ACTEW Corp debt to hit $2.2 billion
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ACTEW Corp debt to hit $2.2 billion

The debt of government-owned ACTEW Corporation will exceed $2.2 billion after it grows by more than 20 per cent in five years and the opposition says the growth is unsustainable.

Budget papers show it will push total borrowings against the ACT government's name to more than $4.5 billion by 2018.

Much of it is due to the water and sewage entity's borrowings which will increase by more than $400 million in this financial year and across the territory budget's forward estimates.

Opposition treasury spokesman Brendan Smyth said ACTEW Corporation was “really in a position where it could not pay any of its debt”.

“The interest payments are $200 million to $250 million a year. The question is, how do they pay all this back?” Mr Smyth said.

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“Debt is OK if you can repay it. But at the end of the day this comes back to the taxpayer.

Mr Smyth said the ACT government continued to take a 100 per cent dividend from ACTEW Corporation.

“This is the debt (Treasurer) Andrew Barr doesn't want to acknowledge or doesn't want people to talk about,” he said.

“Last year we asked ACTEW Corporation about its debt in annual report meetings and we were just told they would renegotiate it.”

The $4.5 billion debt figure comes from parts of the budget papers which add together general government sector( GGS) debt with private trading enterprise (PTE) borrowings, made up mostly of ACTEW Corporation.

ACTEW Corporation managing director John Knox said the entity's gearing ratio would be about 60 per cent – generally in line with regulatory principles – and that it was important to place context around the issue of debt, and how it contributed to investment and growth of its asset base.

“ACTEW’s total asset base sits at $2.864 billion and includes a network of water and sewerage infrastructure which provides vital services and amenity to the Canberra community,” Mr Knox said.

“Current debt, in context to these assets, sits at around $1.4 billion.

“It’s also important to acknowledge that any growth in debt, ensures an equivalent growth in our asset base – for example, it is estimated that our total assets are forecast to grow to $3.239 billion by June 2018 and our debt will grow to $1.8 billion.”

He said in recent years, the majority of ACTEW’s borrowings had funded some of the biggest and most significant infrastructure projects the ACT had seen – the Murrumbidgee to Googong Pipeline project and the enlarged Cotter Dam project.

Mr Barr said ACTEW was meeting all required debt payments.

He said Mr Smyth's comments were aimed at distracting everyone from the Canberra Liberals' embarrassing mistakes in their recent budget reply.

“(Liberal leader Jeremy) Hanson and Mr Smyth clearly have no idea how to read budget papers,” Mr Barr said.

“PTE debt in relation to ACTEW is reflected in the GGS balance sheet as interest bearing liabilities because it has been borrowed directly from the financial markets by the GGS sector,” he said.

“These borrowings are matched by loans receivable assets as reflected in the GGS balance sheet.”

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