Dam faces another setback

A High Court decision sending Hawke's Bay's Ruataniwha Water Storage Dam back to a Board of Inquiry is expected to create another delay, and another hit to the soaring cost of the project.

While the Hawke's Bay Regional Investment Company was last night not commenting on the prospects for what is billed as New Zealand's largest irrigation scheme and its budget of over $250 million, sources said with Christmas and the need to reconvene the board intervening, the company would be hard-pressed to meet its end-of-March deadline for the signing of the water-use contracts needed for the project to go ahead.

Two months ago, chairman Andy Pearce said deals with farmers to use about 35 million cubic metres of water a year were pending, but some were awaiting the appeal decision before making any commitment.

The Hawke's Bay Regional Council (HBRC) has agreed to invest up to $80 million, but only once HBRIC, the company, has signed enough deals with potential irrigators. On Friday night, HBRIC was unable to comment further than a statement released by council chairman Fenton Wilson, who said he welcomes the decision on the central Plan Change 6 appeal, lodged successfully by the Royal Forest and Bird Protection Society (Forest and Bird), the Hawke's Bay and Eastern Fish and Game Council (Fish and Game), and the Environmental Defence Society (EDS).

Mr Wilson says the decision maintains the consents granted by the Board of Inquiry earlier this year, but requires a single condition related to Change 6 to be reconsidered. "The judge has required the board to apply the most recent version of the National Policy Statement on Freshwater Management when considering the rule in question," he said.

Given the matter was being referred back to the Board of Inquiry no further comment would be made out of respect for the ongoing judicial process, the statement said. But the matter is expected to be discussed by the regional council at its last meeting of the year on Wednesday.

The decision relates specifically to an out-clause the Board of Inquiry created to allow 615 larger farms to dodge a stringent new water quality rule relating to nitrogen leaching into waterways. The board had exempted all farms larger than 4ha from having to comply with its finding that levels of dissolved inorganic nitrogen (DIN) in the Tukituki River, downstream from the proposed Ruataniwha dam, should be less than 0.8 milligrams per litre.

The judge said it created "a factual fiction" that "approximately 615 farms are deemed not to be contributing to excessive quantities of DIN entering waterways in the catchment area when in fact they are likely to be doing so".

"While constructing a factual fiction may not in itself amount to an error of law, when the effects of that factual fiction are taken into account in the context of this case, it becomes apparent that an unsatisfactory state of affairs is created," Justice Collins said.

He added it was "difficult to reconcile with the board's desire to impose controls over the discharge of nitrogen in order to manage the "ecological health" of the catchment area."

Two "over-arching errors of law" had been created, the first was a failure to reconsult affected parties when it concocted the new Rule TT1(j), and the second that the new rule meant "the regional council would lose an important tool in its management of the amount of DIN that enters significant portions of the catchment area", the judge said.

As a consequence, the rule failed to give effect to the Government's National Freshwater Policy Statement, first issued in 2011 and updated in 2014. "I therefore direct the board to reconsider and change Rule TT1(j)," said Justice Collins. "I am not suggesting the board should necessarily revert to its draft rule."

The three appellant organisations, also awarded costs, all claimed triumph in their action, which was heard last month.

Fish and Game nutshelled the decision by saying the Board of Inquiry, chaired by Justice Lester Chisholm, a former Napier barrister, made errors in the way it set rules on nitrogen levels leaching from farms, after accepting submissions from the dam's promoters when the board had finished its hearings.

Chief executive Bryce Johnson said it was a "victory for both the environment and natural justice".