September start for Ruataniwha?

This is the message from Andrew Newman, chief executive of the Hawke's Bay Regional Investment Company.

"If everything went unconditional and we had the small amount of DoC land we need, things would start immediately after financial close – probably September," he told Rural News.

"That remains speculative. We have to finish the financing condition and resolve residual issues."

In the development phase the company needs to meet four conditions for the council to approve $80 million development funding, Newman says. These are consents, sufficient water contracted, a construction contractual form which allocates risk correctly and the financing. The first three have been met and the company is now confirming financing conditions with the council.

"We are right in the middle of closing out now; we are probably about six to eight weeks away from doing that," he says.

A big push on signing up farmers and growers in March and April resulted in numbers in "pretty reasonable shape". They expect to contract more water and will give it another push before the end of August.

The cost of the dam, distribution network, pipes, pumps and the canals and development is about $340m. It will take about three and a half years to complete.

The scheme will be a 93m cu.m reservoir on the upper Makaroro River, storing water during winter. Water will be released from the reservoir to improve river flows in the Tukituki catchment in summer for river life and for irrigation.

The council condition was that 40m cu.m had to be signed up by farmers and growers; at the time of speaking to Rural News they had 42.6m cu.m. Contractual negotiations in process will take them to 48-49m cu.m. Signatures now total 190, a number expected to grow a lot in the next few weeks.

There are 30-odd land transactions involved. A couple of private land deals are yet to be concluded and that is happening now, Newman says.

Beyond that they have a land exchange with DoC, which has agreed to it, but Forest and Bird has run a judicial review process. It first went to the High Court which found in favour of the land exchange. Forest and Bird has now taken that to the Court of Appeal; the decision is pending.

In addition to the $340m in dam and distribution infrastructure costs, the amount of onfarm development capital required will depend on use of the scheme. If there was 4000ha or more of intense, permanent horticulture like trees and vines, a total of $550m could be needed extra to off-farm capital. But that would be funded by irrigators and landowners.

If the land were not so horticulture-intensive, those onfarm costs may total about $350m but it depends what land use emerges.