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Farmer signing targets hit for Ruataniwha irrigation scheme

Surge in farmers signing up shows reflects increasing confidence in scheme.

Pattrick Smellie
Thu, 28 Apr 2016

Enough Hawke's Bay farmers have signed up for the proposed Ruataniwha Water Storage Scheme to go ahead.

The next hurdle is finding a cornerstone institutional capital investor to back it.

The regional council promoter says some 196 water users have signed up to take up to 42.8 million cubic metres of water annually from the scheme. It requires a $333 million dam on the Tukituki River for mainly livestock and arable farming, including horticulture and winegrowers, as well as dairy expansion. 

That total is "in excess of the formal Hawke's Bay Regional Council condition precedent," the Hawke's Bay Regional Investment Company (HBRIC) chief executive Andrew Newman says. 

He told BusinessDesk a surge in uptake from water users reflected increasing confidence the scheme will attract institutional capital to sit alongside the $80 million HBRIC is putting into the scheme, which will eventually store up to 93 million cubic metres of water.

He declined to comment on recent speculation the investment arm of the Accident Compensation Corp, a Crown entity, will back the scheme, which is eligible for funding from the government's $400 million Crown Irrigation Fund, as subordinated debt. Crown funding is only available with institutional capital backing.

The Ruataniwha scheme had previously attracted Tauranga-based Trustpower and the trading arm of South Island iwi, Ngai Tahu, to back it before they abandoned the process two years ago after Infratil-controlled Trustpower determined it would "not be possible to invest within its risk and return framework for a project of this nature."

A recent report for the promoters suggested that, including on-farm infrastructure farmers would pay for, the total cost of the scheme had risen by 50% to $900 million and it will contribute 3500 jobs and $380 million a year to the economic output of Hawke's Bay.

The announcement came on the same day as the two-yearly DairyNZ report was released on the Sustainable Dairying: Water Accord, which monitors dairy farmer compliance with industry standards for managing freshwater resources.

The audited report shows 96% of dairy cattle are fenced off from 25,656 kilometres of waterways and 5.8% of dairy units nationally showed "significant non-compliance for dairy effluent systems", down from 7% in 2013-14.

"Seventy-five percent of farmers, compared to 56% in 2013-14, are now getting nitrogen information to help them farm more responsibly - with 8598 nutrient budgets processed last year."

More than 99% of 42,773 regular stock crossing points on dairy farms now have bridges or culverts to protect local water quality.

However, Forest & Bird says it remains disappointing to still see high levels of non-compliance in Northland and Auckland and cast doubt on the accuracy of figures for the Waikato region.

"In Waikato only 10% of dairy farms are monitored and advance notice is given for those farm inspections," says the environmental lobbyist's Kevin Hackwell. "A quarter of New Zealand's dairy farms are in Waikato, where the non-compliance rate is recorded at 3% in the latest survey. We suspect the real rate of serious non-compliance in the Waikato is actually a lot higher than the stated figure."

Forest & Bird has an appeal pending against a High Court decision dismissing its objection to a "land swap" deal required for the Ruataniwha scheme.


Pattrick Smellie
Thu, 28 Apr 2016
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Farmer signing targets hit for Ruataniwha irrigation scheme