Budget Paper No.2 Fiscal and Economic Outlook 2008-2009
Tabled paper 1293
Tabled papers for 10th Assembly 2005 - 2008; Tabled papers; ParliamentNT
Tabled By Delia Lawrie
Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.
2008-09 Budget 24 Fiscal Position and Outlook Quantifiable Contingent Liabilities These contingent liabilities result from arrangements for the purchase and transportation of gas, and the purchase and sale of electricity by and for the Power and Water Corporation. Material contingent liabilities relating to these arrangements are reported below. The Power and Water Corporation has been a government owned corporation (GOC) since 1 July 2002. Under the Government Owned Corporations Act, a GOC is not within the shield of the Crown and the obligations of a GOC are not guaranteed by the Territory except where the Treasurer specifically agrees to this. The following Territory commitments were given prior to the Power and Water Corporation (formerly the Power and Water Authority) becoming a GOC and will remain in place until the relevant contractual arrangements cease. The Territory has indemnified the financiers of the Amadeus Basin to Darwin Gas Pipeline Lease in relation to the residual value of the pipeline to be paid by the Power and Water Corporation on expiry or termination of the pipeline lease agreement. The Power and Water Corporation has entered into agreements for the provision of gas and wholesale supply of electricity for the Pine Creek region and the McArthur River Mine. The agreement for the supply of gas contains three indemnities relating to the Power and Water Corporation supplying non-conforming gas. Although the Corporations contingent liability is unquantifiable, a major portion of the value of the contingent liability is the cost of overhauling turbine machinery, owned by the electricity producers, damaged by the provision of non-conforming gas. The Territorys maximum exposure is equivalent to the net present value of lease and operating charges under the purchase agreements. Under the Power and Water Corporations current operating practices, the contingent events relating to each of the above indemnities are within the Corporations control and are expected to be avoidable. Statutory Contingent Liabilities Under section 97 of the Public Trustee Act, the Treasurer indemnifies the Common Funds against any deficiencies in money available to meet claims on it. The Common Funds are a repository for all moneys received by the Public Trustee on behalf of estates, trusts or persons, and earns interest. Money to the credit of the Common Funds is invested according to the directions issued by an Investment Board. Although a material statutory contingent liability exists, the prospect of this contingent liability being called upon is considered negligible. Electricity, Gas and Water Supply Amadeus Basin to Darwin Gas Pipeline Electricity and Gas Supply to Pine Creek and McArthur River Public Trustee Act
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