Upon the written request of the Company the Council shall supply water to the Company through the Tiwai Trunk Main into Tiwai Reservoir.
The Company having made the said request agrees to take water at a uniform rate (as described in 4.01) and to pay for the quantity received (4.02) at an agreed basis of costing (4.03).
It is further agreed that all of those works referred to above shall be carried out by the Council in the manner and to the extent more particularly detailed as follows and that the Company will meet its obligations in accordance with the terms as follows:
1.01 The Ring Main: As part of the improvements to the Council's water reticulation system in the City of Invercargill the Council proposes to lay a large diameter high pressure water main as a trunk feeder main to boost the supply to the north eastern, eastern and south eastern suburbs. This Ring Main will be laid commencing from the pumping station at the Waikiwi Reservoir, thence to Queens Drive, Herbert Street, Racecourse Road, Rockdale Road and Tramway Road to link up with the existing 15″ main in Tramway Road. The term “Ring Main” shall include all associated specials, valves, airvalves, scours, markers and covers, and other equipment or works as may be necessary.
The length of the Ring Main from the Waikiwi Reservoir to the corner of Rockdale Road and Tramway Road will be approximately 27,500 feet. The Ring Main shall be designed, purchased and completely laid by the Council or its agents when the Council determines but in any case not later than the date when it will be needed to serve the Tiwai Trunk Main.
1.02 Capacity of the Ring Main: The capacity of the Ring Main shall be:—
1.03 Company Share of Cost of Ring Main: It is agreed that the size of pipe necessary to supply the Company at a rate of 930,000 gallons throughout twenty hours of each day of the week would be twelve inch diameter throughout the length of the Ring Main. The Company Share of Costs of the enlarged capacity of the Ring Main shall be the cost of purchasing and supplying to the site of the Ring Main the equivalent length of twelve inch diameter pipe of the same class and materials as used for the Ring Main as laid together with such bends, valves, and specials, and other equipment or works as may be necessary, as well as the test meter referred to in Clause 1.05, as would have been necessary had such a twelve inch pipe been laid, but not including the cost of trenching, laying, backfilling, or surface reinstatement. The cost of the twelve inch pipe shall be deemed to be the price of this size pipe as quoted on site at the same time by the suppliers of the Ring Main pipe accepted by the Council.
1.04 Council Finance for Ring Main: The Council shall finance the full cost of the Ring Main (including the Company Share of Cost of Ring Main as defined in 1.03) by way of a loan raised in accordance with the terms and conditions approved by the Local Authorities Loans Board.
1.05 Rate for Ring Main:
(a) The Company shall pay to the Council a rate, calculated and payable quarterly, equal to such of the Loan Charges (as hereinafter defined) for that quarterly period applicable to the Company Share of Cost of Ring Main as are not capitalised pursuant to Clause 3.06. The rate shall be calculated and payable from the date when the Loan Charges applicable to the Company Share of Cost of Ring Main are first incurred by the Council until whichever is the sooner of the date when the said loan (including renewals thereof or of part thereof) shall have been repaid or the date when the Company is first supplied with water through the Tiwai Trunk Main (when at such latter time the rate shall be incorporated in the cost of water as set out in Clause 4.03(b)) provided however that if the extra capacity of the Ring Main provided for the Company is being used by the Council, the rate in respect of the quarterly period shall be reduced by an amount which bears the same proportion to the said Loan Charges for that period as the part of the extra capacity used by the Council during that period bears to the said extra capacity of the Ring Main provided for the Company.
(b) The Company may, in intervals of not less than twelve months, request the Council to, and thereupon the Council shall, demonstrate that the extra capacity of the Ring Main provided for the Company is or is not being used by the Council. The demonstration shall be made by permitting water to flow for a period to be agreed by the parties hereto through a test meter connected to the scour outlet near the proposed or actual start (as the case may be) of the Tiwai Trunk Main. If the rate of flow through the test meter can be sustained at 780 gallons per minute with a residual pressure in the Ring Main of 39 lbs per square inch then the extra capacity hereinbefore referred to shall be deemed to be available. If the said flow and pressure are not sustained then the Council shall be deemed to be using part of the said extra capacity. If such a demonstration shows that the Council is using part of the said extra capacity of the Ring Main the parties hereto shall thereafter determine during each quarterly period for which the said rate is calculated the part of the said extra capacity being used by the Council during each such period. The cost of water consumed during the said tests shall be paid for by the parties hereto in the same proportion as the said extra capacity is being used by each party.
