Port used as 'worst case' collateral

Napier Port and other regional assets could be used as collateral if, in the worst-case scenario, the Ruataniwha dam puts the Hawke's Bay Regional Investment Company into liquidation.

The Napier Port and other regional assets could be used as collateral if - in the "worst case scenario" - the Ruataniwha dam puts the Hawke's Bay Regional Investment Company into liquidation.

The investment company had previously denied the port would ever be used in such a manner.

This was revealed during a council debate on the modification to HBRIC's statement of intent, which would allow it to borrow working capital to fund its required profit to the council, from both the Port and the proposed water storage scheme, if dividends from either asset come up short.

During discussion, councillor Rex Graham asked what security would be used if, in the worst case scenario, the company found itself with a $50 million debt.

HBRIC board chairman Andy Pearce said the company had not discussed that with the bank but that the arrangements they would normally have would be nothing unusual in such a circumstance.

"You mean your assets? You secure against your assets?" Mr Graham asked.

"Yes," Mr Pearce said.

"Which is the port?" Mr Graham asked.

"Yes - and the investment in Ruataniwha Water Limited Partnership around $300 million," Mr Pearce responded.

This is in stark contrast to what the company has said in the past, with HBRIC chief executive Andrew Newman being reported in this newspaper last November denying the Port would be used as collateral.

Napier MP Stuart Nash backed this up saying he had been promised over the past four years that if the scheme went ahead, it would not put the region's other assets at any sort of financial risk.

It was one of the four conditions Mr Nash listed last year that the scheme had to meet before he would back it.

The others were that: the RWSS created a number of "well paid, sustainable jobs", it does not turn the Tukituki River toxic and such a scheme needed to be economically viable.

"To now find out that the Port of Napier may well be used as collateral is really concerning for me," he said.

He said he still stood by his comments last year and now, in light of this information, has withdrawn his support for the dam.

"Unless I see something that can change my mind or that proves me wrong then I just can't back the dam when its economic viability puts our other regional assets, that have been built up over generations, at risk," he said.

Also during the meeting councillor Debbie Hewitt put on record that she had no conflict of interest in regards to the scheme.

She said it had come to her attention that a "fictitious" email had been circulating containing allegations regarding her.

"The record being that I reside on 227 Porangahau Road, it's fully declared to council and there is some suggestion that there is water flowing over my land from Ruataniwha and that I may have a conflict," she said.

"So in free and frank discussion I would like to declare quite firmly today I do not have a conflict of interest in this area I don't and I never have."

Council chairman Fenton Wilson supported his councillor, saying she had no greater or no less interest in the Ruataniwha scheme than anyone else living in Central Hawke's Bay.