Health board seeks compensation for power cuts

The country's largest district health board is seeking half a million dollars in lost earnings from Transpower following the power cut which plunged much of Auckland into chaos last month.

Auckland District Health Board's move to recoup the cost of cancelling 608 operations during the June 12 blackout follows a clamour of similar compensation claims from business and consumer groups.

But Transpower, which owns and operates the national grid, said the incident was no different to other outages that have occurred in the past. A spokesman said the company has been advised it has no legal liability.

An independent report into the power cut caused by the failure of two shackles at the Otahuhu substation found the station had design deficiencies and there were "small, but critical weaknesses" in Transpower's maintenance programme.

"This was nothing to do with the weather - this was just incompetence," said Auckland DHB chairman Wayne Brown.

He said the health board was in the midst of putting together a claim for an estimated $500,000.

"If it was only $15,000 or $20,000, we wouldn't bother. It's a fair chunk of dough, and more than anything else, it's lost opportunity for us to deliver services to the people of Auckland. We're under constant pressure to reduce waiting lists, to improve elective outcomes, and it actually cost us more in production than the junior doctor strike," said Mr Brown.

The outage, which forced the closure of all but the hospital's emergency department, also set back the board's total tally of electives performed. For the year to April, Auckland had performed about 680 more surgeries than in the corresponding previous period.

"We're the only health board in the Auckland district which was ahead of last year. We struggled all year long to get 680 ahead and we have 608 people in that day and we can't do anything on them. And it's hard to get that back again."

The Employers & Manufacturers Association (Northern), meanwhile, is exploring whether to take a group case on behalf of its members.

Chief executive Alasdair Thompson said the association was proposing Vector initiate a class action against Transpower on behalf of its customers, and has written to its Auckland members advising them of the option.

He said Vector and local power retailers were not to blame.

"While the fault lies with Transpower, the problem is that businesses and other consumers are not direct customers of Transpower whereas Vector and the retailers are."

"This means that though we believe Transpower is liable if it were held to be negligent in its duty of care, insurance companies are not likely to settle on claims made directly by businesses if a third party is held liable."

Earlier this week, a consumer watchdog asked Vector to honour its promise to give a $50 credit to customers whose power is off for more than 2 hours.

Vector said it was not obliged to pay, and is blaming Transpower for last month's blackout.