1.06 Definition of Loan Charges: Where in this agreement the context so permits, “Loan Charges” means:—
(i) such underwriting fees, brokerages, loan advertising, placement fees and the like (including any management fees of the Reserve Bank of New Zealand as may be payable by the borrower) in respect of and interest payable on the Loan as are not capitalised or included in the cost of the work in respect of which the loans are authorised to be paid out of the said loans;
2.01 Tiwai Trunk Main: The Tiwai Trunk Main is the supply main to the Tiwai Reservoir from the corner of Rockdale Road and Tramway Road. The route of the Tiwai Trunk Main shall be via Rockdale Road to Woodend, then by as near a direct line as possible to the Bluff Road in the vicinity of the Phosphate Works, and thence via Colyers Road to the start of the causeway and bridge over Awarua Bay, then over Awarua Bay on the supports provided for this purpose upon the new bridge, thence via the flank of the new road to the Tiwai Reservoir.
The Tiwai Trunk Main shall be designed, purchased, and laid by the Council or its agents and shall remain the property of the Council even though it is outside the City boundary; although the Company makes no warranty nor shall it be obliged to ensure that it shall so remain.
On receipt of the written request of the Company, the Council shall expeditiously seek Loan Authority and Finance for Tiwai Trunk Main in the manner hereinafter provided and then proceed to construct the Tiwai Trunk Main to plans and specifications agreed between the Company and the Council. During construction of the Tiwai Trunk Main the Council shall keep the Company informed regularly of the progress of its construction, and shall consult with the Company as may be requisite regarding any alterations of or variations to the plans and specifications or to the method of, or arrangements for, construction of the Tiwai Trunk Main.
2.02 Loan Finance for Tiwai Trunk Main: The Council will use its best endeavours to raise the finance necessary to fully cover the Cost of the Tiwai Trunk Main by way of a loan raised in accordance with the approval of the Local Authorities Loans Board. The Company shall make such representations as may be appropriate with a view to ensuring that the raising of the said loan shall not be prejudicial to the raising of other Loan Finance by the Council to meet its normal commitments for other City works. The Council shall not be held responsible if the Loan Finance for the Tiwai Trunk Main is not forthcoming and thus causes any delay or detriment to the Company's works.
The Council shall invest at call any part or parts of the said loans which are not required for the time being to pay the cost of Tiwai Trunk Main.
2.03 Cost of Tiwai Trunk Main: The Cost of Tiwai Trunk Main means the total of the costs of:—
(d) the supply, delivery, and checking of all pipes, valves, and specials;
(g) the maintenance, servicing, and repair of the Tiwai Trunk Main, its valves, specials, and markers, by the Council or its agents, during the first six months of operation;
As soon as practicable after completion of the Tiwai Trunk Main the Council shall calculate the Cost and shall render a statement thereof in reasonable detail to the Company. The Company within thirty days after receipt of the said statement may make such comments as it sees fit. The Council shall consider the comments and shall render to the Company a final statement for the Cost of Tiwai Trunk Main. The statement first hereinbefore referred to shall be final and binding on the parties hereto if no comment is made by the Company within the said period otherwise the final statement shall, unless otherwise agreed, conclusively establish the Cost of Tiwai Trunk Main.
The Company shall pay to the Council a quarterly rate equal to such of the quarterly Loan Charges as are not capitalised pursuant to Clause 3.06 from the date when they are first incurred by the Council until such time as the Company is first supplied with water through Tiwai Trunk Main. Thereafter the Loan Charges are included in the price of water under Clause 4.03 (b).
2.04 Maintenance: The Council shall keep an account of all costs involved in the regular servicing, maintenance, repairs, or replacement of the Tiwai Trunk Main.
2.05 Other Consumers: The Council shall consult with, and consider fully representations made by the Company before making or allowing connections to the Tiwai Trunk Main to supply water to other consumers. The Council shall ensure that the Company's water requirements are supplied in full by the Council in priority over other consumers who may, from time to time, be supplied with water by the Council from the Tiwai Trunk Main.
In the event that the average total daily consumption in any quarter of all such consumers exceeds 5% of the total daily capacity of the Tiwai Trunk Main, the Council shall charge all such consumers in addition to the payment for the water received an amount per thousand gallons to cover a reasonable share of the loan and maintenance charges on the Tiwai Trunk Main and Loan Charges on the Ring Main as payable by the Company under this agreement.
