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TrustPower, Ngai Tahu Holdings may invest $106M in Ruataniwha water scheme

Thursday 19th September 2013

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TrustPower, the utility controlled by Infratil, and Ngai Tahu Holdings may fund up to 40 percent of the capital costs of the controversial Ruataniwha Water Storage Scheme in Hawke's Bay.

The power company and the commercial arm of the South Island tribe have signed a memorandum of understanding with Hawke's Bay Regional Investment Company (HBRIC) to potentially invest in the scheme, which would take enough water from the Tukituki River to irrigate up to 30,000 hectares of land.

The resource consent applications are currently before a Board of Inquiry with the Environmental Protection Authority.

But the proposed development has become a political football after Conservation Minister Nick Smith was forced to deny he had tried to hose down his department's concerns about potential water pollution or meddle with its submission. Green Party co-leader Russel Norman has called on Smith to resign for misleading parliament.

Smith was reinstated to Cabinet this year after resigning in March 2012 over his advocacy for an ACC claimant while in charge of the no-fault-accident scheme during the last term of Parliament.

The estimated capital cost, including water storage and distribution infrastructure is $265 million, according to an HBRIC statement. TrustPower and Ngai Tahu may fund 30 percent to 40 percent of the initial capital cost, and a share of the final business case costs incurred prior to financial close, it said.

HBRIC managing director Andrew Newman said farmers and landowners are likely to have the opportunity to invest in the scheme though no money would be sought or equity capital raised until an investment statement is available.

He said for the Hawkes Bay, "large scale water storage can relieve pressure on ground water and surface water takes during major periods of stress."

Shares of TrustPower fell 0.1 percent to $7.

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