Pressure is building over the Ruataniwha dam, with a key investor pulling out yesterday and a group of regional councillors claiming they have been sidelined in the decision-making process.

Further concerns also emerged about the economic damage that could occur under a related environmental plan change proposed by the Ruataniwha Board of Inquiry.

The investment arm of South Island iwi Ngai Tahu announced yesterday it had withdrawn what would have been an eight-figure investment in the $275 million irrigation scheme.

Ngai Tahu Holdings Corporations pullout follows a similar exit by TrustPower earlier in the year and leaves the scheme without any identified corporate backers.


Ngai Tahu said it had a series of criteria that needed to be met for continued investment to occur, including the identification of an appropriately qualified investment partner.

"As a replacement investor to TrustPower has not been found, NTHC has ended its memorandum of understanding with the Hawke's Bay Regional Investment Company [HBRIC]," the company said.

HBRIC, the investment arm of the Ruataniwha schemes instigator, the Hawkes Bay Regional Council, said it was not fazed by Ngai Tahus withdrawal.

HBRIC chief executive Andrew Newman said the company's focus was on gaining workable resource consents for the project and signing up water users. Investment money would follow once that happened, Mr Newman said.

But the process of working towards finalised consents for the dam and the related plan change took a hit yesterday, with a war of words breaking out between regional council chairman Fenton Wilson and a group of four councillors who say they have been sidelined over the board of inquiry process.

Councillor Rex Graham, on behalf of fellow councillors Rick Barker, Tom Belford and Peter Beaven, has written to Conservation Minister Nick Smith and Environment Minister Amy Adams to tell them the four councillors have not had any input into the councils submission to the board of inquiry.

The councillors are upset council staff sent the submission, commenting on the boards draft proposal, without it being signed off at a council meeting.

They have asked the ministers for the opportunity to lodge their own submission on the boards proposal. "I would have thought that, as an elected representative, I would have seen [the submission] and been able to debate it," Mr Graham told Hawkes Bay Today.


"We have to sign off documents this important. This is a fundamental, in-principle thing. We have had a board of inquiry present us with their thoughts and their proposal and we are essentially challenging that. I would have thought its huge. I would have thought its a major, fundamental thing, he said. If the executives [council staff] make the decisions, then why do we have an election?"

"If this is the way that it is, then I might as well go back to my job."

Mr Barker said that, without being put to councillors, the submission had no moral authority.

"This isn't North Korea, this is Hawkes Bay."

"Here, people expect the democratic institution to work and, for significant issues like this, the submission should have gone before the regional council for councillors to have a debate in public around the issues, and the nature of the response before it was sent," he said.

"To use a slippery piece of manoeuvring to cut us out of the debate is unacceptable."

Council chief executive Liz Lambert said the organisation had been up against a tight deadline and the content of the submission had been technical in nature. During the board of inquiry process, there had been a number of times when technical and legal input had been required almost on the spot, in which case submissions were not referred back to councillors.

Mr Wilson described the four councillors action as "a joke and crazy stuff."

"I'm not really sure what theyr'e trying to achieve by making so much silly noise."

He said it was inappropriate for the group to be attempting to influence the board of inquiry process in the way they were.

"Nick Smith and Amy Adams will laugh themselves to sleep," he said.

"This is quite silly politics."

Mr Graham said he did not think the ministers would be impressed that councillors had not seen the submission.

While the council has expressed concern that the boards draft proposal will damage the regions economy because of strict environmental conditions it imposes on farmers and growers in the Tukituki catchment, Mr Graham said he and other councillors were supportive of the proposal.

"The regional council, which is supposed to protect our environment and be the regulator, is out promoting a business venture that has an impact on the environment. Its just not right," he said.

"If these guys think theyr'e going to railroad us they have got another think coming."

Meanwhile, several Central Hawkes Bay farmers have used the boards submission process to vent concerns that the plan change will put their livelihoods at risk.

BEL Group, which runs eight farms in the catchment, told the board the total cost of complying with the conditions set under the draft proposal including additional annual operating costs, capital expenditure and interest would be more than $3.9 million.

Farmer Michael van der Burg told the board the requirement to reduce nitrogen leaching levels would mean a 30 per cent reduction in income, leading to the loss of two jobs on the farm.

"With this economic scaling-down to us and our community, we feel that the effects will be far-reaching, both locally and within the townships," he said.

Ashley Clinton farmers Andrew and Robbie Hunt also said the changes would lead to a drop in production of at least 30 per cent and a reduction in the number of staff they employed.

Eliot Cooper, a director of Cooper Del Este, said the business would have to reduce cow numbers by more than 33 per cent to satisfy the proposed nitrogen leaching rates.

"This would render our business uneconomic," he told the board.

Farmers faced the risk of over-capitalising their properties to meet stringent environmental objectives, he said.

This could result in ongoing financial and emotional stress.