Appendix 2: Additional information about the funding agreement projects

Inquiry into the Saudi Arabia Food Security Partnership.

The funding agreement listed the following projects:

  • Export Breeding Ewe Supply Chain;
  • Awassi Breeding and Genetics Programme;
  • Forages and Nutrition;
  • New Technologies;
  • Abattoir and Feedlot Design and Construction; and
  • People Development.

Export Breeding Ewe Supply Chain and Awassi Breeding and Genetics Programme

The purpose of the Live Export and Sheep Breeding Project was to resolve two key issues through research: "managing a late season mating in New Zealand to ensure that sheep are not arriving and lambing in the heat of a KSA summer" and "which breeds and age of ewes will give optimum performance both for a successful late mating and then adapt to KSA conditions".

MPI regulations restrict the transport of pregnant sheep to the Middle East to ewes that are no more than 115 days in lamb (if by air) or 96 days in lamb (if by sea), and ewes cannot be exported between the months of May and October because of the high temperatures in the region at this time.

To export pregnant sheep from New Zealand, mating must occur in July, which is later than normal. The objective of the research was to "generate data on the length of the breeding season and the relative success of late matings". The project included:

  • an evaluation of Awassi sire genetics;
  • an evaluation of ewe age and breed effects and their adaptation to Middle East conditions; and
  • research into the seasonality of breeding and late mating of ewes and hoggets.

The summary contract price was estimated at $718,628. Project savings and revisions through to December 2014 put new costs at $537,476. The actual cost was $581,977. We have evidence that the project has been completed.

Forages and Nutrition

The Forages Project was planned to benefit the efficiencies of the overall feed production onsite by two research programmes into evaluating alternative winter active alfalfa varieties grown under local conditions and alternative winter active Rhodes grass varieties grown under local conditions. The Al Khalaf Group grows alfalfa and Rhodes grass, which is blended with imported grains and additives, and converted in its own feed mills to feed pellets for stock. The summary contract price was estimated at $83,446, and the actual cost was $26,634. The project was cancelled at the request of the Al Khalaf Group, and the funding reallocated to the provision of increased expertise to support the abattoir construction.

New Technologies

The New Technologies Project was "to provide current NZ agricultural technology both for use on the Um Alerrad farm, and to provide a demonstration facility to showcase NZ agricultural equipment, technology, and expertise in the wider region". The Technologies Project included "a six stand shearing shed to be shipped in kitset form and assembled in the sheep breeding feedlot to provide the capability to shear 1,000-1,200 sheep each day; a demonstration area adjacent to the lamb finishing feedlot contained by a covered yards complex shipped from NZ to demonstrate the use of key NZ agri-tech equipment". NZTE described the delivery of the project as:

Two major facilities have been constructed within the technologies project:

  1. A fully equipped raised four stand NZ woolshed complete with a comprehensive set of covered yards attached. These facilities have been constructed adjacent to the existing sheep breeding feedlot. It is capable of shearing up to 1,000 sheep per day. An animal race connecting the feedlot to the woolshed and covered yards has been erected, with all equipment installed and commissioned.
  2. A partially covered set of sheep and cattle handling yards. These facilities have been constructed adjacent to the new abattoir site, and designed to service the new lamb and cattle finishing to be built by the Saudi Partner.

The major technologies that have been provided in conjunction with these two facilities include:

  1. Automated animal handling and drafting equipment which are linked to electronic weigh scales and identification (EID) devices for sheep, cattle and camels.
  2. Management software to assist with recording and monitoring farm performance.
  3. A full range of animal husbandry tools, shearing plant and equipment.

The intended completion date was 30 March 2015. The summary contract price was estimated at $1,525,926, and the actual cost was $1,490,068. We have evidence that the project has been completed.

Abattoir and Feedlot Design and Construction

The Abattoir Project was "planned to showcase New Zealand meat processing technology, with high quality equipment supplied by the project from New Zealand where possible, and with public viewing areas to be utilised for marketing and promotional activities planned".

The Project Plan also indicates that the showcase area for marketing and promotion would enable the public to see their own animals slaughtered if they wished. A New Zealand company was contracted to design the plant and equipment required, issue construction specifications, oversee the installation of equipment supplied from New Zealand, commission the plant, and train operators once the plant has been commissioned. The New Zealand engineering firm that will construct the internal machinery fit out, install the equipment, commission the plan, and train local staff to operate the abattoir satisfactorily has been selected.

The Al Khalaf Group is obtaining regulatory approvals for the abattoir in Saudi Arabia. This has caused delays with the project (see Part 7). The Al Khalaf Group has expressed confidence that the approvals will be obtained. In August 2015, the NZTE project manager included the following in a report on the project:

As part of the abattoir, a New Zealand company has developed two prototype portable slaughter boxes, one each for sheep and cattle (camels). This leading innovative technology was developed in New Zealand at the request of the KSA partners and trialled in their abattoirs in Dammam. It complies with the KSA slaughter (halal) requirements. Potentially this technology could open up the market and be adopted by many of the other abattoirs across the Middle East.

The remainder of the project will be completed once the approvals are obtained, and the current anticipated completion date is the end of December 2016. An alternative solution is planned if approvals are not obtained. The summary contract price was estimated at $3,172,000, and the actual cost as at June 2016 was $489,460. About $2.8 million remains budgeted for this project.

The project to develop procedures for the sea freight of breeding ewes was stopped as a result of the decision to airfreight 900 pregnant sheep to Saudi Arabia in October 2014. The summary contract price of this project was estimated at $47,000, and the actual cost was $7,531 before cancellation.

People Development

We did not find evidence that People Development became an active project, although we note that training of staff at the Agrihub was carried out as part of other projects. For example, people were trained in shearing and wool handling as part of the New Technologies Project.