This action is led by Peter Winder with Board support from Brett O’Riley.
- To develop an initial consolidated plan for the capital and assets structure of NZIST.
- To identify likely future capital requirements (scale and timing) for both the NZIST and each subsidiary.
- To develop an understanding of the extent to which major assets are fit for purpose, their flexibility to deal with different modes of delivery, and their likely remaining useful life.
- To identify assets that are surplus to requirements now, and those that are likely to be surplus to requirements in each of the next 5 years.
- To identify potential for disposal of surplus assets (scale, timing and location).
- To inform the Board on the adequacy of current capital and asset management plans for ITPs, and identify gaps, issues and opportunities.
- To identify the timing and nature of key capital decisions in each ITP and the current state and quality of advice in relation to those decisions.
- To identify and ringfence cash reserves that will be ringfenced for regional use, including the formula that will be used to determine what is ringfenced.
- To determine the parameters for access to cash reserves.
- To inform the Implementation Business Case and decisions on final balance sheet structure for NZIST.
- To inform decisions about debt structure, cash flow and institute treasury functions.
- To inform the delegations framework for subsidiaries.
This workstream includes consideration of:
- all capital and assets of all ITPs and related subsidiaries and partnerships / joint ventures
- all ground leases, rentals and leasing commitments (including leases of ITP assets to others)
- all liabilities (borrowing, payments in advance, leases, etc.)
- all impairments or contingent liabilities
- all undertakings or guarantees that may result in future liabilities or future revenue
- all legal action that may result in future liabilities
- all asset management plans, all campus masterplans, all asset utilisation information and any future delivery plans for every ITP and related entity of partnership.
- Investigation and evaluation of ICT assets and requirements (with consideration to dependencies below)
- Utilisation analysis of campus assets
- ICT investment strategy: Evaluation of ICT asset situation and investment requirements is needed in order to feed into the overall capital asset strategy
- Funding strategy: the calls that are likely to be made against existing and/or new capital financing
What's been done
We've developed a staged approach. The stages and the deliverables from each stage are set out below.
Stage 1: Stocktake and Consolidation
Complete a stocktake of the information set out in the scope section above. Much of this information will already be available through the information that TEC has collected and compiled regarding the financial position of each ITP.
Summarise the plans / forecast for each ITP – including identifying key risks and gaps.
Consolidate the stocktake information to create both the current state, the expected state as at 1 April 2019, the requirements for the 2020 financial year, and for each following year for the next 5 years.
Stage 2: Draft Strategy and Framework
Develop options for establishing ringfenced cash reserves – and relative merits of options for establishment Board to consider and consult on.
Develop draft capital and assets strategy that addresses the issues set out in the purpose section above.
Develop draft decision making and delegations strategy to support the capital and asset strategy.
Stage 3: Refinement of Draft and Consultation
Refine draft capital and assets strategy and decision making and delegations strategy following consideration and feedback from the Board.
Consult with ITPs as necessary.
Refine draft capital and assets strategy and decision making and delegations strategy following consideration of the feedback from ITPs.
Present revised drafts of strategy to the Board.
Stage 4: Initial Asset disposal strategy
Develop initial asset disposal strategy, including the identification of key assets and the disposal process and how this fits within the ringfence decision making framework.
What we're working on this month
We're engaging an external consultant to assist with this work.
We're working with TEC's asset records together with onsite visits to quantify the portfolio, understand and assess current, near and longterm capex programmes.
We're considering the network of provision and assets required for delivery, develop a cash and asset reserve strategy for investment across subsidiaries to meet the requirements of the network as a whole. This information will feed into the implementation business case.
A draft approach will be considered by the Board, with decisions taken on the future asset strategy.
If required, an asset disposal plan will be consulted on for surplus assets with capital being redirected to meet learning requirements.