Drainage Loans Position Better

Press, Volume CVIII, Issue 31662, 24 April 1968, Page 18

Drainage Loans Position Better

A marked improvement in the amount of loan money available for works was reported to the Christchurch Drainage Board last evening by its secretary (Mr T. A. Tucker). He said that in the year to March 31 the board had raised $2,292,250, compared with $781,360 in the previous year.

“At this time last year, a very serious position had arisen because of the rapid depletion of loan funds, resulting in a temporary transfer of $401,080 to bring the loan account to credit,” he said. This meant that the transfer had to be repaid before any new contracts could be let, and, in addition, the board faced the prospect of re-financing a record sl.4m of renewal loans. A $400,000 table loan launched last April had been filled, and the loan position, after the announcement of new interest rates, was such that by June, it had been possible to resume letting contracts. Since then, a steady stream of work had been put out to tender in the knowledge that a June loan of $400,000 and an October issue of $250,000 would be underwritten.

Mr Tucker said that a $250,000 issue in February would be successful, and a $400,000 issue next month would be underwritten. Where, last year, the board was $600,000 short on its

commitments on contracts, the board at March 31 had $602,895 in cash to meet commitments of $737,579. The board authorised the raising of an $850,000 sewerage loan, and of another $220,000, being the balance of a $700,000 sewerage loan authorised in 1965. Mr Tucker said the Loans Board had reduced the term on the $850,000 loan from 35 to 30 years. This would mean a saving of $186,362 in charges.

The board was always exposed to the vagaries of the investing public and other means should be found to finance the work, said Mr J. F. Davidson. The board’s service must never be put in jeopardy from lack of money. An alternative might be Reserve Bank finance.