3.01 Tiwai Reservoir: When requested in writing by the Company, the Council, through its own staff, agents, or consultants shall design and construct a reinforced concrete reservoir (in this Agreement called “Tiwai Reservoir”) of two million (2,000,000) gallons capacity upon the Reservoir Site.
The general principles of the design and construction and the layout of the pipework and valves shall be as agreed between the Engineering Manager of the Company and the City Engineer.
The Council shall purchase the freehold of the Reservoir Site from the Commissioner of Crown Lands, call tenders for, let, and supervise a contract for the construction and testing of Tiwai Reservoir, together with all associated piping, valves, meters, or other equipment as may be necessary.
During construction of the Tiwai Reservoir, the Council shall keep the Company informed regularly of the progress of its construction and shall consult with the Company as may be requisite regarding any alterations of or variations to the method of, or arrangements for, construction of the Tiwai Reservoir.
3.02 Loan Finance for Tiwai Reservoir: The Council will use its best endeavours to raise the finance necessary to cover the Cost of the Tiwai Reservoir by way of a loan raised in accordance with the approval of the Local Authorities Loans Board. The Company shall make such representations as may be appropriate with a view to ensuring that the raising of this loan shall not be prejudicial to the raising of other Loan Finance by the Council to meet its normal commitments for other City works. The Council shall not be held responsible if the Loan Finance for Tiwai Reservoir is not forthcoming and thus causes any delay or detriment to the Company's works.
The Council shall invest at call any part or parts of the said Loan which are not required for the time being to pay the cost of Tiwai Reservoir.
3.03 Cost of Tiwai Reservoir: The Cost of Tiwai Reservoir means the total of the costs of:—
(ii) engineering, design, and consulting services which are provided by, or arranged by, the Council in connection with the construction of the Tiwai Reservoir, and associated piping, valves, meters, and other specials;
(iv) the net amount paid to suppliers, contractors, consultants, and others directly related to the construction of the Tiwai Reservoir;
(vi) if authorised to be paid from loan moneys interest on and the cost of obtaining approval for and raising loans (including underwriting fees, brokerages, loan advertising, placement fees,) for the purpose of and applied in the payment of the foregoing items (i) to (v) (both inclusive) and incurred or accrued to the date of completion of Tiwai Reservoir less any interest received by the Council from temporary investment of any part or parts of the said Loan as provided in Clause 3.02.
As soon as practicable after completion the Council shall calculate the Cost of Tiwai Reservoir and shall render a statement thereof in reasonable detail to the Company. The Company within thirty days after the receipt of the said statement may make such comments thereon as it sees fit. The Council shall consider the comments and shall render to the Company a final statement of the Cost of Tiwai Reservoir. The statement first hereinbefore referred to shall be final and binding on the parties hereto if no comment is made by the Company within the said period, otherwise the said final statement shall, unless otherwise agreed, conclusively establish the Cost of Tiwai Reservoir.
3.04 License: As soon as possible after completion of the Tiwai Reservoir the Council shall license to the Company the use of the Tiwai Reservoir by instrument of licence, in the form, at the licence fee (which includes the Loan Charges) and upon the terms and conditions set out in the First Schedule hereto. The term of the said licence shall commence from the date construction of the Tiwai Reservoir has been completed or such earlier date as the Tiwai Reservoir is accepted by the Company for storage of water.
Until commencement of the term of the licence as aforesaid the Council, as far as is consistent with the stage of construction, and with contracts in relation to its construction, license the Company to install and connect water mains from the Tiwai Reservoir to the Smelter, and from the Company's water bores on Tiwai Peninsula to the Tiwai Reservoir, as well as install a chlorine injection system for bore water.
3.05 Purchase of Tiwai Reservoir: If the Company has not within a period of five years after the commencement of the term of the said licence given notice pursuant to Clause 2.01 requesting that the Council lay the Tiwai Trunk Main then the Company shall at the expiry of the said period purchase from the Council the Tiwai Reservoir together with the whole of the Council's estate or interest in the Reservoir Site for an amount equal to the Cost of the Tiwai Reservoir as defined in Clause 3.03 less the total of all periodical payments or provisions made in respect of the reduction of the principal of all loans raised to pay the Cost of Tiwai Reservoir. The purchase shall be made in cash in one payment within sixty days after an audited statement of the amount payable is given to the Company.
