Environmentalists are accusing Hawke's Bay Regional Council of being irresponsible in continuing to develop the Ruataniwha Dam when it has no plan to comply with resource consents it has been granted.
On Friday, the Board of Inquiry into the dam confirmed strict limits on the amount of nitrates that can leach into waterways as a result of farming activity while also pointing out most of the catchment already exceeds that limit.
Hawke's Bay Regional Investment Company (HBRIC) chief executive Andrew Newman said the council would push ahead with building the dam anyway because it did not have to comply with those nitrate limits until 2030.
Nitrates leaching into waterways from livestock farming and fertiliser have turned many New Zealand rivers and lakes toxic, so to prevent this happening in the Tukituki catchment, the board of inquiry set a limit on the concentrations of nitrates in waterways at 0.8 mg/l.
Mr Newman said the board had acknowledged those nitrate limits were already exceeded whether the dam went ahead or not.
"The board itself, not us in this instance but the board, has explicitly noted that if the RWSS (Ruataniwha Water Storage Scheme) were to comply with that, the consents would be frustrated," he said.
"It (the board decision) gives us good confidence we can continue on with other material elements of the deal that includes water contracting and capital raising. We are looking forward to moving on."
But Massey University freshwater scientist Dr Mike Joy questioned how the council could continue developing the dam, saying there was nothing on the horizon to stop nitrate leaching apart from expensive options such as taking cows off pasture into sheds, and even then that would solve only a small part of the problem.
Even without the dam going ahead it was likely nitrate levels in waterways will get worse not better because the toxin can take decades to reach waterways.
"So you are going to have a worsening situation going into 2030 even with the status quo. It is very dangerous ground they are treading now," he said.
Dr Joy said the council was being irresponsible in pushing ahead with the dam, and was asking farmers to put themselves at "incredible risk" by financially committing to the irrigation scheme.
Forest and Bird lawyer Sally Gepp said the Board of Inquiry had given the council the power to force farmers to reduce how much nitrogen they could allow to leach into waterways in the future, which could mean farmers have to cut back production.
"Certainly they will need to know they are in a robust enough position in terms of having enough headroom with the nitrogen limits that they have, that they can make addition reductions if necessary.
"Whether that makes it feasible for them to sign up or not will be an issue for them," she said.
Ms Gepp said in its early submissions to the Board of Inquiry, the regional council had stated the task of reducing nitrogen in waterways, even before the dam was built, would be 'formidable.'
Fish and Game Hawke's Bay manager Pete McIntosh said farmers were in a difficult position because they would sign a 35 year contract to buy water, but 10 years in they might be required to reduce production to meet environmental regulations.
Mr McIntosh said this highlighted the Hawke's Bay Regional Council's massive conflict of interest.
He said the regional council was the developer who wanted to build the dam and sell water to make money, but was also the environmental regulator tasked with strictly controlling nitrate levels in waterways.
"And when the levels are starting to get up, their option is to turn off the water but why would they want to turn off the water of this infrastructure that they own to get the nitrogen levels down when they are trying to sell this water. It's just wrong," he said.
Parties have until 18 May to make comment on any minor or technical aspects of the Board of Inquiry's decision before it becomes final.