New Zealand Gazette – 1999 – No. 170

Page 4055

✨ Financial Notes



15 NOVEMBER

NEW ZEALAND GAZETTE

4055

Electricity Corporation of New Zealand Limited

Notes to the Financial Statements

27. Contingencies

The Second Manapouri Tailrace Tunnel Project has been experiencing significant delays in boring the tunnel portion of the project. The cause of the delay is under investigation by both ECNZ and the Fletcher Dillingham Illbau (FDI) joint venture consortium contracted to carry out the tunnel mining. Both parties are not in a position, at this stage, to reach agreement on the cause of the delay. As a consequence it is not possible to state with certainty what will be the financial effect of the delay on the project. The delay may give rise to a either a contingent asset and / or a contingent liability to ECNZ.

ECNZ is entitled to deduct liquidated damages for late completion beyond the contract date. FDI is also entitled under the conditions of contract to claim additional costs and time extensions if the tunneling conditions as encountered differ substantially from the baseline conditions defined in the contract.

The asset and liability claims arising from the tunnel delay are viewed as contingent at 31 March 1999 because there is uncertainty as to the net final financial outcome of these claims. The management of the project has been transferred and all contracts have been assigned to Meridian Energy Limited on 1 April 1999 (refer note 26).



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🏗️ Electricity Corporation of New Zealand Limited Financial Notes (continued from previous page)

🏗️ Infrastructure & Public Works
Financial instruments, Power stations, Energy retailing, SOE transfers, Hydro stations, Thermal power, Debt management