This is the country of Niue, a little island. It’s a self-governing, in free association with New Zealand.
A lot of New Zealanders got there for holidays in tourism. They are able to come to New Zealand.
When that was allowed, the population sort of went from about 10,000 to about 2,000. Everybody came to New Zealand.
And we just recently did an asset management plan for every single asset in the country. So, this is the entire country’s assets. This one of one more slide.
And the thing is we did this by cost category. So I’m going to show it to you.
So, “Operations and Maintenance” is the light blue; “Depreciation;” “Risk” reserved for cyclones mainly for them. Then “Renewals” and then “Capital”, the new capital. And so this I think renewals around power assets.
And what we said to them when you look at all of that, that’s your average over the next 10 years, and about $28 million. Now they don’t have $28 million dollars. So, that’s the problem.
What they do now, I think they’ve got 15 or 18 – about maybe 10 million dollars short, but New Zealand provides most of their money.
So now they are in negotiation with New Zealand, saying hey, we actually need to do the job properly, we need $28 million. So, we’re now talking about real numbers as opposed to what we think we need or whatever.
And in the second graph is by asset type. So, green is the power supply.
So, what they’ve got diesel generators there at the moment.
They are planning to go onto solar power supplies. So, that’s the solar upgrade basically because on an island every bit of diesel has to be carted in across the wharf, which is quite expensive.
Solar is also a lot more environmentally sustainable than carting in diesel all the time.
And I said there’s your $28 million but you can see it by different classes of assets going forward.
And so, that’s the whole country and you can do that for any country once you’ve done the initial analysis.
And what it allows you to do is have the discussion about affordability, which is strategic.
So, for them, the big question they’re trying to answer is, what’s affordable and what is our priority?
We want to build this stuff. We all think it is necessary but if we can’t afford it, which ones do we do first, which ones do we do second.
I tell you now, they will do the power first because it cuts out the need to bring everything across the wharf, and also sets them up for saving a lot of costs.
FEATURED IMAGE CREDIT: sandwich via Flickr Creative Commons License