25 MARCH NEW ZEALAND GAZETTE 897

Dated at Wellington this 23rd day of March 1999.
W. E. QUINN, Valuer-General.

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Transport

Civil Aviation Act 1990

Notice of Intention to Consider Varying a Scheduled International Air Service Licence

Pursuant to section 87(3) of the Civil Aviation Act 1990, and a delegation from the Secretary for Transport dated 28 August 1996, I give notice that having received an application from Air New Zealand Limited, the Minister of Transport intends to consider varying the scheduled international air service licence held by that airline in order that it might provide services, including by code-share, over the route: "From points in New Zealand to a point or points in Switzerland, optionally via any point and beyond to any point", with passenger capacity of up to 3 frequencies per week with any aircraft type. Traffic rights may not be exercised at the intermediate points of Bangkok, Hong Kong and Singapore.

Any person or organisation wishing to make representations relating to this application must forward those representations in writing to reach me at the Ministry of Transport, P.O. Box 3175, Wellington, on or before 15 April 1999.

Signed at Wellington this 23rd day of March 1999.
J. G. BRADBURY, General Manager International Relations, Ministry of Transport.

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The Treasury

Electricity Industry Reform Act 1998

Office of the Treasurer and Minister of Finance

22 December 1998

The Board of Directors
Electricity Corporation of New Zealand Limited
Wellington

Directions Relating to Split of Electricity Corporation of New Zealand Limited (ECNZ)

1. Background

1.1 Section 98 of the Electricity Industry Reform Act 1998 empowers the shareholding Ministers of ECNZ (being the Minister of Finance and the Minister of State-Owned Enterprises) to direct, by written notice to the board of ECNZ ("the board"), that any or all of the assets and liabilities of ECNZ, or of any wholly owned subsidiary of ECNZ, be transferred to the Crown and/or any State enterprise, and to specify terms and conditions of any such transfer.

1.2 By letter dated 29 September 1998, the shareholding Ministers gave written notice to the board advising it of their intentions or expectations with regard to directions to be given under section 98.

1.3 The Government decided on 14 December 1998 that ECNZ would be split into 3 new State enterprises and a residual ECNZ with effect on and from 1 April 1999.

1.4 For the purposes of section 129 of the Companies Act 1993 (which relates to major transactions), it is intended that the shareholding Ministers of ECNZ will sign resolutions approving the transfer of assets and liabilities from ECNZ to the 3 new State enterprises.

1.5 It is intended that ECNZ’s debt securities, swap transactions and electricity hedges will remain with ECNZ after 1 April 1999 and will not be transferred to the new State enterprises. Instead, ECNZ will—

(a) lend to each new State enterprise on 1 April the amount of debt required to complete the purchase of its assets from ECNZ on terms which match ECNZ’s underlying debt and swap obligations; and

(b) enter into a hedge offsetting contract with all of the new State enterprises under which ECNZ will agree to make payments to each new State enterprise which correspond to a fixed percentage of each electricity hedge payment received by ECNZ and, in return, each new State enterprise will agree to make payments to ECNZ which correspond to that same percentage of each electricity hedge payment required to be made by ECNZ.

The Minister of Finance, on behalf of the Crown, has entered into arrangements for the purpose of enabling ECNZ to meet its obligations incurred before 1 April 1999 and providing for its ongoing funding after that date.

1.7 Section 99 of the Electricity Industry Reform Act 1998 provides that sections 4 and 5 (1) of the State-Owned Enterprises Act 1986 do not apply to ECNZ from the date on which section 99 comes into force. Sections 4 and 5 (1) state that the principal objective of every State enterprise is to operate as a successful business and require the directors of a State enterprise to be persons who will assist the State enterprise to achieve its principal objective. The Government intends that section 99 be brought into force by order in council with effect on and from 1 April 1999.

1.8 In view of the transfer of assets and liabilities required by these directions and the bringing into force of section 99 of the Electricity Industry Reform Act 1998—

(a) it will be necessary for ECNZ to change its statement of corporate intent for the quarter beginning 1 April 1999 and subsequent financial years; and

(b) the previous direction given by shareholding Ministers to the board of ECNZ under section 13 of the State-Owned Enterprises Act 1986 will cease to be appropriate on and from 1 April 1999.

1.9 Before giving these directions, the shareholding Ministers have—

(a) advised the board by written notice of the matters to be referred to in these directions at least 14 days before these directions are given;

(b) considered any comments relating to these directions that the board has made to the shareholding Ministers within 10 days of the date on which the board received the advice under paragraph (a);

(c) had regard to Part I of the State-Owned Enterprises Act 1986.

2. Directions

2.1 In these directions (including the Schedules)—

“Draft Huntly Agreement” means the agreement relating to the sale and purchase of assets which is expected to be entered into between ECNZ and Huntly SOE after these directions are given to ECNZ and which has been initialled for the purposes of identification by, or on behalf of, the shareholding Ministers and given to ECNZ together with these directions;