Legislative Assembly for the ACT: 1998 Week 9 Hansard (19 November) . . Page.. 2692 ..
Mr Quinlan: Well, you say a lot about them.
MR SPEAKER: You asked for information and the Chief Minister is answering.
MS CARNELL: Mr Speaker, one thing I do know about it is that it has not been signed at this stage and I would hate to do anything to undermine that deal. I understand that, yes, it looks like it will be a very good deal for ACTEW if they could sign it. But let us be fair, Mr Speaker; so was Yallourn for the first four weeks until electricity prices fell below where we were hedging at. That is the problem with all of these deals. They come with risks. You enter into long-term - - -
MR SPEAKER: Order, please! Do you want an answer?
MS CARNELL: I am trying to give one. You are asking for details and I am trying to give them. The problem with long-term agreements is they are absolutely essential in this market to give some confidence, but equally, if you take, as we did with Yallourn, a three-year agreement or whatever at a particular price and the price of electricity falls below it, you lose money. If it is above it, you make money. It is quite simple. It is not as if this is a way to remove the risk of the market. What it does is minimise the risk because obviously you have power at a particular price over a period of time, but you cannot guarantee that the market will not fall below your hedge price, as it did with the Yallourn deal.
I am very hopeful that the Delta arrangements will come to pass. I hope that they are the best possible deal that ACTEW can do in a very difficult marketplace. I am confident the people who are negotiating that deal will keep the best interests of their owners, the people of Canberra and the taxpayers, in mind when they do that deal.
MR RUGENDYKE: My question is to the Chief Minister, Ms Carnell. Chief Minister, in relation to the proposed sale of ACTEW, I understand that the model suggested for the sale of the water business entails the ACT Government retaining ownership of the water resource, the dams, and the water and sewage treatment plants but also includes a lease contract that would be granted to the owner of ACTEW for a period of 50 years and the water and sewerage pipes being relinquished as a part of the sale. Are there any other water utilities in the world which operate under this model, particularly with a 50-year concession?
MS CARNELL: Mr Speaker, there are other models that are very similar to this one. The general approach worldwide is for multi-utilities. That seems to be the way things are going. Instead of having a water utility, an electricity one and a gas one, utilities are becoming multi-utilities. As you know, ABN AMRO suggested that we sell the whole lot, sell water and so on and keep them in one entity. We believed that it was essential for the ACT to maintain strategic assets - water testing facilities, sewage testing facilities, the dams and water generally.