OUR ELECTRIC SCHEME.

Manawatu Times, Volume XLII, Issue 1764, 16 March 1921, Page 5

OUR ELECTRIC SCHEME.

HELD UP BY MONEY SHORTAGE. POSITION DISCUSSED BY COUNCIL. The question of the Borough’s electric light and power proposals received a thorough airing at last night’s Council meeting, when the electrical committee reported as follows: (1) After consulting with Mr Black, the Committee reports that it is now in readiness to call tenders for the reticulation contract, but before taking any further steps desires the Council to consider making the necessary financial arrangements. (2) That the question of calling for tenders for the reticulation, and Messrs Turnbull and Jones' offer to carry out the necessary work on a ten per cent, basis, be deferred at present, and the firm be written to ftoting that the Council will again consider their offer at a later date. (3) That after considering details of cost of the electrical undertaking, the Council be Informed that the sum of £85,000 will be required to complete the whole scheme apart from the £40,000 already raised. Details of the former amount are as follows: Meters £I9OO, mains (additional poles) £35000, power to station £06,000, repair equipment £I2OO, transformers £3200, power station buildings and offices £SOOO, wiring buildings and alterations to telegraphs £2OOO, 5 per cent, engineer’s commission £6OOO, stock £4700; total, £125,000, less £40,000 already raised: £85,000.

Cr. Crabb (chairman of the committee) said Mr BJack was now in readiness to call tenders for the reticulation, but the committee had thought it would be unwise to go any further before referring the matter to the Council to consider the question of finance. The present position was that the Council was committed to the extent of £65,000, of which £4.0,000 had already been raised. If the undertaking could not bo carried any further, the loss on the amount of the committment annually would be £4255 for interest and sinking fund. He estimated a further loss on the profits of £2OOO tb £3OOO, which would really bring the total loss to over £6OOO per annum, of which £4225 would have to be found by the ratepayers out of special rates. Assuming that 1 the amount which they would need to raise ' altogether was £IOO,OOO, the year’s loss on tho amount of the present commitments would pay an extra one per cent, for the whole period of seven years, being the life of the proposed shortened debentures. It had always been understood that the local, scheme would be in operation two years be-, fore the Mangahao scheme came In. Although the Mangahao scheme would not render the plant altogether superfluous; it would make it less valuable. In the meantime, however, they would be building up their demand. Now it seemed likely that the Council’s scheme would not be ready much over a year before the completion of the Mangahao scheme, even if no further delay occurred. He wanted the ratepayers to see the awkward position the Council had grot into through no fault of their own, but through the delay over the railway deviation. Had it not been for that delay the Council would have arranged for the money six months ago. The Mayor (Mr J. A. Nash, M.P.) said he was very sorry that he had to take up the stand that while Mr Black was ready to go op with the reticulation and an offer had been received to proceed with the work on a 10 per cent, basis, the Council could not at the present time endorse the proposal. . Gr Crabb protested that no attempt had been made by the committee to force a proposal on the Council. The Mayor disclaimed any intention to put the matter in thht light. He went on to say that the Council did not have the money at the present time, and they could not, under any consideration, allow tenders to be called just now. It was hoped that the Council would shortly be in the position to reduce the tenure of the debentures. This would mean the reduction from par of the selling value of the debentures. This would help the Council out of its present commitment; Every member of the Council would like to be able to say that they were prepared to go on with the reticulation, but they must see that the finances were right first. The question of raising money at the present time was an utter impossibility. The Council had done remarkably well in raising £95,000, ’compared with other local bodies, which had not got anything. He would like to have seen the rate of Interest raised to 0 per cent., but Mr Massey had taken up the stand that the rate of interest must be kept down. All he could do at present was to advise the Council to adopt the committee’s report. In reply to Cr -Eliott, he said the amount of £120,000 had been authorised by the ratepayers for electric light and power. Mr Black, the electrical consulting engineer, who was present, in reply to Cr Oram, said that assuming tenders for both the power plant and reticulation were preceded with at the same time, the reticulation contract would take 12 or 15 months to "carry out, and the power station equipment would take six months from the time the plant arrived here. In about three months’ time. That meant that the power station should be ready in about nine months and some of ’ the reticulation might be readv in about a year. It would be preferable for both contracts to be let simultaneously. He pointed out that the delay in the first place had been caused through altering the plan on account of the tramway scheme falling through, and they were still held up through the deviation. In reply to a further question from Cr Oram, Mr Black said that he did not know of any other cause for possible delay.

To Mr Eliott: They could still use the telegraph poles to some extent for reticulation along the route mapped out for the trams. The payment to the Telegraph Department would be a trifling matter.

Cr Crabb said the committee had no intention of pushing the matter on the Council. Ho had felt it his business merely to report on the electrical side and leave the finance to the Council. It was ridiculous to expect local bodies to raise money at B per cent, when people could get 7 per cent, on the open market. The question was whether the Government was going to assist the local bodies. He commented unfavourably on the Government’s proposal to allow the shortening of debenture tenure to secure a higher rate. He considered that if the Government left the rate of interest alone instead of merely

tinkering with it in this way it would be better for the country. The Mayor: We will have to have that put on record and sent to the Finance Minister. The report was adopted.