Dam companies asked to 'share pain'

The Ruataniwha Dam project has been the subject of much debate.

Private companies that stand to benefit from the Ruataniwha dam project are being asked to "share the pain" of extra development costs if the irrigation scheme takes longer to get off the ground than expected.

Hawke's Bay Regional Investment Company, the ratepayer-funded promoter of the $275 million Central Hawke's Bay project, said yesterday it was working on plans for dealing with the financial implications of a potential delay in securing sufficient farmer sign-up for the scheme.

HBRIC's owner, the Hawke's Bay Regional Council, has agreed to fund the cost of developing the scheme through until the end of March. By that time HBRIC had anticipated reaching "financial close" " the date by which it hoped to have locked down sufficient water sales and secured institutional funding to make the project viable.

But legal delays involving the dam's resource consent and a related environmental plan change have hampered sales.

Last week the High Court ordered the board of inquiry that approved the consent and plan change to reconvene and amend one of the conditions it imposed after a hearing that ended 11 months ago.

The board is expected to reconvene in February.

Yesterday HBRIC told a meeting of the regional council it was working on funding plans to cover a possible delay in reaching financial close so that it did not need to request more money from the council to keep the project afloat from April 1.

HBRIC director Jim Scotland said developing the irrigation scheme was costing the company about $250,000 per month "and we have to start worrying about that quite soon".

The other director at the meeting, Danelle Dinsdale, said the issues HBRIC was facing were not unusual for a major project and seeking assistance from other the parties involved made sense. "There's no other gig in town, this is what they all want to do so there is a lot of will to get this over the line by those we are using as suppliers " we should use that."

The board remained confident the project would reach financial close, Mr Scotland said, although he told councillors it had rejected a suggestion from its financial advisers, BNZ Advisory, that it commit to spending $20 million on early detailed planning work that could have started in January.

HBRIC chief executive Andrew Newman told the meeting he also believed the project remained on track and he was working on plans to keep to the planned construction schedule even if the financial close date slipped.

Cr Tom Belford said he was "flabbergasted" the board thought it could still get sufficient sign-up from farmers to achieve financial close within the next six months, let alone in March.