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Annual Report of the Treasury for the Year Ended 30 June 2012

Extending and Implementing the Mixed Ownership Model

Scope of Mixed Ownership Model Appropriations

Extending the Mixed Ownership Model

  • This appropriation is limited to policy, operational and transactional work in preparing to extend the Mixed Ownership Model.
  • This appropriation covers work leading up to the approval by Cabinet of a multi-year appropriation to implement the model in December 2011.

Implementation of Mixed Ownership Model

  • This appropriation is limited to policy, operational and transactional work to implement the Mixed Ownership Model.
  • This multi-year appropriation commenced on 15 December 2011 and will expire on 30 June 2015.

Significant Work Completed During 2011/12

Extending the Mixed Ownership Model

  • Appointed commercial advisors to advise on work required to extend the Mixed Ownership Model to four energy SOEs.
  • Undertook scoping studies on the four SOEs identified for a Mixed Ownership Model and investigated each company's readiness for an Initial Public Offer (IPO) and any commercial impediments for a potential sale process. The Crown Advisor analysed the way in which a programme of IPOs might be undertaken and the Independent Advisor provided independent quality assurance on the work completed by the Crown Advisor.
  • The Treasury prepared advice for Ministers on the design of a sales programme, drawing on the advice from its advisors and the views of the SOE companies and the relevant government departments.

Implementation of Mixed Ownership Model

  • A substantial consultation process with Maori was designed and executed in the period December 2011 to March 2012 which involved 10 hui throughout the country, and the receipt and analysis of 213 submissions to the Treasury. The process resulted in ministerial decisions to bring certain elements of the current SOE legislation into the Mixed Ownership Model Bill.
  • The Treasury provided support to Ministers and the Finance and Expenditure Committee through the legislative processes for the Mixed Ownership Model Bill: 1,486 submissions on the Bill were received, analysed and reported on to the Select Committee resulting in enabling legislation being passed on 26 June 2012.
  • Appointments were made through public tender processes for various commercial roles associated with the Mixed Ownership Model programme.
  • Commercial workstreams for the Mighty River Power IPO commenced in each of Due Diligence, Offer Structure, Corporate Finance, Retail Marketing and Logistics and Communications. In addition, the Treasury has led a Crown-wide due diligence process to discover Crown-held information which is material to the proposed IPO.
  • The Treasury has worked closely with the Crown Law Office and external counsel to prepare and make submissions to the Waitangi Tribunal hearing of WAI 2358 - The National Freshwater and Geothermal Resources Inquiry.
Performance Measures: Extending and Implementing the Mixed Ownership Model
Performance Dimensions for 2011/12 Target Performance for 2011/12

Extending the Mixed Ownership Model

Policy advice complies with the Treasury's Quality Standards for Policy. Achieved Achieved

Implementation of Mixed Ownership Model

Advice to government regarding the implementation of the Mixed Ownership Model complies with the same quality standards agreed for Treasury policy advice. Achieved Achieved
Completion of all procurement for sub-contractor and service providers for the Mixed Ownership Model programme. N/A

Substantially achieved

Completedall but one procurement by 30 June 2012, and the final one by 31 July 2012

Provided advice on and supported the passage of legislation to enable implementation of the Mixed Ownership Model programme.  N/A

Achieved

The Public Finance (Mixed Ownership Model) Amendment Act 2012 received assent on 21 June 2012

Extending the Mixed Ownership Model
2011
Actual
$000
Extending the Mixed Ownership Model 2012
Actual
$000
2012
Main Estimates
$000
2012
Supp. Estimates
$000
- Expenses 3,496 5,900 3,497

Funded by:

- Revenue Crown 3,496 5,900 3,497
Implementation of Mixed Ownership Model Multi-year Appropriation (MYA)
2011
Actual
$000
Implementation of Mixed Ownership Model Multi-year Appropriation (MYA) 2012
Actual
$000
2012
Main Estimates
$000
2012
Supp. Estimates
$000
- Expenses 6,640 - 26,802

Funded by:

- Revenue Crown 6,465 - 26,802
- Other revenue 175 - -

Expenditure is $20.163 million under the Supplementary Estimates budget. This is a multi-year appropriation and the result against budget reflects the uncertain timing of the work programme. The full amount underspent is therefore transferred to 2012/13.

Main Estimates initial budget was appropriated under the Extending the Mixed Ownership Model and this was then transferred into the new appropriation for the Implementation of Mixed Ownership Model.

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