Hawke's Bay Regional Council has appointed independent consultants to assess the business case for the Ruataniwha water storage scheme and identify and evaluate alternative investments.
The council initiated the scheme, which would supply water to about 25,000 hectares of land from a dam on a tributary of the Tukituki River.
It's seeking consents to build the 83-metre high dam and make associated district plan changes.
The regional council is also considering investing up to $80 million in the scheme through its own investment company.
It will consider the business case for the scheme later this month.
Before making a final decision, though, it's commissioned a peer review from the accountancy firm, Deloitte. That will look at the financial feasibility, the return on investment and the risks.
The council has also contracted another consultancy firm, Nimmo-Bell to evaluate possible alternative investments.