Regular Hawke’s Bay motorists were shocked Tuesday morning to find southbound traffic between Hastings and Waipawa at a total standstill, cars lined up all the way back to Poukawa and still building up.
Midway beyond Otane, well-dressed men and women clutching fat briefcases were seen abandoning their vehicles and running frantically toward Waipawa.
Our investigation discovered these were lawyers, accountants, bankers, planners, infrastructure consultants, PR advisors and a smattering of farmers – all desperately trying to get in line early to grab their piece of the $18 million the Government announced that morning it was giving advocates of Ruataniwha Dam 2 to pursue their dream.
As blazoned by Hawke’s Bay Today: “Biggest NZ dam since Clyde gets $18m Govt loan to test its viability”. They could have said, “Most expensive”, but then Dam 2 advocates aren’t ready to talk about that.
The media release from the Tukituki Water Storage Project (TWSP) had indicated that the project would create 200-300 jobs even during construction, and support more than 1,800 jobs once Dam 2 was operational.
And with maybe only 200 jobs up for grabs, those roadrunners on SH2 knew from experience … the early bird gets the worm. Indeed, they are likely the only ones who will benefit from that $18 million of public funding.
Their job, as TWSP Chair Mike Petersen put it, is to move us “from asking whether this project is feasible, to answering whether it is viable”.
So, $18 million to get us from “feasible” (Oxford: possible and likely to be achieved) to “viable” (Oxford: can be done, be successful). Does any taxpayer wonder how TWSP would actually repay an $18 million Crown loan if – shock and horror – Dam 2 proved unviable? Can’t wait to see the guarantees and paperwork on that loan!
Herding the army of consultants on this semantic quest will be Mark Scott, who recently oversaw the Waimea Dam built outside Nelson, whose cost inflated from $78 million to $211 million, leaving farmers and growers there with an unsustainable $100 million debt … and tears in their eyes. As Wise Water Use Hawke’s Bay spokesperson Dr Trevor Le Lievre put it: “It now looks like Waimea was a dress rehearsal for Ruataniwha.”
Making this situation even more unintelligible, Hawke’s Bay ratepayers already paid over $20 million a dozen years ago to discover that Ruataniwha Dam 1 was neither feasible nor viable … at a price then that would be easily double today.
So TWSP will now spend $18 million of taxpayer money attempting to establish that its Dam 2 is different … and affordable. So far, that seems to mean chiefly that it will entail pumping water via pipeline from the Mākāroro site to the Ngaruroro River in Hastings. Why? There are simply not enough paying customers in CHB.
Despite intensive lobbying, only 186 CHB farmers indicated they would sign water contracts for Ruataniwha Dam 1. That’s why it was not “viable”. Better off giving the $18 million directly to those farmers – that’s $96,774 each. No doubt they could make better use of the money than TWSP’s consultant army. For a sense of scale, $18 million equates to half of CHB Council’s entire rates take this year.
TWSP advocates have continually downplayed the role of public money in their ‘commercial’ adventure. But there’s public money sprinkled throughout – initial $3 million loan from the Crown, now this $18 million, ‘forgiven’ development fees by HBRC, some contributions from desperately poor CHBDC, and a bit of dosh from publicly owned Centralines. And you can bet that TWSP will insist any water eventually released for ‘environmental benefit’ if Dam 2 is built should be charged back to the public in some form as well.
I suspect some readers might treat this article as a frivolous dismissal of a serious project intended for the greater good of Hawke’s Bay.
However, I do take the project seriously. It could well be the worst expenditure of public funds I’ve seen since BayBuzz has been on the scene … with potentially worse to come.
So be assured we will dissect the proposition bit by bit as TWSP puts Dam 2 details on the table, just as thoroughly as we did with Dam 1.
Thank God for you Tom.
This would be funny if not for the ridiculous waste of everyone’s money AGAIN!
Unbelievably we will have to fight this battle again, please will someone let some common sense prevail!
Catherine Pedersen
CHB resident, ratepayer
I get what you are saying. However, water is going to become a scarce & extremely valuable commodity. Whether this project, or the other proposed project, or neither of them, that is up to people more intelligent & higher up the pay scale than me to work out. But I will leave you with two final comments – firstly, water is going to be valuable (more so than gold) & essential in the future and secondly, it will never be cheaper than now to plan & execute for that eventuality. If not this, something needs to be planned & progressed or we will look back on this time as a failed opportunity.
Good God! (or the deity of your choice) when will this travesty stop? As quoted by a noted figure in history “doing the same thing over and over and expecting a different result is the height of insanity” and this is just more of the same. Please stop this sucking of public money and get on to something worthwhile such as solar power, rubbish treatment or pest eradication – anything but this!
