Comalco says Govt asking too much

Press, 18 February 1977, Page 3

Comalco says Govt asking too much

PA Wellington | I Government moves to inI crease the price of electricity i supplied to the Bluff alu- | minium smelter seem to be 'at an impasse. Since October Govern-; Iment officials have had three; meetings with representa-j lives of Comalco, Ltd, which' owns 50 per cent of the) smelter and manages it for the other Japanese partowners. A meeting on Munday seems to have clarified the negotiating positions of both parties and highlighted their major differences. Government officials in the! negotiations have refused to , comment on progress, but ( the corporate manager of , Comalco in New Zealand > (Mr M. B. Bennett) yesterday criticised Government proposals for a major increase ; in the price of power supplied to Bluff, and for what : he says would amount to a , rewriting of the agreement ; under which Comalco works in New Zealand. Mr Bennett said the officials’ committee had proposed that the cost of elec- 1

I tricity supplied to the smelI ter be increased by 600 per cent. This would add about S27M to the cost of running the smelter, he said. Other proposals included I provision for increasing i power charges in the future. ; Cost increases of the order j proposed might seriously j jeopardise the future of the | Bluff smelter, he said. Comalco had come to New Zealand because it could getj cheap electric power from; the power station at Lake; Manapouri, and this outweighed disadvantages such as the cost of transport. I “Whatever price we pay j for power has to keep us competitive in a highly competitive world aluminium market, and there is a point past which we cannot go.” Mr Bennett said Comalco was quite happy with its existing agreement, worked out! during the 19605, which tied; the price of power to the I cost of building the Mana-1 pouri power station, and j allows for cost increases re-, lated to the running of the; station. The company acknow- I ledged that conditions had!

l-lchanged in New Zealand r’ since the 19605, and had ;t| been prepared to talk about i- the possibility of increased power charges. It had in fact j made- the first moves by go- „ ing t 6 see the Prime Minister , (Mr Muldoon) last July and " again in September. But the * proposals of the officials'! (committee which was negotie lating for the Government " went right outside the terms "I of the existing agreement. N “You don’t invite someone; I to your house and then' 5 I change the whole basis of I " the invitation. A huge in-j I dustry 7 like this one cannot’ be established on shifting’ ■’ sand.” Mr Bennett said. > The officials who are' ■ negotiating on behalf of the) i Government are the Com-! c missioner of Energy Re-: ’ sources (Mr R. J. Hogg), the! > general manager of the Elec- - tricity Department (Mr P. W. II Blakeley), a representative of lithe Prime Minister’s Departs I ment (Mr G. H. Datson), the ■ | Deputy Secretary (Internal) 11of the Department of Trade] - and Industry 7, and Mr S. C. :(Parker, a Deputy Secretary) of the Treasury. Mr Parker; •j is believed to be the chair- j I !man of the committee.