WEDNESDAY, JANUARY 24, 1979
3
+FIRST. ITS APPLICATION WOULD AVOID AN INDISCRIMINATE CONTRIBUTION FROM EITHER GENERAL REVENUE OR FROM DOMESTIC CONSUMERS TO THE PROFIT OF TRADE CONSUMERS,
→SECONDLY, THE APPLICATION OF THIS PRINCIPLE WOULD ENCOURAGE CONSUMERS TO APPRECIATE THE TRUE VALUE OF WATER AND TO USE IT ECONOMICALLY, AND THIRDLY, THE APPLICATION SHOULD REDUCE THE NEED TO EXPAND WATER RESOURCES PURELY TO COPE WITH EXTRAVAGANT AND EXCESSIVE USE, HE SAID.
MR. HADDON-CAVE SAID THE CONCESSIONARY TARIFF WOULD APPLY TO THOSE TRADE CONSUMERS WHO, ON APPLICATION, ARE ABLE TO DEMONSTRATE, FIRST THAT CONSUMPTION AT A RATE IN EXCESS OF 6.000 UNITS PER FOUR-MONTH BILLING PERIOD IS LIKELY TO BE SUSTAINED FOR AT LEAST 12 MONTHS= SECONDLY, THAT SUCH HIGH LEVELS OF CONSUMPTION ARE ESSENTIAL FOR THE PROCESSES INVOLVED THIRDLY, THAT WATER IS USED ECONOMICALLY FOURTHLY, THAT PRACTICAL STEPS HAVE BEEN TAKEN TO CONSERVE OR RE-CYCLE WATER AND, FINALLY, THAT THE COST OF WATER REPRESENTS A LARGE ELEMENT IN OPERATING COSTS.
HE SAID THE DIRECTOR OF WATER SUPPLIES WILL ANNOUNCE HOW TO APPLY FOR THIS CONCESSIONARY TARIFF IN DUE COURSE.
TURNING TO THE IMPLICATIONS OF THE REVISED PRICE STRUCTURE ON THE ECONOMY, MR. HADDON-CAVE SAID THE EFFECT OF THE REVISED CHARGES WOULD BE TO INCREASE THE CONSUMER-PRICE INDEX BY NO MORE THAN 0.03 OF A PERCENTAGE POINT WHILE THE REVISED CHARGE FOR TRADE SUPPLIES WOULD INCREASE AVERAGE MANUFACTURING COSTS BY LESS THAN 0.1 OF A PERCENTAGE POINT.
HE SAID THE WEIGHTED AVERAGE COST OF POTABLE WATER OVER THE FOUR YEARS 1979-80 TO 1982-83 IS ESTIMATED AT $8.13 PER UNIT. THE AMOUNTS INCLUDED FOR THE BULK PURCHASE OF WATER HAVE BEEN ADJUSTED UPWARDS TO TAKE INTO ACCOUNT THE RECENT INCREASE IN THE PRICE AND QUANTITY OF WATER PURCHASED FROM CHINA.
+BUT THE INCREASED EXPENDITURE INVOLVED IS MORE THAN OFFSET AND I WISH TO STRESS THIS POINT BY A REDUCTION IN THE AMOUNT ALLOWED FOR INTEREST ON CAPITAL EMPLOYED, AS IT HAS BEEN ASSUMED THAT THE SUBSTANTIAL CAPITAL EXPENDITURE INVOLVED IN DEVELOPING ADDITIONAL CATCHMENT AREAS WILL NO LONGER BE REQUIRED HAVING REGARD TO THE EXPECTATION OF FURTHER SUPPLIES FROM CHINA AFTER 1982.+
ON THE WATERWORKS ACCOUNTS, HE SAID THE REVISED PRICE STRUCTURE WOULD REDUCE THE ACCUMULATED DEFICIT OF ABOUT $170 MILLION AT THE END OF THE CURRENT FINANCIAL YEAR TO ABOUT $142 MILLION AT THE END OF 1982-83.
14.....