Ngai Tahu 'nervous' over plan

Last updated 05:00 29/03/2014

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Ngai Tahu's commercial arm is "very nervous" now about investing in the $270 million Hawke's Bay Ruataniwha irrigation scheme after its partner TrustPower pulled out.

Ngai Tahu Holdings Corporation chief executive Mike Sang said yesterday that Ngai Tahu's continued participation depended on certain issues being sorted out.

Ngai Tahu and TrustPower were talking six months ago about investing around $50m each in the scheme proposed to irrigate about 25,000 hectares of farmland in Hawke's Bay.

Sang told The Press that Ngai Tahu was an investor with a lot of capability but it did not have experience in the large scale civil construction contracts like building a dam.

"Whereas TrustPower brought a lot of the knowledge of irrigation. They have experience of Coleridge (power station) and electricity generation so they brought a skill set that complemented the skill set that HBRIC (Hawke's Bay Regional Investment Company) have got and that was relevant for the sector and the type of investment it was.

"So when you take that skill set out, we don't necessarily have it, so that's make us very nervous."

TrustPower withdrew this week saying there would not be high enough returns from the scheme for it.

Ngai Tahu and TrustPower signed a memorandum of understanding with the Hawke's Bay Regional Investment Company leading the development six months ago.

At the time they said "Ngai Tahu and TrustPower will equally invest up to 30 per cent to 40 per cent of the initial capital cost."

The memorandum did not commit them to invest but their signalled investment at the time was about $50m each.

A statement from Sang yesterday said "The Ruataniwha Water Storage Scheme has a number of components key to its success, including commercial criteria and the involvement of the right investment partners.

"We are currently working these issues through with the HBRIC and other parties. Participation will be dependent on these matters being satisfactorily addressed."

Hawke's Bay Regional Council may invest up to $80m in the scheme. Investment from the Crown Irrigation Investments Scheme has also been sought.

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