apr-11.pdf (2.07 MB) - Crown Ownership Monitoring Unit

OperationsCFH was incorporated on 29 October 2009. CFH was established withthe purpose of operating a partner selection process for, and managinginvestments in, the Government’s Ultra-Fast Broadband Initiative (UFB).The UFB initiative’s “objective” is to deploy the UFB network to 75% ofNew Zealand’s population covering 33 urban areas by the end of 2019. TheGovernment is providing CFH with funding of $1.35 billion to invest with privatepartners for building the network.In 2010/11, CFH completed the partner selection process by entering intopartnerships with Chorus, Christchurch City Networks Limited, WEL NetworksLimited and Northpower Limited. These partnerships will fulfil the UFBobjective through the construction, deployment and operation of the UFBnetwork by the partners in their coverage areas.The UFB rollout has now commenced with fibre optic cable being rolledout in a number of towns and cities including Hamilton, Whanganui andTauranga (with WEL Networks Limited); Whangarei (with Northpower Limited);and Auckland and Wellington (with Chorus). Deployment in Christchurchcommenced in November 2011.Performance against planCFH’s operating expenditure for the period ended 30 June 2011 was$19.1 million and capital expenditure of $195,000. CFH has issued$1.35 billion shares to its shareholding Ministers. These shares are on anuncalled basis, but may be called by the Board at any time to meet CFH’scommitments to its partners. These capital calls will be funded by capitalinjections from the Crown’s UFB Initiative appropriation.CFH is still in the process of finalising UFB capital flows with each of itspartners.DividendsCFH has been designated a public benefit entity as it aims to provide servicesto the public, rather than make a financial return. There is therefore noexpectation for CFH to pay any dividends to its shareholder – the Crown. CFHwill therefore incur operational losses each year.page | 73