New Legislation for Power Boards

Sun (Auckland), Volume I, Issue 124, 16 August 1927, Page 9

New Legislation for Power Boards

SAFEGUARDING THE FUTURE AUCKLAND NOT AFFECTED THE alarm expressed last week by the Waitomo Power Board at the prospect of having to provide a sinking fund “sufficient to repay a loan within the life of the asset,” and at the same time establish another fund to replace the same asset within its life, is not shared by the Auckland Electric Power Board, according to a statement given to a SUN representative this morning by Mr. W. Holdsworth, chairman of the board. The legislation which the Government is promoting will make it compulsory for all power boards to establish funds for renewals and depreciation, “but at the same time,” stated the Minister of Public Works, the Hon. K. S. Williams, at the recent power boards conference, “there is no intention of placing an undue burden on the boards ” The total sum to be set aside for depreciation and renewals will not exceed 25 per cent, of the capital involved in the respective boards’ undertakings, and the necessity for providing this amount will be taken into consideration by the Loans Board when it is fixing the amount of the annual sinking fund payments for the clearing off of the loan. The idea in making it compulsory for the boards to create renewal and depreciation funds, it was stated, was not to provide a capital sum to replace the whole of the assets at the end of their life, but to ensure that the boards will have some money set by against which they can draw to replace damaged plant. » ADEQUATE PROVISION The Auckland board, said Mr. Holdsworth, had been putting aside funds and re-investing them in its own business, providing in addition 2 1 per cent, for sinking fund. On his visit to the power boards conference at Wellington be had taken that point up with the Minister and Air. Kissell, chief electrical engineer for the Public Works Department. They assured him that boards such as the Auckland Power Board which made such adequate provision would not be affected by the new legislation. The Local Government Loans Board Act of last year lays down that the board shall not approve the raising of any loan unless provision to its satisfaction is made for the repayment of the loan within such a period as the board deems reasonable. This provision applies to power boards equally with other local authorities, and in the legislation which is on the drafting boards it is not intended that it should be amended. The new regulations would mainly affect the smaller bodies, said Mr. Holdsworth. He considered it was wise and reasonable to expect them to provide against the old age of their plants in an adequate manner. Mr. Holdsworth instanced this by the fact that some boards had experienced trouble with their wooden poles within three years of their erection, renewals having to be made. Under the new system there will be no possibility of local bodies incurring large debts for future generations.