Council writes off $14m investment in failed Ruataniwha dam project

A screenshot from an animated video of the proposed Ruataniwha dam in Central Hawke's Bay.
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A screenshot from an animated video of the proposed Ruataniwha dam in Central Hawke's Bay.

Hawke's Bay Regional Council's decision to write-off $14 million spent trying to develop an irrigation scheme for the Ruataniwha Plains doesn't mean the project won't be built eventually, one councillor says.

The council voted on Wednesday to take its auditors' advice and write off the investment made by its commercial arm, Hawke's Bay Regional Investment Company, trying to establish the scheme in Central Hawke's Bay.

While there is general agreement the drought-prone Ruataniwha catchment needs a water storage solution, debate has raged for several years over the council's backing for a proposal to build a dam and create a massive reservoir in the foothills of the Ruahine Range.

Part of the Ruahine Forest Park would have been swapped to pave the way for the Ruataniwha Dam, but the Supreme court ...

Part of the Ruahine Forest Park would have been swapped to pave the way for the Ruataniwha Dam, but the Supreme court ruled in July the move was not legal.

The final blow to the project was a July Supreme Court decision ruling a land-swap required to free up Ruahine conservation estate land required for the scheme had not been legal.

READ MORE:
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Government may change law after court rules against land-swap
'Bold' Ruataniwha dam project will never be risk-free
Ruataniwha dam paused as new council to review plan
Ruataniwha land-swap to be appealed in Supreme Court

Speaking at Wednesday's meeting, councillor Debbie Hewitt, who represents Central Hawke's Bay where support for the project was strongest, said the write-off decision was inevitable given the "tide had been turning for some time" against the scheme.

Hawke's Bay regional councillor Debbie Hewitt believes there may yet be more water to go over the bridge in the ...
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Hawke's Bay regional councillor Debbie Hewitt believes there may yet be more water to go over the bridge in the long-running dam saga.

The decision would mean the loss of "desperately" needed employment opportunities, she said.

"It's a sad day in terms of where we've landed with this project. I do believe it will go ahead in one vehicle or another."

Hewitt said with the Government supporting irrigation schemes and an institutional investor having done significant due diligence on the project she believed it would eventually progress "and it's going to be probably far better off without council as a cornerstone investor in terms of getting on and the project being a success". 

Councillor Paul Bailey said the demise of the scheme was a "salutary lesson" for the council in terms of its future investments.

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He said the potential issue of the DOC land-swap first emerged in 2013 when only $5m had been invested in the project and the council made "an appalling decision" back then to proceed when there remained uncertainty about the availability to the land.

"I certainly wouldn't go and build a house without making sure I owned the land I was going to build the thing on,a nd that's exactly what's happened here."

Green Party water spokeswoman Eugenie Sage welcomed Wednesday's developments, saying the dam would have have encouraged more intensification of farming in Central Hawke's Bay.

She said regional councils should not be involved in irrigation schemes because promoting them "undermines their role as independent regulators of land and water use and creates a conflict of interest".

However, Federated Farmers' Hawke's Bay provincial president Will Foley said the council's decision left questions around the region's future water storage capability.

 - Stuff

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