Drop Ruataniwha Dam project - Greens

STACEY KIRK
Last updated 12:39 20/05/2014

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The Green Party is calling for the Government to pull the plug on the controversial $230 million Ruataniwha dam project.

The call comes after the withdrawal of two major investors and a report which says the dam is not economically viable.

The Ruataniwha irrigation scheme would involve the construction of an 80-metre-high dam on the Makaroro River, storing about 9 million cubic metres of water which would irrigate 20,000 to 25,000 hectares in the Ruataniwha Basin.

The Government has labelled the project as one of national significance.

Hawke's Bay Regional Council has estimated the scheme will cost $232m, but one of its major backers, Ngai Tahu Holdings Corporation, withdrew as an investor yesterday.

The iwi's exit follows electricity company Trustpower, which dropped its support in March.

Green Party water spokeswoman Eugenie Sage said the investment loss left a "$90m hole" in financing the scheme.

"The Government needs to face the reality that the Ruataniwha dam is not commercially viable and could only be constructed with massive public subsidies," Sage said.

"TrustPower pulled out because of the financial risk and likely low returns, Ngai Tahu have dropped it because of a lack of experienced investors, and the council's own figures show the dam is no longer viable."

The council last month asked for more time to consider the board of inquiry's 1000-page draft decision on the massive scheme.

Environment Minister Amy Adams granted the extension and, at the end of April, the regional council voted to shift the deadline for a decision on the dam project to September 30. That was three months later than initially planned.

The council said then the draft resource consents would cost about $50m in lost GDP between now and 2050.

Adams would not comment today on whether the government project was likely to get under way.

"No, I don't make any comment on the dam itself, my role is just limited to appointing the board on the inquiry," Adams said.

"They've made a request to extend the time, which I've granted. But other than that I don't get involved at all in the build of the dam."

Conservation Minister Nick Smith also refused to be drawn on the potential outcome of the process, but said the Government would respect the board of inquiry's final decision.

"I'm very hesitant to make any comments on the Ruataniwha in the sense that it's still before the board of inquiry," Smith said.

"There's a draft determination out there, it's an individual decision for investors if they want to be part of it, there's a lot of water to go under the bridge yet.

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"I don't have a view, as minister of conservation, as to whether it is good, bad or indifferent. My view is to make sure the processes are robust and to allow it to take its course.

"The Government is going to respect the independent process that we set up with the board of inquiry, and we have confidence in that board doing a thorough job of [investigating] both the environmental challenges and economic balance."

- Stuff

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