Future Commercial and Charging Arrangements Review for a GBE, Department of Finance

ANI is a Commonwealth Government Business Enterprise responsible for the construction and ongoing maintenance of naval shipbuilding infrastructure at Osborne, South Australia. Following Government’s announcement that future nuclear submarines will be built at Osborne, ANI is preparing for a material change to its capabilities, facility and commercial and funding model.

KordaMentha were engaged by the Department of Finance on behalf of Shareholder Departments to conduct a commercial and charging review of ANI in order to assess the strengths and weaknesses of the current model, and to identify opportunities for potential future improvements.

The engagement’s key objectives were to advise and make recommendations for ANI’s future commercial and charging options. This was to be achieved through:
•    Assessing strengths and weaknesses of ANI’s existing commercial and charging arrangements;
•    Conducting a comprehensive qualitative and quantitative analysis to explore alternative commercial and charging arrangements that incentivise best for enterprise behaviours and deliver optimal Whole of Government Outcomes; and
•    Critically analysing underpinning inputs and assumptions from ANI’s financial model.

How we helped

KordaMentha conducted a detailed charging and commercial review of a ANI through:
•    Conducting a comprehensive review of the existing financial model and its underlying assumptions;
•    Analysing Corporate Plans and other strategic documentation;
•    Performing a benchmarking analysis;
•    Developing a range of charging options and funding scenarios; and
•    Assessing and evaluating potential new charging options.

Outcomes

KordaMentha delivered an independent Evaluation Report, presenting future state options for consideration by Shareholder Ministers containing: 
•    In-depth analysis of commercial options, covering corporate structure, delivery models, asset management, roles and responsibilities, risk management, and charging arrangements;
•    Benchmarked comparisons against international and domestic naval shipyards and comparable organisations;
•    Detailed review of ANI’s financial model, including extensive sensitivity and scenario analysis to evaluate assumptions and to assess the robustness of the models structure;
•    Quantitative modelling of potential future charging and commercial options, supported by qualitative analysis to support strategic recommendations and to evaluate the feasibility of proposed changes; and
•    Actionable recommendations, integrating findings and providing a comprehensive plan for both Shareholder Departments and ANI.