THE NIHOTUPU DAM.

New Zealand Herald, Volume LVII, Issue 17471, 15 May 1920, Page 6

THE NIHOTUPU DAM.

Attention was l directed by' the M

Herald yesterday to the provisior made by the City Council for the cost of its water conservation work; at Nihotupu, and the suggestion was made that a larger proportion oi the liabilities should be met by loan. The soundness of this principle, in its' general application, is acknowledged by the Mayor in an explanation of the council's policy published to-day, though ho implies that it is not advisable to adapt it to the Nihotupu obligations. Through circumstances over which the council has had no control tho completion of these works has been delayed far beyond the original estimate, and in tho meantime the cost has greatly increased. When tho project was adopted in 1911, the cost of the dam was calculated at £645000, and provision to that extent was made in the Waterworks Loan of £150,000. Before the work was commenced the first plan was abandoned and an alternative scheme to cost £120,000 undertaken. Loan money to the extent of £73,800 was available (owing to a reduction in tho expenditure on new mains), and. in 19.14 the council agreed that the balance of £46,000 should be drawn in five annual instalments from the water account revenues, in preference to raising a new loan. That policy the council now proposes to carry into effect. The position has, however, radically changed in the intervening six years. According to the latest published estimate, the cost of the main dam will be £160,000, while the estimate for the auxiliary dam is £11,200, a total of £171,200, or over £97,000 in excess of the loan money available in 1914. It is, however, clear from Mr. Gunson's memorandum on the estimates that this figure does, not cover the whole liability, as it is expected this year to exhaust the loan balance of £22,000, and by March 31, 1923, to have devoted to this undertaking all but £11,000 of the present balance on the water account and the prospective annual surpluses. This indicates a total expenditure of £182,800, of which £73,800 will represent borrowed money and £109,000 transfers from the revenue account. The utilisation of profits in the trading businesses of the city is unquestionably sound, with the qualification mentioned by the Mayor that " abnormal extensions " call for the introduction of fresh capital. A similar policy was followed in 1911 when the council decided to borrow £64,000 for the Nihotupu dam and £80,000 for new mains; it also explains the proposal to borrow £500,000 for .an "abnormal extension " of the electricity undertaking. For thai reason, it is not clear why a distinction should be made in the case of the waterworks, to the extent of paying out of revenue 60 per cent, of the cost of a scheme which should be more enduring than such things as generating machinery or tramway squipment. ■•■-•• I '