Media Release – Hawke’s Bay Regional Investment Company Ltd

29 July 2015

Council approves ‘condition precedent’ on consent for water scheme

Hawke’s Bay Regional Investment Company Ltd (HBRIC Ltd) today updated Hawke’s Bay Regional Council (HBRC) on the progress of the Ruataniwha Water Storage Scheme and the Napier Port revaluation.

Ruataniwha Water Storage Scheme

HBRC approved HBRIC Ltd’s recommendation to accept that workable resource consents have been granted, being the first of four ‘conditions precedent’ to be met for the scheme to proceed.

The scheme passed a major hurdle earlier this month when the High Court confirmed there were no appeals to the environmental consents for the scheme issued by the Board of Inquiry. This means those environmental consents are now confirmed.

Water Uptake

To date farmers have signed up for just over 20 million cubic metres of water, with a further 15.7 million cubic metres in the contracting process and another 21.9 million in negotiation. 20% of the water signed up is for deep water transfers.

Current projections suggest the $275 million Ruataniwha Water Storage Scheme will be able to supply water to 27-28,000 hectares of land, create 2,250 new jobs and inject millions of dollars into the Hawke’s Bay economy.

Approximately 23% of potential irrigable properties are not proceeding, however it is expected a number of these may irrigate under future new ownership.

HBRIC Ltd continues to see active interest from external parties interesting in moving into the area to farm and it expects this activity to increase now the BoI consenting phase is complete.

HBRIC Ltd wants to sign up 45 million cubic metres of water by November to meet the water uptake condition for the scheme to proceed.

Design & Construction

The OHL-Hawkins consortium is preparing to undertake a price revalidation, which is expected to be complete by September.

Investors

Engagement with investors is ramping up with the preferred investors expected to be presented to council in October to meet the investor condition for the scheme to proceed.

Final Decision
HBRIC Ltd plans to make a final decision on whether the scheme will proceed before the end of the 2015 calendar year.

Napier Port Revaluation

The value of Napier Port shares has increased by $61 million in the last three years. Deloitte has undertaken a revaluation of Napier Port shares. It set the value between $219.4 and 257.4 million. The HBRIC Ltd Board has recommended adopting a mid-point value of $238.4 million, up $61 million from the 2012 valuation.

HBRIC Ltd says the valuation continues to reflect very positively on the performance of the Napier Port Board, senior management and staff at the port.

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