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Ruataniwha Business Case Peer Reviewed by Deloitte

Media Release
24 April 2014

Ruataniwha Business Case Peer Reviewed by Deloitte

Hawke’s Bay Regional Council will consider the Ruataniwha Water Storage Scheme Investment Statement of Proposal at its meeting next week on Wednesday 30 April.

The Statement of Proposal forms the basis for public consultation.

In making its final decision on whether or not to invest in the large irrigation scheme for Central Hawke’s Bay, Regional Councillors will be considering a range of reports including a Deloitte peer review of the HBRIC Ltd business case that recommends investment.

The final Deloitte report will be provided to Council next week, and Regional Councilllors will have the opportunity to formally receive it at their 28 May meeting.

Deloitte has provided an interim presentation of its findings to the HBRC Corporate & Strategic Committee meeting on 16 April.

In summary, Deloitte is satisfied that the assumptions used in the HBRIC Ltd business case are reasonable. These include the up-front capital investment in the physical infrastructure, the business model that drives the operating cash flows necessary to provide the investor returns, the ownership model, the investment structure that allocates capital, risk and return to different investors, and demand, ie how long it takes to get to full uptake.

Deloitte is also satisfied with the way the financial model has been constructed and the returns that have been calculated within that business case.

Deloitte has identified the key risk to the project as the length of time being taken to get to full uptake of water, although they recognise that demand will eventually outstrip availability as the demand for water continues to increase.

The Deloitte peer review is part of the comprehensive package of information being considered by Hawke’s Bay Regional Council as it moves towards a final decision on its investment in the water storage scheme over the coming months.

The Regional Council meeting agenda for 30 April is now available online at http://www.hbrc.govt.nz/About-your-Council/Pages/Meetings--Agendas.aspx

ENDS

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