Funding Napier Port proposed Wharf 6 is a big decision facing the Hawke's Bay Regional Council. But is this a decision about the port or the purpose of the regional council itself?
Everyone knows McDonald's sells hamburgers. But is that its primary purpose or is it a company that uses franchising to sell its burgers to expand its property portfolio?
Which end of the telescope you chose to look through, burgers or property, will give you a different answer to the same question. Similarly, for HBRC, is it about Napier Port or environmental protection in 20 years' time?
The volume of trade through Napier Port has increased beyond all predictions. This is a good problem that is set to continue if Napier Port has increased capacity.
For decades this region struggled with flat growth and we watched with sadness as our young people left, through necessity, for opportunity elsewhere. We now have strong economic growth and employment opportunities are growing.
Fundamental to this is access to world markets via an efficient port. Building Wharf 6 will be a statement to the world that Hawke's Bay is open for business.
Responding to this growth Napier Port has already borrowed to build capacity, incrementally, but now needs a quantum leap to a new wharf. The cost of Wharf 6 is beyond Napier Port's capacity to borrow and carry debt. New money is required. Broadly speaking there are two options here: HBRC borrows the money or new money is introduced.
HBRC could borrow to pay for Wharf 6 but it would come at a significant cost. Rates would have to rise just to service this debt. Rates will also increase by at least inflation just to maintain HBRC's current capacity. Any new work will require additional rate rises. Three tiers of rate rises is a real prospect. Some are prepared to pay this cost but not all are in that happy financial space.
Any investment in Wharf 6 will have a payback when the work is finished. In the meantime HBRC carrying a large debt will not only cost ratepayers, but constrain what HBRC can do. This is a cost too.
HBRC is our region's primary environmental agency. It has been subjected to some tough criticism for its failings, such as reports of dogs dying from drinking water from the Tukituki River, the abysmal state of Lake Tutira and the list goes on.
There are issues about water quality, water quantity, swimability, water storage and air quality. Then there are growing issues about responses to climate change.
Climate change will have a significant effect on our region in 20 years' time and HBRC must be at the forefront of our response. With the potential for other natural disasters, HBRC needs the capacity to both invest to protect the people of Hawke's Bay and our environment and be prepared with the financial resources to respond.
The region faces major challenges such as escalating weather extremes, sea level rise and other potential natural disasters. The region's stop-banks are designed for 1 in a 100 year events, but this level of confidence doesn't cut it anymore. 1 in 500 is now needed to provide the security we will require.
These quiet, mostly unseen, assets protect the more than100,000 people living in Napier and Hastings, along with the industries on the Heretaunga Plains.
A stop bank failure during a severe storm could result in massive losses to people, homes and businesses. Not attending to major infrastructure in these circumstances will be a dereliction of duty. Hurricane Katrina in New Orleans and failed levies comes to mind.
The choice here is between HBRC debt funding Wharf 6 at an additional cost to its ratepayers and pushing back its environmental work, or commercially funding Wharf 6, while maintaining control of the port and enabling HBRC to proceed with its environmental leadership role.
This is a choice best judged in 20 years' time. Will future generations judge us on having put HBRC's available resources into maintaining absolute control and ownership of the port and pushing away the region's environmental work?
Or will they thank us for a commercial decision about the port, while maintaining majority control of it and pressing on to attend to today's environmental issues, as well as investing and preparing for climate change, with its related sea level rise and extreme weather.
Prior preparation and planning is about looking to the future and the future is coming, ready or not. That's our choice, to be ready or not.
* Rick Barker is Hawke's Bay Regional Council deputy chairman