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Legislative Assembly for the ACT: 2000 Week 12 Hansard (7 December) . . Page.. 3851 ..

MR QUINLAN (continuing):

A number of years ago I managed the project that set up Actew out of the ACT Electricity Authority and the ACT Water Administration. Given the number of lawyers, consultants and bankers I met in relation to that project, it is fairly clear that times have changed in terms of how we handle a project like this. It involved a very substantial amount of professional support.

We have a $119 million equalisation payment, with $32 million in capital, a total of $151 million, for half of our electricity supply system. Overall, we got a bum deal because of the way we went about it. It has been my contention - and I would like to make it a matter of record before this year closes - that option 1 presented by AGL, under which we could have worked with them in the purchase and supply of energy without necessarily ceding control over our assets, seemed to be the far more preferable option. But given that the government had been defeated in its bid to sell off Actew - which, as the house has been reminded, was not on their agenda anyway - there seemed to be a fairly bloody - minded approach to sell something because this fell into the realm of win/lose. We got less than an optimum price for a very highly prized asset in the ACT.

We were informed during the process that if it did not work out we could always back out of the deal and the assets could revert to the ACT. By the time the day the deal was to be finally signed and sealed arrived, it was clear to all that this was not going to be a deal that could be backed out of. I do not think you can go into a partnership with a firm the size of AGL and say, "We are in a partnership with you, but we may change our mind and back out tomorrow." They are not interested in a deal like that. You have to know what you are doing. The assurances that at some future time we would be able to back out of this deal and effectively unscramble the egg were just so many high promises made in order to progress this deal and, I guess, maintain support of non - government members within the place. That is a bit of a shame.

I congratulate the people who worked on this deal. They did a very creditable job within the framework that was set. It is still to my mind an inevitability that there will be considerable pressure for the sale of the other half of Actew. There is also likely to be considerable pressure for a capital restructure which is closer to AGL, which is much more highly geared than the Actew that we own. We were fairly conservative in the operation of Actew over many years, and financially it was probably one of the strongest electricity supply organisations in Australia, with one of the most modern systems - a function of Canberra's fairly rapid growth over recent years. It therefore was a prize acquisition.

AGL have done very well out of this deal. I observe from the last annual report of Actew that they could pay $66 million in dividends in one year, which if you own half of it would be $33 million in one year. But we sold it out for $150 million all up. It does not seem to me to be a very good deal. Whether it be the Bruce Stadium, whether it be CanDeliver, whether it be InTACT, whatever business the government have put their hands on directly has turned sour. It is no wonder that they have a philosophy of outsourcing and selling off. It does not look to me that they are capable of very much at all. It is a great shame that an asset like Actew, which could have been preserved through the first option offered by AGL, was flogged off, I think through sheer bloody - mindedness.

Question resolved in the affirmative.

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