In the event of the Company wishing to purchase Tiwai Reservoir at any time, and the Council being willing to sell, then the above terms shall apply unless agreed otherwise.
3.06 Loans Generally: When the Council applies to the Local Authorities Loans Board for approval to raise loans required to cover the Cost of Ring Main, Cost of Tiwai Trunk Main, and Cost of Tiwai Reservoir it shall use its best endeavours to obtain the approval of the Board to the raising of the loans on terms which will provide for the repayment of the whole of the principal and interest thereon over a period of not less than twenty years, and to the payment from the proceeds of the Loan of:—
Any payments so approved shall be capitalised and shall form part of the cost of the relevant facility for the purpose of this Agreement.
3.07 Loan for Tiwai Reservoir: In addition to the foregoing the Council in applying to the Local Authorities Loans Board for the loan for the Tiwai Reservoir shall request that it be on the additional condition that the Council pays only interest thereon to a date being not earlier than the 31st day of March 1971.
4.01 Supply of Water to Company: When requested by the Company in writing and after completion of the Tiwai Trunk Main the Council shall supply water into the Tiwai Reservoir. Such water shall be supplied at as uniform a rate of flow as possible throughout twenty hours of each day of the week. The Company will use its best endeavour to avoid unnecessary surges in demand for supply of water from the Council. Variation in the rate of demand for water from the Council will bear approximately the same relationship to average demand from the Council as the actual Smelter demand from the Tiwai Reservoir bears to the average demand from the Tiwai Reservoir. Only in the case of fire, breakdown of supply or other emergency shall the Company draw the water storage in Tiwai Reservoir down below 500,000 gallons.
4.02 Measurement of Flow:
(f) If at any time the quantity of water recorded by the Council water meter is not within 5% of the quantity of water recorded by the Company water meter (if such meter is installed) then the meters shall be deemed to be registering in error and the Council shall forthwith have both meters tested by a competent Engineer appointed by the Council after consultation with the Company. If the Council meter is found to be accurate within 5% when tested, the cost of such testing shall be paid by the Company.
(h) If at any time the said meters are found to be registering in error as aforesaid then the fault shall be deemed to have arisen immediately after the last regular monthly meter reading made prior to the date on which the meters were found to be registering in error, or from such later date as they may have been checked as both reading without error.
4.03 Basis of Charging for Water:
(a) The Council shall calculate in accordance with established accounting principles the cost per thousand gallons to the Council of all water supplied by the Council to all its consumers (including the Company) during each financial year. The calculations shall be taken from the Council's Annual Statement of Accounts covering the accounts for the supply section only of the Water Department. This excludes the cost of the internal city reticulation network but does not exclude the Ring Main. The items more specifically covered under Supply include:
The sum of the Loan Charges and the Operating Costs will be multiplied by 1,000 and divided by the total number of gallons of water delivered out of the Branxholme Pumping Station annually, thus giving a figure to be known as the “Council's Unit Cost” per 1,000 gallons of water.
(c) As soon as possible after the end of each quarterly period the Council shall render to the Company a preliminary statement of the amount payable by the Company for water supplied to it by the Council during that quarterly period calculated pursuant to paragraph (b) of this Clause, but by making an estimate of “B” (being the Council's Unit Cost per 1,000 gallons) based on the Council's approved Annual Estimate of Expenditure for, and an estimate of the quantity of water to be delivered out of Branxholme Pumping Station during the Council's financial year in which the relevant quarterly period falls. Within 14 days after receipt of the preliminary statement the Company shall pay the amount shown thereon. If the Company does not pay the said amount within the aforesaid 14 days then all payments in arrear shall forthwith incur interest which shall accrue from the due date at a rate of 2% above the approved maximum interest rate payable for Local Authority loans. In the event of any error or discrepancy being discovered in any statement then, unless otherwise agreed, an appropriate adjustment shall be made in the next statement.
(d) As soon as possible after the end of each financial year of the Council, the Council shall give to the Company an audited statement showing the factors in and calculation of the Council's Unit Cost per 1,000 gallons of water for that financial year together with a final statement for that financial year showing the adjustments to be made to the preliminary statements rendered in respect of the quarterly periods of that financial year as a result of the adoption of final figures in lieu of the estimate made for the factor “B” in the formula for calculating the price of water. The said adjustments shall be made by debits or credits (as the case may be) to the next quarterly preliminary statement rendered to the Company.
