D-day looms for Ruataniwha Dam

The site of the proposed Ruataniwha Dam. Photo / Supplied

The Hawke's Bay Regional Investment Company (HBRIC) has as few as six weeks to meet its water-contract threshold, as the November 11 deadline looms for farmers.

Yesterday the company presented its monthly report to the Hawke's Bay Regional Council (HBRC), where lots of predictions and assumptions were offered up by the HBRIC's chief executive, Andrew Newman, and his board, but not a lot of definites.

For a project that has been running for five years, the Ruataniwha Water Storage Scheme (RWSS) seems to have come down to the wire - the company is not only scrambling to find water uptake to satisfy its conditions precedent, it has pushed back its financial close to December.

It is hoped the deadline will be met so that work on the dam can begin next March, with construction hopefully beginning in earnest next September.

Mr Newman said after the meeting the objective of the RWSS was "to get an absolute decision around proceeding or not proceeding within a five-year period".

"We are five-and-a-half years through that now and there will come a decision [from the board].

"Ultimately the board will make an informed decision as to whether ... it does or doesn't persevere."

In its report, HBRIC noted the financial close date would clearly be dependent on other investors' ability to transact the deal and achieve their own shareholder approvals.

It noted that it had just over 45 per cent or 20,478,000m3 of the required total water uptake to make the project profitable.

A total of 45,000,000m3 is needed, and those who spoke at yesterday's meeting said they were hopeful that would be achieved.

"These are, by and large, the farmers for whom additional water is an obvious addition to their business and are, in many cases, the farmers who have supported the scheme right from the start," the report said.

"We have another significant number, the A's, who have either actually said they will sign up, but there are a number of outstanding issues that they are wanting a final decision on, such as the water price."

HBRIC's database supports this, showing "current water orders are less than would be expected for optimal production" at 80-90 per cent, depending on the land use.

"We anticipate that as farmers come to understand the productive value of irrigation, they will move from treating scheme water as a drought hedge and start using water to increase production," according to the report.

When questioned about the uptake, Mr Newman said HBRIC was at the backend of the process and he thought "the reality of hitting the uptake threshold is quite good".

The chief executive also corrected media reports that the dam was set to cost $600 million.

He said, over a period of time and depending on the land-use conversion assumptions, the expenditure of farmers on their own properties could be in the order of hundreds of millions of dollars over a period of time.

"The ultimate capital deployment of the Ruataniwha scheme is in the order of $500 million or so.

"But the key thing is that the dam and distribution network, that is heavy infrastructure, is $275 million."

Mr Newman also said that if RWSS were to go ahead, then for the $80 million that the regional council has committed, it would bring about $400 million into the region through investment.