Joewolf, I looked at the article but I couldn't see the reference to maintenance costs.
$10,000,000/ year seems very low. Lets look at it a couple of ways;
a) Consider that a tradesman is paid at least $60,000, Engineers more, tradesman's mates a little less; say $60,000 average for the maintenance guys. 35% on costs for super, insurance, payroll tax, leave; total cost $78,000. $10m would pay for about 128 maintainers. Which is about what I would expect out of a staff of about 300. However this doesn't allow for refactories, parts, oils, crane hire etc.
b)Perhaps you are considering maintenance costs only, not rejuvination costs. These might be $10m Imagine the maintenance costs of a truck; servicing, oil and tyres etc. They are quite predictable. However if you want the truck to last 70 years you need to add the ongoing cost of rebuilding (new gearboxes, diffs and engines). These rebuilding costs are seen as capital items by the ATO. These rebuilding costs are not tax deductible but are the logical offset of depreciation. It is these rebuilding costs that I don't think are being allowed for. The PSH plant is depreciating without reinvestment.
Bacci
PSH Price at posting:
38.0¢ Sentiment: Sell Disclosure: Not Held
