Benefits of dam project under scrutiny



A dam earmarked for Ruataniwha would cost $230m. Corey Charlton examines both sides of the issue

PICTURE a dam looming 80 metres high, containing 90 million cubic metres of water, stretching 7 km long and generating 6.5 megawatts of power.

Sitting amongst the hills surrounding the Makaroro River in Central Hawke's Bay, it collects water during the winter, then releases it across the Ruataniwha Plains to anywhere between 17,000 and 30,000 ha of land during the parched summer months.

This image could become a reality in 2017 if a $230 million dollar proposal being investigated by the Hawke's Bay Regional Council (HBRC) is given the green light.

Touted as one of the most significant projects ever undertaken in Hawke's Bay, the Ruataniwha Plains could be transformed into an economic powerhouse with the potential to produce up to $250 million GDP per annum.

``Massive'' is how Federated Farmers president Bruce Wills describes its potential.

``And more so in the future than today.''

To place this potential in context, he recalls the east coast drought of 2007/2008, and how that drought was estimated to cost the country $2.8 billion in exports.

``The Rugby World Cup added up to less than a quarter of the loss that we suffered because of that drought,'' he says.

``To me, when you look at those numbers that is the sort of damage that these severe droughts can have on New Zealand.''

The big question, if submissions to the HBRC's draft Long Term Plan are a good indicator, is what the impacts of such land use intensification will have on water quality.

Mr Wills says this impact is something continuing improvements in science will be able to address and he is ``very reluctant'' to put growth or opportunities such as the dam on hold.

``From our view, with top soil management practices and continued investment into good science, we can meet these challenges.''

The benefits of such a scheme he expects to be long term. Jobs, rivers and kids are good indicators, and in his view ``building a dam absolutely ticks those boxes''.

Jobs are created through the creation of thousands of hectares of irrigable land, the Tukituki's water quality improves as water takes are no longer over allocated, and the kids grow up in a prosperous Hawke's Bay.

Mr Wills is well aware of the pros and cons, and the dam is without question an exciting and ``crucial'' opportunity.

``This is about the future of Hawke's Bay and it is very important that it goes ahead. It is a big project, and Hawke's Bay people will need some courage to support this thing.''

One Hawke's Bay person, a man with over 20 years' experience in beef, sheep and dairy farming, and an ex-Massey University senior lecturer in agriculture production and economics, holds serious reservations about the viability of the dam.

Barrie Ridler discusses it in terms of risk. Global markets, financing, the uptake of farmers into the irrigation scheme are but a few of these.

``It's all very well to say we can now irrigate 20,000 ha,'' he says. ``If the farmers don't take up the irrigation, who pays for it?''

Costs to convert to dairy farming are substantial and if the farmers can't make a profit it is ``futile to dream about any GDP boost to the region, as it will not happen''.

Buying land, the cost of water to the farm gate, the pivot, and the cows are expensive realities for a farmer, who he says must consider the cost to convert their farming system against the potential profit of the enterprise.

``You're looking at about $40,000 per hectare to buy a dairy farm with the water on it,'' he says. ``If it is too expensive nobody will use it.''

What the farmers' general consensus is on the matter is not known, considering the project has yet to be confirmed as proceeding, but Mr Ridler relays some anecdotal concerns about the project.

``They're really, really, worried that their rates are going to go up, and they're really, really, worried that they're going to be forced to pay for their water at their gate even if they're not using it. This is the sort of stuff these farmers down there are terrified of.''

But he doesn't care if HBRC finds investment for the scheme which does not burden the ratepayer, and remains in control of the water flows and nutrient levels.

``If all of the rest of the money comes from somewhere else, it doesn't worry me. If they control the water, they control the nutrients, that's all I'm worried about.''

The project came about several years ago, when the current Tukituki water take consents came up for renewal and there were concerns about their level of sustainability on the water system.

This also coincided with droughts, HBRC chief executive Andrew Newman said.

