Comalco withdraws

Press, 5 November 1977, Page 1

Comalco withdraws

PA Wellington The latest round of talks between Government officials and Comalco had broken down with the withdrawal from yesterday afternoon’s meeting by Comalco representatives, said the Minister of Electricity (Mr Gair) last evening. Expressing disappointment about the apparent stalemate, Mr Gair said the major point made by Comalco throughout the afternoon meeting was an allegation of its inability to pay the Government’s asking price for power. “Comalco’s general manager of special services (Mr I. F. Borrie) asked whether Government officials would accept Comalco’s audited figures, explaining that the answer to this question was most important to him,” Mr Gair said.

“Officials replied that they accepted Comalco’s figures as being audited but could not give an unqualified answer without an opportunity to analyse them. "Mr Borrie insisted on a simple yes or no answer.

“Officials were not prepared to give such an answer, and the Comalco representatives withdrew. “I am most disappointed that Mr Borrie chose to take this course of action and hope that after reflection and the opportunity to consult with his board he will see fit to rejoin Government officials in further discussions,” Mr Gar- said. Comalco officials later confirmed that the talks had broken down over the audited accounts issue, but said that talks might once again resume next week. The Government’s hardline attitude on power prices for the Bluff aluminium smelter will not soften, according to the Prime Minister (Mr Muldoon) speaking at the opening of the new National Party headquarters in Invercargill yesterday. Comalco was the" only power user in the country that got its power at less cost than the wholesale bulk-tariff prices. It was, in fact, “only a fraction” of the tariff prices. In the first six months of this year Comalco recorded a profit of S2OM, compared with SB.SM for the same period last year.

Government authorities had investigated all the costs, and had come to the conclusion that “they can stand a substantial increase in price. “There are no ifs or buts about that,” Mr Muldoon said. Mr Muldoon firmly believed the smelter would not close down if the price the Government was asking was not reduced. However, in the unlikely event that Comalco withdrew, he was sure another aluminium producing company would be willing to take it over. Comalco is believed to have offered a 300 per cent increase, while the Government is reportedly asking 600 per cent. Somewhere between Comalco’s offer and what the Government asked was a reasonable, fair price, Mr Muldoon said. Negotiations, had been drawn out over the last year without result, at a cost to New Zealand of more than SIM a month on the Government’s asking price. “We want finality within the next six weeks,” Mr Muldoon said.