The proposed land swap would have allowed land to be flooded to create the Ruataniwha Water Storage Scheme, the largest irrigation project in the country. Without it, the scheme's ability to proceed is uncertain.
This uncertainly led council to today agree to write off a $14million debt - which was incurred by HBRIC to fund part of the feasibility and development costs of the scheme.
Central Hawke's Bay councillor Debbie Hewitt said this was a "sad day" for the region.
She noted ditching the scheme meant the region would lose a number of its promised benefits - from jobs, a loss of production in CHB, to no ownership of the asset in the long term.
However she remained optimistic the scheme would still go ahead, "in one way or another".
Council also agreed - despite some opposition - to authorise HBRIC to sell any assets of intellectual property developed to date in connection with the scheme.
The company has said they wanted to if the scheme was to proceed in some form, it would be best led by other investors.
Although council also agreed not to invest any further capital in the scheme, there would be more operational costs for HBRIC, estimated at about $100,000 per annum.
The majority of this related to consents costs. They would be absorbed within HBRIC's existing budgets.
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".
