NOT COMPARABLE

Dominion, Volume 19, Issue 165, 9 April 1926, Page 10

NOT COMPARABLE

HYDRO-ELECTRIC COSTS WAIKAREMOANA AND MANGAHAO PRIME -MINISTER REPLIES TO CRITIC There is a tendency in some quarters to compare Mangaliao costs with Waikaremoana estimates. The Prime Minister points out that there can be no satisfactory basis of comparison unless tlie figures refer to the actual costs of corresponding services; and that the excess of cost over estimate might have been greater in the case of Waikaremoana than in that of Mangaliao had they been commenced and carried out together.

Tlie Napier “Daily Telegraph” recently published a criticism of the Mangahao hydro-electric station from the point of view of cost, and made certain comparisons of Mangaliao figures with Waikaremoaua and Lake Coleridge figures. Replying yesterday, the Prime Minister, the Right Hon. J. G. Coates, acting in the capacity of Minister of Public Works, found fault with the. Napier paper’s basis of comparison. The critic had taken costs, in the case of Mangahao and Lake Coleridge, and had compared them with estimates of cost in the case of Waikaremoana; and lie had taken on the one hand the cost of the whole system (including generating station, transmission lines, sub-stations, and a certain amount of distribution lines), and had compared it with Waikaremoa tin’s estimated cost of generating station only.

Cost of Increasing Power. The critic, said Mr. Coates, made so many misleading statements that some rebuttal appeared to be necessary. After outlining the point mentioned above, he jdded: “The comparison of Mangahao with Lake Coleridge'is also misleading, in that the cost of the Lake Coleridge development is given at March 31, J-La, at which time the developed capacity was not 36,000, but 16,000 horse-power. The figure for Mangahao is given for some subsequent date., A considerable increase in the total capital cost ior Coleridge will be required before the horse-power mentioned is available, me capital figure stated, however, has, as in the case of Mangahao, included also the transmission lines, etc., but the transmission lines are not included m the estimated cost of Waikaremoana, with which it is compared. Before Maikaremoana can come into • operation, transmission lines would have to be built to Gisborne and Napier, and, in addition, to provide the load necessary to make this station anything like a commercial success, it would be nece.sarv for it to tak3 over considerable additional lengths of transmission lines to other sub-stations in the Hawke s B’iv and Wairarapa districts which have been charged to the Mangaliao system. The Government’s general policy in embarking upon a scheme offtthree major stations, instead of deyelopi 4 karemoana alone and requiring that staHon to supplv the whole of the North Island, is criticised. On this point the Prime Minister said: . “ \ scheme of development nti'ising one station was gone into- very carefu y before the present scheme was finallj decided upon, and complete estimates of the alternative development were made Waikaremoana was considered hi this connection, but the’ Wartmen s engineers were emphatically ot tne opinion that even if one power station were to be developed for the supply of the North Island, that power station would not be at Waikaremoana, but would be at one of the larger sources of power on the Waikato River, which were much more suitably situated for a general scheme of power distribution. It was felt, however, that it was better to develop power available m the three sources rather than concentrate in one station, with the consequent «sks in the long transmission , lines radiating over the whole island.”

Higher Voltage. Would not the open-power plan have meant a higher voltage? . “It would. The installation of a single generating station would have necessitated going to a still higher voltage than the 110,000 volt which has been "adopted for the present scheme, and which is very considerably m advance of anything previously attempted in this country. “It cannot be denied that the estimates given in the report of 1918 have been very considerably exceeded. These estimates were definitely stated as being made on a basis not exceeding 12 per cent increase on pre-war costs. At that time it was quite impossible to state what the trend of prices was going to be; actually the costs of material have been very much more than 12 per cent, above pre-war costs, in many cases running to 250 and 300 per cent, above pre-war costs. If Waikaremoana had been commenced at the same time as Mangahao the estimate for its construction would have been exceeded in exactly the same way as has the estimated cost of Mangahao.” In answer to questions, the Prime Minister proceeded to e'xplain that, as compared with Mangahao, a large proportion of the total cost of Waikare-

moana is represented by pipe. and because of the point to which pipe costs rose, the excess of actual cost over estimated cost would P robab - V ~ been greater in the case of Waikaremoana than in the case of Mwigahao, had the former been started at the time when the latter was started.

Soaring Pipe Costs. As an example of the way costs rose during the period when a great deal oi the material for Mangahao was ordered, the Prime Minister mentioned that whereas the original Coleridge pipelines cost in the neighbourhood of £2O per ton of steel, the small pipe-line which was erected at Waikaremoana in 1922 cost over £lOO per ton delivered in Wairoa without erection. At about the same time the lowest of the tenders received for the Mangahao pipelines was in the neighbourhood of £9O per ton. “ With conditions such as those prevailing,” added Mr. Coates, “ it is very difficult to say what the cost of Waikaremoana might have been if the construction of it had been commenced at the same time as Mangahao. It is pleasing to note, however, that, although" prices have not come down to anything like a pre-war basis, a very considerable reduction on the high prices ruling in 1922-23 has been obtained. For example, the Lake Coleridge pipe-line, built during the past year, has cost onlv about £36 per ton, and it is hoped tliat future orders can be obtained at still lower prices. While the Department does not fail to appreciate fully the value of Waikaremoana as a source of power and has made due provision for its development in the. general scheme of power supply, it is, however, quite emphatically of the opinion that the present scheme, which includes Mangahao, is the right one to have adopted in the general interests ol the country. When Mangahao becomes overloaded, Waikaremoana will. be brought in to supply the additional amount of power required, and the Department is hopeful that Waikaremoana under these circumstances can be built up at a very much lower cost than if it had been developed at the period of high prices, during which Mangahao development was installed. The districts more immediately adjacent- to Waikaremoana have been so diffident in coming forward and guaranteeing to take power when developed that this station must depend very largely on the growth of load in districts further remote to make it commercially successful.”