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Still more water to flow

Tom Belford28 April 2016

Yesterday HBRIC announced that it almost had reached the HBRC-stipulated goal of ‘signed and sealed’ water user contracts committing CHB farmers to buying 45 million cubic metres of dam water per year over the next 35 years. The signed contracts totalled 42.8 cubes, with the promise of more in the pipeline, plus a new device … options to buy.

As I commented at the HBRC meeting yesterday, I respect the 196 farmers who actually signed those commitments — that’s a tough decision to make.

Having said that, an equal number of CHB farmers (200), after similar reflection, have said ‘No’ to the scheme.

So after two years of aggressive promotion of the scheme by HBRIC, half the CHB farming community operating within the (steadily expanding) dam footprint, has said ‘Yes’, and half has said ‘No’.

And that ‘draw’ despite intense lobbying and advertising by HBRIC over the past two months. The pressures put on these farmers was enormous — they’ve sampled what delegates to the Republican nominating convention in the US will soon face!

With all that effort, HBRIC has barely made the mark. Hardly the outpouring of community support for a $900 million venture that HBRIC CEO Andrew Newman claimed.

And now HBRIC must still somehow find the additional — about 50% more — water contracts the scheme would require to be truly viable — i.e., to pay all operating costs, mitigation commitments, borrowings and investor returns over the life of the project.

HBRIC suggested they could get those additional commitments from the group of farmers already signed up. That’s hugely ambitious and leaves no margin for error.

Before agreeing that any water uptake condition has been met, I for one need to have a far better understanding of exactly what ‘the deal’ is. Even as a councillor, I had to insist on receiving a copy of the latest revised Water User Agreement to review, only learning about it from a CHB farmer. And now I’ve been denied a request to have HBRC legal counsel made available to answer questions about its terms. This current agreement includes new elements and is more complex that the original agreement we were shown long ago … and at that time we did have the opportunity to put our questions about it to legal counsel.

So why the refusal now?

In any event, there are more hurdles for the scheme to overcome …

  • An independent Deloitte’s review will give councillors an opportunity to finally examine HBRIC’s business case in detail.
  • The Forest & Bird legal challenge regarding the DOC land swap needed for the dam reservoir is yet to be heard by the High Court (May 26), and would likely be appealed by whichever party ‘loses’ at that point.
  • An investor — HBRIC has yet to establish that it has a funding source other than ratepayers or taxpayers, or borrowing, committed to the project.
  • And now a potential conflict of interest involving one of the supporting councillors.

There’s still a lot of water to flow over this dam.

Tom Belford

Tom Belford28 April 2016

13 responses to “Still more water to flow”

  1. John J Harrison says:

    Unbloodybeleivable !
    How can our representatives make an informed opinion on this disaster without competent legal advise ?
    The sooner this circus that is the HBRC has a change in 5 clowns who are supporting this disaster the better.
    Roll on October !

  2. Hayseed says:

    I do wonder at the role of HBRC in creating an ‘investment’ arm (company) to instigate and heavily promote a commercial scheme of such a dubious nature. Where is their mandate? why all the secrecy and subterfuge? surely voters and taxpayers/ratepayers are entitled to honesty in these dealings, aren’t they?
    The general idea of creating water storage to enhance the viability of the farming prospects and employment of a region such as CHB is admirable, but the process that has been implemented and undertaken is at best “shonky”. A neighbouring farmer has constructed dams in every paddock he farms while this debacle has been going on and they are full, his farming operation working effectively and to budget without long term ‘hairy fairy’ commitment such as the proposed scheme is locking a few farmers into. I ask who are the real beneficiaries? Obviously No. 1 is Andrew Newman. Not only has he secured a sizeable salary for the last (5?) years but has also made sure that if this ‘smoke & mirrors’ enterprise doesn’t come off he can slide back onto his previous chair, kept warm by the ‘interim’ CEO. The ‘tight’ Five too must have some discernible interest for surely no intelligent person could support the way this whole affair has been handled? Those people do not deserve to be voted back into office on this record of events, do they? Not what I would call actions of ‘prudent’ business people. Who else is going to benefit? The landowners where the dam is proposed to go? I do believe I had heard that no money had been mentioned as such. The farmers that have reportedly signed up? A 35 year commitment to such a shady deal which can (or most probably will) change terms and costs during its proposed life!! What about the ratepayers/taxpayers, those long suffering playthings of those in ‘power’? Well, I don’t believe we will see anything out of it. And the job prospects for the region… how many, how much…. maybe the main contractor??? Sack Newman, discharge the HBRIC, subsidise those worthy farmers who need irrigation to grow with the funds set aside for the dam (subject to voter approval) and make a term of the subsidy that they have to employ farm cadets to ensure not only employment but a farming future for CHB. Just a thought. Signed, Hayseed

  3. Pauline Elliott says:

    According to the latest HBRIC financial report, the two years of ‘aggressive promotion’ of the scheme to CHB farmers has a price tag of $2m – that’s just “landowner negotiation” ($503,000) and “Water Contract & Sales Advisory ($1.41million). “Other Consultants & miscellaneous” is expected to be $3.2m by June ’16!
    With regard to “steadily increasing dam footprint” who knew that the Resource Consent required for the extension was granted in January as ‘Non notified’. Really? Such a massive project; such a high level of public interest; such a significant change – and it snuck in as ‘non-notified’?
    Gosh John Harrison – I agree with you: Unbloodybelievable!

