Luggate dam put on hold by Govt

Press, 19 June 1987, Page 6

Luggate dam put on hold by Govt

By

OLIVER RIDDELL

■ .JXrJmd’PA*-

The Government has deferred any decision on building the planned Luggate "dam on the Clutha River and will-leave any future - decision to the Electricity Corporation.

Generating any power from Luggate might not be;needed for another 23 years,* said the Minister of Works and Development, Mr Colman, and the Minister of Energy, Mr Tizard, yesterday. In general terms, they -said, proceeding now would be a waste of national resources. The Cabinet’s decision was . confirmed by yestermeeting of the Labour Party caucus. It was based on an analysis by" the Electricity Corporation and a report from The Treasury. Both documents concluded that Luggate was not likely to be economically or commercially justified until some years into the next century, the two Ministers said. The best development path favoured North Island thermal and geoth-

ermal development some increase in the capacity of the inter-island link migbt be desirable before the end of the century, but a large expansion of 1600 megawatts would not be profitable until the planned replacement of the existing link in 2006.

The Ministers said the Government would neither direct nor enter into a contract with the Electricity Corporation to proceed with the project. If work began now it would be built by 1993-94 at a cost of $250 million. But the Electricity Corporation had said the earliest it would need power from Luggate would be 1997-99, and more likely not until well into the next century.

There were indications it might not be needed until 2010, 23 years from now, the two Ministers said. If the dam was built now then most of the water trapped would have to be spilled and the energy could not be used.

The general secretary of the Workers’ Union, Mr Dan Duggan, said the workforce would see the

decision as a breach of promise on the Government’s part “Our members on the Clyde workforce are going to be affected by it Their job security is going to be in tatters. They thought they had work for about 20 years. That is not now the case,” he said. "We. have to admit that while we fought the whole battle along the way to try to save the jobs, I think we have done the best we could under the circumstances, right to the bitter end.”

The Government recognised the social problems for the almost 400 staff working on the Clyde dam who would be affected, Mr Tizard said.

There was still work to do at Clyde, and the State Services Commission’s social impact unit would be “on site” today. The, Electricity Corporation had been instructed to begin a study on how to provide for the resumption of the hydro programme in the future.

Mr Tizard Said there were other issues to be considered, such as the number of jobs lost at

Huntly if the Luggate dam was commissioned early. Early commissioning could mean a reduction in the amount of coal needed by up to 100,000 tonnes a year.

“This would save the Electricity Corporation’s operating costs, but would reduce coal production in an economically inefficient manner and create difficulties for the Coal Corporation in terms of planning and employment,” Mr Tizard said.

If the dam was commissioned early it would “further inhibit” the development of a competitive power industry. The amount of excess capacity already in the system had inhibited the entrance of non-corporation generators.

The president of the P.S.A., Mr Colin Hicks, said there were a number of very powerful reasons why the dam was needed now.

“One of the strong arguments we have pressed is the need to maintain a strong public works team on the hydro side to have a knowledgeable expertise workforce there.”