.png)
Tim Gilbertson, CHB Farmer,and 50% shareholder of Water Holdings Hawke's Bay Ltd.
Explainer: Water Holdings Hawkes Bay Ltd. Science Charges
Q: What are Water Holdings Hawkes Bay asking the Regional Council to do?
A: Water Holdings Hawke’s Bay Ltd. own the consents to build the Ruataniwha dam, which accrue annual ‘science charges’. They are asking the Regional Council to ‘defer’ collection of current outstanding and future charges until the consents can be exercised.
Q: How much money is involved?
A: As of August 2022 Water Holdings Hawkes’s Bay owe $383,000.00 – they haven’t paid their science charges for 2 ½ years! The last time they were paid was for the 2019-2020 year (charges fall due each March) and that year CHB District Council ratepayer’s paid their charges. That was the start of ratepayer largesse for this private company.
Q: What does it mean to ‘defer’ this debt?
A: Water Holdings Hawke’s Bay are asking that the charges be deferred until the Ruataniwha dam can be built. This assumes that the dam will be built. There is no provision for repayment if the dam is never built. The science charges for the upcoming 2022-2023 year will be another $157,000.00 (i.e. $417,000.00 total will be owned by March next year), and will continue to accrue at a similar amount each year.
Q: So, who will pay if Water Holding’s Hawkes Bay are let off the hook?
A: You guessed – ratepayers will pick up the tab to subsidise a private company who hope to profit from a $100,000 investment! The Regional Council will need to borrow $383,000 to make up the budget shortfall, at 3.5% p.a. (i.e. incurring $13,432 interest charges).
Q: When might the consents be exercised?
A: The consents and intellectual property apply to the Ruataniwha dam so they can’t be used for any other purpose. The only way the dam can be built is if 22 ha. of Department of Conversation land in the Ruahine Forest Park has its conservation status revoked, so it can be flooded. This would require a local member’s bill to be passed in Parliament, and it is far from certain that such a bill would pass.
Q: Will ratepayers get a say in the Regional Council’s decision?
A: No. Regional Council staff have decided that the potential financial implications of this decision is ‘low’ according to the criteria in Council’s ‘Significance and Engagement Policy’ (every local body Council must have one of these). This means that ratepayers don’t need to be consulted.
Q: What can I do?
A Since ratepayer’s have been shut out of the decision-making process, Wise Water Use are asking supporters to attend the meeting in Napier this Wednesday 31st at 1:30 pm to ensure that Councillors are aware of the public interest in how they vote. Meanwhile, you can contact your local elected regional Councillor and express your concern by going to the HBRC website and clicking on the link to your Councillor.
More about the ‘science charges’ …
Q: What are ‘science charges’?
A: The Regional Council incur costs in developing the science needed to work out what water is available in the catchment, and how much to give out, and to then monitor the use of the water once a consent is granted. They pass on a part of these costs (35%) to consent holders by charging them ‘science charges’ each year.
Q: Who pays science charges?
A: When someone successfully applies to the Regional Council for a permit to take water they are granted a right, or ‘consent’. There is no cost levied to obtain the consent; however, the ‘consent holder’ must pay ‘science charges’ to the Regional Council each year that they hold the right to take water.
Q: How are science charges calculated?
A: The Regional Council work out each year how much money they have spent on science and monitoring costs, and then divide this among the number of consent holders in Hawke's Bay. They look to recover 35% of their costs from levying science charges. The science charges vary each year, depending on (i) Regional Council costs for that year, and (ii) number of consent holders.
Q: Who owns the consents for the water that would be needed to fill the Ruataniwha dam?
A: The Ruataniwha dam consents are owned by a private company, Water Holdings Hawkes Bay Ltd. (WHHB). This company comprises 6 shareholders made up of CHB farmers and business persons. You can find information about WHHB and its shareholders on the NZ Companies Register, here.
Shareholders are:
1. Timothy Edward Gilbertson (50%)
2. David Hugh Ritchie (15%)
3. Bruce M Worsnop (Ruataniwha Water Company Ltd.) (10%)
4. Gavin George Streeter (10%)
5. George Bruce Stephenson and John Lawrence Armstrong) (10%)
6. Estate Arthur Rowlands (5%)
Q: How did Water Holdings Hawke’s Bay Ltd. get the Ruataniwha consents?
A: The Regional Council (more accurately, their investment arm, Hawke's Bay Regional Council Investment Company (HBRIC)) sold WHHB the consents, along with the intellectual property (i.e. the plans to build the Ruataniwha dam), in 2018. This followed a decision by the Regional Council to no longer proceed with the Ruataniwha dam, after a 2017 Supreme Court ruling that it was illegal to remove the conservation status of 22 ha. of Department of Conservation (DOC) land in the Ruahine Forest Park.
Q: How much did Water Holdings Hawke’s Bay Ltd. pay for the Ruataniwha consents?
A: The company paid $100,000.00 for the consents and intellectual property rights for the Ruataniwha dam. The Regional Council had spent upwards of $20 million ratepayers’ money in developing the intellectual property and consents.
Q: What volume of water do the Ruataniwha consents allocate for a dam?
A: The volume is huge. The Ruataniwha dam is consented to store 104 million m3 water. This is more than the total groundwater take from all users in the Heretaunga Plains in any given year.
Q: Could Water Holdings Hawke’s Bay cash in on their consents?
A: Yes, absolutely. This is what the Regional Council call an ‘option value’. An option value is the potential benefit the holder of the consents would get if the Ruatanihwa Dam was built. The consents for the water needed to fill the dam would become very valuable, and return a tidy profit to WHHB shareholder’s on their $100,000.00 investment.
Comments