Legislative Assembly for the ACT: 1999 Week 4 Hansard (20 April) . . Page.. 998 ..
MS CARNELL (continuing):
Why is the Government pursuing a merger? At the outset the Government's objective has been to maintain the value of ACTEW on behalf of the Territory. Previously the Government decided that the best way to do that was to undertake a combined sale and concession of ACTEW after the outcomes of rigorous investigations into the risks that ACTEW faced and the pros and cons of the numerous options that were available had been considered. The studies were carried out by experts in their fields. The first of these studies was by Fay Richwhite and stated:
As a sole shareholder in the ACTEW business, the ACT Government is faced with a substantial dilemma in relation to the growth options available to ACTEW. While the pursuit of these growth options is the key to the enhancement of ACTEW's long-term commercial value, the pursuit of these growth options carries the risk of investment failure to varying degrees.
So, there is a real issue of failure if we get involved in the sort of growth that Mr Quinlan just spoke about, Mr Deputy Speaker.
In September ABN AMRO delivered a scoping study into ACTEW which indicated that ACTEW would lose about $500m in value if the utility remained under public control. On 2 February, during the debate on the ACTEW (Transfer Scheme) Bill, members of the Assembly asked the Government to consider other options. The following are members' comments during the debate. Ms Tucker said:
In relation to the electricity retail side of ACTEW, I am disappointed that the Government did not suggest any other options for lessening the risk ACTEW faces from the new competitive electricity market, apart from selling off the whole of ACTEW. Such options could include a strategic alliance or merger with another electricity utility.
That is what Ms Tucker said. These comments were made during the debate, suggesting that the Government look at these issues. Mr Rugendyke said:
In my view, private ownership is not the answer at this time. However, I am prepared to consider other options that could enhance ACTEW if they were to arise in the future.
In addition, members have made comments in the press. An article in the Canberra Times on 1 February 1999 said that Mr Rugendyke was "prepared to consider options such as a merger or other strategic alliance of ACTEW, given the 'challenges' posed by the competition in electricity". In the same article, Mr Osborne's spokesman is quoted as saying that "a merger with Great Southern could be a marriage made in heaven" and that "he would look at a merger as long as it looked nothing like a sale". He would support a merger as long as it looked nothing like a sale, Mr Deputy Speaker. Mr Quinlan said that Labor had "always urged the Government to look instead at strategic partnerships and that Labor did not support ACTEW becoming a junior partner