If the dodgy socialist dam business case was rooted before, it is well-rooted now

The Ruataniwha Water Storage Scheme had a marginal business case in the first place. We know this because institutional investors walked away from it, like Ngai Tahu and others.

Now the costs have blown out by over 50%. If the dam’s business was rooted before, it is well-rooted now.

The cost of the Ruataniwha water storage project in Hawke’s Bay has jumped 50 percent and is approaching the billion dollar mark.

The new figures are in a report commissioned by the dam developer, the Hawke’s Bay Regional Council, to review the regional economic impacts of the irrigation scheme.

The Butcher report predicts economic activity around the dam will create 3500 jobs and contribute $380 million to Hawke’s Bay’s GDP.

The same report, to be considered by the council this morning, shows the total cost of the dam has jumped by $300m to over $900m.

The construction cost of the dam alone has jumped by nearly $100m to $333m.

The Butcher report says this is because a new irrigation zone has been added so more pipes and pumps are needed to get the water into the zone.

Of that $333m, $80m will come from Hawke’s Bay ratepayers and the rest will be met by Crown Irrigation Investments and ACC, which RNZ News understands is the preferred investor.

Sixteen million has already been spent on the project, but the biggest cost increase is the amount farmers are expected to invest – that has jumped $200m to $556m.

ACC are smart; better even with returns than the Super Fund. They will realise quickly that this dam is rooted, both financially and politically.

The construction cost of the dam only gets water to the farm gate and farmers are expected to invest or borrow to install additional pipes and irrigators.

The regional council’s investment company HBRIC says the farmers’ cost has increased because a large part of the irrigated land is now expected to be used for growing apples and grapes.

The farmers’ land would have a higher profitability than other land uses and in turn a higher economic return to the region, HBRIC says.

However, it’s not clear how many Central Hawke’s Bay farmers will suddenly want to convert to apple or grape growing.

The Council has shifted focus from dairy to fruit growing for two main reasons. Firstly, new dairy conversions would have blown the nutrient overhead through the roof; the Tukituki is already at the overhead. Secondly, dairy is in the poos at the moment, and farmers are more interested in surviving on low milk payouts than committing to buy very expensive water predicated on a dairy price payout over $6.50.

If ACC bails then the dam is poked. It was always poked but this will make sure it never gets built.

 

– RadioNZ


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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. 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 who takes no prisoners.

He is fearless in his pursuit of a story.

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

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