A bid to build a dam in the shadow of the failed Ruataniwha scheme in Central Hawke's Bay has been given a $3 million injection from the Government.

The money will be used to find out if the massive project to store water on the Makaroro River is viable — commercially, environmentally and technically.

Regional Development Minister Shane Jones said the perilous state of water security and resilience in Hawke's Bay could no longer be ignored.

He announced at the Regional Growth Summit in Hastings on Friday that a grant would come from the Regional Infrastructure Fund for the pre-construction development of the Tukituki Water Security Project in Hawke's Bay.

The project was being co-funded by the Tukituki Water Security Project (TWSP), although it was not immediately clear how much it was pitching in.

"Climate change is leading to depleted water, higher temperatures and frequent droughts," Jones said.

"The people, communities and environment of Hawke's Bay need to have a safe and reliable water supply. Doing nothing is no longer an option," he said.

Various attempts to get the dam off the ground have been mired in controversy since it was first supported by Hawke's Bay Regional Council (HBRC) almost a decade ago.

It was eventually abandoned by HBRC in 2018 after a Supreme Court finding against it, and the $20 million it had spent on development went down the drain, with the consents then sold to Water Holdings Hawke’s Bay Ltd, a group of local farmers.

For several years, hopes of reviving the project appeared slim, with the consents set to expire in 2025.

However, amid Prime Minister Christopher Luxon’s desire for dams around the country, the project got a big boost from the Government when it included in a list of things being considered under fast-track legislation.

On October 31, at a Central Hawke’s Bay Council meeting in Waipawa and amid backlash from some in the community, the council voted to endorse a Hawke's Bay Community Water Trust Deed that could also help pave the way for the dam to be revived.

The purpose of the Hawke's Bay Water Trust and its draft deed is to explore water security in Central Hawke’s Bay, and initiatives that could help it — including a large-scale dam.

TWSP spokesperson Mike Petersen welcomed the Government’s leadership and support in allocating the grant to help enable the next phase to creating an intergenerational water infrastructure asset for the Hawke's Bay region.

Petersen said a dam was commercially viable.

"The reality of growing water deficits, and the wider regional benefits of improving river and community health in the face of drying weather patterns from climate change, demonstrates the importance of this project for our proud food-producing region," Petersen said.

"Every year billions of cubic metres of fresh rainwater washes into the Pacific Ocean from our rivers."

“This project will one day see less than 2% of this captured, stored and delivered in a manner that pays respect to our waterways and surrounding environment, in balance with protecting the long-term viability of the food and fibre industries that underpin our region,” he said.

LDR is local body journalism co-funded by RNZ and NZ On Air.

By Linda Hall for Local Democracy Reporting