Dodgy Socialist Dam = Clyde Dam?

Economist Peter Fraser has written a scathing article comparing the Ruataniwha Water Storage Scheme to the ill fated Clyde Dam. He compares the decisions made to allow the Clyde Dam to proceed, and the similarities with the Ruataniwha scheme.

The RWSS’s promoters would therefore do well to pause and consider the similarities between their proposal and the ill-fated Clyde High Dam – as it is a truism that those who fail to heed the lessons of history end up repeating the same mistakes. While it is now universally accepted that the Clyde project was an unmitigated disaster that should never have been built, it is less well understood that there was sufficient information available at the time that clearly showed the project should be abandoned. Unfortunately, a combination of egos, politics, and sheer pig-headiness meant that these ‘off-ramps’ were ignored – a situation that looks eerily similar today.

Firstly there is no economic benefit in building the dam.

The first off-ramp was that the economic evaluation of the Clyde High Dam and proposed smelter at Aramoana showed that it did not meet the hurdle rate necessary to justify public sector investment – which, in ‘normal speak’, means the project was a dud. Amazingly, the RWSS is in an even worse position: it is a $600 million project that produces net benefits of negative $27 million dollars.

That is a truly jaw-dropping result: it means HBRC would be better off simply putting $600 million on a bonfire and burning it, because as least the result is only nothing. It also implies that claims that the RWSS is some type of economic circuit-breaker are simply illusionary. 

Then outside investors pulled out because the dam was not worthy of outside investment because the numbers didn’t stack up for those in the real world.

The second off-ramp was when investor Alusuisse pulled out of the project – which indicated that private sector investors had also done the numbers and concluded it did not stack up either. The comparison with Trustpower and Ngai Tahu pulling out of the RWSS is therefore telling – especially given the former has considerable hydro expertise.

Lord knows who thought it was a good idea to build a dam when no one actually wanted the water in the first place, but this is what the extremely dodgy Hawke’s Bay Regional Council has attempted to do.

The third off-ramp was building the Clyde dam in the knowledge that there were no customers for the power generated – as the proposed Aramoana Aluminium Smelter had long since been cancelled. The fact that only about 5 per cent of the RWSS’s capacity has been contracted to farmers – despite repeated extensions, exhortations, and discounting – indicates a similar lack of customers.

Will Chairman Fenton “Jong-Un” Wilson and his merry bunch of council sycophants continue with their dodgy socialist dam in spite of reasoned advice not to.

 

– Hawkes Bay Today


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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story.  And when he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet.   Cam Slater doesn’t do quiet, and as a result he is a polarising, controversial but highly effective journalist that takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him.  But you can’t ignore him.

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