The hunt is on for alternative investors in Hawke's Bay's controversial Ruataniwha dam after keystone investor Trustpower pulled out of the project.
Trustpower and Ngai Tahu signed a memorandum of understanding with the Hawke's Bay Regional Council last year to look at investing more than $100 million in the water storage project.
Trustpower pulled its investment of more than $50 million on Thursday, telling the Stock Exchange its investment is not possible within its risk-and-return framework and the returns it expected to get would not be high enough to recommend the investment to shareholders.
Ngai Tahu Holdings Corporation chief executive Mike Sang said the Ruataniwha water storage scheme has a number of components key to its success, including commercial criteria and the involvement of the right investment partners.
Mr Sang said Ngai Tahu is working through these issues with the Hawke's Bay Regional Investment Company and other parties, and participation will be dependent on these matters being satisfactorily addressed.
Tom Belford, a Hawke's Bay regional councillor and self-confessed sceptic of the project, said the fact Trustpower has pulled out could create a domino effect on other investors. He said Trustpower is a knowledgeable investor and its withdrawal will make others question whether they would want to be involved.
However, regional council chair Fenton Wilson believed it is an opportunity for local investors to get on board. The council's investment company said it has been talking to other investors and negotiating on a confidential basis.
Irrigation New Zealand is calling on farmers and businesses in Hawke's Bay to quickly jump on board and fill the investment gap. Chief executive Andrew Curtis said the central Hawke's Bay is in desperate need of jobs and an economic boost, and it is time for the community to take ownership of the project and drive it.
Much will rest on what happens with the business case for the entire $600 million storage project, which councillors have voted to send to Deloittes for an independent review.
Meanwhile, a board of inquiry's draft findings on the dam's impact on the Tukituki River will be reported to the council in April. Farmers say they want to see those findings before making a decision, because supporting the dam will likely mean significant on-farm costs.