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Legislative Assembly for the ACT: 2000 Week 1 Hansard (17 February) . . Page.. 222 ..

MR HUMPHRIES (continuing):

the possibility of the sale of ACTEW, based on recommendations contained in the ABM AMRO/DGJ Projects scoping study of ACTEW Corporation, and a merger between ACTEW and Great Southern Energy. Neither of those options was able to proceed.

Expressions of interest were subsequently called from organisations wishing to enter into joint ventures with ACTEW. The ACTEW board concluded that a proposal from the Australian Gas Light Company (AGL) warranted further investigation and that was agreed to by the Chief Minister and me as ACTEW's voting shareholders. Mr Speaker, those investigations indicate that a partnership between ACTEW and AGL for the provision of energy, both gas and electricity, water and waste water services has the potential to benefit both ACTEW and the ACT community as its owner by providing a more secure and diversified base for ACTEW's future operations through further enhancing the existing multi-utility synergies while reducing its energy trading risk and, secondly, enhancing the value of the Territory's investment in ACTEW while reducing the Territory's exposure to potential losses from energy trading by ACTEW. The initial investigations have proved positive and the proposed partnership has the support of both the ACTEW board and AGL.

The Government is at the stage where it is seeking the agreement of this Assembly to allow the partnership negotiations to proceed to the due diligence stage and has brought forward a Bill which establishes the framework for those negotiations. The ACTEW/AGL Partnership Facilitation Bill 2000, presented to the Assembly now, facilitates the formation of a joint venture by ACTEW and AGL by way of a partnership. It provides for agreements for the provision of electricity and gas and for the undertaking of water and sewerage operations and maintenance activities.

The partnership agreement between ACTEW and AGL was a significant initiative based on sound commercial realities. I would like to assure members that the Government has required that, in addition to reducing ACTEW's energy trading risk and enhancing the investment in ACTEW, certain essential protections are firmly in place. Specifically, these are that the interests of ACTEW staff be protected, that the Territory's financial interests in the infrastructure assets are retained, and that the water and sewerage infrastructure is to remain as a resource belonging to the Territory.

Mr Speaker, these requirements will be met through the following structural and other arrangements involving ACTEW and AGL: ACTEW Corporation Ltd will remain intact and will be subject to the TOC Act, which will remain unchanged by this Bill; no change will be made to the ownership and accountability relationship between ACTEW and the Government, nor to the relationship between ACTEW and the Legislative Assembly; ACTEW will carry on its existing business through entities created for partnership purposes; two partnerships, one involving energy distribution and the other energy retail, will be created in which ACTEW and AGL will both hold equal interests - ACTEW therefore does not lose control of its existing businesses, plus it gains an interest in the ACT gas business; the partnership will control and operate the existing ACT electricity and ACT and Queanbeyan gas supply businesses of the two companies and manage ACTEW's water and sewerage business under contract; existing staff will remain as ACTEW employees with all associated benefits and protections;

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