End on the cards for Ruataniwha Dam

After years of setbacks, this could be the end for the embattled Ruataniwha Dam - proposed to be built on this CHB site. Photo / File

The end is near for the controversial Ruataniwha Water Storage Scheme - with the council behind it choosing to focus on other priorities, and the company driving it looking for other investors.

A paper to be considered at a Hawke's Bay Regional Council meeting tomorrow proposes the council, and its investment company - the Hawke's Bay Regional Investment Company ltd (HBRIC) - move on from the scheme and focus their efforts on other priorities.

Subject to controversy since first mooted in 2012, the $330 million project has been faced with much opposition over a turbulent five years - but a Supreme Court decision in July appears to have been the final blow.

The land swap would have allowed this land to be flooded to create the Ruataniwha Water Storage Scheme, the largest irrigation project in the country. Without the swap, the scheme's ability to proceed is uncertain.

Although there was talk of pursuing two possible avenues for the scheme to proceed, yesterday council CE James Palmer said it and HBRIC needed to focus their energies on new priorities.

There had been "considerable effort" to deliver the scheme, but the council needed to formally decide to stop investing in its development, and no longer ring-fence council funds for this purpose.

To support the council's other priorities, the council had initiated a capital structure review - which included "the best use for the $66 million investment presently allocated to the now uncertain Ruataniwha scheme".

Yesterday, council chair Rex Graham said for the majority of councillors, the high court decision was the "end of the road".

"There's disappointment on all sides, there's disappointment that so much money has been spent on this, disappointment...that it's not going ahead, but the reality is, it's not.

"It's time to move on, and look ahead."

The dam was to be built in Central Hawke's Bay. Its regional council representative Debbie Hewitt said residents had been waiting for some certainty, which she thought would finally be provided during Wednesday's meeting.

"While there's a great degree of disappointment, I don't think there's huge surprise given the political climate that we currently have around the council table."

Progress on the scheme stalled late last year with the election of a new group of councillors, which shifted the 5-4 split away from supporting the dam.

Following this was a moratorium on any further dam-related activity, a wide-ranging review of the scheme's key elements, and the resignations of two men who had driven the scheme.

HBRIC has agreed that if the scheme was to proceed in some form, it was best led by other investors, HBRIC CE Blair O'Keeffe said.

"We are seeking support from the council for HBRIC Ltd to continue to explore options to recover funds and progress the Ruataniwha scheme without further council funding," he said.

If the scheme did proceed under another form, Ms Hewitt said it was unlikely the region would benefit as it would have - including owning the scheme in its entirety at year 70.

She also questioned what support would be provided for residents who had been "waiting instead of moving on" - specifically due to the role the scheme had played with Plan Change Six.

"They've been waiting [with] the expectation that Ruataniwha will proceed, and a lot of them are in a very precarious situation now."

Tomorrow, the council will also be recommended to write off a $14million debt, which was used by HBRIC to fund part of the feasibility and development costs of the scheme.