To identify the assets to be transferred to the new companies, it will be necessary to determine the physical and operational constraints of the network.
Technical and policy considerations will impact the physical and operational boundaries between the newly formed entities, and will be based on a consideration of the practicalities of the network as it exists today.
Aspects of this process include:
- assets will be identified, recorded in asset registers, and allocated to the relevant new entities in accordance with established principles;
- in the event that records are unavailable or do not exist, assets will need to be valued based on their current condition, which involves both an engineering and financial analysis;
the rules for the transfer of staff to the new divisions will need to be developed, agreed upon, and consulted on with relevant trade unions; - disputes over any allocation of assets, accounts, and staff should be resolved prior to formal unbundling;
- stranded assets (i.e., those assets no longer able to recover their capital and operating costs under new market arrangements) and bad debts need to be isolated, sometimes into a separate entity; and
- the use of shared corporate resources (e.g., HR, Finance, IT, etc.), if any, will need to be agreed upon and a basis for charge-out rates by these services will need to be established.
