The Hawke's Bay Regional Council has voted to pull its financial support for the controversial Ruataniwha water storage scheme.
An illustration showing the site of the proposed Ruataniwha dam - before and after Photo: SUPPLIED / Isthmus Group
Councillors voted unanimously at a meeting this morning to withdraw backing for the project. The council will now be able to write off the $14 million already spent on planning and resource consents.
Councillor Niel Kirton told the meeting the council should shoot the "dying horse" and rescue ratepayers immediately.
Though the council-controlled company holding rights for the scheme will still be able to sell assets and and intellectual property in relation to it, local farmers have said they doubt the scheme will ever go ahead.
The plan to dam a large part of the Ruataniwha basin to provide water for an extensive irrigation scheme has been in the works for the past four years, but struck its biggest obstacle last month, when the Supreme Court ruled the council could not flood a large parcel of conservation land.
"I'm never happy about writing off large amounts of money, but I certainly have never been an advocate for putting ratepayers' money into this commercial scheme," Hawke's Bay Regional Council chairman Rex Graham said, before this morning's vote.
"I'm happy that it's come to this finality, but of course writing off $14m is a tragic event that we're going to have to come to grips with."
Federated Farmers Hawke's Bay president Will Foley said earlier local farmers would be gutted but could at least get on with their lives.
"They're going to have to continue to deal with the dry periods, the summer droughts that we're experiencing and expect to increase. Farmers will potentially have to farm differently to cope with those periods," he said.
"I think either way, with a definite result on the dam, farmers can go away now and make alternative decisions based on their own businesses."
Hawke's Bay Regional Council chief executive James Palmer said before the vote that the project could still go ahead if other investors stepped forward.
Subject to approval by the council, the Hawke's Bay Regional Investment Company, which holds the intellectual property for the scheme, could seek out other interested parties to take it over.
"The investment company is saying to the council 'never say never' and there is a possibility that, some time in the future, the legal environment could be different and a land swap could be provided for.
"At that point in time, it may well be that all of the investment to date in the Ruataniwha scheme has some value to somebody."
But council chairman Rex Graham said the scheme was unlikely to ever go ahead.
He said the council-owned investment company, HBRIC, which is leading the project, can on-sell the intellectual property and assets if a third party was interested in picking up the project, but he doubted that would be the case.
He said there was no point in HBRIC continuing to try and sell the idea of the dam, because it had been tried and failed.
Mr Graham said the council and ratepayers did not want to invest any more time and energy in the project.
Forest & Bird took the ultimately successful legal challenge over the land swap agreement between the Department of Conservation and the council, which would have allowed formerly protected conservation land to be flooded.
Spokesperson Kevin Hackwell said the council should ensure any potential future investors stuck to environmental guidelines already in place.
"There is a range of issues which they needed to meet, and a lot of them were environmental issues.
"We would hope that the council will insist that if the investment company is going to carry on, that it also has to meet those criteria before it can progress."