Investors still interested in dam: HBRIC

Those not interested in irrigation water from the Ruataniwha scheme tended to be smaller farm owners and farmers reaching retirement age. Photo / File

Hawke's Bay Regional Investment Company says it continues to have strong interest from corporate investors wanting to take a $100 million stake in the Ruataniwha dam.

HBRIC, the commercial arm of Hawke's Bay Regional Council, says it aims to recommend a "preferred investor" to the council in October - a month before councillors are expected to make a final decision on whether the Central Hawke's Bay irrigation scheme goes ahead.

The council has conditionally agreed to invest up to $80 million of ratepayers' money in the project subject to several conditions being met. The scheme is expected to cost about $275 million in total to build.

In a report to be considered by councillors at their monthly meeting on Wednesday, HBRIC says it is satisfied that the first condition - satisfactory resource consent parameters for the project - has been met following the passing of a deadline for appeals against the decision of a board of inquiry.

The report says farmers in the dam's irrigation footprint have signed contracts for, or are in the "contracting process" to take, 35.7 million cubic metres of water from the scheme, about 10 million cubic metres short of the amount required to meet the second condition for the project to proceed. HBRIC chairman Andy Pearce said yesterday that with a further 22 million cubic metres of water in the "negotiation and due diligence" stage, the company was confident of reaching the uptake target it needed to proceed, even though about 23 per cent of property owners in the targeted area had indicated they were not interested in signing.

Those not interested in irrigation water from the Ruataniwha scheme tended to be smaller farm owners and farmers reaching retirement age who were not interested in investing, Dr Pearce said. While legal proceedings involving the board of inquiry process have delayed the project, Dr Pearce said he did not expect the final contract price to be very different from the current $275 million estimate. HBRIC is looking for about $100 million in corporate investment for the scheme, plus a similar funding commitment from the Government through its irrigation investment agency, Crown Irrigation Investments.

HBRIC said in February that it was talking to one New Zealand-based institutional investor and two from Australia, including one with a parent company in the European Union.

Dr Pearce said yesterday that discussions with the three parties were continuing and HBRIC was approaching other potential infrastructure investors to see if it could broaden the pool of interest in the project.

"It's very important that we have contention about investment.

"We need to maintain some price competition here. If there was only one person who was interested then you're not in a very strong position to negotiate terms," he said.

A final decision on the project is expected to be made by the council at its November 25 meeting.