Investors may inject $90m in water scheme

Andrew Newman, HBRIC chief executive, believes the scheme will attract corporate backing. Photo/Duncan Brown

Hawke's Bay Regional Investment Company says it is talking to two corporate investors interested in putting about $90 million into the Ruataniwha dam and water storage project.

South Island iwi investment company Ngai Tahu Holdings Corporation announced this week it was withdrawing as an investor in the $275 million scheme, which is being promoted by Hawke's Bay Regional Council through HBRIC, it's investment arm.

The iwi's decision not to invest follows a similar withdrawal by Trustpower earlier. HBRIC has signalled it is seeking about $90 million from corporate investors, on top of up to $80 million from the regional council.

The council is in the midst of a public consultation programme before deciding whether to invest in the scheme. It is to vote on the investment proposal late next month.

At a public meeting in Havelock North yesterday - one of 17 meetings being held as part of the council's consultation programme - HBRIC chief executive Andrew Newman said he remained confident the company would be able to secure corporate backing for the scheme despite the withdrawal of the two high-profile potential backers.

"We do have two institutional investors sitting there in negotiation with us," he told an audience of about 80 at yesterday's lunchtime meeting.

"One of those institutional investors is capable of doing that entire amount of money on their own, and in fact would be willing to do more subject to a couple of key issues being sorted out."

Mr Newman declined to name the companies HBRIC was in discussions with but said one "could fit quite nicely with Ngai Tahu".

Ngai Tahu said this week its reasons for withdrawing included that a replacement co-investor had not been found after Trustpower's departure.

A board of inquiry issued a draft decision last month granting consents to build the Ruataniwha scheme but setting strict environmental conditions in the Tukituki catchment which will affect farming and growing businesses in the area where irrigation from the scheme would be available.

Mr Newman said HBRIC's investment process with the dam was "in a bit of a holding pattern while we understand what the final impact of the board of inquiry decision is".

The board is considering submissions on its draft decision and is due to issue a final ruling by late June.

Mr Newman said if the final decision resulted in the scheme being "operable" and sufficient water user agreements were signed, "then I'm not concerned about raising the capital".

HBRIC director Sam Robinson, who was also at the Havelock North meeting, said he believed a workable set of environmental rules for the Tukituki catchment would result in farmers and growers signing up to take at least 40 million cubic metres of water a year from the scheme - a minimum level set by HBRIC to make the scheme viable.

However, no water users had yet signed up, he said.

"Farmers are, appropriately, not signing until they know what the board of inquiry is going to do," Mr Robinson said.

"They're ready to sign and I predict if the board of inquiry come out with a decision which is workable for farmers, the 40 million [cubic metres of water] is in the bag."

Mr Newman said the corporate investors HBRIC was talking with were New Zealand companies. Infratil, the listed infrastructure company and major shareholder in Trustpower, was not one.