Last Friday was a jumbled day at the Regional Council, juxtaposing two public-excluded briefings on the dam with two public sanitised versions of those presentations, followed by a confusing procedural vote.
As I wrote beforehand in this Talking Point published in HB Today last Thursday:
“If one were specifically tasked with concocting a decision-making process offering the absolute minimum of transparency, due diligence and responsible financial and legal stewardship on the part of councillors, this would be the process. It’s an abomination.”
Not surprising then that the weekend HB Today led off with a misleading headline and story, leaving probably most readers with the impression that the dam had been approved.
That’s not the case. Let me clarify.
On Friday, Councillors were asked to confirm that most of the pre-conditions that had been set by HBRC for the dam to proceed had been met, but with work on one other condition – final confirmation of an investor — still not completed. All conditions must be met before the project can go to ‘Financial Close’ and construction expenditure begin.
The resolution passed on Friday re-affirmed that no drawdown — no expenditure of ratepayers’ $80 million or any part thereof — can occur until Financial Close. That still requires a confirmed investor and lender(s), with whom negotiations are still underway, with Council still required to review final terms in a Special Session to be called after HBRIC proposes those final terms have been reached.
Furthermore, there are two explicit conditions which then come into play regarding any actual drawdown/expenditure. Here are those conditions, from Friday’s resolution:
“HBRIC Ltd will proceed to Financial Close with counterparties in July/August 2016, with the timing of financial draw-downs from Council to HBRIC Ltd (and all other investor and financier draw-downs) being subject to a Condition Subsequent/Precedent of either:
5.1.1. obtaining full and unfettered access to the land being proposed for exchange between Department of Conservation and the RWLP, or
5.1.2. any Council funds drawn down being adequately protected by financial arrangements and/or legal agreements approved by Council.”
The first stipulation is quite clear.
The ‘Or’ clause is very vague and worrisome.
Clearly, if Forest & Bird prevails in its lawsuit to block the DoC land swap, HBRIC will attempt to come up with some other stratagem that enables spending — in some way — to still proceed while another way is sought to seize the land. It would appear that even HBRIC recognises the PR disaster that would ensue if they tried to spend ratepayer money on construction without actually having the required land in hand – “unfettered access”.
But at least if that ‘Plan B’ scenario eventuates, whatever scheme HBRIC proposes must be approved by Council (and of course, before that, by its other financial partners).
So, all in all, there will be one, and quite possibly two, further Council considerations/votes on the project.
Meantime, from an administrative standpoint, HBRC financial staff was authorised to start planning for the drawdown … again, however, with any actual drawdown subject to above conditions being met and approved by Council.
There’s a second major issue that also remains to be clarified, and steps have been initiated on the weekend to accomplish that.
In short, it was discovered late Friday that Councillors were either seriously under-informed (at best), or deliberately misled (at worst) regarding the calculations used by Deloitte and BNZ Advisors to affirm that HBRIC has indeed met the Condition Precedent regarding the level of water sales required for the project to be ‘breakeven’ at its outset.
The actual assumptions behind these calculations were not fully disclosed, and one of those in particular is seriously flawed. It would appear that the required water sales were not in fact in hand as of Friday. If this had been known prior to voting, the vote would have been different. This matter will now be thrashed out in a yet-to-be-scheduled workshop … behind closed doors, of course.
Any wonder that this process is so distrusted?!
I am pleased the final resolution passed on Friday at least ensures that Councillors — and not Council staff as HBRIC had preferred — will determine if the final condition has been met. That satisfied Councillors Barker and Beaven on the day.
Nevertheless I voted against the resolution on Friday, as did Councillor Graham.
Here are my full comments explaining my vote, which I was permitted to deliver in abbreviated form.
But to summarise briefly, based upon my nine years of frustrating involvement with Tukituki issues, here’s the bottom line for me …
“…nothing I have witnessed over those nine years, and particularly over the 32 months I have served as a councillor, waiting for evidence to the contrary, gives me any confidence that HBRIC or the HBRC, despite the framework imposed upon them by the Board of Inquiry, will conscientiously and effectively mitigate the damage to be done by intensified farming triggered by this dam.
“…I have concerns about its operational and financial viability and risks as well, and the cursory public-excluded ‘review’ we’ve been offered today.
“I might swallow these other concerns if they were not so over-shadowed by my conclusion – reinforced over time – that this project will bring about further degradation of the Tukituki.
“So, today I’m voting against ticking the boxes that would advance this dam, based upon what I’ve learnt during my years’ long involvement with its incubation and with its advocates. It is not a vote against water storage achievable in other ways, in other places, and with better consequences.
“More importantly, I am voting against this dam to give voice to those I believe constitute the majority of the attentive public who are not convinced this project can or will satisfy either its environmental or economic claims … and want it stopped.”