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.
The council abandoned it in 2018 after a Supreme Court finding against the flooding of Department of Conservation 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.
The work will include completion of detailed design, engineering and confirm construction costs and overall commercial viability.
The water security project 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 $18m loan for engineering, environmental and commercial work to help decide if the facility is viable.
If the dam goes ahead, the Tukituki project says its modelling suggests it would create 200 to 300 jobs during construction. Once built, it would increase Hawke’s Bay’s GDP by up to $693m and 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.
Project chairman Mike Petersen said those involved 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.
“It’s about making sure the design is right, understanding the cost of water and user demand. All this has to be done properly before we think about any building work.
“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.”
Patterson said Hawke’s Bay was a key food-producing region and had the potential for expansion with reliable long-term water supplies.
“This project will support land uses such as horticulture, seed production and high-value pastoral farming,” he said.
“It represents an important investment in Hawkes Bay’s future, helping protect water security while enabling economic development and long‑term regional resilience. I look forward to seeing continued progress.”
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, he said.
Communities would benefit from additional urban water supply and new recreational facilities at and around the reservoir.
Wise Water Use Hawke’s Bay, a pressure group that has been opposed to the dam’s construction and critical of both its environmental footprint and its business case, called the announcement “crony capitalism on steroids”.
“Mark Patterson’s $18 million announcement shows there’s no end of public money this coalition Government will splash on their pet projects – this is crony capitalism on steroids,” Le Lievre said.
He said the loan, combined with the public money already committed, brought the total amount of money thrown at the project to $48m “without a sod of earth being turned”.
“Taxpayers should fasten their seatbelts and secure their wallets because they’ve just signed on for a hell of a ride,” Le Lievre said.
A final investment decision is to be made in 2028.
“We are under no illusions about the significance of what we are proposing,” Petersen said.
“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.”
MP for Tukituki Catherine Wedd said it was “amazing news” for Hawke’s Bay.
“It unleashes so much economic potential and will create more jobs and opportunities. It also enables growers to grow higher-value crops, which opens up more choice,” Wedd said.
She said the government was investing in water security for the future of Hawke’s Bay.
Last year, Hawke’s Bay Regional Council announced it preferred the development of a smaller $225m 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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