Hawke's Bay mayors are so concerned about the Ruataniwha Water Storage Scheme they have offered to pay for a peer review of the plan.
In a letter The Dominion Post obtained under the Official Information Act, Napier Mayor Barbara Arnott and Hastings Mayor Lawrence Yule urge regional council chairman Fenton Wilson to address four "process issues".
They say there is insufficient separation between the regional council and its investment arm, which has lodged resource consent applications for the $250 million dam and irrigation scheme.
Having councillors as the company's directors meant it was impossible to provide confidence that decision-making processes were fair, transparent and undertaken without some pre-determination, the mayors said.
They believed regional council chief executive Andrew Newman should not be involved in both entities as this exposed the council and ratepayers to "significant risk around independent advice that may be given to the council".
They were worried about the level of capital and operating cost risks that could fall on ratepayers and noted that private investors were likely to seek to have the investment company carry as much of the risk as possible.
The council needed to do more to build public confidence.
Unless more financial analysis was done on the scheme to boost public confidence the project ran "a serious risk of being fatally flawed in its process", they wrote.
Mr Wilson met with the mayors on May 7. In a letter dated May 15 he said the council did not believe there was a conflict of interest between the council and its investment arm. He would continue to seek professional advice on the matter and ask auditors to provide a view on processes.
He said it was not Mr Newman's role to give independent advice and a review would be sought by a suitably qualified person if required. Mr Wilson said the council would take further advice on all issues.
The proposed public-private water scheme would build a 90 million cubic metre dam west of Waipukurau.
- The Dominion Post