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Where did all ACTEW’s money go?

By johnboy - 1 July 2013 3

The Liberals’ Brendan Smyth is wanting to know how things have gone so horribly wrong for the very well remunerated executives at ACTEW?

“Last week, Canberrans learnt that they will be paying 5 per cent more for their water to keep ACTEW afloat, as opposed to enjoying a 16.9 per cent decrease in their water bills as initially proposed by the ICRC.

“Today we revealed that the recent price determination could create a $100 million black hole in the Territory’s Budget and a question over $400 million through potential asset impairment in the out years.

“The questions beg to be asked: how did shareholders Katy Gallagher and Andrew Barr allow ACTEW to get into such a precarious financial position? Why do Canberrans need to pay more to secure the financial viability of a company with a monopoly on the Territory’s water?

“With the price exploding from $145 million to over $400 million, $400 million in doubt, no plans to pay back the capital, under reporting of salaries, and now a $100 million hole in the budget, I call on this government to finally admit there are serious questions concerning the operation at ACTEW and begin a full performance audit by the Auditor General,” concluded Mr Smyth.

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3 Responses to
Where did all ACTEW’s money go?
chewy14 12:07 pm 02 Jul 13

dungfungus said :

What is of more concern is the revealation that Actew owes $1.4 billion and Mark Sullivan rationalises that this debt may never be repaid because “public utilities all have big debt like this”.
That is tantamount to saying Australia’s economy is the best in the world because we owe less money than our competitors.
Only last week he was reminding us that Actew was a commercial business. No lender I know would provide money to a commercial business if there was no plan to repay the principal.
A debt of $1.4 billion in the industry that Actew is in is appaling considering that the NSW Government is selling the Eraring Power Station for $50 million. Actew isn’t a power generator of any significance so what assets does it have that would offset the debt if the company was sold?
I suspect that the ACT ratepayers will cop any shortfall as they did with Rhodium’s failure.
Actew lost $50 million on the TransACT venture. If they stayed within their area of “expertise” they could have bought a power station.

I honestly don’t see why this would he a big deal. Many companies have gearing where they may only be paying the interest, its fairly common practice. I’d be thinking that due to the low risk of their activities, finding funding wouldn’t be difficult at all up to a certain point.

As for what assets Actew own, perhaps you’ve missed the four massive dams, and thousands of kilometres of pipe throughout the territory. I don’t know the total worth but I’d guess it would be many billions worth.

dungfungus 11:48 am 02 Jul 13

What is of more concern is the revealation that Actew owes $1.4 billion and Mark Sullivan rationalises that this debt may never be repaid because “public utilities all have big debt like this”.
That is tantamount to saying Australia’s economy is the best in the world because we owe less money than our competitors.
Only last week he was reminding us that Actew was a commercial business. No lender I know would provide money to a commercial business if there was no plan to repay the principal.
A debt of $1.4 billion in the industry that Actew is in is appaling considering that the NSW Government is selling the Eraring Power Station for $50 million. Actew isn’t a power generator of any significance so what assets does it have that would offset the debt if the company was sold?
I suspect that the ACT ratepayers will cop any shortfall as they did with Rhodium’s failure.
Actew lost $50 million on the TransACT venture. If they stayed within their area of “expertise” they could have bought a power station.

bundah 9:28 am 02 Jul 13

Well organising extravagant parties is both time consuming and expensive!

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