The regional council may pull up stumps on a project that has dominated its agenda for the past seven years – the Ruataniwha Water Storage Scheme.
At this week’s corporate and strategic committee meeting it became apparent that it will now be even harder to get this controversial project off the ground with a bigger water buy in agreed to [from the 40 Million cubic metres to 50Mm3], an extra environmental condition precedent added [taking it up to five] and 186 Foundation Water User contracts expiring in June.
Despite this, Hawke’s Bay Regional Investment Company chief executive Blair O’Keefe said he believes his team can present a scheme that offers HBRIC with the controls that it needs to meet its requirements.
“To do so in a way that presents leadership to the region and in fact HBRIC is committed to that process which is why we are very satisfied to insert an environmental management plan condition precedent as part of the programm,” he said.
“A key ask of council as it considers its decision is that you recognise the merits of the scheme whilst working on building any additional confidence that you need around what the environ management package will deliver we are asking that you accept our recommendations in our letter.
“What we would like to advocate for relative to your deliberations today and next week is that the council considers a balanced decision which delivers the best possible outcomes for environment and economy and jobs.”
Some of these recommendations put forward by the investment company were included in newly minted chief executive James Palmer’s 10 recommendations put to the committee.
While Palmer’s 10 recommendations [see above ] were all passed [individually] by the 10 committee members – other issues were raised that give rise to shade being cast over the RWSS.
Probably the most heavily debated move was made by councillor Tom Belford when he requested that staff prepare a new condition precedent that establishes clear environmental parameters to be met prior to RWSS proceeding.
This was met with support and resistance in equal measure – with staunch proponent of the scheme councillor Fenton Wilson saying the process may as well end now if it was passed.
“I would be against this on the basis that it is too vague.
“If we have got to wait for an environmental court process to go on for five years to give us a view on the 0.8 DIN [dissolved inorganic nitrogen level] as an example frankly we might as well close the gate now.
“So I think what is written here gets us there.”
Belford’s amendment was lost on a 5-5 spilt, with the Hastings Ward councillor saying he would present it again at next week’s council meeting when there were nine votes – of which he would have five.
Another issue that could make it difficult for the RWSS to proceed is the fact that the 186 FWU agreements needed for the scheme to proceed expire on June 30, 2017.
Palmer said what this means is that after this date the contractual obligation between the water users and the scheme become null and void.
“In so much as that these are take or pay contracts which farmers have signed up to paying for the water over 35 years and the scheme is contractually obliged to provide the water for the contracted volumes at certain pressures at farm gate,” he said.
“So both parties are no longer obligated to each other [post June 30].”
Palmer said this sign up by FWUs is necessary for the scheme as it needs a certain volume of secured contracts before it can proceed.
This has been a long-standing condition precedent for the council, so what will now need to happen, he said, is that those contracts will have to be either rolled over or renegotiated.
However, he says water users do not have to resign with HBRIC – they can walk away from the project.
“It is entirely over to them and time will tell whether or not any of them are getting cold feet at this point,” said Palmer.
He said that if users do choose to walk away and after the rollover or resigning of contracts the 40Mm3 is not reached “then clearly the CP is unmet at that point”.
However, Palmer said that in practice it probably did not matter either way.
“Because the scheme isn’t going to proceed until those contracts have been rolled over and there is sufficient [water] volume of them to meet the new number which in today’s meeting was agreed at 50m3m,” he said.
Moreover, another court case is now on the cards that directly affects the scheme – this time it is lobby groups Environmental Defence Society and Fish & Game are involved and it is before the Environment Court.
Palmer explained these groups have indicated an intention to seek a declaration from the Environment Court around the interpretations that the regional council will need to take in relation to the nitrogen management issues for the scheme.
“Specifically, around the 0.8 mgs per litre DIN levels and the fact that the scheme has to by its resource consents operate in a manner consistent with achieving those limits,” he said.
“So they [the lobby groups] want to understand what does that mean in practice and so does the council so they intend going to the court to seek that declaration and have invited the council to join with them.”
In regards to the Supreme Court case concerning the Department of Conservation, Palmer said he recommended that the spending moratorium currently placed on the scheme by the regional council should be extended to one month following the land swap matter being resolved.
“It could be quite some time away if the Supreme Court comes out with a ruling either that the land swap cannot occur or that the land swap as previously agreed to by the department of conservation is good to go then that could be relatively soon in terms of the moratorium ending,” he said.
“In possibly a more likely scenario where the Department of Conservation has to remake their decision that could take us well into the latter stage of this year or even next year.”
The fifth condition precedent that has been added to the previous four – concerning the water buy in, financing for the scheme, the Environmental Protection Agency granting satisfactory resource consent condition securing the funding required to build and operate the RWSS infrastructure and obtaining a bankable construction contract – concerns the environmental management of the scheme.
“That is the only one that has been added today,” Palmer said.
“[It] is essentially the current package of environmental management measures that the scheme has to meet will be reviewed and any additions that need to be made as per direction from the council they will need essentially be met as well.”
All recommendations will have to go to council next week to be ratified.