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Legislative Assembly for the ACT: 1999 Week 4 Hansard (20 April) . . Page.. 999 ..

MS CARNELL (continuing):

in a merger where it could be subsumed by another company, but would consider all alliances that allowed ACTEW to remain in public hands while reducing the risk it faced from competition". Mr Deputy Speaker, those were Mr Quinlan's own words.

Mr Kaine said on ABC radio on 13 April 1999 in relation to merger investigations that "this is the sort of stuff that the Government should be doing". On the same day on ABC radio, Ms Tucker said that the Greens would need to see the detail before they would be able to say how they would vote on such a proposal. That is a reasonable approach. I would expect all members to judge any proposal on its merits after the Government has investigated the full range of options.

The Government has accepted the Assembly's decision that a sale of ACTEW is not an option, but that does not mean that we should do nothing. I am sure the Assembly would agree with me on that. Consequently, the Government is investigating ways of addressing the challenges that ACTEW faces, including the lack of economies of scale and lack of capital to fund growth options without resorting to the sale of the business. The Government is therefore investigating the possibility of strategic partnerships, as that seems to be a course of action universally agreed by members of the Assembly, although you would not know from the actions of those opposite today, in an attempt to ensure that ACTEW has the critical mass to be able to compete effectively in the national electricity market. Expressions of interest were called on 10 April 1999 inviting proposals from other industry participants, the benefits of which will be considered by the ACTEW board and the Government.

Not only do most members of the Assembly believe that we should be pursuing partnering options, but also the ACTEW board and management believe that they should be pursued. It should also be remembered that the other party we will be talking to in relation to a possible merger with GSE is the New South Wales Labor Government, who also believe that this approach is worth investigating. It would appear that the Opposition is out of step with not only the wishes of the Assembly but also with their New South Wales colleagues.

The Government's objectives in calling for expressions of interest are: To improve the commercial viability of ACTEW and enhance economic efficiency; to achieve either a reduction in risk or at least no increase in risk for ACTEW; to maintain effective government control over the core services of ACTEW; to provide the opportunity for releasing significant excess capital from ACTEW; and to assist in the economic development of the ACT region.

While many possible arrangements exist for ACTEW to enter into, some are more apparent than others. A merger with GSE is one. However, a merger with Great Southern would pose some complex cross-jurisdictional accountability and regulatory issues. If a proposal to merge with GSE was to be considered in the same light and timeframe as proposals from the private sector arising from our call for expressions of interest, these issues would need to be flushed out. That is exactly what the preliminary discussions taking place between the ACT and New South Wales are doing, and the working party has been established to identify and investigate all relevant issues. Naturally, the ACTEW board and the Government would be derelict in their duties if they did not consider all relevant options that may be available for joint ventures,

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