public meeting about the Ruataniwha Water Storage Scheme earlier this ' />

It was really encouraging to see so many people attend the Hawke's Bay Today's public meeting about the Ruataniwha Water Storage Scheme earlier this month.

It certainly proves there's plenty of interest in the $275 million water storage project and the HB Today team promoted and ran the meeting effectively and fairly.

From our perspective, it was the right time to discuss the scheme following the major milestone of achieving resource consents from the EPA's Board of Inquiry (BoI).

These consents give us a level of certainty and we are now able to move on to our other key milestones - getting enough farmers to buy access to water from the scheme, confirming investors and ensuring we have a viable design and construction contract. The intensity of activity in these work strands has increased dramatically since the BoI decision was confirmed.


If the Ruataniwha Water Storage Scheme proceeds, and the chances of this have improved substantially now we have consents, then the resulting investment on and off farm will be a major boost for Hawke's Bay, which desperately needs to deepen its economic resilience in a world where the climate is drying and warming.

The scheme will deliver more than $200 million annually to the region's GDP at full water uptake and potentially over 2000 jobs in rural support and food processing. This would give Hawke's Bay a substantial lift in the drive to hold its own in regional New Zealand. And, at the same time, we have the ability to improve the water quality and quantity in the Tukituki River.

For farmers, access to reliable water opens up options for more resilient, productive and diverse farming systems, all of which will evolve in the years ahead.

Contrary to perception and consistent with our forecasting, the dominant land use emerging is arable/mixed arable not dairy.

What's a BOOT?

The financial model which the scheme will operate under is called a BOOT (Build-Own-Operate-Transfer). This is the same model used to build Transmission Gully in Wellington. Basically public and private investors are brought on board for a set number of years (in this case 70) and receive an agreed rate of return on their investment during that time.

After the 70 years, the asset (the Ruataniwha Water Storage Scheme) is transferred into the ownership of an agreed recipient (in this case the Hawke's Bay Regional Council) and local investors, the public and farmers.

So what does this all mean to you?


The irrigation company will create an asset that will eventually come into community ownership once it is paid off. As an investor in the first 70 years of the scheme, the regional council's investment company, HBRIC, will get a rate of return of 6 per cent or more over the life of the $80 million investment.

After 70 years, all of the investors will walk away and the scheme will be transferred into the hands of the regional council, giving the region a debt-free multi-million-dollar asset. This asset and the community are protected by a concession deed. What the region will also have is a better Tukituki River, thanks to the combined effects of Plan Change 6 and the scheme.

The irrigation company with farmers will be focusing on the broad ecological health of the river through strategies such as Farm Environment Plans and nutrient management, along with stock exclusion and riparian planting in streams it directly influences such as the Papanui stream.

We have built in a provision for flushing flows capable of shifting and removing algae down the main stem of the Tukituki River during the dry summer months when flows are low. These flows are only viable due to the scale of the dam and reservoir.

We are confident the irrigation company will meet and, some areas, exceed its responsibilities to protect the environment. The framework developed ensures continued environmental improvement.

These are long-term economic and environmental benefits for the region.

They will, in turn, strengthen the social fabric of the rural communities of our region and enhance the natural capital of the region - land, water, climate for the benefit of the region and the nation.

-Andrew Newman is chief executive of the Hawke's Bay Regional Investment Company.

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