The controversial Ruataniwha water storage project is likely to be deemed a "proposal of national significance" by the Government and could be ready for construction at the beginning of 2014.

The project, to be built in Central Hawke's Bay, which could cost the region's ratepayers up to $80 million, passed a significant milestone when the Hawke's Bay Regional Council decided to apply for a resource consent for the dam at its meeting yesterday.

The council planned for the Environment Protection Agency (EPA) to handle the application but first it would have to achieve approval from the Minister for the Environment, Amy Adams.

The council heard from the EPA's applications and assessments general manager Sarah Gardiner who said it was likely the agency would consider the dam proposal one of national significance, mainly because it would operate across more than one council boundary.


The agency would pass on its recommendation to the minister who would decide whether the EPA should handle the resource consent application.

If the answer was yes, a board of inquiry would be set up and would have nine months to make a decision on whether to grant the consent. If all went to plan, the regional council expected the outcome to be declared by November 2013.

The council spent five hours debating the water storage project and its Tukituki Choices document which outlined the future management options of the Tukituki river catchment, which will be impacted by the dam.

About 30 people were in the public gallery for the meeting and a small group of protesters formed outside the regional council's Napier office, asking for better measures and control over river water quality and farming operations.

The council's chief executive, Andrew Newman, said the water storage dam would offer relief to Hawke's Bay's drought problems and provide water for irrigators, taking pressure of river and underground water sources which were over-committed.

If the council did not support the dam it would have to take "a fall-back position" where it would use a standard plan change to re-fix the level of water irrigators could take and the level of nutrients farms could put on land.

"But you can be sure that it will be a protracted process and that the current irrigation community will contest it."

Councillors were aware of public caution, which included the fact no fixed cost had been established, there was no clear indication of take-up from farmers for the scheme and access to the dam water would prompt conversion of land to dairy, although there was no guarantee the dairy industry would remain prosperous.

There was also concern about the council's plan to hand over the project to its investment company because it appeared the public may not be able to track its progress.

Councillor Neil Kirton successfully argued for Mr Newman to report on how the investment company would be made accountable for its work so ratepayers could see how the project was advancing. He supported the project going to the EPA because it would allow the mountain of reports and studies on the dam to be tested in public.

Regional council chairman Fenton Wilson said moving to the consenting phase did not mean the water storage project was "a done deal".

"No final decision on whether the water storage project goes ahead will be made until the project gains resource consent.

"This is simply the next stage in the process."