Findings Our analysis has confirmed that the proposed staffing level for the MG internal functions, compare favourably to other Gas distributors and are consistent with prudent, efficient, sustainable operating practices. Synergies and operating efficiencies of the current arrangement, involving a of business’ ‘whole outsource to Jemena are maintained in the new business model. In the new business model MGH will have 92 internal full time equivalent staff (FTE) across the different functional areas. We benchmarked internal staffing level of MGH against APA Allgas, Jemena JGN, SP Ausnet in Australia. We also compared MGH against a range of European gas distribution utilities and for corporate and support functions included a range of non-utilities companies. After adjusting for differences in outsourcing level, network size (km of pipes), asset value (RAB) and customer numbers, the FTE levels for the insourced functions compare favourably to other Australian and European gas distributors, as outlined in the table below. MG Jemena Jemena SP APA European European (2013) MGH JGN Ausnet Allgas benchmark benchmark (sample (best average) practice) 0.96 0.97 0.78 0.93 3.3 1.0 0.75 FTE/100,000 14 14 19 16 114 15 11 customers FTE/ $ bn RAB 95.9 96.9 84.1 93.5 192.4 n/a n/a The more direct comparison of the new business model with Jemena MGH and MG’s historical FTE levels from 1998 and 1999 show a reduction in FTE staffing levels. MG (2013) Multinet/ UED 1999 Jemena Ikon 1998 MGH Asset management (including HSEQ, technical 20 92 25 25 compliance) Service Delivery Contract Included in Management 15 asset 12 10 management NCC Included in Not directly asset stated, 17 19 management assumed 17 CMS Included in 13.5 asset 22 14 management IT strategy and 5 8 6 5 management Finance 8 26 12 7 Other corporate 13.5 11 11 13 Total 92 137 105 93 Our analysis has confirmed that the proposed staffing levels for each of the function areas are appropriate and that the synergies and operating efficiencies of the current arrangement are either maintained, or in some functional areas exceeded. Overall, across all internal functions the proposed structure represents a slight efficiency improvement over the current operating arrangements. The proposed staffing levels demonstrate above average
Findings Our analysis has confirmed that the proposed staffing level for the MG internal functions, compare favourably to other Gas distributors and are consistent with prudent, efficient, sustainable operating practices. Synergies and operating efficiencies of the current arrangement, involving a ‘whole of business’ outsource to Jemena are maintained in the new business model. In the new business model MGH will have 92 internal full time equivalent staff (FTE) across the different functional areas. We benchmarked internal staffing level of MGH against APA Allgas, Jemena JGN, SP Ausnet in Australia. We also compared MGH against a range of European gas distribution utilities and for corporate and support functions included a range of non-utilities companies. After adjusting for differences in outsourcing level, network size (km of pipes), asset value (RAB) and customer numbers, the FTE levels for the insourced functions compare favourably to other Australian and European gas distributors, as outlined in the table below. MG (2013) Jemena MGH Jemena JGN SP Ausnet APA Allgas European benchmark (sample average) European benchmark (best practice) 0.96 0.97 0.78 0.93 3.3 1.0 0.75 FTE/100,000 customers 14 14 19 16 114 15 11 FTE/ $ bn RAB 95.9 96.9 84.1 93.5 192.4 n/a n/a The more direct comparison of the new business model with Jemena MGH and MG’s historical FTE levels from 1998 and 1999 show a reduction in FTE staffing levels. MG (2013) Multinet/ Ikon 1998 UED 1999 Jemena MGH Asset management (including HSEQ, technical compliance) 20 92 25 25 Service Delivery Contract Management 15 Included in asset management 12 10 NCC 17 Included in asset management Not directly stated, assumed 17 19 CMS 13.5 Included in asset management 22 14 IT strategy and management 5 8 6 5 Finance 8 26 12 7 Other corporate 13.5 11 11 13 Total 92 137 105 93 Our analysis has confirmed that the proposed staffing levels for each of the function areas are appropriate and that the synergies and operating efficiencies of the current arrangement are either maintained, or in some functional areas exceeded. Overall, across all internal functions the proposed structure represents a slight efficiency improvement over the current operating arrangements. The proposed staffing levels demonstrate above average
C-14%20Internal%20benchmarking%20final.docx