'A bloody disgrace': Mayor John Carter's reaction to canned mill

Far North Mayor John Carter.

"A bloody disgrace" - that's how Far North Mayor John Carter describes the loss of a $300 million pulp mill which could have brought 200 badly needed jobs to Kaikohe.

The mill was to have been built in an industrial park at Ngawha making use of power and heat from a new geothermal power station planned by lines company Top Energy.

However, the Advocate revealed earlier this week that the mill has been shelved due mainly to plans by the Electricity Authority (EA), a government agency, to sharply increase the cost of power in Northland.

The mill had been backed by Northland Inc, NZ Trade and Enterprise and Ministry of Primary Industries, but they have decided not to take it any further due to uncertainty over future power costs.

Two overseas firms had been keen to invest in the new mill.

Mr Carter said it appeared one hand of government didn't know what the other was doing.

The EA's proposal to change the way New Zealanders pay for power could undo years of economic development work just as Northland was on the cusp of an "economic Renaissance".

Initiatives such as the cycle trail and a new tourism school at Paihia, together with Treaty settlements reached or under way in Northland, had created a sense of optimism about the region's future.

The council, iwi and central government had also been working together for better utilisation of Maori land, with many of the plans hinging on the industrial park at Ngawha.

"All of a sudden a government department called the EA stumbles blindly into the mix and puts the whole lot at risk. It's a bloody disgrace," Mr Carter said.

Not only had the EA proposal put the new pulp mill and its 200 jobs on ice, it also put at risk many existing jobs in the Far North.

He urged Ministers Simon Bridges (Energy) and Steven Joyce (Economic Development) to intervene.

"They've asked us to do a lot of hard work, and we have. Now they're saying they're not interested. We need them to step in."

Northland MP Winston Peters said NZ First had long spoken out for the need to add value in the wood industry, which would help Northland prosper again.

Now it seemed plans for a major wood processing plant at Ngawha had been "killed off by a self-serving, dysfunctional electricity industry".

"The decision of the project partners to back away from the Ngawha proposal is alarming. The fear of the EA's new pricing regime, which is likely to significantly raise power prices in Northland, is cited as a key concern. New Zealand is in dire straits if a proposal which has potential to boost the Northland economy and create jobs is stymied by an authority that is supposed to act in the long-term benefit of consumers," Mr Peters said.

Tai Tokerau MP Kelvin Davis said 200 jobs would have made a huge difference to Kaikohe.

As well as hindering new investment the changes proposed by the EA could add another $300 a year to Northlanders' power bills.

"Why should the people who can least afford it be hardest hit?" he asked.

The mothballed mill was one of the key projects in the government's 58-point Northland Economic Action Plan launched in February this year.