Mr STIRLING - 1999-02-18
I seek leave to table a copy of the contingent liability clause contained in the financial statement of Paul Everingham’s company, NT Power Pty Ltd. I quote from this statement:
In the event of default or termination of the transmission line agreements, the company has an obligation under the security agreement to indemnify the project financier by purchasing the financier units in the NT Power Trust. However, if the company fails to meet its obligation, the Northern Territory [and that means Territory taxpayers] has the ultimate responsibility to indemnify the project financier.
What is the extent of this liability to Territory taxpayers, and why do Territory taxpayers carry this financial risk associated with Everingham’s business activities?
ANSWER
Mr Speaker, it is believed that the original deal, which was financed and had an option put on in September of last year, was a total contingent liability. The Treasurer would have had this in his contingent liabilities statement - statement 6, I think it is – and it was $52m. However, that project has now been refinanced and the Northern Territory believes that it has no guarantee to that project any more. However, can I add that this is now a matter of litigation between us and NT Power, and I do not wish to comment any further on that.
To answer the question, it was originally $52m, I think. Today we believe it is zero.
In the event of default or termination of the transmission line agreements, the company has an obligation under the security agreement to indemnify the project financier by purchasing the financier units in the NT Power Trust. However, if the company fails to meet its obligation, the Northern Territory [and that means Territory taxpayers] has the ultimate responsibility to indemnify the project financier.
What is the extent of this liability to Territory taxpayers, and why do Territory taxpayers carry this financial risk associated with Everingham’s business activities?
ANSWER
Mr Speaker, it is believed that the original deal, which was financed and had an option put on in September of last year, was a total contingent liability. The Treasurer would have had this in his contingent liabilities statement - statement 6, I think it is – and it was $52m. However, that project has now been refinanced and the Northern Territory believes that it has no guarantee to that project any more. However, can I add that this is now a matter of litigation between us and NT Power, and I do not wish to comment any further on that.
To answer the question, it was originally $52m, I think. Today we believe it is zero.
Last updated: 09 Aug 2016