Ruataniwha Water Storage Scheme Update

Work on finalising the Ruataniwha Water Storage Scheme continues within all four main work streams.

Delays due to High Court Appeals within the consenting process mean a delayed financial close date of 30 June 2015 is being considered.

With the dry summer continuing, soil moisture is as low if not lower than the 2012/13 drought in some areas of Central Hawke’s Bay. It is interesting to note that if the full amount of water stored in the Ruataniwha reservoir was contracted for irrigation, then using this year’s Makaroro river flow data and taking into account climatic conditions to date in Central Hawke’s Bay, the water storage volume in the reservoir in January this year would be approximately 54 million cubic metres (approximately 60% full). If half the water was contracted then the reservoir would be 83% full.

Consenting
An extensive process by the Environmental Protection Authority has been undertaken for the Ruataniwha Water Storage Scheme and Hawke’s Bay Regional Council’s Tukituki Plan Change, which included a six week hearing by a Board of Inquiry. The board’s decision resulted in High Court appeals. A referral back to the Board of Inquiry sought comments from all parties on recrafting one specific rule in the Plan Change and how to reflect that rule in the scheme’s land use consent. A final decision from the Board is expected next month. The 17 consents for the scheme are granted and no longer under appeal. The point of debate is whether conditions relating to one consent are amended or not.

Water Uptake
Hawke’s Bay Regional Investment Company Ltd staff continue to work closely with farmers considering options to take water from the scheme. For the scheme to go ahead farmers need to sign up to take at least 40 million cubic metres of water by financial close. So far close to 10 million cubic metres of water contracts have been signed up with approximately 13 million cubic metres of water in the contracting phase. In total there is 51.7 million cubic metres of water in the various stages of negotiations.

The scheme will operate on a ‘Take or Pay’ system, which is common in irrigation schemes in New Zealand. Put simply it means farmers pay for the water whether they use it or not and this approach is necessary to fund large infrastructure projects, but it also allows them to farm with confidence and certainty.

Design & Construction
Work on optimising the design for the Scheme with the preferred contractor OHL Hawkins is well advanced, including negotiation of the final contract detail. Final design would commence at financial close with construction works beginning in early 2016 to meet water delivery for the 2018/19 irrigation season. This work would only proceed if the scheme meets the agreed conditions around water uptake, investment and consent. Additionally, HBRIC Ltd is currently considering whether to undertake necessary in-river geotechnical work, while river levels are low, to allow the construction to remain on schedule.

Investing in the scheme

There are three institutional investors considering investment in the scheme.

Hawke’s Bay Regional Council has committed to investing up to $80 million dollars in the scheme, subject to agreed conditions. Discussions are also ongoing with the Government about investment via Crown Irrigation Investments Ltd. These investors need to be confirmed before the scheme can proceed.

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