Northern Territory Power Struggles to Keep Up with Upgrades
Saturday May 16, 2009
Power and Water will need to borrow millions of dollars every year to keep up with power infrastructure upgrades.
Power and Water general manager Alistair Parker said the utility needed to borrow heavily, despite the fact power prices are about to be hiked. Additionally, the utility cannot guarantee residents of the Northern Territory will be free of power outages even after the $1.2 billion spend.
The company will need to borrow $144 million this financial year and $200 million next year.
"We are building 40-year assets, and that will require debt," Mr Parker told the Northern Territory News.
"It is an efficient way to finance."
The Northern Territory Power and Water's annual statement of corporate intent - tabled in parliament last week - displayed the utility's debt to equity ratio would increase from 83 per cent to 140 per cent by 2012. Mr Parker admitted this was a "high ratio".
The utility is expected to borrow a further $195 million in 2010-2011 and $133 million in 2011-2012.
Mr Parker stated that the borrowings were part of Power and Water's $1.2 billion five year upgrade.
"We have been funded to go ahead and get on with the job," he said. "We have guys working through the night."
Additionally, the utility cannot guarantee residents of the Northern Territory will be free of power outages even after the $1.2 billion spend.
"Nobody can guarantee that," he said. "The equipment is not in great shape and we need a lot of work to fix it up."
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