MR. RISHWORTH'S CRITICISMS

Evening Post, Volume CII, Issue 88, 11 October 1921, Page 2

MR. RISHWORTH'S CRITICISMS

REPLY BY MAYOR OF PETONE.

Eeplying to the points made by the Mayor of Lower Hutt in Saturday's Post,- Mr. J. W. M'Ewan, Mayor of Petone, Said to-day : — "Mr. Eishworth must be included in those who are 'fairly befogged with the mass of details that have been stated and restated in connection with this discussion,' otherwise he would not have failed to see that the proposed terms submitted to the Ratepayers' Association were essentially the same terms as those submitted at practically the same time to the Hutt Council per medium of the Board of Trade, which body subsequently informed Petone that 'the Hutt Council was not prepared to further consider the proposal; that arrangements be made to continue to draw supplies from the Petone plant.' Taking .this letter with a previous letter from the Hutt Council dated 11th August, 1921, in which Petone is informed 'that none of the suggestions made at the recent conference were acceptable, and, all were rejected,' it is quite patent that the Hutt Council applied the closure to further negotiations of any proposal whatever, and Mr.' Rishworth should not complain if they were taken seriously* / "■Now, I pointed out at the Hutt meeting that the terms supplied to the association were practically the same terms as those submitted to the Hutt Council two years ago, when the cost of making gas stood at 4s lOd. After a very full discussion the Hutt Council then turned them down. At. any time during the past two years the Hutt could have had an agreement on these terms. "Mr. Rishworth says there is no mention of coke and tar in, the proposed terms. Surely Mr. Rishworth knows that the amount obtained from sales of coke and tar is subtracted from the gross cost of making gas; and, of coiu-se, the more you obtain for coke and tar the cheaper your gas will be. It really does not matter so far as Pe-. tone is concerned under the proposed terms whether the Hutt gets all the tar and coke over Petone's requirements. Certainly, if the new works are gone on with, tha Hutt will get little' more than at present. They' will get more tar, but the quality will be poorer. "Mr. Rishworth affirms that Petone gas at Ss 6d means a cost to, the Hutt consumer of 9s 6d per lOOOc.f.—distribiu tion costing 4s per 1000. A perusal of the Hutt's balance-sheet convinces me that 2s lid is nearer the actual cost. Certainly an explanation appears to be required. We are told that,gas could be sold from the new works at 7s lOd. Let us see. He tells us 'that interest, sinking fund, and depreciation are provided' for in the estimate of this 7s lOd gas. Very well. Interest at 7 per cent, on £64,000, plus exchange, amount to £4640 per annum. Sinking-fund at 1 per cent, £640. Depreciation at 4 per cent., £2560. Total under these heads, £7840. This sum on an annual 'make' of 30 millions works out at 5s 2d per 1000 cubic feet produced. If it is contended that depreciation at 4 per cent, is too high, I must point out that the Audit Department, when dealing with the question on behalf of the Board of Trade, iixed depreciation at 4 per cent, for costing purposes. I also desire to point out that the life of the class of plant proposed to j

be installed is not as great as that of ordinary gas plants. In fact, 7 per cent, is little enough to provide for depreciation of plant subjected to very high temperatures, and considerable wear and tear. "With regard to coal cost per 1000c.f produced, taking coal at 54s (Mr. Rishworth's price), and conceding that the proposed works, by the adoption of a process of steaming" the coke, can- be mmade to produce 18,000c.f. of not the best-quality gas per ton of coal used, I find that the cost per IOOOc.f. works out at 3s. With regard to' wages, I find the general experience ranges from 9d to Is per 1000 c. f. Salaries, rates, water, gas used in works, maintenance, and repairs (plant), telephone, insurance, stationery and printing, and miscellaneous will cost 6d per 1000 c. f. Our totals will thus be as follow:—lnterest, depreciation, and sinking fund per ■1000c.f., 5s 2d; coal at 54s per ton, 3s; wages, say, 9d; salaries, etc., as above, 6d; distribution (vide Mr.- Rishworth), 4s; total, 13s sd. "I have not included, the sixpence per IOOOc.f. unaccounted for gas or gas lost in distribution, referred to by Mr. Bashworth. It ns usual for this loss to be included in cost of distribution. "This sum of 13s 5d is .subject to reduction by' the amount of coke and tar sales. ' This amount on the basis of IOOOc.f. of gas produced varies according to the amount received per ton for coke or per gallon for tar. Petone coke and tar produces approximately Is per IOOOc.f. , If the Hutt people for public purposes, when they have their own works, charge up coke at 20s per ton and tar at 3J,-d pev gallon', then I am pretty safe in saying that the selling, price of 13s 5d can only be reduced at the best by Is 5d per IOOOc.f. "It therefore follows, on the "figures, here submitted, that even granting' a consumption of 30 million cubic feet per annum, the Hatt consumer must pay 12s per IOOOc.f. If the Hutt gas consumer pays 7s lOd as stated, then the ratepayer must find the difference of 4s 2d'per IOOOc.f. or over £6000 per annum. Sir Francis Bell intends,to stop' leaning on the bank or on temporary depositors. ' • • • "Over and over again we have been told there 'is something remarkable about the proposed new plant. I have before me'figures from a Yorkshire gasworks' that prove that this class of plant, proposed to be installed, gives no better results than our Petone works. Better results, so far as quantity of gas is concerned, may be obtained by steaming the coke, but even this is not impossible with the class of plant in Petone's works. Mr. Rishworth devotes much space to Petone works, being apparently desirous of showing that considerable expenditure is immediately required. That he has failed to understand the position is quite evident, as the following replies will show: — ■■•"Mr. Rishworth says 'Petone works are operating at their full capacity,' "The gas works manager in August, 1920, reported: 'When the retorts are placed in the new setting we will have 48 retorts in use- capable 6i producing 250,000c.f. per day or 91 millions per annum.' The total make for the year ending 31st March, 1921, was 66,744-,----000c.f., of which the Hutt received 26,859,000c.f. There is still a big margin* as these figures show. A temporary setting as suggested at the Hutt meeting, with different methods of work, will easily carry us on for four years. By that time, or, rather before then, we can assess what electricity means to the district. -.-..-■- ---"I have not, as alleeed, valued the Petone works at £50,000. The whole business has been valued by Mr. Kennedy at the sum mentioned. .'-' Re the new holder: All Mr. Apple., yard says is that in three years' time we can look round for a. new holder. It might suit in that time to place it. in the Hutt. , We know that Masterton, with a make approximately the same as Petone's, has carried on with about half of our holding capacity. As to the scrubber, that is down on this year's programme, and the purifiers have been installed for some time. " We would like to know who estimated the cost of, the plant mentioned at £60,000. ' It certainly was not our gasworks' manager, Mr. 'Appleyard. He says it is a ridiculous amount.. The Hutt wants-'a full-blown gasworks for £4000 more. " I am not disposed to follow further in detailed criticism. We have been told that we' have been unreasonable. If w» have, the provocation has been great. Last year the loss on the contract,1 was £1464. If the price of coal remained as for the first four months, this year would show a loss of £2000. We are told that we do not want to lose the Hutt connection. We don't, but'we will not be depressed unduly if we do. We say it would be a grave mistake to erect another gasworks in the district, and in this -we have the support of those who know most about the subject."