As reported in the DomPost by Marty Sharpe, Mayors Yule and Arnott have significant concerns about the financial risks posed to ratepayers by the Regional Council’s dam project. So great is their apprehension that they are demanding an independent review of the project’s economic and financial assumptions.

The most obvious cost to ratepayers if the scheme goes forward is the $80 million explicitly budgeted in the Regional Council’s Long Term Plan. However, that’s the tip of the iceberg with respect to the financial exposure that the Regional Council (i.e., ratepayers) would face if various of the economic and operational assumptions underpinning the scheme prove to be overly optimistic … or flat wrong.

And so far, those assumptions — the product of consultants and bankers sucking fees from HBRC — have not been cross-examined by independent authorities. Indeed, with HBRC and HBRIC (its holding company responsible for progressing the dam) sharing councillor-directors and having the same chief executive, the mayors also have conflict of interest concerns … how is HBRC to get suitably independent and informed advice on the viability of the scheme?

So, independent risk assessment is what the two mayors and their councils want … and they are willing to fund the cost for such review if necessary.

Kudos to Mayors Yule and Arnott for taking this stand.

I have been approached by many community leaders, to say nothing of farmers in CHB, who privately voice serious apprehensions about the scheme, but are wary of taking a public stance counter to HBRC. The mayors will be widely applauded for exercising this leadership.

On the basis of a HBRC Powerpoint presentation, or slick advocacy mailing, the dam scheme looks better than sliced bread. It’s only on closer analysis that the dependencies upon dependencies — assumptions upon assumptions — become clear, along with the consequent risks.

And instead of putting these under a glaring spotlight, as befitting a project whose total costs amount to $600 million, the Regional Council is rushing forward, telling everyone to not worry, trust us. Unfortunately, the Regional Council has no ‘trust equity’ in its credibility accounts.

The mayors’ concerns are the same concerns that have led Transparent Hawke’s Bay to file a complaint with the Auditor-General, which is under review, and that have caused others in the community — business leaders, Ngati Kahungunu, and HB Fish & Game among them — to call for a ‘time out’ in the Regional Council’s rushed process. These actions are reported in this BayBuzz article.

A project of this scale must earn a commensurate public mandate … one that weighs all pertinent risks in an informed manner. In effect, what our mayors are saying is that it is premature for there to be any mandate. Too many big, unanswered questions. The mayors have put their concerns on the table. In the coming week we’ll see if our HBRC councillors give a hoot.

It’s mystifying how the Regional Council can continue to profess — and spend ratepayer dollars to propaganise — that everyone’s been fully consulted and endorses the project, when the reality is so blatantly the opposite.

Welcome to Planet HBRC!

Tom Belford

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1 Comment

  1. Tom, as we now know the Dad and Dave team–DAD have made a great play of this in 2.5 of their submission to the LGC.
    They have the temerity to note “Prominent members of ABHB are known to actively oppose the Ruataniwha Scheme”.
    Well, so what, some do and some do not. What they fail to note is that the same applies to their own membership.
    It is great to note that mayors Arnott and Yule are leading the charge for an independent review of this project.
    This of course should not have been required. That is the job of the directors, who in this case are found wanting.
    Both mayors are to be applauded, and supported by their councillors — members of DAD or not.
    It is time for the DAD supporters to question the commercial acumen of the directors involved.
    After all they say they are supportive of a transparent process.
    About time they walked the walk instead of just talk the talk.

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