Government officials have put the brakes on the $24 million project to shore up the floodwalls around Franz Josef Glacier village and build a new bridge over the wild Waiho (Waiau) River.
The work has been keenly awaited as a way to reboot the glacier economy, which has stalled since Covid-19 and the loss of international tourism.
West Coast-Tasman MP Damien O'Connor said he believes funding will eventually be released.
But the plan to top up the stopbanks by an extra 2m, extend them and build a new bridge is under review as the agencies involved check to ensure taxpayers' money is not being wasted, he said.
Funding for the Franz Josef project from the provincial growth fund was announced with fanfare by NZ First MP Fletcher Tabuteau in Greymouth last July.
It was one of four flood protection proposals submitted by the West Coast Regional Council in response to the government's call for 'shovel-ready' projects to boost the economy.
While the other three river protection projects in Westport, Hokitika and Greymouth have been approved, O'Connor says the various agencies involved - including the Provincial Development Unit and the NZ Transport Agency - are taking a second, hard look at the Franz Josef one.
Since the election, the new minister for regional economic development Stuart Nash had been reviewing all the major shovel-ready projects in terms of their long-term value to the country, O'Connor said.
"And so he should - it's only sensible because he's now the one who will be held accountable for them."
O'Connor said the problem was that raising the stopbanks was not a lasting fix for the hazards facing Franz Josef.
"No one wants to throw good money after bad. The Waiho River is unique in the world - the bed is rising all the time with gravel coming down from the mountains; it wants to fan out to the south, and dumping more rock to try to confine it is always going to be a temporary solution."
The West Coast Regional Council has said the floodwall project would buy the glacier town time to eventually migrate northwards to Lake Mapourika, away from the river and the Alpine Fault it perched on.
But O'Connor said councils had been saying that for the past 30 years.
"The problem is they've never come up with a decent plan for Franz Josef - it's always been ad hoc and muddled development there."
The PGF funding approved for Franz Josef was for the development of a sustainable solution for the township but so far no plan for that had emerged, he said.
Westland Mayor Bruce Smith last week implored the Government to release $12m of the Franz funding package to at least get contractors working on the north bank of the Waiho, where there was no dispute, to inject some money into the town's moribund businesses.
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