Moves to prepare for the shelving of the controversial Ruataniwha Water Storage Scheme could be taken by the Hawke's Bay Regional Council, in light of the recent Supreme Court land swap decision.

Last week the Supreme Court found the Minister of Conservation acted illegally by trying to make 22 hectares of Ruahine Forest Park available for exchange to the Hawke's Bay Regional Investment Company Ltd (HBRIC) for the $330 million project.

The land swap would have allowed the Ruahine Forest Park land to be flooded to create Ruataniwha Water Storage Scheme, the largest irrigation project in the country.

Although there were two possible avenues which could allow the swap to go ahead in future, in the short term the decision appears to have dealt a short-term blow to the scheme's progress.


At a meeting today, the council's environment and services committee will be asked to make a number of recommendations about staff's work on the RWSS - including suspending some of the work staff have begun to meet revised conditions precedent.

A paper before the committee - written by council acting strategic development group manager Tom Skerman - also recommends they request HBRIC advise the council on the merits of further investment in the Ruataniwha Water Storage Scheme, and on "any steps, if any exist" that are available to progress the scheme in light of the recent decision.

Council chairman Rex Graham said given the circumstances, the council wanted to "put things on hold" until they could receive this information from HBRIC.

"This is a significant moment in this project, and the council is going to need to put things on serious hold and stop spending money on it until HBRIC can provide a report."

Mr Graham was not able to attend today's meeting, at which HBRIC could also be requested to report on any revisions required - and implications of this - to amend their statement of intent for the next financial year "should council, as shareholder, resolve to direct HBRIC Ltd to shelve the Ruataniwha Water Storage Scheme indefinitely".

Earlier this year the council completed a five-month long review into the scheme, which found withdrawing from it could cost a write-down of about $19.5m already invested.

There was also a risk the Crown could seek a refund of its $7m investment to date.

Given most of the conditions precedent remain outstanding, council were able to decide that the conditions had not been met and that it was either shelving, or withdrawing from the scheme.

However given the RWSS's place in the council's Annual, and Long Term Plans, council had previously been told any such move could require public consultation, in case this decision was challenged.

The two other avenues which could allow for the land exchange could be a change of law - which could take between nine months and two years - and securing access to the land through the Public Works Act.

The Supreme Court ruling last week marked the end of a lengthy and controversial battle through the courts that began in 2015.