The Ruataniwha dam prospects get steadily cloudier … and the decision-making around it ever more opaque.
Challenge to Board of Inquiry decision
Last week two conservation organisations – Fish & Game and Forest & Bird – filed High Court appeals challenging the final Board of Inquiry decisions on the Tukituki water management plan (Plan Change 6) and the proposed CHB dam. The Environmental Defence Society intends to file in support of these two.
These groups argue that in modifying (some would use the term “softening”) its stance from its draft decision, largely in response to HBRC/HBRIC objections, the BOI acted improperly in view of the legislation it is charged with implementing.
At the centre of dispute is whether farmers – and the dam — would indeed be held accountable for meeting nitrogen (DIN) limits in the catchment, and thereby give effect to national water quality objectives. The BOI appeared to say ‘Yes’ in its draft decision, but ‘No’ in its final decision.
As the consent applicants for the Plan Change and dam respectively, HBRC and HBRIC will now need to respond. All other original submitters to the BOI have the same prerogative.
The ensuing judicial process could easily carry into next year.
Given the legal fluidity, not an especially inviting environment for CHB farmers to decide whether the proposed dam’s irrigation water is viable for them, or for external investors to commit funding to the dam scheme.
Investors and Water Purchasers
Speaking of investors … the Central Hawke’s Bay District Council (CHBDC) will NOT be bringing any money to the table. CHBDC voted against making a $5 million investment in the dam, responding to CHB ratepayers’ lack of appetite for the additional council borrowing that would be required.
As reported by Hawke’s Bay Today, Councillor Mark Williams said it all:
“I think I can say this council is unreservedly in favour of the dam going ahead but somewhat divided about the investment. We should not be borrowing money to invest in the dam – if it was such a good investment I would have considered it, but I have been convinced by submitters it’s not a good investment.”
In other words, wishful thinking and rally speeches are in ample supply in CHB; real cash is not.
There’s no sign that the farmer-beneficiaries of the proposed scheme are yet prepared to invest in it … or buy water from it.
We keep waiting on Mayor Peter Butler, owning land in the dam footprint, to table his signed Water User Agreement.
Water User Agreements (WUAs)
As for WUAs, these would supply the absolutely required revenue underpinning for the nearly $300 million financial edifice proposed by HBRIC. A WUA commits the farmer to purchasing dam water each year, whether needed or not, for 35 years. Those payments provide virtually the entire cash flow on which the financial viability of the dam depends.
However, there are none yet signed. And as indicated above, legal uncertainty about the environmental regime to be required will further deter sign-ups.
And just as important, uncertainty exists regarding just how “unconditional” or escape-proof the WUAs are.
Despite repeated requests, Regional Councillors have never been shown the boilerplate WUA by HBRIC.
Nor have we received a legal briefing on the WUA terms and how well those terms protect the HBRC from loss of revenue as years go by, and farmers reassess their water needs and/or their willingness to abide by potentially more demanding Farm Environmental Management Plans. Unbelievably, we recently learned that our legal counsel had never reviewed the WUA … because staff had never requested it. We’re still awaiting that review.
Truly unconditional WUAs – accounting for at least 40 million cubic metres of purchased water – are essential to the scheme, but lack of transparency around these is just the tip of the iceberg.
It gets worse
Councillors Graham, Barker, Beaven and myself have officially requested much additional financial information about the construction and financing of the dam – all ignored to date. Regional Council Chairman Fenton Wilson, our official channel to HBRIC, admonishes us for wanting to get too deep into the weeds.
For our part, we four Councillors believe the ‘devil is in the detail’ and that digging into that detail is critical to fulfilling our fiduciary role. If we were Directors of a corporate entity looking to make a $80 million investment (just counting the upfront HBRC share, more could follow), we’d be criminally derelict for not examining such detail.
The habit of refusing to inform Councillors goes well beyond failing to provide documents and financial analysis.
The most recent example of failed transparency involves HBRIC’s pre-emptive (i.e., first come, first served) consent application to take for itself all additional 15 million cubic metres of water authorized by the Board of Inquiry to be extracted from the Ruataniwha aquifer. In other words, cornering the market … pre-empting all other potential users of additional aquifer water.
This consent application was filed 17 May. Councillors only found out about it in mid-July – not from HBRIC, not from HBRC staff – but only ‘through the grapevine’.
Indeed, throughout this decision-making process, we have learned more — and in a more timely manner — from ‘sources’, than through official channels.
So much for transparency and ‘no surprises’ policies as between HBRC and HBRIC (our holding company after all), as well as between Councillors and staff.
Is this the way you want to see a $300 million investment decision made on your behalf?