What happens to the shingle at Haumoana?
The Ruataniwha Scheme consents require 3400 m3 of gravel to be deposited annually on the beach, resulting from the impact of constructing a dam in the Makaroro River -- this is double the amount calculated in the sedimentation study. The Makaroro catchment is one of 17 sub-catchments making up the whole Tukituki catchment and specifically one of five significant catchments that contribute gravel into the Tukituki system.
Who carries the risk of cost over runs and force majure events?
Cost overruns are contracted into a "fixed cost-fixed time" contract format, similar to that used in Public Private Partnership contracts. The risk is therefore assigned to the contractor.
Force majure is a risk for all businesses -- all equity investors in the Ruataniwha Scheme will share this risk and insure to a sensible level assuming it proceeds. We note, for example, that Napier Port is exposed to force majure risk and also insures to the sensible extent possible.
I am not sure which farmers Mr McHardy is referring to when he claims that they were told not to worry about nitrogen.
Farmers will be required to meet Ruataniwha consent conditions and these require management of nitrogen and phosphorous and that obligation will be contractually binding.
The financial rate of return analysis is mistaken according to Mr McHardy.
The rate of return analysis are not mistaken and will be re-reviewed by Deloittes if and when HBRIC Ltd presents a final case to Hawke's Bay Regional Council (HBRC) for investment based on meeting the agreed hurdles. All financial calculations are subject to investor assessment and independent due diligence. We further note the Deloittes report can be accessed on the HBRC website under Ruataniwha Water Storage Reports.
Why has Fletcher Challenge and other NZ contractors not bid for construction?
Five engineering contractor consortiums provided expressions of interest in the project, which included the significant NZ contractors. Those successfully shortlisted were Bouygues & OHL/Hawkins, both who had vastly more dam-build experience than other parties, with OHL having built more than 100 dams worldwide, many in much more seismically challenging areas than the Makaroro.
The successful bidder, OHL/ Hawkins clearly includes substantial NZ consultant design and contracting expertise.
The river is suffering from over-allocation of water
The independent board of inquiry, in its decision, did not substantially reduce groundwater allocation and the environmental submitters surprisingly did not push for it. To compensate, HBRIC is contracting with farmers to switch groundwater takes to stored water. We believe the eventual contracted number may be in excess of 10 million cubic metres, noting that is more that 50 per cent of the amount utilised for irrigation in the 2012-13 drought year.
An assertion is made that HBRC replenishes water in the Heretaunga aquifer.
HBRC does not replenish water in the Heretaunga aquifer, however, should a water storage project proceed on the Ngaruroro, this would be a potential outcome.
We agree that managing our rivers and lakes is critical for New Zealand's reputation which is one reason why the status quo is not viable in the Tukituki catchment.
Andrew Newman is Hawke's Bay Regional Investment Company Ltd chief executive Business and civic leaders, organisers, experts in their field and interest groups can contribute opinions. The views expressed here are the writer's opinion and not the newspaper's. Email: editor@hbtoday.co.nz
