A GOAL CONTRACT

Evening Post, Volume CXIV, Issue 149, 21 December 1932, Page 11

A GOAL CONTRACT

AKAPTJNI STANDBY

SETTLEMENT ANNOUNCED

It was announced at the meeting of the Auckland Electric Power Board this week by the chairman, Mr. W. J. Holdsworth, that a settlement had been, reached in connection with a claim of * 75,000 by Glen Afton Collieries, Ltd., for the supply of coal to the King's Wharf station during the breakdown of Arapuni hydro-eleetrie station. "When Arapuni broke down, a contract was signed for the supply of coal forl three years at the rate of 3000 tons a week. At the expiration'of about eighteen months Arapuni was restored, and negotiations were opened for the cancellation of the contract In his statement to the-board, Mr. Holdsworth outlined the negotiations in reference to the contract. "The board was well aware of its responsibilities in this connection and, by agreement .with the . Government, arranged to revert to hydro-electric power immediately. it again became available. On 14th April last the King's Wharf /station was again closed down and the: board's supply transferred to the' Government under an agreement by which any compensation payable to /Glen" Afton Collieries, Ltd.; in respeot of the unexpired period of the contract should be met equally between the Government and theboard., "Negotiaions have since this date been in progress with the Glen,Afton Collieries, Ltd., but, as these did not prove successful, the company, recently issued its writ of approximately £75,000, representing its claim for damages arising as the result of this breach. ' ■ .. ■ . . ■ £55,000 AGKEED UPON. • "Further effort has recently been made to reach an amicable: settlement,and the final report of the Cpal Com-: mittee, now being presented, shows that these protracted negotiations have now ( been concluded on a basis' which it'is considered is fair to both parties.. A lump sum> compensation of £55,000 .will be payable, one half by the Government and.the other half by this board. ' "By the breach the board is effecting considerable economies which. gTeatly exceed any compensation which the board has agreed to meet. . '.

"It .will be "remembered," he said, "|hat some few months after' the King's Wharf station had been closed down an v unfortunate development occurred at Arapuni- which made it necessary for'the board's steam station-to resume operations for an indefinite period, whilst the necessary remedial measures wero being undertaken, at Arapuni. At that date it was considered by tho Government that the complete restoration of the Arapuni hydroelectric works could not he concluded under a period of three years, and,it was on this basis that the Government entered into a lease' for the Stacdonald State Coal Mine, which was followed by this board entering'into a contract with the Glen Aftpri Collieries under which the board was to be supplied with its total requirements of coal. The earlier restoration of the 'Arapuni supply has necessitated a breach of the above contract." • MEMBERS SATISFIED. Members of the' board were unanimous in their support of the report brought down by the chairman. "It'is always easy to be wise after an event," Mr: Holdsworth remarked, "but at tho time this board entered into the arrangement for the supply of coal no one knew what was going to happen to Arapuni. Even though this board made a breach of its contract, it was in. the •interests of economy to do SO." .' ■ Mr. E. H. Potter said he thought the word '"breach" hardly covered the position. The difficulty had only arisen because Arapuni had been reeommissioiied and the coal could not be used. Mr. H. Goldie wanted the word "terminate" instead of "breach." Mr. S. ; I. Crookes: It was a breach all right. ' The Chairman: Call it by any other name. It was still a breach. It had been a worrying time for all, he said, and the board was glad to see the end of it. Had the matter gone to Court it.would have been a costly and protracted business. :