HYDRO-ELECTRIC SCHEME.

Taranaki Daily News, 19 October 1920, Page 4

HYDRO-ELECTRIC SCHEME.

LARGE INCREASE IN COSTS. FURTHER LOAN NECESSARY. .£OO,OOO REQUIRED. The question of the hydro-electric extensions and the increased costs being encountered in connection with this work is dealt with by the New Plymouth' general manager in his monthly report to the Council. Reporting on scheme F,'2, he says: — '"No tenders were received for contract No. H, embracing No. 2 tunnel race, etc., although one contractor submitted a price and offered to do the work on a percentage basis. The price submitted was so high that it strs deemed advisable to obtain revised estimates from the consulting engineers in regard to the civil engineering portions of the work, and from the electrical engineer in regard to the electrical portion of the work. These have now been obtained.

In submitting the revised estimates the .consulting engineers remark: In the light of the present prices of labor and materials, we have advanced our original rates to what we "consider should cover the rates now ruling. the present instable conditions of the- markets for labor and materials it is quite impossible to state, and consequently to estimate what the conditions .will be by | the time the wo.rks are well in hand. In view of this wc have made in our opinion reasonable allowance." After submitting figures, the manager states: "The position shown can only be described as extremely disquieting. .Work which in November, 1018, was estimated to cost £40,000, and -which in January, 1020 t was estimated to cost £112,000, is now estimated to cost £160,000. Large expenditure has, however, been incurred; part of the work is under construction, and contracts have been let for other works and plant. There can be no thought of drawing back and the position has to be faced. I have no option, therefore, but to rceojnmend that steps be taken for the raising of a further loan. The estimate over expenditure is shown as £48,000, but in the light of past expedience a margin should bo allowed, and the loan should be for at least £t"0,000. "Regarding the actual carrying out of the works, I am adverse to it being effected on the ordinary percentage basis. There being no chance of carrying out the works by contract the next best thing to do would be to endeavor for the work being carried out upon the percentage basis, plus a guaranteed maximum cost of an amount approved by the Council for an increased percentage at completion upon any sum by which actual cost is less than the guaranteed maximum. Failing this the Council should undertake the work itself, appointing someone ■ with the necessary qualifications and . experience to take charge of the works, under the control of the consulting engineer."