Talking Point: Andrew Newman and Graeme Hansen

Andrew Newman and Graeme Hansen on the site of the proposed Ruataniwha dam.

There has been plenty of discussion about the Ruataniwha Water Storage Scheme over the last few months, which the Hawke's Bay Regional Council and its investment company HBRIC Ltd welcomes. However it is important the facts are correct, so we wish to address a list of inaccuracies and misleading statements in a recent Talking Point article by Phyllis Tichinin.
Water coming into the dam
Ms Tichinin claims the projected amount of inflow to the dam is "suspect at best". The inflow data used in the design is sourced within the Makaroro and Tukituki catchments and includes actual rain gauge information. The method used in applying this information to the scheme design is typical for projects of this nature. The project engaged one of New Zealand's leading hydrological experts in the project design and the Board of Inquiry recognised that the work was carefully formulated and accurate.
Gravel extraction
Ms Tichinin's claims that removing sediment from the dam reservoir is "virtually impossible" and makes the dam "uneconomic" are totally incorrect. The gravel at the site is accessible and of a high quality, suitable for roading and construction. Predictions of the annual average quantity available are consistent with the amount currently being extracted within the Ruataniwha Plains area. The dam design also incorporates a dead storage provision of four million cubic metres for this issue.
Opuha Dam Comparisons
Ms Tichinin is clearly confused in her comparisons between Opuha and the RWSS so let's clarify some points:
?Opuha was built in 1998 and is only a storage dam. Some limited distribution infrastructure was built prior to the Opuha dam, relying on direct river takes. The RWSS is a dam and distribution network so when we separate the two, we have the dam cost of around $145 million and the distribution at around $130 million.
?Using the Civil Construction Price Index, Opuha would cost around $65 million to build in today's terms and the RWSS is about 2.4 times larger by construction volume than Opuha. So if Opuha was 83 metres high as opposed to 52 metres the dams would be price comparable.
?As we progressed through feasibility it became evident that size and economies of scale by way of a larger dam were required to make the scheme economically viable.
?RWSS does not hold less than the amount of water of Opuha. The RWSS reservoir has a static storage of 96 million cubic metres, while Opuha holds 72 million cubic metres.
?Opuha is now fully farmer owned, but when it was built 16 years ago it was funded by two local district councils, private investors and only 15% farmer funded.
?The cost of the water from Opuha is for the storage element only, when we look at RWSS the cost is for storage and distribution of the water to the farm gate under pressure. So if we were to split the cost for a better comparison Opuha water costs around 11 cents per cubic metre while RWSS is approximately 12 cents. This is confirmed in work undertaken by Irrigation New Zealand and published in the RWSS Business case.
?It is important to note that under the National Policy Statement on Freshwater Management, ALL areas of New Zealand will be subject to new nutrient limits in time.
?Ms Tichinin is wrong when she states Opuha has 100% higher water inflow than the RWSS. Opuha's records indicate that annual catchment inflows are 200 million to 300 million cubic metres compared to an average inflow of 200 million cubic metres per year at the Makaroro site. The RWSS dam location was deliberately chosen because it is in a high rainfall zone under the Ruahine Ranges and climate forecasts predict the area to benefit from a wetter westerly rainfall pattern. At the same time the irrigation zones targeted by the scheme, which are further east, are expected to get drier.
How much land will RWSS irrigate?
It is true the RWSS is expected to irrigate around 25,000 hectares of the Ruataniwha Plains. The 17,000 hectares mentioned in the Board of Inquiry hearings relates to an intensive purely pasture based system as one scenario modeled, whereas the 25,000 hectares also modeled reflects the more likely mixed land use make-up that has been indicated through the Expressions of Interest (EOIs)from farmers in the area.
These EOIs show around 32% of the land will be used for dairying. Sheep, beef and arable farming are all viable under the scheme.
Like all recent irrigation schemes throughout the country farmers signing up to the RWSS will be required to pay for water every year, wet or dry.
How much water in the dam and how much needs to be sold to make the scheme viable?
The RWSS does NOT have to sell 104 million cubic metres of water to be financially viable nor does it need to have 100% uptake from day one. HBRIC Ltd has been very clear that for the scheme to proceed it needs to sign up 40 million cubic metres of water.
At this level the scheme is considered viable, based on a mixture of both public and private capital and will provide a return to investors, noting however the scheme will provide better returns as water is taken up. It is worth noting that when 100 million cubic metres of water has been sold the scheme will be providing a substantial financial return to HBRIC Ltd, and in turn the Council.
Some of Ms Tichinin's confusion over the amount of the water in the dam may come from the fact that between the feasibility report being released and the design and construction plan being optimised the amount of reliable water available from the scheme has increased from 96 million cubic metres to 104 million cubic metres. The highest priority of water is for environmental flows.
After 17 Council public consultation meetings, held over the last two weeks, regarding a potential investment in the RWSS it is clear there is strong interest and support for the RWSS alongside vocal opposition. We welcome healthy debate on the pros and cons of the scheme.
Inaccurate and misleading comments simply serve to confuse the public.
#Andrew Newman is chief executive of Hawke's Bay Regional Investment Company and Graeme Hansen is Ruataniwha Water Storage Scheme project manager.