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Commercial assets

Forecast through to 2015

Figure 35 - Forecast movements in commercial assets
Figure 35 - Forecast movements in commercial assets.
Source:  The Treasury

The physical assets held by the energy SOEs and KiwiRail form the bulk of the commercial assets held by the Crown. Figure 35 shows the expected movement in commercial assets through to 2015.

Commercial assets are being driven upwards by:

  • planned investment in electricity transmission network assets, and
  • proposed investment and/or forecast growth in KiwiRail, Kiwibank and Air NZ, and an overall increase in total PPE across the portfolio. This movement is after depreciation and is funded from new capital injections and from SOE surplus cash at the expense of dividends paid.

Estimated revaluations have not been included in the forecast growth disclosed in Budget 2010. SOEs regularly revalue their assets. For example, the electricity generation assets are valued on a discounted cash flow basis of their future earnings, while KiwiRail assets are valued on cost to replace the rail network.

Projections into the longer term under current policy settings

The Government's current policy setting is no asset sales. With the exception of processes already underway to dissolve the two non-operational SOEs (Timberlands West Coast and ECNZ), the current commercial portfolio - as defined in this Investment Statement - is expected to remain unchanged.

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