  4. Bill Sutton says:

    I made a submission several years ago opposing setting up HBRIC, which action however resulted in no changes to the Regional Council’s plan. It was my opinion then, and still is, that the real reason for creating HBRIC was to permit exactly the kind of behind-closed-doors political decision making that we’ve seen in action since, with the full costs to ratepayers hidden under the cloak of ‘commercial confidentiality’. In my opinion the only way this approach could now realistically be changed is by replacing all the current councillors with a commissioner, but since the current government has backed the council majority, that isn’t going to happen.

  5. Dexter McGhie says:

    The Queen has been quoted as saying, “For evil to prevail it only takes good men to stand by and do nothing.

    The modus operandi of the Regional Council is one of obfuscation and subterfuge.

    It is hard to believe things have progressed so far, to waste so much money and there appears to be no red light in sight to bring sensible logic to the table to bring this Dam fiasco to an end!

  6. Barry A Jones says:

    I believe the go ahead for the Dam is the right move. We are all aware of the dry conditions farmers have to successfully farm in Central Hawkes Bay. One only has to travel through from Oxford in North Canterbury to Ashburton taking the inland route to see an example of what can be done with irrigation. This area in the 1960s was rabbit country dry, baron .It is now lush, green, a mix of crops all looking fabulous. Good on you HBRC for taking the positives out of the opportunity to give farming a pushup I support the mve 100 percent and by the way I’m looking forward to fishing a new lake and watching the rowing in Hawkes Bay create some more Olympic stars with the new facility they will be able to develop.

    • William {Wills} says:

      Well Barry if that is the situation down in that area of land in NZ, why in the hell did these farmer clowns buy land down there to farm on, that is not one very intelligent business decision is it!! and now they want every home owner to bail them out and prop up their businesses, get real Barry!! do you think all and every home owner is a charity,waiting to be tapped on the shoulder!! if these intelligent Farmers who bought the land in this area have wanted Water, why on Earth have they not sunk their own Wells long before today?? not so bright at running their businesses are they!!

  7. kelvyn stevens says:

    Reply to Barry A Jones. The charge of the Light Brigade also probably seemed like a really good idea. (until they tried it)

  8. Heather Scherger says:

    I have been following the events around this dam proposal for some time, now, in relation to our regional council, and also to governing in general, in N.Z. Whether the dam is a good idea, or not, is for me a ‘side line’, the real issue I believe is the process. There is a disturbing thread among central government and local government that is becoming entrenched in our society and that seems to be, ‘power to the ruling class, and everybody else, (who’s opinions and wishes don’t really count), can just deal with it!) Decisions are made on a daily basis by our governing bodies, (who are supposed to be working for us) that seem anything but focused on the welfare of ‘the people’. Like an insidious cancer these bodies seem to grow bigger and stronger at the expense of us all. We need to stop this nonsense. This isn’t Democracy. Just because they were voted in by the majority and have been given the ‘right’ to make decisions in our names, and we have placed our trust in their ability to do that fairly and in our best interests, doesn’t give them the right to trample on and totally ignore our wishes. In my humble opinion some members of HBRC have totally abused the power and trust of the people of Hawke’s Bay, and this corruption needs to be exposed and lawfully prosecuted. Because they are criminals, plain and simple.

  9. Ian McIntosh says:

    The current Regional Council is definitely NOT concerned with “Democracy”. The latest “consultation” is a result of Audit Office intervention rather than the senior management following the guidelines. The Napier councillors voted “in principle” to go ahead with spending $37 million without consultation and only voted for consultation after the Audit Office had a say. Too many times the Napier councillors have agreed to HBRIC plans in “public excluded” sessions, not bothering to question their merits. Alan Dick, in particular, must be feeling chuffed with the latest agreement with KiwiRail over the Napier-Wairoa rail line, again in a “public excluded” meeting, although HBRIC was deliberately not involved in that, it being Allan’s pet project.
    Roll on the October elections.

  10. Wills says:

    I have stumbled across this today in the NBR, I’m not sure that I am able to copy and paste this to this site so best you guys decide!
    http://www.nbr.co.nz/opinion/five-reasons-put-price-water-gs?

  11. Ian McIntosh says:

    Just a niggling “language” point: HBRIC announced that it was “cash-flow positive”, not that it had reached a position where it could declare “financial close”. In other words it was taking in more money (from HBRC and the Govt irrigation start-up fund) than it was paying out in expenses. It has been “cash-flow positive” all along. Note that the HBRC legal opinion (and many thanks to the Councillor who asked for that) about HBRIC paying 6% on the public funding was met with a request to use debt to pay that dividend. In other words, HBRIC are a long way from true “financial close” if they wont have the income to pay the dividend to HBRC and have to borrow money to do so. Now we have to wait for the Napier councillors to support whatever dodgy mechanism HBRIC uses to claim they have reached “Financial close”.

  12. Kevin says:

    The 200 farmers who didn’t sign up will be laughing all the way to the bank anyway as the mere fact that have access to the scheme will have a nice positive outcome on the value of their land.

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