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Item 12.4 - Attachment 1 |
Minutes Extra Ordinary
Parraconnect Committee Meeting 9 July 2012 including Parrasync Mechanism
Report |
MINUTES OF
THE EXTRA ORDINARY ParraConnect Advisory
COMMITTEE MEETING HELD IN MEETING Room
Level 12 Boadroom, CIVIC PLACE,
PRESENT
Lord Mayor Clr
George Mavros, Alan Cadman, John Moxon, ,
Frank Dorian,
Greg Smith, Elios Alexoulis,
1. APOLOGIES
Clr Michael McDermott, Clr Prabir Maitra.
2. PREFERED MECHANISM PARRASYNC
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
3. RECOMMENDATION
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,
REPORT OF SGS (Frank Dorian)
St Micro (Jean Claude Pellice)
Parraconnect (George Mavros)
PCC (Group Manager Corporate Services)
PURPOSE
To
determine the appropriate mechanism and strategy to enable the public rollout
of ParraSync.
RECOMMENDATION
That the
mechanism and strategy detailed in the report be endorsed for Council
determination.
BACKGROUND
1. Parramatta
City Council launched the ParraConnect initiative to not only provide
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.
ISSUES/OPTIONS/CONSEQUENCES
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
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.
PROPOSED MECHANISM AND
STRATEGY
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.
CONSULTATION & TIMING
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.
FINANCIAL IMPLICATIONS
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
ATTACHMENTS
There are no
attachments for this report.