SUCCESSFUL OPERATION

New Zealand Herald, Volume LXIII, Issue 19412, 21 August 1926, Page 15

SUCCESSFUL OPERATION

PROFITS ON OLDER SCHEMES.

DEMAND ON MANGAHAO.

FAR AHEAD OF ESTIMATES.

[By TELEGRAPH.—SPECIAL REPORTER.] WELLINGTON, Friday.

The construction of power-supply systems involves very heavy initial expenditure on headworks and transmission system to meet considerable future increases in load. It is only to be expected in such cases that there will be difficulty in earning a high percentage return on the capital invested in the earliest years of operation. The schemes already in operation have indicated tliis very clearly, but the two older schemes have now reached a stage where there are sufficiently high percentages to be ablo to offset the initial losses. From a summary of the results given in the Statement, the position of the two older schemes, in respect oil capital, profits after meeting all charges, and reserve funds is as follows; _ . , Coleridge. Horahora. Capital Investment . . £1,366,951 £733,091 Net Profit . . . . £26.046 £21.348 Depreciation Fund . . 111,526 46,444 Sinking Fund . . 8.907 28,939 Reserve Fund .. Total Reserves . £120,433 £105,937 The capital expenditure on the Lake Coleridge scheme includes £360,000, representing works which were not in operation until after the end of the financial year. The year's revenue was £123,354 and the operating expenses £27,035. The balance of £96,319 has been used in paying interest charges, together with 2 per cent, depreciation, leaving a profit on the year's operations of £26,646. This has been used in wiping off the accumulated deficiency on the profit and loss account, amounting to £17,739, the balance of £8907 having been paid into the sinking fund account. Results of Horahora. Tho financial results at Horahora have again been very satisfactory, though, on account of the considerable increase in capital charges, tho profit has not been quite so great as in tho previous year." The revenue was £85,830, and the operating expenses £19,612, leaving a balance of £66,218. The balance has been used in paying interest and depreciation, and has left a profit of £21,348 for tho year. This has been used in paying £11,342 to sinking fund account and £10,006 to •reserves.

The maximum load at Lake Coleridge during the year was 14,430 kilowatts and that at Horahora 11,400 kilowatts. The small initial plant (1000 kilowatts) at Waikaremoana has been leased to the Wairoa Power Board, pending being taken over again by the department when construction work on the main development is well under way. The capital outlay is £80,564; capital charges, interest, and depreciation amount to £5949; the revenue received has been £1901; leaving a loss of £4048 for the year First Year at Slangahao. Mangahao, the latest. Government station, went into regular operation at the beginning of . the year, 'and, considering- the magnitude of the initial development and the high costs ruling during the period in which it was built, has had a successful initial year. The total capital expenditure has been £2,022,315, of which about £520,000 represents expenditure on extensions and sub-stations which had not come into operation at the end of the financial year, and on the third dam, which is not yet complete or in operation. A considerable portion ,of the expenditure on transmission lines and sub-stations is an advance part of the expenditure necessary to provide load for the Waikaremoana scheme.

The revenue for the year was £76,857 and the operating expenses, £21,865, leaving a balance' of £54,992. This amount has not been sufficient to pay interest and depreciation charges, and leaves a deficiency of £67,291. It represents a payment of about 3.65 per cent, toward capital charges, which is considerably more than was paid by the Lake Coleridge scheme (now quite successful) in its first or even second year of operation, . and must be considered satisfactory. The load on the plant has developed very rapidly. The peak load to the end of the financial year, was 13,960 kilowatts, but since that date a maximum load of 18,100 kilowatts has been carried. It was a condition of the contracts made with the various supply authorities that each- authority should guarantee to take within five years the amount of power he desired to be allocated to him. That the demand lias exceeded the estimates of most of the boards is evident from the fact that in some cases the demand has already exceeded the total allocation, and the peak load on the station has already been only a very few per cent, below what the various consumers' guarantees indicated as the probable load on the station at the end of five years.

MONEY FOB HOSPITALS. THE MENTAL INSTITUTIONS. AUCKLAND GRANT OF £53,000. [EY TELEGRAPH. —SPECIAL REPORTER.] WELLINGTON, Friday. Expenditure proposed during the current year on mental hospital lands and buildings total £229.862, as against £198,040 voted and £77,835 expended last year. The principal items are : —Auckland, £53.000; Porirua, £22,500; Seacliff, £48,500; Nelson, £2500; Stoke (Nelson auxiliary), £40,000; Suifnyside, £34,000; Tokanui, £13,000; Waitati £SOOO. The principal sums expended last year were £38,213 at Porirua aud £12,568 at Stoke. Under the heading of health and hospital institutions there is a grant of £4OOO for the Auckland St. Helens Hospital (no portion of last year's vote of £793 was expended). Other grants areChristchurch St. Helens, £10,000; Gisborne St. Helens, £2000; Wellington St. Helens, £1000; Motuihi quarantine stations. £4OOO. Last year's grant of £7OOO for King George V. Hospital, Rotorua, is repeated, a sum of £241 only having been expended last year.