Catchment proposal swallows half of budget

The proposed Ruataniwha Dam site. Photo / File

Costs to develop the controversial Ruataniwha Catchment Proposal has reached nearly $5.5 million, about half the full budget to initiate the project.

New private investor partners Ngai Tahu and TrustPower have contributed funding towards the bulk of the costs recorded to August, 2013.

Details of the project's financials will be reported to the regional council today before it breaks for the triennial local government elections.

The council's investment company was heading the catchment proposal, which included the Ruataniwha dam and plan change 6, new rules and regulations designed to deal with water quality issues in the Tukituki River.

The investment company's total capital expenditure on the proposal for the month of August was $626,552.

It included $68,884 on director fees, management services by regional council staff and consultancy fees. There was $358,210 spent on "phase two" costs for the Ruataniwha dam and $268,342 on work preparing for a public hearing through the Environmental Protection Authority (EPA), due in November.

It brings the total capital expenditure for the project to $5.4 million. It was funded by the Ministry of Primary Industries ($1.9 million), Hawke's Bay Regional Council ($80,000) as well as the investment company with contributions from Ngai Tahu and TrustPower ($3.4 million).

TrustPower and Ngai Tahu's investment could be about 30 to 40 per cent of the initial capital costs, with a share of the final business case costs.

The total budget for the project's development phase was $11.1 million, to June 2014, when it was expected a decision on whether the proposal could go ahead would be clear.

Regional council chairman Fenton Wilson said he was comfortable with the costs to date and the memorandum of understanding with Ngai Tahu and TrustPower gave the project major backing. "The ink is just dry on the document but we have had discussions with them going back some time and so they have come to the table with cold hard cash."

Mr Wilson said there were still "some hurdles to climb" in terms of the EPA hearing, construction costs and water costs. He expected more details on farmer interest in buying water from the dam at today's meeting.

Transparent Hawke's Bay co-chairperson Pauline Elliot said the $5.5 million had been spent largely on consultants, advisers and regional council staff.

"That's a lot of resource for a project still missing critical information around economics, price of water, financial and ownerships structures, an independent review and public consultation. We are still being told this may not go ahead.

"Of interest is the $3.2 million budgeted for the EPA process. Submitters who need expert advisers and witnesses must fund those people themselves. A fund of $90,000 has been allocated through the Environment Legal Assistance Fund as total funding available for all submitters."