Ruataniwha water scheme cost spirals

  • 13/04/2016

The projected cost of the contentious Ruataniwha water storage project in the Hawke's Bay has now ballooned to almost $900 million.

The project, which is being driven by the Hawke's Bay Regional Council, has so far been touted as costing $600m but a new economic assessment has revised the figures first put forward in 2012.

The council's corporate and strategic committee will discuss the report, by Butcher Partners, at a meeting on Wednesday ahead of a deadline on Monday for farmers to sign up for the scheme.

The report says the cost of constructing a 83m-high dam on the upper Makaroro River has increased from $240m to $333m and landowners are now expected to invest $556m (up from $356m), most of that coming from expansion in profitable vineyards and orchards.

Changes have also been made to how the water will be delivered to farms.

The irrigated land area has been increased from 25,000ha to 26,250ha.

The report says the project will create 3580 jobs and increase regional GDP by $380m a year. Construction would employ 1400 in the first three years and 1300 farm jobs will be created further down the track.

The benefit cost ration would be positive - with the report giving a best-case 1.89 BCR over 70 years.

It is not yet clear where the money to fund the scheme will come from. The council is contributing $80m and ACC has been reported to be a possible investor.

Other high-profile investors have pulled out of the project, which has also been criticised for the environmental impact it will have on the Tukituki River catchment.

Monday is the deadline for landowners to sign up for the scheme.

The dam will hold about 100 million cubic metres of water and the council says investors will need to commit to taking at least 45 million cubic metres for the project to proceed.