It is disappointing that the Central Hawke's Bay District Council, who have achieved so much this term with six fresh faces and a dynamic new mayor, are proposing to make a suspensory loan of a quarter million dollars to a private company, Water Holdings CHB.

It also coincides with hefty rate increases, begging the question as to how wisely our money is being spent.

The Annual Plan Consultation Document which arrived in letter boxes recently is light on detail, requiring recourse to the lengthier Discussion Paper available online. After several attempts at penetrating the foggy corporate jargon, answers to the following questions are revealed.

Who are Water Holdings CHB? A private company comprising five established local farmers and a trade business owner.

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The company purchased for $100,000 the intellectual property (the science, resource consents and construction plans) amassed by the Regional Council to scope the Ruataniwha dam, at a cost to ratepayers of $18 million dollars.

The company's purpose is to work through the IP with a view to finding a new "water storage solution", most likely another large-scale dam on the Makaroro River since this is what the consents and plans are for.

What is a suspensory loan? Essentially, a loan that doesn't need to be paid back if certain criteria are met, which in this case includes the development of a water storage scheme or, alternatively, no practical water storage plans. In other words, this is an outright gift by ratepayers.

Where will the money come from? From the Rural (Aramoana and Ruahine) Ward funds.

These two funds contain $811,000, and are currently only able to spend interest, and for certain uses, generally Council-owned assets.

However, Council are proposing a "small change" to the relevant policies, while assuring ratepayers that there will be no impact on rates.

The erosion of the above principal amount by $250,000, or 30 per cent, and the consequent loss of $9000 p.a. interest is clearly not considered an impact on rate-payers, who have built up these funds.

The chairperson of Water Holdings CHB states they seek to "provide water for all. Not just farming and irrigation … (also for) businesses, our towns and the environment".

It's not clear why the towns require more water from a large dam since they currently draw ample supply from river bores under long-term consents, the only constraint being pumping capacity.

The upgrading of pumps by Council would provide a considerably more cost-effective solution, if supply of town water were indeed an issue.

Once water for the towns is discounted as a convincing rationale for Water Holdings CHB's existence, its purpose is narrowed to resurrecting a dam capable of supplying large-scale farm irrigation currently under threat by the minimum river flow levels imposed by the Regional Council's Plan Change 6.

The dream of Ruataniwha lives on, while the lessons are ignored. Any large-scale water storage project, to pay its way, requires farming intensification and, inevitably, further degradation of our waterways. The dream of some is thus a nightmare for others who value our environment over short-term profit.

Ratepayers have the opportunity to say either "yes" or "no" to Council's proposal to the gift of a quarter million dollars to a private company by completing the submission form for this year's Annual Plan.

Submissions close this Friday, April 12, and late submissions may be considered on request.

Dr Trevor Le Lievre holds a PhD in politics.
• Views expressed here are the writer's opinion and not the newspaper's. Email: editor@hbtoday.co.nz