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Legislative Assembly for the ACT: 2000 Week 8 Hansard (29 August) . . Page.. 2497 ..
MS CARNELL (continuing):
Their theoretical review suggested an equalisation payment in the range of $123 million to $138 million. The likely equalisation payment of $128.8 million which has been achieved through negotiation lies within this range. A market sale of ACTEW or its electricity assets and business would yield a higher price than can be achieved through the negotiated establishment of a partnership. However, the Assembly determined that a sale option is not available.
The government and the committee of ACT government chief executives which has oversighted the entire process consider the minimum equalisation payment achieved by ACTEW represents fair value to the ACT.
The value which the ACT will derive from the joint venture goes well beyond the receipt of the equalisation payment. The joint venture will increase the shareholder value of ACTEW by an estimated $56 million to $1,272 million. ACTEW's annual profits are also forecast to increase over the next five years, resulting in increasing annual dividends and tax equivalent receipts to the ACT.
As I mentioned earlier, the ACT government and AGL have agreed to a memorandum of understanding which sets out the initiatives which AGL will undertake to contribute to the ACT economy. These initiative are: the development of a gas-fired power generation plant in the ACT; the establishment of a major operation in AGL's national customer call centre system in the ACT; and the location of the national headquarters of an AGL infrastructure services management business in the ACT.
This memorandum of understanding will deliver significant additional economic benefits and employment benefits to the ACT region. There will be substantial investment, and about 100 full-time ongoing direct and indirect jobs in the ACT are expected to be created.
Mr Speaker, in endorsing the joint venture the government has taken particular care to ensure that the territory's assets have been afforded the maximum protection. The proposed contracts between ACTEW and AGL to establish the joint venture and partnerships have been reviewed and cleared by the ACT Government Solicitor. In addition, an independent probity auditor was appointed with a key task of ensuring "that by the provision of proper, independent professional service, the interests of ACTEW and its shareholders are protected and that any agreement is fair and equitable".
The independent probity auditor has reviewed the process of the establishment of the joint venture and has concluded that: the process was appropriate for a transaction of this kind, and has been carried out professionally; those representing ACTEW acted fairly and equitably, with full information being provided to the ACTEW board, the shareholders and the Standing Committee on Finance and Public Administration; and that the shareholders now have sufficient information to make an informed decision on whether to proceed with the final agreement as negotiated between the parties. The full report of the independent probity auditor is also part of the papers I plan to table today.
Appropriate legal protections have been developed to ensure that the assets which ACTEW is to contribute to the partnership are fully protected. On 5 July 2000 AGL advised ACTEW that AGL and its subsidiaries are restricted from borrowing on either
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