Freak power failure puts Auckland out of business

THE New Zealand power company Mercury Energy said at the weekend that it expected the restoration of normal electricity supplies to central Auckland to take more than a week, after a freak power crisis paralysed the central business district.

Hundreds of businesses are preparing to shut down for the next week and thousands of residents are leaving their homes after the fourth - and final - major power cable supplying the inner city failed on Friday night.

Mercury said that only 10 per cent of the central city will have power this week, leaving only emergency services and hospitals supplied with mains electricity. Repair crews were, it said, working around the clock, but only one of the four collapsed cables would be fixed by the weekend.

"It will bring back some supplies to the CBD. It will not be a normal supply. We will not have a normal supply until at least two more cables are fixed. Early in the following week is the best estimate," said Richard Gibbons, Mercury's general manager of networks.

He said people in the affected area who had power were likely to lose it and those without should not expect it to return for up to seven days. Businesses have been told to close for a week or relocate if they do not have their own power generators, and residents have been told to find alternative accommodation.

The Prime Minister, Jenny Shipley, said that at this stage the government was not getting involved. "It is a contractual matter between the supply authority and businesses in the downtown area," she told Television New Zealand, which was able to stay on air thanks to diesel-powered generators.

She said the government's role in the crisis may be in the form of an inquiry. "We need to know how this occurred, and we need to know whether there is anything we can do to avoid it happening again." It was unclear how many businesses would open in Auckland today.

Michael Jacomb, the manager of Power Hire Generators, said his entire stock of more than 100 generators had been hired or sold. The Coopers & Lybrand building, Auckland's largest central office block, was shutting down for the week.

Also closing were Auckland University, where 12,500 students had been expected to attend Enrolment Week over the next few days, and the Auckland High and District Courts.

Furious retailers have called on Mercury to compensate for losses caused by the crisis. But while Mercury accepted responsibility for the power failure it denied it had scrimped on maintenance and has refused to pay compensation unless it is shown to be negligent.

Its chief executive, Wayne Gilbert, said the CBD network's design standard was the same as for similar sized European cities. Four major cables to the district, rated at a total of 440 kilovolts of electricity, have failed over the past month. Mr Gibbons said it would be hard to determine the cause of the failures until parts of the cable were sent overseas for testing, but the long, hot summer had probably contributed.

However, Michael Barnett, head of Auckland Chamber of Commerce, said it was unacceptable that the country's commercial heart had to operate in a "Third World" environment of unreliable infrastructure.

"Irrespective of fault, business has been dealt a major blow," he added, "and in time a fair and just compensation needs to be found."