Item 12.4 - Attachment 1

Minutes Extra Ordinary Parraconnect Committee Meeting 9 July 2012 including Parrasync Mechanism Report






Lord Mayor Clr Lorraine Wearne, Clr Paul Garrard, Clr Chiang Lim.

George Mavros, Alan Cadman, John Moxon, , Frank Dorian,

Greg Smith, Elios Alexoulis,




Clr Michael McDermott, Clr Prabir Maitra.




The committee met to further discuss as per its recommendations to Council and Council’s endorsement of the recommendations at its meeting on the 25/06/2012, these being


a)   That Council support the Parraconnect Advisory Committee in carrying the work forward and evaluate the mechanisms available to ensure the ongoing success and development ParraSync.


b)  That a further a report be submitted by the Parraconnect Advisory Committee to Council on the preferred mechanism.


The committee discussed the proposed mechanism and strategy as detailed in the attached report




a) That the mechanism and strategy detailed in the attached report be adopted.


b) That the CEO, in consultation with the Lord Mayor, be delegated the authority to finalise Councils commercial and operational requirements and necessary legal documents, in accordance with the endorsed Mechanism Strategy


Meeting Closed 1.35pm










Parrasync Proposed Mechanism

Meeting: 9th July 2012, 1pm, level 12, 30 Darcy st Parramatta


REPORT OF                   SGS (Frank Dorian)

St Micro (Jean Claude Pellice)

Parraconnect (George Mavros)

PCC (Group Manager Corporate Services)  



To determine the appropriate mechanism and strategy to enable the public rollout of ParraSync.



That the mechanism and strategy detailed in the report be endorsed for Council determination.



1.       Parramatta City Council launched the ParraConnect initiative to not only provide Parramatta with all the benefits possible from the new world of Broad band and e-Commerce but also to promote the city as the first Smart City in Australia.


2.       Through the initiative the opportunity of the city being involved in a “Smart Card” was presented. The broad outline of the card’s intended deliverables is to provide people with either a stand alone swipe card or a mobile phone alternative that will allow them to make electronic wallet payments, utilise the services of the local libraries, enter / exit and pay for the use of local car parking stations through to gaining access to council owned building and using the card as a loyalty rewards and out of pocket expenses organiser for the local retailers.


3.       ParraSync was originally thought of as a Parramatta Local smart card opportunity but very quickly was seen as having the potential of being a product / service that could be marketed not only nationally but quite realistically could have an international market potential.


4.       The ParraSync project has in the main been carried forward through the co-operation of three main parties and their associates Parramatta Council, SGS and STMicro.


5.       Through the combined efforts of these three entities the project has completed the successful proof of concept and prototype stages of its life cycle. The parties now want to see the project move into the commercialisation stage and as such have held a number of discussions with each other and the ParraConnect committee to try and establish the mechanism / entity that will allow not only the project to continue but to reward the 3 parties for their foresight.



6.       Since the beginning of the ParraConnect Committee it has been made abundantly clear that the Council has and will always wish to adopt a “risk averse” approach to any commercial opportunity that it considers. The reasons for this being obvious, as the Council is the custodian / representative of the local constituents funds and as such is always mindful of gaining the optimum reward versus risk return for its constituents in the way it seeks to utilise the funds and resources available to it.


7.       As ParraSync needs significant funds to be injected into it now, to be able to realise the potential commercial value of the product/service in future years, it has to be seen as a risk venture in the short to medium term.


8.       The ParraSync project has two opportunities for commercialisation that both need to be addressed concurrently. The first of those is the full introduction and commercialisation of it to the Parramatta LGA and Western Sydney region. The second being the extending of the concept out to other NSW, National and then hopefully International market opportunities.


9.       Councils and all other government related entities have many advantages and opportunities when one is working with them. They also have a significant disadvantage of being more susceptible to having to make political rather than hard commercial decisions in their daily running. Commercial entities on the other hand need to make decisions that are centred on achieving the desired commercial outcome of the business that should also take into account other aspects such as being a good corporate and community citizen.


10.      Commercial entities, especially those engaged in new and emerging technologies or market place opportunities, need to be able to take calculated risks where whilst there is every intention that the venture entered into will be profitable and successful in the future, it is accepted that there may be a negative financial outcome in the short and medium term and in some cases the total venture is a financial failure.


11.      Whilst private enterprise in the main like to have Councils and other Government bodies as their business clients and in some cases associates and partners, they are some what wary of investing in a venture where commercial decisions may well be over ruled by political constraints.


13.      Having reviewed and considered the various desired outcomes and the various constraints of the existing project relationship the following is put forward as the over arching objective to be achieved through the next phase of the ParraSync project.


14.      To provide a mechanism and entity that will allow the project the opportunity of being commercialised not only at local level but to the broadest markets realistically possible. Whilst doing so, provide an opportunity for Council to gain commercial value from the project with minimal risk and in a manner that enhances rather than hinders the other two foundation participants SGS and STMirco’s abilities to attract other commercial partners as and where required.


15.     Until the 3 parties agree on the intent and purpose as set out in this document and then formalise it, the Commercial Entity (CE) is unable to actively negotiate and engage from a position of strength with the Investor market. Further if the project is delayed all the benefits of the publicity and good will that has been established to date for the Parramatta and Western Sydney Region is in serious jeopardy of being lost.



16.     The following diagram provides the mechanism and representation of how the project will move forward and the intended relationships between the various parties and entities.  (Please see next paged
















17.     One of the challenges for not only the ParraSync project but for the ParraConnect initiative as a whole has always been that there tends to be a need to move forward from a commercial reality aspect, without the ability to be able to exactly define all aspects of the structure that is going to be the final commercialisation party.


18.      This strategy provides the definitive mechanism and structure to allow the existing stakeholders to take not only the local ParraSync project but the entire opportunity forward and engage with the other investors and or alliances that will be required to realise the short, medium and long term objectives.


19.     The steps to move forward therefore are:


a)       ParraConnect consider this proposal and provide a recommendation to Parramatta Council.

b)       Parramatta Council considered and make a determination.

c)       The parties finalise the formal agreement (s) that covers the various intentions and outcomes of the above mechanism

d)       The CE be formed and from there the final proposition be put in place between all the parties and entities.



All the members of the consortium have been involved in the preparation of this proposal and report. Councils General Counsel has review the proposal and advises that there is nothing that prevents PCC from entering into this kind of arrangements.



For Council there are no significant financial implications as the risk in operating a commercial organisation has been structured so that has been transferred to the commercial entity (CE). There may be some minor operational expenses relating to Councils costs for the roll out of ParraSync in Parramatta.



There are no attachments for this report.