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Legislative Assembly for the ACT: 2001 Week 10 Hansard (29 August) . . Page.. 3630 ..

MR HUMPHRIES (continuing):

assessment of TransACT's commercial viability, and shareholders' predictions as to the long-term viability of the venture.

Mr Speaker, it is important to understand that Actew currently has approximately a 35 per cent shareholding in TransACT, with the majority, 65 per cent, being owned and funded by private companies and individuals. TransACT is also in a highly competitive market, so sensitive commercial information disclosed in this place could be of value to TransACT's competitors, and could therefore seriously jeopardise the company's ability to compete on a level playing field.

The history of the TransACT project has been outlined in the Assembly on several occasions, and I will summarise it briefly now. Actew began investigating the use of its infrastructure to support a broadband fibre-optic network for the ACT after the national capital was excluded from the analogue rollout of cable by both Telstra and Optus. The government supported this project, as it was seen as a necessity for Canberra to provide real opportunities for business, education, health, innovation and private use, and to ensure that we were not left behind the rest of Australia in the area of the latest technologies.

In 1998, the board of Actew Corporation sought approval from shareholders to conduct a trial of broadband fibre technology in Aranda, ACT. The work leading up to the trial and on various independent financial and technological reports resulted in expenditure of some $6 million.

Following the overwhelming success of the Aranda trial, Actew again approached the shareholders and sought agreement to establish TransACT as a commercial business. This request was supported by:

a business case and independent technological and financial reports, which indicated that the concept was viable;

a strong proposition that there would be major benefits for Canberra, as it continued to promote high technology industry as one way of offsetting major cutbacks in Commonwealth spending and employment in Canberra;

a proposition that Telstra and others had basically ignored Canberra in their national rollout of new technology;

the need to involve other investors to offset some of the risks and to gain access to specialist expertise, equipment and vendor finance;

the importance of Actew holding at least 25 per cent of shares, so that it could ensure that any special resolution by TransACT directors was in the best interests of the Canberra community; and

a possibility, at least, that the Actew Corporation could choose to withdraw some or all of its investment within two years, when it was expected that the timing could be conducive to some sort of public float, possibly giving some form of preference to the citizens of Canberra.

The shareholders accepted this advice from the Actew Corporation board. Actew was joined by the Telecom Venture Group and, in February 2000, TransACT Communications was established. In May 2000, a series of other investors, including AGL and Marconi, made further investments in the company.

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