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Infrastructure Investment In Australia


CKI has a quality portfolio of energy investments in Australia. Together with Power Assets, the Group holds a majority stake in the electricity distribution businesses of ETSA Utilities, Powercor and CitiPower. CKI also holds interests in Spark Infrastructure, Envestra and AquaTower.

ETSA Utilities

ETSA Utilities continued to meet all key financial targets.

In conjunction with Power Assets, CKI holds a 51% stake in ETSA Utilities, the primary electricity distributor of the state of South Australia.

ETSA Utilities manages a regulated electricity distribution network that serves more than 820,000 residential and business customers. The network has a route length of more than 87,000 kilometres and includes over 400 zone substations, 69,000 transformers and 723,000 poles.

In 2010, ETSA Utilities continued to meet all key financial targets. Regulated revenues exceeded targets partly due to higher network tariffs following the 2010-2015 regulatory reset outcome. The reset, which was determined by the Australian Energy Regulator in May 2010, secures stable returns for ETSA Utilities for the five-year duration through to 2015. Above budget sales were also attributed to favourable weather conditions during the year under review. In the unregulated electricity infrastructure construction and maintenance market, ETSA Utilities has maintained its strong market reputation and won new contracts.

The regulatory reset secures stable returns for ETSA Utilities.

With an ongoing focus on maintaining reliability and improving customer service performance, ETSA Utilities met all regulated service targets for timeliness, call centre performance and complaints handling. It was a finalist in the national Customer Service Institute Awards and won a State award for South Australia for Customer Response in the Large Business Division.

In terms of safety, ETSA Utilities has continued to be regarded as an industry leader. As at 31 December 2010, ETSA Utilities employees had worked 534 days in succession without a Lost Time Injury, a new record for the business. A number of environmental management initiatives were also successfully carried out in 2010.

CHEDHA Holdings Pty Ltd.

CitiPower and Powercor achieved a strong performance.

CKI, together with Power Assets, has a 51% shareholding in CHEDHA Holdings, the holding company of CitiPower and Powercor.

CitiPower supplies electricity to more than 310,000 customers in Melbourne's CBD and inner suburbs. It operates one of the most reliable urban and rural electricity networks in Australia.

Powercor is Victoria's largest electricity distributor, supplying electricity to regional and rural centres in central and western Victoria, and Melbourne's outer western suburbs. It services approximately 700,000 customers. Additionally, Powercor also operates a successful non-regulated business.

In 2010, a strong performance was achieved by CHEDHA Holdings on the back of higher revenue from various aspects of the regulated business. Unregulated revenue also increased during the year under review.

During the year, the Price Review process for the five years from 2011-2015 resulted in an acceptable final determination for CHEDHA Holdings. This helps to ensure the continued stability of future revenue.

Both CitiPower and Powercor improved their performances in managing customer complaints, as stated in the Energy and Water Ombudsman of Victoria report. In 2010, a number of awards were also received, such as the "Best Sustainability Report" from the Energy Supply Association of Australia and various Australian Service Excellence Awards from the Customer Service Institute of Australia, including "Victorian Large Business", "National Large Business (commendation)", and "Victorian Service Excellence in a Service Desk".

The roll out of Advanced Metering Infrastructure (Smart Meters) exceeded all Government Advanced Meter deployment targets, with 10% of meters installed by August 2010 – four months ahead of schedule.

Additionally, a number of key environmental and climate change initiatives were implemented in 2010.

Spark Infrastructure Group

CitiPower supplies electricity in Melbourne's CBD and inner suburbs.

CKI has an 8.5% interest in Spark Infrastructure, a leading Australian utility infrastructure group that is listed on the Australian Securities Exchange, and with objective to invest in regulated utility infrastructure assets with relatively low risk and stable cash flows.

Spark Infrastructure's portfolio comprises a 49% interest in three high quality Australian electricity distribution businesses – ETSA Utilities in South Australia and CitiPower and Powercor in Victoria.

Stable cash distributions were delivered to CKI by Spark Infrastructure in 2010.

Envestra Limited

With an approximate shareholding of 19.3%, CKI has a strategic interest in one of Australia's largest natural gas distribution companies.

Serving over one million consumers in South Australia, Victoria, Queensland, New South Wales and the Northern Territory, Envestra owns about 21,000 kilometres of natural gas distribution networks and 1,000 kilometres of transmission pipelines.

In 2010, Envestra has provided CKI with steady cash returns.

AquaTower Pty Limited

AquaTower recorded a good performance.

CKI has a 49% stake in AquaTower, the exclusive potable water supplier for four regional towns in Victoria, serving approximately 25,000 people.

In 2010, AquaTower recorded a good performance and generated stable returns for CKI.

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