Failed water storage plan could lead to $5m write off

By Lawrence Gullery lawrence.gullery@hbtoday.co.nz

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The multi-million-dollar Ruataniwha dam and the threat of amalgamation are listed among the top 10 risks to the future of the Hawke's Bay Regional Council.

A risk assessment to be tabled at the regional council's meeting tomorrow said the water storage scheme proposed for Central Hawke's Bay may not be granted a resource consent, or may be granted one with "untenable conditions".

The project could be unaffordable resulting in fewer people prepared to buy water from the scheme. It would then fail to attract investors to fund the project.

If the scheme did not go ahead, the regional council would have to consider writing off expenditure on the project to date which was about $5.35m.

Those were the key points listing the risk status of the dam, as part of a wider assessment updating the top 10 corporate risks facing the regional council.

To reduce the risk around the dam, the report said the council had set up an investment company to manage the scheme, a communications plan to release decisions on the future of the dam and ensure public feedback was taken into account.

Potential impacts of the dam on the land and rivers would be identified and addressed through studies. It would have financial advice to help form a feasibility study.

The risk report also identified council amalgamation has a threat to the dam's development and the regional council would work to make sure any reforms would not threaten the scheme.

It went on to say the possible merger of Hawke's Bay's five councils into one would devalue the regional council's work.

"The value to the region of an organisation such as Hawke's Bay Regional Council, focussing on long-term sustainable management of the region's natural resources is not well understood by the public.

"The risk of the loss of this focus and commitment through amalgamation is real."

The council's chairman Fenton Wilson and chief executive Andrew Newman had worked to show government the regional council's value when it came to national resource management and economic development.

The regional council's own controversial amalgamation plan to expand its boundaries down to Wellington would ensure it survived any moves to merge it with other city and district councils. The council's leasehold land portfolio was also listed as a risk, along with the dam scheme.

Work on selling its leasehold land investments in Wellington and Napier had been stepped up and the money from the sales would be used for long-term returns in areas such as economic development.

A total of 245 properties sold by September 2012 for $23m. A further 37 worth $3.8m will be accepted under a discounting offer.

- HAWKES BAY TODAY

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