Environmental groups are warning the Ruataniwha Dam has become more risky for farmers looking to buy water after the Board of Inquiry tightened the rules on nitrogen leeching.
After over a year of hearings, deliberations and a High Court challenge, the Board of Inquiry released its final decision yesterday.
Nitrogen leaches into waterways from livestock urine and fertilizer and is responsible for the severe degradation of a significant number of waterways in New Zealand, according to scientists.
The Board of Inquiry said with a large part of the catchment already over the nitrogen target, Hawke's Bay Regional Council would have to demonstrate it was bringing those levels down by 2030.
Fish and Game New Zealand said it was pleased with the decision, describing it as a significant victory.
Environmental manager Corina Jordan said the board had tightened the rules around nitrogen leaching, with a tougher monitoring regime in place.
She said a large part of the catchment already exceeded the nitrogen target so it appeared there was little room to further intensify agriculture with the dam.
"This is something that the farmers will need to consider. Our information is it will increase the cost on the farmers," she said.
Ms Jordan said Hawkes Bay farmers had been told by the dam's backers that if they invested in the scheme, they would be exempt from complying with the nitrogen limits.
She said the Board of Inquiry had made it abundantly clear that simply was not true.
"I would say its highly risky at this stage because the farmers will not know what stringent environmental conditions will be imposed on them in the future. All they will know is they will be more stringent than what is currently written into that consent," she said.
Environmental Defense Society chairman Gary Taylor said the intensification of farming under the water storage project would create much more nitrogen pollution, not less, so it was hard to see how there was room for the intensification of agriculture.
Mr Taylor said if the nitrogen target was not reducing, the board had given groups the power to take court action to enforce the consents.
"What we looked for is if the situation developed for some reason where the council didn't enforce the conditions could we bring enforcement actions against it and the quick answer appears to be 'yes we could,'" he said.
Mr Taylor said it came down to whether individual farmers were prepared to put their personal dollars on the line for something as speculative and uncertain as the dam.
Andy Pearce, who chairs the regional councils investment company HBRIC, which is developing the dam, said it was good to get some finality in what had been an extremely long and involved process.
Dr Pearce said the final board decision was not a lot difference from the draft.
"And we thought the draft decision was workable and we think this final decision is workable from our perspective as well," he said.
Dr Pearce said HBRIC was pushing ahead with developing the dam, but would make no further comment until the 15-day appeal period had ended.
And Federated Farmers' Hawke's Bay president Will Foley said farmers who had signed up for the scheme remain committed to it.
"They believe very much so that this is a workable consent, that's what the High Court judge instructed the board - that whatever changes they made couldn't frustrate the consents of the dam project, so farmers are very keen to still go ahead."
Irrigation New Zealand board member Hugh Ritchie, who farms at Otane, believes Central Hawke's Bay will benefit economically.
The council still has not met some of its own conditions set for construction to begin, including having enough farmers signed up to buy the water and no big investors to replace Trustpower and Ngai tahu, which pulled out last year.