4.04 Failure to Supply: In the event of a breakdown in the supply of water to the Tiwai Reservoir the Council will immediately notify the Company and will take all steps possible to restore the supply as quickly as possible. If the failure is due to a breakdown in the supply to the City so that the City supply has to be conserved the Council may shut off the supply to the Tiwai Trunk Main for a period not exceeding 18 hours. During this period the Company will conserve its own storage and will use any auxiliary supply available to it. After the initial 18-hour period if the full supply is not restored, then the Council will supply Water to the Tiwai Reservoir at such rate as may in the opinion of the City Engineer be reasonable having regard to all the circumstances. The Council shall not restrict or prohibit the use of water supplied pursuant to this Agreement except as is herein provided.
The Council shall not be held liable for any claim by the Company as a result of any such interruptions to the supply of water to the Company.
4.05 Supply to Others: The Company may supply water from Tiwai Reservoir to the Southland Harbour Board for its operations on Tiwai Peninsula as well as ships berthing at Tiwai Wharf, contractors and others on Tiwai Peninsula engaged in the construction, expansion, or repair of the Smelter and its associated facilities and works, and to any industry or operation established on Tiwai Peninsula by Comalco Industries Pty Limited and any of its subsidiary companies, provided always however that such water shall be supplied by the Company at cost to it.
4.06 Other Rates, Fees and Charges: No other rates, fees, or charges (however the same may be termed in future Council by-laws) other than those agreed between the parties hereto will be charged against the Company in so far as they apply to the supply of water to the Company.
5.01 Term of Agreement: The term of this Agreement shall be for a period from the date of this Agreement until the last of all the loans raised to meet the cost of the Ring Main, the Tiwai Trunk Main, and the Tiwai Reservoir, and all renewals of or replacements for those loans or any of them have been fully repaid. It is the intention of the parties that Section 248(4) of the Municipal Corporations Act 1954 shall not apply to this Agreement.
5.02 Provision for Extension or Review of Agreement: In the event of the Company wishing to draw more than 930,000 gallons throughout twenty hours of each day or more than can be supplied in the Ring Main or Tiwai Trunk Main, or needing more storage than is provided by the Tiwai Reservoir, then this Agreement may be amended or extended as agreed to by both parties. Throughout the currency of this Agreement or any extension of it either party may, on the giving of three months' written notice, request that the terms of the Agreement be reviewed or revised subject to the request being made not more frequently by either party than at three-yearly intervals, dating from the date of the Agreement. The parties shall consult in good faith to consider the request.
5.03 Precedence: In the event of any conflict or inconsistency between the terms and conditions contained herein or the expressed or implied intention of the parties set out in the recitals herein on the one part and Council by-laws on the other part, the terms, conditions, and recitals contained in this Agreement shall at all times be paramount.
5.04 Legislation: Where any matters, things, conditions, or agreements contained in this Agreement are outside the existing powers of the Council, or in the opinion of the Council or the Company would require validation, the Council shall use its best endeavours to have them validated by appropriate legislation and they shall be conditional upon such validation being obtained. Failure to secure the approval of the Local Authorities Loans Board to the raising of any of the said loans or failure by the Council to raise the necessary finance shall not render the Council liable for any claims for damages for failure to carry out the terms of the Agreement.
5.05 Insurance: Unless the Company requests it the Council will not take out insurance, either fire or earthquake, on the Ring Main, Tiwai Trunk Main, or the Tiwai Reservoir. The cost of any such insurance shall be included in the costs which go to make up the price of water supplied to the Company.
6.01 Arbitration: In case of any difference or dispute arising as to any clause matter or thing herein contained or implied or as to the construction hereof or arising in any way in respect of this agreement such difference or dispute shall be decided by an arbitrator if the parties can agree upon the appointment of one person or failing agreement to be nominated on the application of either party by the President for the time being of the New Zealand Institution of Engineers and such reference shall be deemed to be a submission to arbitration within the meaning of the Arbitration Act 1908 or any statutory re-enactment or amendment thereof for the time being in force.
(a) All notices, requests, consents, statements, and other communications (other than day to day communications between the parties) and all of which are hereinafter referred to as “communications” shall be in writing.