Manapouri costs and benefits

Press, Volume CXI, Issue 32777, 30 November 1971, Page 14

Manapouri costs and benefits

Sir, —Your leading article endeavours to explain the findings of the three economists employed by Comalco who arrived at supposed benefits from the industry ranging from s33om to minus so.sm, according to unknown future interest rates. They neglected the most important factor. The plain truth is that the Government gave away to foreign interests for 100 years the last remaining block of cheap hydro-electric power in the world at a bargain price of about 40 per cent of that which it has to charge supply authorities for sale to the people. Simple arithmetic, and official data prove that the people will have to pay at least sll,ooom more for their power for the term of the agreement because this cheap power is denied to them. It does not really matter which of the economists’ figures you choose —the huge loss is not reduced much.—Yours, etc.,

H. G. ROYDS November 28, 1971.

[The institute’s report says: “Obtaining the electricity calls for miles of tunnelling under the mountains, the costs of which have made it difficult to find an economically viable use for the electricity produced. The ordinary pattern of demand in the national grid, being variable, is unfavourable for economic development of Manapouri. Distance from New. Zealand’s major load centres was a compounding factor. Suitable market conditions were eventually created by discovery, at the northern tip of Australia, of one of the world’s largest single deposits of bauxite. . . . Extraction of aluminium takes place in two steps, the second of Which is high-temperature electrolysis demanding enormous amounts of electricity. As the process continues uniformly day and night, 365 days a year, it creates that unique pattern of demand for electricity that allows minimum cost development of Lake Manapouri’s hydro-electric potential.”—Ed., “The Press.”]

Sir,—You accept the economist’s report at face value. The basis of this report seems to me too narrow; thus it lacks the ring of truth. No economist can predict What price Comalco will pay for electricity. There is a clause in the agreement providing that in the event of unforeseen circumstances the price of electricity may be reduced. Tliis clause has already brought the price down dangerously low. Economists might hesitate to estimate the date by which Comalco will get electricity free, or the date by which they would claim a subsidy for using our power. I think the Government that agreed to that clause and some others should rank with the Government that imported rabbits. —Yours, etc., ARTHUR LUSH. November 28, -1971.