POWER SUPPLY

Timaru Herald, Volume CXLIII, Issue 20863, 20 October 1937, Page 5

POWER SUPPLY

RANGITATA TO BE RETICULATED DECISION OF BOARD Whether the Rangitata or Lyalldale power extension should be undertaken first was debated at length by the South Canterbury Electric Power Board at its meeting yesterday, Rangitata being given preference. The Board also decided to endeavour to arrange accommodation from the tank to finance the work. Reporting on the Lyalldale extension the general committee advised that a deputation headed by Mr Bishop, of Lyalldale, represented to the committee that settlers had been promised current and were waiting with houses complete with installations, but the line was not yet started. Promises were not kept, and much inconvenience was being caused. Discussion elicited the following: That there was a hold-up by reason of one guarantor finding himself unable to guarantee. Tills the deputation undertook to overcame by adding to guarantees; that poles were overdue and had not arrived; that loan monies would not be available for this work before November; that the Board had decided to commence Rangitata first. Tire chairman, Mr G. Dash, gave notice to rescind the motion regarding the Rangitata work, to re-open the subject. The motion was seconded by Mr G. Saunders. Letter From Minister. The Minister of Finance, the Hon. W. Nash, replying to the Board’s letter, said he noted that the Board had been unable to raise loan moneys at 3i per cent., and that it desired the Government to provide the necessary finance. The Board had no doubt seen the statement in the Budget that in order to support the existing rate of interest at 31 per cent, it was intended to increase the amount which the State Advances Corporation had available for investing in the securities of local authorities. The moneys made available in that way were not intended to finance all local authorities, but only those cases, which, after exploring all alternative sources, were unable to secure the necessa.y finance for the works that had been approved. This applied more particularly to those local authorities whose financial position was such that their securities did not appeal to the ordinary investors. Although the Board might not be able to finalise its financial arrangements for the full term, it should have no difficulty in raising the necessary loan moneys for a 10 or even 15 year period. Repayment of the loan could, of course, be maintained on the present basis of 26 years, and thus no increase in loan charges would be occasioned the Board beyond the erst of raising a renewal loan at the end of the first period, although, if possible, it was preferable to provide for complete liquidation in the shorter term. Regarding the £l5OO which the Beard was desirous of obtaining Immediately in order to extend reticulation to the Rangitata River, where road and bridge construction works were in operation, it would be possible for this to be temporarily financed by means of a bank overdraft secured upon debentures hypothecated to the bank under Section 34 of the Local Bodies Loans Act, 1926. Such action would, of course, require to be authorised by the issue of an Order-in-Council. and he would recommend the issue of this should the Bdard so desire. It would be appreciated that the Government was endeavouring to assist local authorities in maintaining Interest rates at 3i per cent., and it was hoped that the local bodies in turn will endeavour to assist the Government in carrying out its policy. "All Right Up To a Point.” The Minister’s letter was all right up to a point, said the chairman. The Board had endeavoured to extend lines for rural would-be consumers in keeping with the suggestion of the Minister of Public Works that the benefits of electricity be afforded the backcountry settler. The Board had loaned £7OOO or £BOOO out of the power fund to keep the reticulation moving into the country. It now appeared that the Board would have to overdraw and pay 41 per cent, for its power fund. Was the Board going to apply to the Local Loans Board for a shorter term, or was it going to hypothecate its securities to the bank at 41 per cent.? If it was going to do either, how soon would the work be carried out? The Board had been obliged to overdraw £2OOO at the bank, and was spending all the time. “We are cer-

tainly placed in a very awkward position," said Mr Dash. It would be all right to borrow from the bank for a short term, said Mr K. Mackenzie. Advice was received from the Public Works Department that the Ashburton Board would probably be prepared to supply one of the contractors at Rangitata. Mr C. J. Talbot said that the Minister had said that if the local body security was not good enough, the finances could be arranged, but that policy was killing the thing the Government wished to maintain—a low rate of Interest. The following motion by Mr Mackenzie was carried unanimously: “That immediate steps be taken to secure permission to raise money on 10 or 15 year terms, and that the Board’s banker be approached for advances up to £7OOO on the hypothecation of our loan security.” “We now come to the serious question of which job is going to be done first,” said the chairman, in speaking of the promises made by the Board to the Lyalldale people to give them electricity. Mr A. W. Buzan moved that the Lyalldale job be given preference. He doubted whether the Rangitata line was worth undertaking. It appeared

as though the Board was going to borrow money to spend £l5OO on a line, which was going to give a return of £3OO. The line should not be undertaken until the prospects were fully investigated. Difficult Position. Mr Talbot said that the Board Knew there was prospective business to be picked up at Rangitata, and while the position was very difficult, the Board must give preference to Rangitata. If the Lyalldale work was carried out first it would be well into the New Year before Rangitata was done. “We will have to do Rangitata first, or not do it at all,” said Mr S. I. Fitch. The chairman emphasised that the Board’s consumers were its main consideration, and the Lyalldale job should be undertaken first. Mr Buzan said he was not opposed to the Rangitata line providing it had a chance of paying. Mr G. Saunders suggested that the Ashburton Board be approached and asked to sell the South Canterbury Board current, and thus keep South Canterbury’s territory intact. Mr Mackenzie considered that the Board had either to do the Rangitata job or hand it over to the Ashburton Board to do do. The chairman’s rotice of motion was defeated by six votes to three, the chairman and Messrs Saunders and Buzan voting in favour.

Those present were Messrs G. Dash (chairman). G. Saunders, B. R. Macdonald, A. N. Oakey, F. J. Cook, C. J. Talbot, A. W. Buzan, K. Mackenzie and S. I. Fitch.