WARWICK SMITH/STUFF

Regional development minister Shane Jones has warned Opotiki that the sky is not the limit when it comes to government investment in its harbour development.

Plans for a $145 million harbour development in the eastern Bay of Plenty have been written off by the government as too expensive.

Regional Development minister Shane Jones told the Opotiki council and local iwi on Friday that the crown would not pay for such a "fiscally gagging" project.

"I acknowledge this is not the news Opotoki wanted to hear, but at the end of the day, as regional development minister, I am on the hook for quality stewardship of the billion dollar fund," he said. The regional development fund was negotiated as part of Labour's coalition agreement with NZ First.

Opotiki Mayor John Forbes said the decision was not unexpected, and wouldn't put an end to the region's mussel farming expansion aspirations.

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The project would have helped expand deep sea mussel farming off the coast of Opotiki by making the harbour usable by larger vessels year-round, boosting employment in the poverty-stricken region.

Forbes explained the development as a "river channel giving access to the ocean" made via a groyne, and said it would have a been owned by the region's 4000-odd rate payers.

He said the proposed plan's hefty cost was due to it being earthquake-proof and "very low maintenance".

"We're mindful of protecting our rate-payers, and they cannot afford something that will require millions of dollars to maintain every few years," he said.

Different ownership – willing and able to foot maintenance bills – would allow for a more affordable development.

"It's just a matter of re-configuring," said Forbes.

Jones said an independent board of advisers had warned him the project was too risky to go ahead with at $145 million.

"It's often the case in these infrastructure projects that when stakeholders realise the crown is paying, they mistakenly think the sky is the limit," he said.

"I naturally am suspicious whether the engineers and other supporters have explored alternative options." 

He said the council was welcome to liaise with engineers from his advisory board to "investigate scope for such a project to be delivered at a far more digestible fiscal level".

"We do remain willing to continue engaging in related projects, to expedite development of deep sea mussel farming off the coast of Opotiki."

 - Sunday Star Times