POWER BOARD ASSETS.

Auckland Star, Volume LXIV, Issue 150, 28 June 1933, Page 11

POWER BOARD ASSETS.

DEPRECIATION RESERVE. VIEWS OF MINISTER. "Legislation dealing with the matter •allows, the amount to be provided for depreciation in any year to be reduced by the amount of sinking fund on loans found in that year," stated tlie Minister of Public Works, the lion. John Bitcliener, in reply to the Franklin Electric Power Board's representations urging a limitation of the amount that power boards may be called upon to accumulate as depreciation provision. The Minister, in his letter read at yesterday's meeting of the board, said lie noted that the board recognised the difficulty of fixing a statutory percentage suitable to all cases. The scale of depreciation requirements was based on the average estimated life of different classes of assets if maintained in proper running order, so that, theoretically, the total provision, with interest added, would be sufficient only to meet the cost of renewing those assets when they were worn out or obsolete, and the boards wero not really compelled to find full depreciation and also linking fund as well. The object of the existing law was merely that when major renewals fell due, the authorities would have tlio necessary money out of year-to-year contributions, from revenue, instead of resorting to further borrowing or other means of raising it. The present scale had been adopted on the best advice, but possibly in the light of future experience might be found to bo too exacting, in which case the remedy would be in a revision of the scale rather than in limiting the total reserve. It seemed that the difficulty mentioned by the board was fairly adequately met bv sub-section 2. section 20, of the Electric Power Boards Amendment Act. 1027, which said that in ascertaining the depreciation to be set aside, a board might take into account any excess provision already made and proved to the satisfaction of the audit office. The board decided to pursue the question and to proceed under the section of the Act mentioned.