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Resolutions
That Council:
1. Agrees that the decisions to be made are not significant under the
criteria contained in Council’s adopted Significance and Engagement
Policy, and that Council can exercise its discretion and make decisions on
this issue without conferring directly with the community and persons likely
to be affected by or to have an interest in the decision.
2. Agrees that the final scope of the review
will include:
2.1 Advice on the process steps available to HBRC, and any associated
legal risks, to withdraw or shelve the RWSS in the event HBRC determines that
either the Conditions Precedent are not met, or as a result of any other
policy matter determined by HBRC.
2.2 Advice on all anticipatable costs and liabilities for both HBRC
and HBRIC arising from abandoning or shelving the RWSS in the event HBRC
determines that either the Conditions Precedent are not met, or as a result
of any other policy matter determined by HBRC. Advice on the residual value
of RWSS-related assets, including intellectual property, in the event HBRC
abandons or shelves the scheme.
2.3 Review
forecast revenue and expenditure (including levels of debt, finance and
insurance costs) for RWLP, and dividends, returns on equity for HBRC and
private investors arising from the scheme’s cashflow model based on: a)
current contracted volumes of water, and b) low, c) medium and d) high uptake
contracted rates of remaining volumes and consequential impacts on spot
market sales, over first 35 years of the project. Advice on the return on,
and terms of, debt provided by Crown Irrigation Investments Limited.
2.4 Assessment
of impacts on a) HBRC’s Long Term Plan, b) HBRIC’s balance sheet
and c) the Port of Napier from scenarios of HBRIC dividends to HBRC falling
below 6% cash returns for estimated periods.
2.5 Peer
review of forecasts of contracted water uptake and spot market demand, taking
into account any new information available from existing water user
agreements
2.6 Advice on the barriers to faster uptake and/or reasons for
landowners in the command area not contracting water, acknowledging the HBRC
Condition Precedent threshold of 40Mm3 is deemed by HBRIC to have been met.
2.7 Peer review and sensitivity analysis of the RWSS Farm
Profitability (Macfarlane Rural Agribusiness) Report, taking into account any
new information available from existing water user agreements.
2.8 Summarise Butcher Report conclusions, scenarios and assumptions
2.9 Collation of views of downstream production demand from major
regional meat, dairy and horticulture processors and exporters, as well as
impacts on Port of Napier, from RWSS related production.
2.10 Assessment of on-farm management practices, including stocking
levels and associated land-use constraints, required to meet the nutrient
leaching and groundwater water quality requirements of Plan Change 6 and the
Regional Policy Statement. Estimate of current compliance within existing
land uses and the extent of headroom for intensification and land use change
will be provided. Estimate implications for the RWSS in meeting consent
conditions relating to scheme water users and nutrient limits.
2.11 Assessment of high level implications for HBRC resources and
approach to implementing PC6 should RWSS not proceed, including for the
management of Tranche 2 water.
2.12 Assessment of the impact on irrigation security and resultant
farm-gate production in the Tukituki catchment arising from the increased
minimum flows in PC6 if the supplementary flows required under RWSS consents
are not available.
2.13 Assessment of the production systems, techniques and technologies
for dry land farming, without irrigation, in the Tukituki catchment.
2.14 Review efficacy of flushing flows and associated estimated impacts
of losses to groundwater within the river course.
2.15 Legal advice on the status of the PC6 DIN limits as they apply to
RWSS farmers relative to other farmers in the catchment.
2.16 Clarification of the obligations of RWSS supplied farmers versus
other farmers’ in the catchment to meet the requirements of PC6.
2.17 High level assessment of the available storage capacity if the
scheme is altered to keep the reservoir below the DOC land and not impact on
currently approved consents, and associated impacts on capital requirements,
distribution, revenue and expenditure.
2.18 High level assessment of alternative dam sites off river main
stems and assessment of specific on-farm storage options, including impacts
on distribution costs and revenue, and impacts on primary production output.
2.19 Advice on the proposed approach to gravel management within the
reservoir, including operating costs and consent compliance, seismic risks to
dam integrity, and any issues arising from future decommissioning of the dam.
2.20 Summarise reports and peer reviews of synthetic in-flow model and
assumed climate forecasts for reservoir recharge, and associated consequences
for the timing of post-commissioning revenue, scheme reliability for water
users and the minimum annual low flow.
2.21 Oversight, tracking and reporting on work streams. Procurement of
advice and financial control.
2.22 Preparation of report for Council
2.23 Public consultation following the review report.
3. Agrees that a Community Reference Group be appointed to provide
advice to the Group Manager Strategic Development on the review process and
their assessment of the adequacy of the review in addressing the packages of
work agreed by the Council, and:
3.1. that the Group will comprise Hawke’s Bay-based people
wherever possible and include members of the Central Hawke’s Bay
community
3.2. that the Group Manager Strategic Development is delegated to
appoint Group members and will report the membership to Council.
4. Approves the Group Manager Strategic Development, incurring
expenditure of up to $170,000 (excluding HBRIC Ltd costs) to be capitalised
to the Ruataniwha Water Storage Scheme, on external costs for the purposes of
completing the review work programme agreed by the Council.
5. Requests the Group Manager Strategic Development reports back to
the Council with the findings of the Review on 26 April 2017.
6. Notes the view of the HBRIC Ltd Board on the proposed moratorium
on further expenditure and expenditure on the scheme, and confirms the
request to HBRIC Ltd that it implements a moratorium
on the Ruataniwha Water Storage Scheme (RWSS) project, to include:
6.1. Ceasing any further expenditure on the RWSS design, development or
construction other than work currently committed or contracted
6.2. Not entering into any new arrangement that would commit either
HBRIC Ltd or Hawke’s Bay Regional Council to future expenditure or
obligations
6.3. Desisting from taking any further steps towards acquiring DOC land
under the Public Works Act
6.4. Except
for expenditure that is required by HBRIC Ltd to:
6.4.1 comply with its statutory obligations
(for example responding to LGOIMA requests, costs required to value
intangible assets to comply with audit requirements
6.4.2 for the directors to comply with their duties to defend and/or
maintain the value of the company’s assets (including intellectual
property and contracts)
6.4.3 to maintain or enhance the value of the
current water sales contracts
6.4.4 to
meet the costs of any Council requests, including HBRIC Ltd’s costs for
Council’s review.
Barker/Belford
CARRIED
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