Summary and terms of debt capital injection
The Government finances a number of projects through debt capital injection to agencies. The decision is based on the nature of the individual project in particular, the degree of commerciality, and the projected returns on the investment.
Where a debt capital injection is provided to an agency, the terms and conditions are disclosed in the Budget Papers under the requirements of the Financial Management Act 1996.
The loan is provided by the Central Financing Unit (CFU) to the agency, and internal to Government. It is supported by an appropriation and does not have any correspondence to external borrowings.
The following table lists the loans provided in the 1999-2000 Budget:
| 1999-2000 $'000 | 2000-01 $'000 | 2001-02 $'000 | 2002-03 $'000 | |
|---|---|---|---|---|
| Chief Minister’s Department | ||||
| AIHS | 1,600 | 1,000 | ||
| InTACT | 5,000 | |||
| Office of Asset Management | ||||
| GDA Capital Works | 3,463 | |||
| Kingston Foreshore | 4,430 | 3,167 | 14,124 | 1,287 |
| Sub total | 7,893 | 3,167 | 14,124 | 1,287 |
| Department of Urban Services | ||||
| Tidbinbilla Visitor Centre | 400 | |||
| Business Restructure | 10,000 | |||
| ACT Cemeteries | 250 | 250 | ||
| Sub total | 10,650 | 250 | ||
| Total | 25,143 | 4,417 | 14,124 | 1,287 |
Terms and Conditions
Australian International Hotel School
The Government will provide loan funds to the AIHS in keeping with the financial restructure of the AIHS agreed in March 1997. The loans provide cash injections to meet operational costs until sufficient students are enrolled.
The loans are subject to interest based on the 5 year Commonwealth bond rate plus a margin of 3.25%. The interest is reset each quarter and the principal can be repaid in full or part at any time without penalty. It is envisaged that negotiations on repayment of the principal will commence in 2001-02.
These injections were highlighted in the 1998-99 Budget.
InTACT
InTACT will receive a loan from the Government of $5m in 1999-2000 for modernisation. Interest is charged at the 90 day bank bill swap rate plus 2%. The loan will be repaid over seven years.
There was an $80m injection identified for InTACT in the 1998-99 Budget. Not all was required in 1998-99, and has been rescheduled to 1999-2000.
Gungahlin Development Authority
The Government will provide a subordinated loan of $3.463m to the Authority on an interest free basis to construct the Southern Boulevard, the second access to the Gungahlin Town Centre. Repayments of the loan will be offset by the return of major infrastructure. It is expected that the loan will be repaid through the return of the completed road in 2000-01. The infrastructure will be transferred to CFU as a repayment of the loan, and then transferred to the Department of Urban Services as equity, who will take ownership responsibility.
Kingston Foreshore Authority
The Government will continue its debt financing of the Kingston Foreshore Authority during 1999-2000, as a follow on to the debt financing already provided. The use of this financing for 1999-2000 and the forward years will be subject to Government endorsement of the preferred development plan for Kingston Foreshore.
As with the existing Kingston Foreshore debts, interest on the loan is capitalised. The principle and capitalised interest will be repaid from revenues generated by the sale of land in the development.
Interest is to be charged on outstanding balance at 90 day bank bill swap rate plus 2%.
Tidbinbilla Visitor Centre
A loan of $0.8m was provided in 1998-99, to be drawn over two years. The loan is to be repaid by 2007-08. Principle repayments will commence in 2000-01. Interest is to be charged on outstanding balance at 90 day bank bill swap rate plus 2%.
DUS - Business Restructure
Principle repayment is to commence in 2001-02 at $3m per annum, with a final payment of $1m in 2004-05. The loan facility is for one year. Interest is to be charged on outstanding balance at 90 day bank bill swap rate plus 1.5%.
ACT Cemeteries
A loan facility of $0.5m is provided over two years. The loan is to be repaid over six years. Interest is to be charged on outstanding balance at 90 day bank bill swap rate plus 0.5%.