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Legislative Assembly for the ACT: 2000 Week 12 Hansard (7 December) . . Page.. 3850 ..

MR HUMPHRIES (continuing):

The ACT Legislative Assembly has previously prevented the government from selling ACTEW and this constraint may have reduced the ACT's ability to maximise the value of ACTEW.

Mr Speaker, as the joint venture is a fifty - fifty partnership, it is not appropriate to include a premium for the control of either Actew's or AGL's contributions to the partnership. According to the terms of the partnership, Actew assumes a 50 per cent interest in the gas business and AGL assumes a 50 per cent interest in the electricity business. Both parties share the convergence benefits that are created.

If the partnership is ever dissolved, then each party takes back their respective contribution and the synergies are lost. Obviously Actew may need to make a payment to AGL to reverse the original equalisation payment. Actew would then retain 100 per cent interest in the electricity business. Both Actew and AGL recognise that dissolving the partnership may well result in a loss of value. This provides a strong motivation to both parties to ensure the partnership remains successful.

Finally, Mr Speaker, the standing committee's report stated:

I can say that this will happen as a matter of course. Under section 25 of the Territory Owned Corporations Act, Actew must seek my approval as Treasurer to borrow moneys. Before issuing such approvals, I would require assurances that the boards of Actew and its subsidiaries have also given detailed consideration to the level of proposed borrowings. Any such borrowings would then be clearly identified in Actew's statement of corporate intent, Actew's annual report and the government's own budget papers, all of which are required to be tabled in the Assembly. I should also add that I am not aware of any immediate plans for Actew to undertake further borrowings, and I would expect it would be premature at such an early stage, with the partnership having only been completed on 3 October 2000.

Mr Speaker, this government has worked long and hard, together with Actew and its many advisers, to ensure Actew is strategically positioned to compete effectively in the national electricity market. As such, I would like to thank the members of the Standing Committee on Finance and Public Administration for the constructive manner in which they conducted their review.

MR SPEAKER: I would like to acknowledge the presence in the gallery of the Hon Tim Fischer MP, former Leader of the National Party. Welcome to the ACT Assembly.

Members: Hear, hear!

MR QUINLAN (3.32): I reiterate the committee's conclusion that the officers involved in this particular exercise had carried out their work very professionally. within the framework of the decision that they had to work with.

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