XN000022-1971-02-24 — Page 31

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Wednesday, February 24, 1971

He estimated that over the period from 1971 to 1976, approximately

up to the time when High Island should begin to supply, assuming a seven per

cent increase in actual consumption annually, the price of water would have

to be about $3.40 a thousand gallons to cover costs. That was after taking

into account the yield from two per cent of Rates, and it also included a

small element to eliminate the accumulated deficit.

Above a fairly small minimum amount, he deseribed water as "the

provision of a commodity of which consumers may choose to purchase more or

less," and they should, therefore, "pay the appropriate price (on a non-

profit basis) for what they choose to consume, the more particularly as a

continuity of supply to meet their demands requires the investment of large

amounts of the community's capital."

"I am not suggesting that we should price water so as to reduce

these calls on the community's capital, and I do not think the proposed new

charges will have any effect on the level of consumption," he commented.

He believed there were "clear and sound grounds" for tempering the

increase to domestic consumers, and raising the price to commercial consumers

by a higher amount, and there were a number of reasons for this.

It was the Government's policy to endeavour to ensure that industrial demand was as fully met as possible, even when domestic supplies were severely restricted.

The demand of trade and industry was rising, and had been for some years, more rapidly than domestic demand. It was forecast that between 1969 and 1981, the latter would rise only from 75 million gallons a day to 125 million gallons a day, or 4.1 per cent a year, but the former from 42 million gallons a day to 196 million gallons a day, or 13.7 per cent a year, more than three times as fast.

It would