INFRASTRUCTURE I T O
ESITO Special General Meeting
Information for Member Companies on the Proposed Merger
Introduction
This information is provided so we can to update stakeholders in the electricity industry on recent
developments regarding the proposed merger of ESITO with InfraTrain. It provides the background to the
proposed merger, outlines the business value proposition and wider benefits of the merger to our sector.
As you are aware our vision is to create an ITO focused on skill development that better serves the customer
and trainee needs of the wider infrastructure sector. The proposed merger is a first step in this process.
Background
In 2011 The Tertiary Education Commission (TEC), announced a series of funding policy changes designed to
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improve performance in the industry training sector
improve the value to Government of funds allocated to that sector.
The Minister of Tertiary Education has indicated that the number of ITOs needs to be reduced to achieve the
efficiency gains expected by the Government. Since this announcement there has been rapid consolidation
across the sector with the number of ITOs reducing from 37 in early 2011 to less than 20 at present. ESITO
identified with their member companies the opportunity that the changing ITO landscape offered to the
infrastructure sector mid 2012. Since late 2012 the Boards of ESITO and InfraTrain have been working
together on a proposed merger. A robust Due diligence has been completed which demonstrated that the
new organisation will be;
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financially viable,
better positioned strategically to deal with changes to the ITO landscape, and,
able to offer a more comprehensive service to its customers and trainees
Both Boards have resolved to merge and will shortly enter into a Deed of Merger. The Deed of Merger is
subject to a number of conditions, including:
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Each party obtaining the necessary support for the merger from their respective industry training
sectors;
The parties obtaining recognition and extension of coverage from the Tertiary Education
Commission and approval as the standard setting body from the New Zealand Qualifications
Authority;
The merger is seen by both organizations as a merger of equals, and both share the view that it will enable
them to better protect and promote the interests of their industries.
INFRASTRUCTURE I T O
Value Proposition
The vision of both Boards is to create a new ITO which will grow to cover the training needs of the entire
infrastructure sector. In our view Infrastructure covers the following areas;
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Transportation (roads, railways, airports and ports)
Energy (electricity, gas and fuel)
Water (community supply, wastewater, drainage and irrigation)
Telecommunications
Over the years we have recognised that the infrastructure sector shares a number of common characteristics
requiring a range of similar skillsets to manage the assets, including design, construction and maintenance,
as well as common areas of priority focus such as health and safety. We all face the ageing demographic of
our technical and trades workforce and the necessity to bring new ideas, different ways of working,
improved skills and better training delivery to our sector.
We believe the Infrastructure ITO will provide a single organisation focused on the training needs of the
entire sector with a collective voice that represents the infrastructure sector Its mandate will be to focus on
satisfying the need for a sustainable, well trained workforce to service New Zealand’s infrastructure now,
and into the future.
ESITO and InfraTrain cover the electricity and civil infrastructure sectors and have responded proactively to
the needs of their customers to support their needs in other sectors such as water and telecommunications.
With the growing convergence in infrastructure industries, many asset owners and service providers operate
across a number of sectors. The new organization will provide the platform to support further growth to
realize the vision of creating an infrastructure ITO.
In the future there may be other industries who wish to join the new ITO. The structure of the new
organization allows for this possibility.
Benefits of the Merger
The benefits to our industries, our customers and our trainees are many:
Better
qualified
trainees
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The new ITO will be able to use its greater scale to design and develop
improved qualifications and training programmes with an infrastructurecentric perspective as well as provided greater support. Infrastructure
focused qualifications provide trainees with greater scope to develop
transferable skills.
Stronger
customer
focus
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An infrastructure focused ITO is better aligned to the future direction of
our customers. The merged organisation will provide a single point of
contact for infrastructure service companies, and will develop a more
consistent approach to service delivery.
Greater
influence
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The increased coverage and size of the new organization and its
infrastructure focus gives it a coherent voice and greater influence within
government
In summary the new ITO will be more resilient, have greater capacity and capability
and will be able to provide high quality service across the infrastructure sector.
INFRASTRUCTURE I T O
Future Business Model
IITO will be an incorporated society which will allow for the future addition of other infrastructure based
industries. A new governance structure with strong industry representation and a skills based Board will be
put in place for IITO. Before completion of the merger a new set of rules for IITO will be drawn up. These
will be available on the ESITO and InfraTrain websites (as a draft).
Both ESITO and InfraTrain operate nationally via regional networks with high frequency face to face contact
with trainees and customers. Our customers and trainees appreciate this approach and there are no plans
to change it. Similarly there are no plans on day one to change the existing qualifications and training
resources. The High Level Business Model for the new ITO is available on our web site. It has been
developed to improve service delivery for our customer and markets, with strong regional networks, specific
local solutions and opportunities for business growth and sustainability
Transition
During the transition period the frontline functions of ESITO will continue to operate as business as usual.
Ensuring our customers continue to receive a high quality service will be a key focus for our people over this
period. Over time we will refine the IITO business model to deliver improvements to service and product
quality. These improvements will be made based upon feedback from customers and trainees.
The proposed merger is dependent upon support from our industry. Both ITOs are now seeking the
necessary support from their respective industry sectors. Further updates will continue to be made
available.
We encourage you to contact us if you have questions regarding the merger, or wish to discuss any of the
information contained in this paper.
John McEnteer
Board Chair ESITO