28 August 2017

Regional Council looks to move on from Ruataniwha Scheme

A paper due to be considered by Hawke’s Bay Regional Council on Wednesday proposes that the Council and its investment company, HBRIC Ltd, move on from the Ruataniwha Water Storage Scheme and focus their efforts on other priorities.

The ability for the scheme to proceed remains uncertain in light of the Supreme Court’s decision not to allow the Department of Conservation land swap necessary for the construction of the proposed Ruataniwha dam.

The Council’s new Chief Executive James Palmer says there has been considerable effort expended to deliver the scheme, against a backdrop of differing community views and a number of obstacles. He says the Council needs to formally decide to stop investing in the development of the scheme and no longer ring-fence Council funds for this purpose.

“The Regional Council has a number of priorities to address. To support this the Council has initiated a capital structure review on the Council’s entire balance sheet, which includes the best use for the $66 million investment presently allocated to the now uncertain Ruataniwha scheme,” adds Mr Palmer.

HBRIC Ltd Chief Executive Blair O’Keeffe says HBRIC Ltd has agreed that, if the scheme is to proceed in some form, it is best lead by other investors, which has proven successful elsewhere.

“We are seeking support from the Council for HBRIC Ltd to continue to explore options to recover funds and progress the Ruataniwha scheme without further Council funding.

“A consequence of ongoing delays and impediments to the scheme progressing is the need to address the book value of $14 million, which was advanced to HBRIC Ltd to develop the scheme. Council management is recommending the Council write these funds off, given the uncertainty of its investment,” says Mr Palmer.

He says both the Council and HBRIC Ltd now need to focus their energies on new priorities.

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