``We can put a whole lot more time, effort and research into the quality of the water resource in the basin but it won't necessarily mean that there's more water to allocate if there is more demand, and there was more demand at that point in time - definitely,'' he says.

``This region needs to be prosperous and it needs some resilience in terms of its agribusiness sectors, it's pretty compelling really.''

Farmer uptake he acknowledged as a commercial risk and was not something HBRC took lightly.

``This question around uptake is a key commercial risk in this process. And it's not just about dairy, I want to emphasise that, it is not just about dairy conversions.

``We've got another stream of activity going on which is basically a conversation and a project sitting in there with the processing industries - both inside the region and outside the region.''

This conversation will help minimise risk for farmers because they have ``security of supply contracts with processors, who are giving them a high level of security for providing reliable food, if you want, at the right time, year after year after year''.

``It starts to actually spread that risk. We are putting a lot of time and effort into that piece of work.''

Some years the farmers may not need the extra irrigation.

But just as they can't predict a wet year when it isn't needed, they cannot predict a dry year when it is. It is about increased security.

``Would you say that we would have 25,000 to 30,000 thousand hectares irrigated within the space of five years? Probably not. They're long-term projects. In the long run, that infrastructure doesn't walk away.''

But the cost of that infrastructure is not cheap, so where will the $230 million dollars to pay for the project come from? HBRC has made provision for $80 million investment, and the rest hasn't been disclosed or is undecided.

But along with HBRC itself, central government has indicated some interest in investing, as have private sector investors, and ``those conversations are well under way'', Mr Newman says.

What he describes as the foremost irrigation experts in New Zealand are considering the project's economics. BNZ Advisory are also on board, including agribusiness experts.

``The economics of it will be perceived in some parts of the community, the farming community in particular, as being expensive, and it's a big shift from where we are today. But it is highly secure, and in the long run it certainly seems to make a lot of sense for this region.''

Hawke's Bay Fish and Game sits on the Ruataniwha Water Storage Project stakeholder group, encompassing 21 representatives from environmental groups, farmers, councils and others.

``We've always been pretty open to the dam proposal and we're a member of the stakeholder group and pretty much have attended every meeting,'' chief executive Peter McIntosh says.

``One of the major bottom lines for us is water quality in the Tukituki [needs] to improve. I'm yet to see any evidence that if you irrigate another thirty to forty thousand hectares. . . water quality is going to improve.''

In conjunction with the dam project is a Tukituki Plan Change. This will set nutrient and water take limits in the catchment area which is as well known for its recreational values as it is for food producing.

Fish and Game is supportive of limits. Mr McIntosh suggests strict regulations to prevent farmers from exceeding these limits, such as farmers getting their water supply turned off if they exceed it.

``I'm Hawke's Bay born and bred and I'm all for the economic benefits but not at any cost, not at the sacrifice of the river, especially one as nationally significant as the Tukituki,'' Mr McIntosh says.

HBRC has stated the dam will improve the quality of the Tukituki by improving its summer low flows. Water stored over the winter high flows will be used for irrigation, as well as preventing the river running low. ``What is the best outcome for the river and the people who live around that river, in totality?'' Mr Newman says.

``That is the issue that we're focused on.''

The cost of the ongoing feasibility studies - encompassing environmental, geotechnical, economic and cultural assessments - has totalled $4.8 million, and central Government is watching.

In January this year HBRC was the first to receive funding from the Ministry of Agriculture and Forestry's Irrigation Acceleration Fund, receiving $1.67 million on top of a previous MAF contribution of $350,000.

This is alongside the $2.8 million HBRC has spent from its own pocket.

The feasibility studies haven't finished, therefore its effects on our region are still unconfirmed. But whatever happens, its proponents and opponents are watching.

And the Ruataniwha Dam, which we are told has unrivalled potential for Hawke's Bay, is edging closer to reality.-->-->

- Hawkes Bay Today

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