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ActewAGL beaten out for ACT Government contracts

By johnboy - 17 January 2013 22

The ABC has the intriguing news that Queensland’s ERM Power Retail has won an ACT Government electricity contract worth $16 million, beating out the ACT Government part owned ActewAGL:

Territory and Municipal Services Minister Shane Rattenbury says the decision was made by directorate representatives based on a tender process.

“I imagine ActewAGL are incredibly disappointed to lose this contract but it is a competitive process,” he said.

“The decision to award the contract to ERM, I’ve been briefed by the officials, they offered the best value for money for the Territory and that’s the basis on which they took their decision.”

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22 Responses to
ActewAGL beaten out for ACT Government contracts
Chop71 4:54 pm 17 Jan 13

davo101 said :

Chop71 said :

Have you considered these points.

Actew will no longer have $16 million in revenue > lower dividend to it’s shareholders >ACT government being one of them. Hence, Actew will try to raise the $16 million in revenue elsewhere, probably with increased fees to households and the ACT government, although making a saving on their $16million in power usage will have a smaller Actew dividend as income.

Hope the government savings make it worth while.

I don’t think ACTEW really is losing too much. They still own the poles and wires so they’ll get the network component all at a nice regulated return on assets.

… and who do you think pays for that?

davo101 4:13 pm 17 Jan 13

Chop71 said :

Have you considered these points.

Actew will no longer have $16 million in revenue > lower dividend to it’s shareholders >ACT government being one of them. Hence, Actew will try to raise the $16 million in revenue elsewhere, probably with increased fees to households and the ACT government, although making a saving on their $16million in power usage will have a smaller Actew dividend as income.

Hope the government savings make it worth while.

I don’t think ACTEW really is losing too much. They still own the poles and wires so they’ll get the network component all at a nice regulated return on assets.

Chop71 3:46 pm 17 Jan 13

thumper109 said :

Chop71 said :

So it’s not just me who puts the boot into Actew.

Unfortunately we all lose on this deal.

You dont need to lose greatly.. Just switch to ERM yourself……….

Have you considered these points.

Actew will no longer have $16 million in revenue > lower dividend to it’s shareholders >ACT government being one of them. Hence, Actew will try to raise the $16 million in revenue elsewhere, probably with increased fees to households and the ACT government, although making a saving on their $16million in power usage will have a smaller Actew dividend as income.

Hope the government savings make it worth while.

thumper109 1:49 pm 17 Jan 13

Chop71 said :

So it’s not just me who puts the boot into Actew.

Unfortunately we all lose on this deal.

You dont need to lose greatly.. Just switch to ERM yourself……….

Antagonist 1:02 pm 17 Jan 13

thebrownstreak69 said :

Antagonist said :

thebrownstreak69 said :

Antagonist said :

PantsMan said :

An ACT Public Servant followed the procurement guidelines and went for the lowest cost option.

Incorrect. They went with the ‘best value for money’ tender, not the ‘lowest cost’.

In government speak, best value generally means lowest cost.

That is naive. ‘Best value for money’ is the exact terminology used to justify using a tender OTHER than ‘lowest cost’, although I do concede that ‘lowest cost’ does not always mean ‘best value for money’.

Having written many tenders for government work over the past 10 years, with both wins and losses under my belt, I can assure you that ‘best value’ almost always ‘lowest cost’. It is naive to think otherwise. Unless you can pull something very special or different out, price wins.

So you missed the heady days of the late 90’s when Howard came into office and tried to outsource the corporate functions (finance and payroll functions in particular) for just about every APS agency? Those were the good old days … when we invented the term ‘value for money’ to use when the ‘cheapest’ tender was not awarded the contract.

thebrownstreak69 12:18 pm 17 Jan 13

Antagonist said :

thebrownstreak69 said :

Antagonist said :

PantsMan said :

An ACT Public Servant followed the procurement guidelines and went for the lowest cost option.

Incorrect. They went with the ‘best value for money’ tender, not the ‘lowest cost’.

In government speak, best value generally means lowest cost.

That is naive. ‘Best value for money’ is the exact terminology used to justify using a tender OTHER than ‘lowest cost’, although I do concede that ‘lowest cost’ does not always mean ‘best value for money’.

Having written many tenders for government work over the past 10 years, with both wins and losses under my belt, I can assure you that ‘best value’ almost always ‘lowest cost’. It is naive to think otherwise. Unless you can pull something very special or different out, price wins.

Antagonist 11:49 am 17 Jan 13

thebrownstreak69 said :

Antagonist said :

PantsMan said :

An ACT Public Servant followed the procurement guidelines and went for the lowest cost option.

Incorrect. They went with the ‘best value for money’ tender, not the ‘lowest cost’.

In government speak, best value generally means lowest cost.

That is naive. ‘Best value for money’ is the exact terminology used to justify using a tender OTHER than ‘lowest cost’, although I do concede that ‘lowest cost’ does not always mean ‘best value for money’.

Keijidosha 11:46 am 17 Jan 13

Can someone explain to me how taxpayer money going to a QLD company is “the best value for money” option when it could be reinvested in local jobs via ActewAGL? Definitely sounds like a lowest cost selection to me, or as pointed out above ActewAGL must have seriously dropped the ball.

Chop71 10:12 am 17 Jan 13

So it’s not just me who puts the boot into Actew.

Unfortunately we all lose on this deal.

thebrownstreak69 10:08 am 17 Jan 13

Antagonist said :

PantsMan said :

An ACT Public Servant followed the procurement guidelines and went for the lowest cost option.

Incorrect. They went with the ‘best value for money’ tender, not the ‘lowest cost’.

In government speak, best value generally means lowest cost.

ActewAGL must have screwed up royally to have lost this.

Antagonist 9:56 am 17 Jan 13

PantsMan said :

An ACT Public Servant followed the procurement guidelines and went for the lowest cost option.

Incorrect. They went with the ‘best value for money’ tender, not the ‘lowest cost’.

Pitchka 9:47 am 17 Jan 13

Sucked in ACTEWAGL, so what happens now, price of water and electricity set to rise to fill this $16m void?

davo101 9:34 am 17 Jan 13

Oh no, the system works.

PantsMan 9:30 am 17 Jan 13

What an outrage!

An ACT Public Servant followed the procurement guidelines and went for the lowest cost option.

Hope he/she is packing his/her desk as we speak.

caf 9:23 am 17 Jan 13

Hard to think of anything more fungible than mains-delivered electricity.

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