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Home / The Country

HBRC Chair wants no more spent on Ruataniwha scheme before decision

By Victoria White
Hawkes Bay Today·
26 May, 2017 06:32 PM4 mins to read

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LONG PROCESS: A yes or no decision on whether the proposed Ruataniwha site (top) becomes a dam (above) is not expected to be made next week. PHOTO/FILE

LONG PROCESS: A yes or no decision on whether the proposed Ruataniwha site (top) becomes a dam (above) is not expected to be made next week. PHOTO/FILE

With less than a week until a decision is made on the future of the Ruataniwha Dam, the regional council chair has said he doesn't "want another penny spent" on it.

This outburst from Hawke's Bay Regional Council chair Rex Graham came during a corporate and strategic committee meeting this week, when councillors spent several hours in a robust discussion on the next steps of the scheme.

Included in the discussion were recommendations that a new condition precedent be included before council invests, and an existing condition altered.

There are currently four conditions precedent. Last July the council voted that three of these had been met - authorising a draw-down of $80m, less development costs, for investment in the scheme.

But progress on the RWSS stalled after a new council was elected late last year, with a review commissioned into the key legal, financial, economic, environmental and engineering elements of the scheme.

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During Wednesday's meeting it was revealed this $150,000 review was part of an increase in council expenditure on the scheme of up to $700,000. Also included was a Deloitte peer review of the scheme.

This meant that council investment - at least on the balance sheet - would be "slightly over" the agreed $80m.

Council chair Rex Graham said this was what had caused him to proclaim during the meeting that "enough is enough", and that he would vote against every resolution "that spends one more dollar on this project".

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When asked to clarify his comments yesterday, Mr Graham said he wanted no more ratepayer money spent on the scheme until a decision was made on its future.

To date, council has invested around $19.5m into the scheme. Its future will be discussed at a meeting next Wednesday.

While other councillors positions post-review have not been expressed, Mr Graham said he had already reached his - that despite the "cup of tea" review, and considering various arguments, he had not been convinced "that this is a good investment for the ratepayer's of Hawke's Bay".

"That's my position and I'm capable of being convinced otherwise, but nobody has been able to convince me that my position should change, nobody".

Discover more

Moves afoot for Ruataniwha Dam

30 May 10:00 PM

The council is able to withdraw from further development of the RWSS, the recent review found, however this would come at a cost. Specifically, this would cost a write down of the $19.5m already invested, and there was a risk the Crown could seek a refund of its $7m investment to date.

When asked if he had concerns about the loss of this investment if the scheme were not to progress, Mr Graham said he was worried, which was why he did not want any more money spent on the scheme.

"We have spent all this money and that's why I don't want to spend another penny because it's a bad investment, it's a bad use of our region's capital," he said.

In response, yesterday councillor Alan Dick - who has supported the scheme throughout - stated while Mr Graham was entitled to his opinion, he thought the review "might have influenced some thinking" amongst others.

"The review has been valuable and the fact that the author of the review [James Palmer] has been appointed as the new CEO is significant," he said. "But the whole . . . issue is still totally open."

He did echo Mr Graham's doubts that a decision on the dam's future would be made at Wednesday's meeting.

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"There won't be a final decision next week, the only decision will be to include some new [conditions precedent]," he said.

He agreed when asked if he thought next week's meeting would simply be an elaboration on this week's and stated the outcome was likely to be more definition on how the dam could proceed, subject to conditions.

The upcoming meeting could be the first step of progress for the dam since last year's election.

A paper to go before council ahead of the meeting includes recommendations that council agree to the two conditions precedent discussed in Wednesday's meeting.

They include modifying the condition precedent for investment in the RWSS on water sales from 40 Mm3 to 50 Mm3 by financial close.

And, introducing a new condition precedent that council investment in the RWSS be subject to further review of the scheme's existing environmental management package.

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This would include approaches to managing nitrogen and phosphorus under farm environment management plans and flushing flows, and that any changes to this management package meet the council's satisfaction two months before financial close.

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