Bayly AndrewANDREW BAYLY (National—Port Waikato): Thank you Mr Chair. I just want to pick up on a couple of comments from the Minister the Hon Nanaia Mahuta. The first comment is that I'd like the Minister to confirm that the Hunua dams and also the Watercare dams in the Waitakeres will be transferred to the new water entity and what does that mean? Does that mean the dams and associated pipes? And does that mean there will be restrictions around access to those dams in particular? So that's a very specific question that the Minister raised before.The second question that the Minister raised before was the issue of transfer of staff. My question to the Minister is: what is going to be the business model for the four new entities? There is an assumption—and she made the inference—that staff from the existing council operations will be able to transfer to the new water companies in a seamless manner. But the simple question is: if there is only one head office for each of the four water companies how the dickens will someone if they're living in Gisborne be able to move to Wellington if that's where the new head office is? Or vice versa: if the head office is going to be in Gisborne how do they move and transfer and in fact work—work? Is it going to be a remote model? I know the transition plan includes some ability to claim back mileage but there is the simple practicality around how the dickens that's going to happen. In many cases people will not actually physically have the opportunity to work for a local provider. So understanding the business model—if there is going to be lots of hubs and one central head office or whatever the case is going to be—would be very useful.I want to now carry on with Schedule 1 because there is a stack of stuff in there that we need to talk about. The issue is around the transfer of the assets. The Minister has been talking about how the assets will be transferred and that councils will have to nominate those. The first question I've got is: what is the dispute mechanism if a council decides that it wishes to retain some assets and yet the new water company believes that it should have ownership of those? What is the independent process? I know it goes through to the Minister but what are the criteria and how will that be decided and over what period of time? And what's the process for coming to a resolution around that transfer of assets?The fourth thing I want to cover—and I'm glad the Minister is writing things down—is that I want to turn the Minister's mind to clause 5(6) of Schedule 1. This to do with the transfer of assets from a council-controlled organisation (CCO). An example of this is Watercare and The allocation schedule for a water services entity (a) must not specify assets liabilities or other matters that belong to any mixed-shareholder CCO; but (b) must list the shares in that mixed-shareholder CCO that are held by the 1 or more shareholders …". Now there are other CCOs that do have mixed ownership. What does this mean? My understanding is that what will be transferred to the new water companies would merely be the assets; the councils would be reimbursed for transitional costs a one-off payment. I forget the name of it—some flash name—Simon Court: "no worse off"—"better off".ANDREW BAYLY: No worse off—yeah one of those ones Mr Court. But the reality is that there was not going to be a transfer of liabilities to the new water companies. But if you are transferring shares obviously that gives rise to—you're basically taking over an entity and that entity will no doubt have assets and liabilities and also contingent liabilities. So I'm trying to understand: what is the mechanism—what is the transfer? Will the new entity in fact pick up the liability for that? In some cases that would be substantial. I know that Watercare doesn't have third-party investment in it but it does have $11 billion of assets and it has quite a significant pile of debt on its own balance sheet. So what would happen? In that case would the new entities be picking up that debt as well as all the contingent liabilities that go with the staff—all that type of thing? Just understanding that transaction would be a very useful and helpful process."