$150K review finds both options for Ruataniwha Dam risky

An artists impression of how the Central Hawke's Bay landscape will be affected by the proposed Ruataniwha dam, which will pose risks whether council choose to proceed with it or not. Photo / File

Developing or ditching the Ruataniwha Dam will have risks but the Hawke's Bay Regional Council "does not have the luxury of 'doing nothing'", a $150,000 review has determined.

Progress on the controversial Ruataniwha Water Storage Scheme (RWSS) stalled after last year's local body elections.

Moratoriums were called, and in November the new council commissioned a review of the key legal, financial, economic, environmental and engineering elements of the scheme.

Tomorrow this review will be formally presented to the council, who will make a decision on the scheme's future at the end of the month.

Over 400 pages long, the review states that as the scheme is both "bold and transformational", it will involve both opportunities and risks - from the RWSS resulting in a loss of biodiversity and habitat, to no scheme meaning farm earnings could reduce by nearly $5million in "the very driest years".

When asked if the review had mitigated the scheme's risks in his opinion, council chair Rex Graham said it had included "much better information" which allowed him to understand both sides of the debate.

"It influenced my thinking, there's no doubt about that... and I look forward to continuing the debate for all parties."

The biggest bone of contention with the scheme has been concern over its environmental impact - reflected with the review's largest number of identified issues, and conclusions being environmental.

These range from flushing flows, the implications a withdrawal of the scheme will have on Plan Change 6 (PC6), and a high improbability that certain water quality thresholds will not be met with, or without the scheme.

These environmental issues "presents a difficult choice for the council because there are risks and uncertainties whether the RWSS proceeds or not", the review noted.

Mr Graham said he felt the environmental conclusions had highlighted both "good points", but also deficiencies in environmental management.

The review also identifies, and draws conclusions on the other key issues associated with the scheme.

These include council being able to withdraw from further development of the RWSS, and that HBRIC has no contractual obligations which would create liabilities if this occurred.

However this would cost a write down of around $19.5 million already invested, and there was a risk the crown could seek a refund of its $7million investment to date.

It was also noted that in CHB, the scheme and PC6 were viewed as being a "package deal" - the implications of PC6 progressing without the scheme are included a number of times as a cost, and risk, of the council choosing to ditch the scheme.

Financially, the critical driver of revenue and risk was water uptake - based on the contracted level of the initial uptake the scheme was expected to break even in its first year. Risks of low uptake would rest with HBRIC, and the council.

At full uptake it would increase the regional GDP by up to $380million and create up to 3580 jobs.

It also concluded that changing the dam to avoid "inundating the DoC land" could make it uneconomic to build - council are awaiting a Supreme Court judgement on land needed for the scheme to go ahead.

The review did not recommend a course of action for councillors, tomorrow's council agenda notes, but did provide an opportunity to reconsider, or reset the scheme's conditions precedent if councillors chose to continue with its development.

Mr Graham said he thought there was a possibility there could be discussion on including new conditions precedent, but he would not instigate this.