The Government is giving an $18 million loan to the backers of a massive and once-controversial dam in Central Hawke’s Bay to test if it truly is viable.
By Linda Hall, Local Democracy Reporter
Associate Minister for Regional Development Mark Patterson announced the loan to the Tukituki Water Security Project (TWSP) from the Government’s Regional Infrastructure Fund (RIF) on Tuesday morning.
The site of its proposed dam is in the headwaters of the Makaroro River on the same footprint as the ill-fated Ruataniwha Dam concept, which was first mooted about 13 years ago.
Various attempts to get the dam off the ground have been mired in controversy since it was first supported with $20m of Hawke’s Bay Regional Council (HBRC) funding.
It was eventually abandoned by HBRC in 2018 after a Supreme Court finding against the flooding of DoC land required by the dam, which had protected conservation status.
It would be the largest capital project ever undertaken in Hawke’s Bay, and the largest water storage project built in New Zealand since Clyde was completed by the Government in 1993.
TWSP has access to the intellectual property purchased by Water Holdings Hawke’s Bay for the old Ruataniwha Water Storage Scheme, including consents and has now secured the $18 million loan for engineering, environmental and commercial work to help decide if the facility is viable.
If the dam goes ahead, the Tukituki Water Security Project says its modelling suggests it would create 200-300 jobs during construction.
Once built, it would increase Hawke’s Bay’s GDP by up to $693 million and would support more than 1800 new permanent jobs – the equivalent of lifting total regional employment by more than 2%, it says.
It says over the project’s lifetime, the total economic benefit ranged from $1 billion to $5b depending on the extent of land-use change, with up to $195m a year in additional government revenue.
TWSP chair Mike Petersen said they were grateful for the Government’s continued confidence in the project and in Hawke’s Bay as a region.
“We are equally grateful to mana whenua, iwi and to the more than 60 visionary local businesses and water users who have backed this project, demonstrating clearly that Hawke’s Bay wants to secure its own future.”
Petersen said the case for water storage in Hawke’s Bay was urgent and well-evidenced.
“This announcement moves us from asking whether this project is feasible to answering whether it is viable,” he said.
“The Hawke’s Bay Regional Water Assessment report concluded that even with significant improvements in water use, efficiency and conservation, by 2040 the region could experience a shortfall between demand and supply of freshwater of nearly 25 million cubic metres.”
He said water scarcity was already preventing businesses from investing and growing in the region, while climate projections point to reduced river flows and worsening droughts, particularly in spring and El Niño summers.
“Water storage is not a silver bullet when it comes to solving water security, however, it must be part of the solution alongside other water efficiency measures.”
Up to 20% of stored water would be used to improve and restore the health of the Tukituki River and other waterways with higher low flows. Communities would benefit from additional urban water supply and new recreational facilities at and around the reservoir.
With the new loan from the Government’s Regional Infrastructure Fund, the next phase of work running through 2027 will include detailed engineering and design, financing and commercial work, in preparation for procurement and a final investment decision in 2028.
“We are under no illusions about the significance of what we are proposing,” said Petersen.
“Water storage is not new to New Zealand, but it is new to Hawke’s Bay. This will be a game changer for our region.”
Last year, Hawke’s Bay Regional Council announced it preferred the development of a smaller $225 million water storage facility further north, on a tributary of the Ngāruroro River, with the costs shared with the Government, supported by a 2020 loan from the Provincial Growth Fund.
LDR is local body journalism co-funded by RNZ and NZ On Air
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