25 Jun 2014

Crucial vote on Ruataniwha Dam

9:16 am on 25 June 2014

Hawke's Bay regional Councillors vote today on whether to invest $80 million of ratepayers money in the Ruataniwha Dam despite not knowing if the water storage project is viable.

Four councillors who question the viability of the dam are expected to move the vote be delayed until key conditions for the investment are met.

The public gallery is full as Hawke's Bay regional councillors prepare for the vote.

The public gallery is full as Hawke's Bay regional councillors prepare for the vote. Photo: RNZ / Peter Fowler

Sources tell Radio New Zealand the councillors are expected to be outvoted by a majority of one, which would effectively sideline the councillors from making any further decisions on the dam.

The order paper for the meeting says the vote will be taken because a decision by the regional council to invest would send a strong signal of support to the wider community, and help attract other investors.

The council said four 'conditions precedent' must be met before it will go ahead with the Ruataniwha Water Storage Project. None of those conditions have so far been met.

No major investors or farmers signed up

The project does not have any major institutional investors after Trustpower pulled out its $50 million investment, saying it was too risky and the returns were not high enough. Piggyback investor Ngai Tahu pulled out its $50 million after a suitable replacement for Trustpower could not be found.

The Hawke's Bay Regional Council's investment company HBRIC has admitted the draft board of inquiry decision on the dam does not give it a workable consent. The final board decision is due by Friday, but councillors will vote before the outcome of this is known.

The councillors do not know what the final cost of building the dam is, with HBRIC still negotiating the price with the preferred contractor DHL-Hawkins.

The project does not yet have any farmers signed up to buy the water, and it is unclear whether there is enough support among farmers to buy the minimum 40 million tonnes required for construction to begin.

Radio New Zealand News understands at least four councillor believe it would be irresponsible to commit such a large sum of ratepayers' money while so many outstanding questions remain, and want to delay the vote until there is a clearer picture of whether the Ruataniwha Dam is viable.

The site of the proposed dam.

The site of the proposed dam. Photo: RNZ

Chief executive's salary under scrutiny

The meeting will also hear a notice of motion about the salary of HBRIC chief executive Andrew Newman.

In January this year, councillors voted 5 to 4 in a secret ballot to give Mr Newman a 29 percent rise, taking his salary to about $400,000.

An item on the order paper notes that decision was made without the new councillors being told that, four months earlier, the previous council considered an independent assessment of Mr Newman's performance and awarded him a pay rise.

Three of the current councillors, Chairman Fenton Wilson, Alan Dick and Christine Scott, were also on the HBRIC board when the September pay rise was considered in public excluded session.

Radio New Zealand news understands those councillors did not tell the six new councillors in January that Mr Newman already had an independent performance review or what the outcome of that review was.

Hawke's Bay Regional Council has refused to provide a copy of Mr Newman's performance review, saying it is confidential and was discussed in a public excluded meeting.