MANGAHAO.

Auckland Star, Volume LIX, Issue 266, 9 November 1928, Page 9

MANGAHAO.

IS IT AN ANSWER?

MR. COATES' STATEMENT.

MAIN POINTS EVADED

OFFICIAL RECORDS TELL A

DIFFERENT STORY.

(By TOUCHSTONE.)

There are a lot of remarkable points about Mr. Coates' reply at Shannon to "Touchstone's" recent exposure of Reform's financial white elephant at Mangahao. The most remarkable point, of course, is that Mr. Coates did not in the least answer what was said in the article. He side-stepped the whole main issue. But, first of all, let us see what Mr. Coates did say. His first statement, according to the newspaper report, was that the criticism came "from people who are not competent to criticise the project." If that is so it is a pity their criticism was not answered. Mr. Coateß next went on to say that Mangahao must be regarded as one of a number of units in the North Island hydro-electric power scheme. "Mangahao," he added, "was never intended to be a profit-earn-ing scheme b£ itself—it was a feeder station." This statement is very difficult indeed to reconcile with what Mr. Parry, then chief electrical engineer, said in his report in 1918 in recommending Mangahao. On page 9of that report (D IA, 1918) Mr. Parry said of Mangahao: ". . . There is no doubt but that at rated (for the sale of power) comparable with Coleridge the scheme would be paying all charges in a very short time." In Parliament in 1924 Mr. Wilford asked if Mangahao was going to be a loss to the Government. In his reply Mr. Coates said: "If we can sell the total supply from Mangahao we will pay interest and sinking fund almost straight away on the production plant." It will be noticed that Mr. Coates used the words "production plant." What he meant by that is not clear. But the information sought was whether Mangahao was going to be profitable. Nobody wanted to know if it would pay interest on the door knob of the powerhouse or anything of that sorf. But anyway, after a question or two more, Mr. Coates added: "At any rate Mangahao will pay interest and sinking fund if we can get sale for the total production immediately." If the three statements quoted above do not mean that Mangahao was expected to be a profitable undertaking and not a sink for the taxpayers' money, what do they mean?

But Mr. Coates has noyr gone one better than this. After saying that Mangahao was never intended to be profitable in itself, Mr. Coates goes on to say that nevertheless it has already yielded a profit: "In the year before last it earned three per cent, and it appeared that it would earn five to seven per cent before very long."

That is Mr. Coates' view of it. Mr. Coates presumably has access to information not available to the general public. The rest of us have to go by what is put in the Public Works Statement and the reports attached to it. If the facts are totally different from what are disclosed there, one can only say that the methods of the Reform Government are even more remarkable than is generally supposed. Turning to the publication mentioned for the last two years the figures set out below will be found (D 1, 1927, page 105, and D 1, 1928, page 102): — Ist year. 2nd year. 3rd year. 1026. 1927. 1928. £ £ £ Working Coats 21,865 26,921 33,914 Interest .... 92,226 98,881 106,441 Depreciation . 30,056 32,997 35,301 Total Costs .. 144,147 158,799 175,656 Revenue 76.859 101,897 44,112 Loss 67.288 56,902 131,544 On page 11 of this year's statement the loss to date onvthe Mangahao, that is, to March 31 last, is given as £255,737 4/9. The method by which Mr. Coates arrives at his conclusion that Manga- i hao has in any year been operated at a profit is obviously a totally different j method from that in which the Public Works Department officials make up their accounts. j

Mr. Coates save Mangahao "will stand the closest examination by competent men, but will not stand the amateur criticism of politicians or engineers, who, while they have the diplomas, are unreliable. I know some of those engineers," added Mr. Coatee, "will go to any length to get their own way. I know some of them would not stop at 'graft.'" "Touchstone" happens to be neither a politician nor an engineer. If Mr. Coates wishes to suggest that "Touchstone" or anybody else is looking for "graft," specific statements that can be nailed down would seem to be-in order.

As for Mr. Coates' final statement that in 1940 the hydro-electric scheme will be yielding a profit of between £7,000,000 and £8,000,000 a year, all we have to judge the value of that by is the right honourable gentleman's own statement of 1924, about what Mangahao would be doing when it started. We have now got to the end of Mr. Coates' rejoinder. It will be noticed that not one word has been said by him about the fact that the Mangahao dams alone cost more than the original estimated cost of the entire plant, which plant cost nearly three times what was estimated. It was shown that a great part of this excess cost arose in connection with the lower Mangahao dam. It was further shown that this dam was built on the assumption that a comparatively small dam across a rocky gorge would impound a body of water. It was further shown that in reality a great concrete core had had to be built across a liver terrace assumed to be solid rock, but which was actually composed of soft and loose material, incapable of retaining water. Finally, it was shown by quotation from the Government's own "Journal of Science and Technology" for March, 1921, that this fact had been publicly disclosed by a competent local geologist in January, 1921, and that no notice whatever appeared to have been taken by the Government of this vital disclosure. To all this Mr. Coates in his reply says not one word that the writer can discover in the reports of his speech.

The questions asked in "Touchstone's" article etill remain unanswered. They were: What steps were taken to ascertain that the site selected for this dam was satisfactory? Were the facta ascertained, or was the dm bmlt oa guMfworkt "—rVikiinT" j.