Water storage is a good idea, but this proposal was always based on ‘build it and they will come’. To make it viable a whole lot of people and capital will have to choose CHB as the best opportunity available. That is a bold assumption. I await the analysis, but in my experience the consultants will pretty much tell you what you want to hear – for a fee. I hope to be proved wrong and that the number really do make sense. They didn’t last time. It seems that they’re attempting to bring in some public good elements, so the commercial case doesn’t have to stack up.
When this project was considered by HB Regional Council about 10 years ago we were being asked to invest $90 million on behalf of ratepayers but to get no return on the investment for 20 years. The numbers simply made no sense. The real problem is the current allocation of water consents in this catchment – more than 60% held by less than 10 dairy farmers who are pouring water on to unsuitable soil. If water storage is such a good investment then the major water users should be willing to pay.
Tom keep up rational explanation
Any chance our local members of parliament can actually address reality and avoid all of us being lumbered with is stupidity?
Tom, your summary of “facts” was “spot on”. There are physical and economic realities that are (still) being ignored.
Example: The Makaroro river generates large quantities of gravel. Last November for example, the gravel depth had increased by >2 metres for the 7.5km I walked to the Barlow Hut junction. The width of Makaroro river gravel was 60 metres reducing to 40metres at the turnoff to Barlow Hut. That is more than 800,000 cum. of gravel build-up from what was a moderate rainfall event in that area.
It is going to be extremely difficult (and expensive) to extract and transport this amount of gravel and will require upgrades to roading and bridge infrastructure additional to those required for dam construction. Any dam on this river will not only quickly lose capacity but also increase the risk of a major collapse.
Mike Peterson now seems to believe that water could be piped ~55km to the Ngaruroro to those who really want it. But with the demise of the major fruit and vegetable processors in HB, there is likely less demand for water.
Add the required ~55km pipeline to the overall ratepayer’s bill?
Another “fantasy” idea.
The expense of water to users from any such scheme has always been an issue. Peter Fraser in an early report on the “first” dam quite clearly showed the costs of the water (even when most of it was pushed onto HB ratepayers) would be financially prohibitive for farmers in the area. He has (again) been proven to be right.
Peter Frazer quotes a BNZ advisory group stating the unsubsidised price of water from Ruataniwha 1 at between 40 to 50 cents per cubic metre
A simple desktop assessment would provide a good guide to what the costs would be today
The sensible thing to do next would be to ask potential customers if they were interested
This has not happened. Better to spend millions of taxpayers money to find out an answer that most thinking people know already
Here we have a stupid Government handing over $18m plus when the illegal war on Iran by US/Israel has sunk this wet dream before it could drown itself.
Ho hum, here we go again, down the same rabbit hole as RWSS v1, which is getting larger by the day. My stance on RWSS v2 remains the same as for v1, and is based on all the same logical, economic and environmental reasons dam 1 was canned. Given the details released to date for v2, it seems highly likely that the actual costs for building it, should it be built, will at least double whatever estimates are currently tossed around – just look at the Waimea dam. What really puzzles me is how the government came to the conclusion that another $18 million was a good investment despite all the overwhelming evidence to the contrary? It seems that common sense and logic has departed from whoever approved this grant, or are there other factors at play here? I hope someone lodges a few OIA requests to find out how the government was persuaded to dole out the dosh, or is it a case of who you know, rather than what you know? There is something not right here, and it needs to be exposed. As the sayings go, where there’s smoke, there’s fire, and if it looks like a duck, flies like a duck and quacks like a duck – well, this is a forest fire with several large flocks of ducks flying over it.
Build a big dam and intensify dairy
Shove all the cost on the towns they’ll pay dearly
Triple my worth and then I’ll be merry
Hey Makaroro! (I’m an arsehole)
Another economic farce!
The superficial and amateurish business case for the Mk 1 version aimed to make the case believable with water selling at about 60c/cu m.
Farmers quickly realised that it was uneconomic at that price, and furthermore the business case did not make economic sense anyhow.
The revised proposal is to sell the water at around 40c/cu m. How can that possibly work?
Well, what is not visible yet is a huge subsidy to pay for the Tukituki “environmental” flows. And who will pay for the subsidy? The long suffering ratepayers in HB of course.
It’s unbelievable that $millions have been made available to pursue the financial viability of the project when it was obvious from the case for the Mk1 version that the financial case could never work.
The previous proponents [i.e. most of the Regional Council] had the wool pulled over their eyes by their consultants. I could demonstrate this on the back of an envelope. Indeed I did this in a short opinion piece in HB Today newspaper a few years ago.
It is almost certain that some weasel words, and slippery calculations will be used by the Mk11 consultants to have you believe that this is going to be a great and financially viable proposition.
I’m keen to see the business case to see how they intend to create the fictitious financials.