Dunedin plans campaign to attract industry

Press, 26 October 1982, Page 16

Dunedin plans campaign to attract industry

PA Wellington Dunedin businessmen plan a continuing campaign to attract fresh industry to Otago in an effort to prevent their children leaving the region in a search for jobs. The Mayor of Dunedin, Mr C. G. Skeggs, said that there was initiative in the city. “You can rest assured we are working to develop our city for the benefit of our children," he said. The president of the Otago Chamber of Commerce, Mr A. A. Futschek, said that the decision to shelve the Aramoana smelter did not come as a surprise, but he was disappointed at the loss of opportunity for the region. The smelter would have had an immediate impact on Otago through the injection of large amounts of money into road construction and housing. “The smelter combined with the Clutha development would have had a fantastic impact on Otago businesses and would have made a lot of Dunedin parents happier, because their children would not haye to leave Otago to seek jobs elsewhere,” he said. “But it is not the end of the world. Dunedin is fairly resilient. It will have to look closely at itself and find other ways of developing its resources.” He said it was accepted that in the present world economic climate no financier in his right mind would put money into something like • the smelter, when it could not see the viability. ■ Mistakes proposing an excessive number of aluminium smelters had been made world-wide, a Massey

University economist. Professor Paul Van Moeseke said. "No fewer than five smelter projects have now been cancelled or mothballed in Australia and New Zealand alone," he said. The planning expense, and in some cases the actual construction expenditure, is in some cases, staggering.” Professor Van Moeseke, professor of economics at Massey University and a recognised world authority on the economics of smelter production, welcomed the Government’s decision to shelve the second smelter at Aramoana. “It has been clearly shown that the second smelter was uneconomic because we do not have the competitive advantages of cheap power, sufficient capital or investment market or the bauxite," he said. But he said that it would be a “grave mistake” to think that the second smelter was uneconomic only because of the world collapse in the world aluminium market. “The second smelter was uneconomic in the long run,” he said. “I strongly urge the application of the principle adopted in the recent energy plan and the Budget — that the long-run cost of power should be decisive. “I’m glad the Government is gradually coming round to that.” Events had shown that it had been wrong to go by the market situation of the time instead of long-run planning. “When my 1980 and 1981 reports, opposing the smelter, came out I was derided for taking long-run plans rather than the acci-

dentally high prices at that time." he said. “Events have clearly vindicated my analysis, both as to the methods and to the data. “To prevent such mistakes in the future I have proposed to the chief executives of all major aluminium companies, at the world aluminium conference in Monte Carlo, as a

concrete measure toward the new international economic order, that either the World Bank or the United Nations International Development Organisation, objectively assess and publish the real social cost of power development in all potential host countries, including Australia, Brazil and even New Zealand," said Professor Van Moeseke.