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Legislative Assembly for the ACT: 2000 Week 12 Hansard (7 December) . . Page.. 3849 ..

MR HUMPHRIES (continuing):

The independent review undertaken by KPMG confirms the view of the standing committee that Actew and its advisers were successful in achieving "an overall outcome which is equitable to the ACT".

The government is confident that it has already put in place sound and effective corporate governance arrangements that were closely reviewed at an early stage of the partnership negotiations. I note the standing committee received advice about corporate governance measures during their deliberations, and their report does not contain any specific recommendations.

The government's corporate governance arrangements applying to the joint venture partnership are briefly outlined as follows.

• The territory's interests are specifically protected by the ACTEW/AGL Partnership Facilitation Act 2000. The act ensures Actew cannot reduce its share of the partnership below 50 per cent without the prior approval of the Assembly.
• The facilitation act also ensures that only Actew fully owned subsidiaries can represent the interests of Actew in the partnership. As such the subsidiaries remain subject to the full range of controls applied by the Territory Owned Corporations Act 1990, including requirements relating to statements of corporate intent, appointment of directors and borrowings. And of course the directors remain bound by Corporations Law to ensure that they act in the best interests of Actew.
• In keeping with the facilitation act, under the partnership agreement:

• Finally, the joint venture will still be subject to the full extent of utility regulatory controls in the form of operating licences, pricing regulation, performance standards and penalty provisions. The utilities legislation passed last week has impacted in this context.

Clearly, the government has ensured that Actew's pre - existing corporate governance arrangements will be maintained and reinforced through the ACTEW/AGL Partnership Facilitation Act 2000.

Although the standing committee did not make any specific recommendations, I would like to take this opportunity to respond to several comments contained in the report. The committee expressed disappointment that it did not receive the final reports of the independent valuation and probity audit before the deal was finalised. However, both reports were tabled in the Assembly on 29 August this year, the day after the government received them, and the partnership was finalised on 3 October 2000. I also note that it was part of the contractual agreement KPMG and Stephen Marks had with the government that they appear before the standing committee if called upon to do so.

The committee's report also comments that "the establishment of a joint venture would make it difficult for the ACT government to ever realise a full control premium in any future sale" of Actew. The committee acknowledged that these constraints may be a necessary cost of achieving the promised partnership benefits. The government agrees that this is a matter of stating the obvious. As noted in the KPMG report:

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