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Transpower pulls out of Ruataniwha Scheme

Transpower pulls out of Ruataniwha Scheme

Transparent Hawke’s Bay spokesperson, Pauline Elliott, says it is not surprising Trustpower has pulled out of the Ruataniwha Water storage scheme. “This scheme has multiple levels of risk. One of them is “demand risk”. That is, how many farmers will want to buy water from the scheme and contract, over 35 years, to pay for a set volume of water, whether they need it or not. It will be expensive, and it could take 15-20 years, if ever, before full uptake is realised.

It is not clear how much of the water will be discounted, incentivised, or funded in order to reach the 40% uptake required before the scheme can proceed.

Crown Irrigation Ltd, the government irrigation fund, will consider a short term secured loan on the scheme if certain conditions are met. Like Transpower, it does not want exposure to the ‘demand risk” of equity investment.

Ratepayers will be asked to invest up to $80million in the scheme. A business case presented to Hawke’s Bay Regional Council (HBRC) by its investment company (HBRIC) on Wednesday of this week indicated that ratepayer investment will be at considerable risk with limited or no return for a number of years.

Transparent Hawke’s Bay, as its name suggests, was established to seek transparency around local government decisions. The catalyst for establishing the group was the lack of transparency around the development of the Ruataniwha Water Storage Scheme.

Even at this advanced stage, and a cost to date of $11million, ratepayers are not privy to the basic elements of a robust business case or key information around financial liability. Chair of HBRIC, Andy Pearce, stated this week that, in his opinion, such information was not suitable for the public.

Transparent Hawke’s Bay will be pursuing every avenue to ensure it is made available and that the planned public consultation will be based on all available information.

Ends

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