Ruataniwha dam faces setback

The site of the proposed Ruataniwha Dam project. Photo/File

The deadline for a decision on whether the Ruataniwha dam gets built has been pushed back three months as its backers grapple with delays in securing funding and signing contracts with irrigators.

And a warning has been issued that more hold-ups could see construction put back by a year.

The scheme's promotor, Hawke's Bay Regional Investment Company (HBRIC), has shifted its crucial "financial close" deadline date from June 30 to September 30 as it talks with potential backers and convinces farmers and growers to sign up to take water.

The company, the Hawke's Bay Regional council's investment arm, has said the $275 million scheme will not proceed if it does not have funding confirmed and deals to sell at least 40 million cubic metres of water a year, just under 40 per cent of capacity, by the financial close date.

Company chairman Andrew Newman told a regional council meeting yesterday the board of inquiry process to determine resource-consent issues related to the project had taken three months longer than expected.

Councillors are to vote in June on whether to invest up to $80 million. The company is in talks with potential corporate investors and the Government's irrigation scheme funder, Crown Irrigation Investments. It also hopes to raise more than $10 million from smaller investors. Mr Newman said construction at the site, on the Makaroro River northwest of Waipawa and Waipukurau, must begin by year's end to avoid a major delay. "We can absorb some creep around delays at this point but the bottom line is if they can't be well into the construction phase through the summer season then clearly the whole thing goes back an entire year," Mr Newman said.

He also signalled that delays in concluding talks with Crown Irrigation Investments (CII) over a low-interest loan to part-fund the scheme could be problematic if they dragged on too close to September's general election.

After a certain point "anything we get out of CII would be conditional," he said, referring to a possible change of government and therefore the potential for a change in policy around funding irrigation schemes. The council yesterday signed off on an "investment statement of proposal" that will form the basis for a round of public consultation, set for this month, on the proposed investment of up to $80m. Councillor Tom Belford voted against the statement's adoption, saying with the shift in the financial close deadline date and uncertainty over the financing and up-take issues, it was not the time to seek public feedback. "To initiate public consultation with this much uncertainty behind a proposition really makes a mockery of public consultation and there is apparently no reason now to be taking the temperature of the public by June 30," he said.

Council chief executive Liz Lambert said public consultation was just one of a number of activities being conducted in parallel as the project progressed.

Councillors approved a HBRIC request for a $2 million advance to fund ongoing project costs.

The cost of the "feasibility" phase of the project was forecast to be $11m in 2012 but had increased to $13.6m .