply current photos in their application which would clearly identify the substantial amount of acreage currently in golf course and turf growing use as opposed to ‘productive farmland’ as the application suggests,” Desbecker and Bodle.

Water permits expiring

Another submission says Coutts might have had the right to build a golf course, but his company knew the risks of holding expiring water permits.

The application should be rejected, the submission says, as it lacks sufficient information, particularly about details of water use.

“The applicants are looking to use historical mining rights to support a golf course and sculpture garden to the detriment of other residents, which will increase fire catastrophe risk, decrease wildlife and birdlife, and threaten other viable land uses on the Crown Terrace,” the submission states.

BSTGT has applied to extend the existing golf course by three holes, which will take it up to 18 holes.

(Incremental construction means BSTGT makes the argument any adverse effects can be disregarded as it’s part of the “permitted baseline”. Critics would say this allows an 18-hole golf course to be built without having to get consent for the negative environment impacts of a full-sized course. The new holes will be built across two unformed legal roads.)

An assessment of effects report, completed in January of this year by consultants John Edmonds & Associates, uses a years-old photo of the golf course area which doesn’t show the latest extent of the work being done on the land.

Jack Barlow, a spokesman for Queenstown’s council, QLDC, says the application is still being assessed by a council planner, who will undertake a site visit. Asked whether QLDC shares information with the regional council about water for the golf course, Barlow says: “As appropriate/allowed for under the type of consent sought, QLDC will liaise with ORC.”

Newsroom sent BSTGT and its consultants a list of questions, including whether it was frank with councils about the extent of its golf course and turf-growing operations. The ORC water-take consent application only mentions the golf course once – on page 20 of 27 – while water is described as being used for “irrigation and stock drinking water purposes”.

(There are no minimum flows for the creeks, but water races need a “base flow”, BSTGT says, to prevent weeds and silt build-up, and for domestic and stock water. The consent application said of the Royal Burn north branch (RBNB): “It is unrealistic and unreasonable for the applicant to be expected to provide a residual flow when there is no water in the creek, and so no residual flow at the Lower RBNB point of take is proposed.”)

Many of the questions put to BSTGT went unanswered.

Council questioned

The water-take consent might have sailed through unnoticed.

BSTGT and McQuilkin’s family trust consulted no one before making its application in April 2019, stating the nearest known downstream “authorised” surface water take was on the main steam of the Royal Burn, more than 4km downstream.

Indeed, the Otago Regional Council’s decision to put through the consent with limited notification – without a site visit by council staff – didn’t consider neighbouring properties were affected. However, Crown Terrace property owners who rely on the Royal Burn for domestic and stock water reminded the council of its own rules – that they’re allowed to take up to 25,000 litres a day.

ORC consents manager Joanna Gilroy says the regional council doesn’t keep a record of permitted takes, which don’t require a consent. “For this application, users with permitted takes were not included in the application and council did not have full records of those users in the area.”

Notification decisions are based on the best available information, she says. “Once information about the other users was known, council took all steps to ensure that all parties that needed to be involved in the application were included.”

On the question of information about water use at Barley Station, Gilroy says applicants need to include information about how much water the applicant will use, if it is an efficient use of water, why they need the water and when they will take the water.

A curious side issue about the regional council’s behaviour is its compliance investigation against the LOFTS water scheme, whose members include Desbecker and Bodle.

After the opposition to the BSTGT and McQuilkin family trust consent materialised, the council sent contractor Pattle Delamore Partners to visit the scheme. This was two months before ORC staff visited the Royal Burn in relation to the bundled BSTGT consent.

The LOFTS scheme – whose daily take is less than one-thousandth of the current permit held by BSTGT and McQuilkin’s family trust – was found to exceed daily volumes, something easily remedied by installing a ball cock or float valve.

In a notification decision in August last year, the regional council deemed the LOFTS scheme “not a lawful user” of water, stating the scheme and its members were “not considered affected” by BSTGT’s application.

ORC confirms a consents officer visited the Crown Terrace to assess the BSTGT and McQuilkin family trust consent in January of this year – 21 months after the application was first made.

Gilroy says when processing applications, ORC follows the clear statutory process for evaluating and notifying consent applications set out in the Resource Management Act.

The wider context of the Crown Terrace water stoush is Otago Regional Council’s mismanagement of water. So concerned was Environment Minister David Parker that two years ago he tasked former Environment Court Judge Peter Skelton to investigate.

Skelton’s report, completed in October 2019, found the council’s freshwater planning system was inadequate, and it wasn’t properly managing water takes and nutrient discharges.

The New Chums and Royal Burn creeks, on the Crown Terrace, flow into the Arrow River, making them part of the Arrow catchment. Skelton’s report says most of Otago’s water catchments, including the Arrow, are over-allocated – meaning permits allow more water to be taken than is sustainable, leading to adverse environmental effects.

(A weeks-long Environment Court hearing is happening now, over so-called Plan Change 7, to determine future water rights of the mining-era “deemed” permits. ORC’s Gilroy says the BSTGT application was lodged prior to the plan change being notified. Therefore it “retains its activity status under the operative plan”.)

As fate would have it, the regional council will hold a public meeting in Arrowtown today “to hear how we propose to manage freshwater flow in your area”. How many Crown Terrace residents might attend?

David Williams is Newsroom's environment editor, South Island correspondent and investigative writer.

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