‘Think big would lose $400M’

Press, 20 November 1981, Page 1

‘Think big would lose $400M’

PA Wellington If the Government’s three “think big" projects proceeded simultaneously, New Zealand’s resources would be overstretched, officials concluded in a report overviewing the projects, according to. Television New Zealand las’t evening. The net loss to the New B Zealand economy over the life of the projects would be $4OO million to $BOO million, depending on the price of oil, said a reporter, David Nicholson, on the Television One News last evening. Mr Nicholson, who sourced his information to senior officials, discussed reports on each of the big three projects — expansion of the New Zealand Steel Mill, the second aluminium smelter, and the synthetic gasoline plant — and a fourth report on the effect of all the . projects on the economy. He said this fourth report recommended that the New Zealand Steel expansion project should have been deferred because it was the most risky of the projects and required considerable government support. ■ Another reason for deferring the project was that it fell below the Government’s criterion of a 1.0 per cent return on investment. The project is the first of the big three to go ahead. The “Evening Post” said yesterday that a number of reports prepared by senior Treasury and Trade and Industry officials had cautioned the Government on the potential dangers of proceeding with the three big “projects at the same time.” These reports are believed to be the basis of the assertion made by the leader of the Labour Party (Mr Rowling) last week that the Cabinet had been advised of the "impossibility" of proceeding with three ‘projects simultaneously. Informed sources said the reports were not as strongly worded as that.