HORAHORA POWER

Evening Post, Volume CXIX, Issue 133, 7 June 1935, Page 5

HORAHORA POWER

PURCHASE OF PLANT

MINISTER REVIEWS POSITION

Commenting on the reply of the Waihi Gold Mining Company to his recent statement regarding the purchase of the Horahora hydro-electric plant from that company, the Acting Minister of Finance (the Hon. Adam Hamilton) stated that he is unable to agree with the position as stated by the company's local director and attorney. .

I In a brief resume of the negotiations, Mr. Hamilton mentioned that the then local director of the company personally approached the Government in June, 1931, with a view to considering any suggestions concerning payment or other mutually advantageous arrangement. As a result of the discus sions and having regard to the question as to the place of payment—held by the Government to be New Zea-i land, whereas the company sought pay-! ment in London —a mutual arrangement was tentatively agreed to whereby the existing agreement would be extended for a period of three years

. Confirmation of the verbal agreement arrived at was received from the company's local director on October 29,1931. The extension for three years with a modification of the agreement relating to supply of electric energy and a reduction of the term of notice should the company desire variation of the supply of electric energy was the basis of the mutually advantageous arrangement. In August, 1931. the company was formally advised that failing extension of the agreement oa this basis the Government would ar range to pay in-New Zealand on tha due date. EFFECT OF LEGISLATION. Various points cropped up in regard to the then, proposed extension and it would appear, said the Minis ter, that the completion of a final arrangement was delayed until the company was fully aware of the, effect of the then impending legislation as affecting interest rates and taxation. In other ..words, the company sought a method of. settlement most advantageous to= the company, having regard to the possibility of establishing its claim for ultimate payment in London, which claim was,1 of course, not admitted at any time by the Government. Even after November. 1, 1931, whea the purchase money fell due the company was still somewhat exercised in regard ,1;o the terms of the extension and in February, 1932, a communication from the local director intimated that his London office desired the question of the, place, of .ultimate payment to remain open, with the added remark: "Three yearsfrom now the place of payment may be quite unimportant." A further communication • from the local director, indicated .that the company thought the matter of the ultimate^ place of payment as being open to doubt; .The-Minister, went ■on to say that in June, 1932, the company was advised that the Government would accept the arrangement for the three years' extension, as agreed upon, such decision having been influenced, first, by the fact-that the negotiations had.been protracted ,to an unnecessary extent, and, second!' on account of the Government's programme for the financial year being.then completed. ' ' NOT UNDERSTOOD. In conclusion, Mr. Hamilton stated that he could not understand the attitude of the company in regard to the 1931 negotiations, in that when the payment became due, on November, 1, 1934, the company then sought extension of the agreement for a further period at a considerably-reduced interest rate. This attitude, he suggested did not fit in with the protestations of the company in regard to the + earlier negotiations and clearly indicated that the extension arranged in 1931 was at least advantageous if not profitable to the company.