Image: William Franklin
The increasing trend among government agencies to opt for private sector advice in infrastructure projects has prompted the New South Wales government to radically rethink how its own Public Works advisory agency will fulfil its role in delivering expertise to state agencies and councils.
That’s the approach given by the Mike Baird government to secure the future of the struggling NSW Public Works agency to find a solution to its already declining revenue.
The government has forecast Public Works’ revenue to fall by up to 40 per cent, fuelling fears that it will lead to a $300 million budget black hole over the next decade.
NSW Public Works has traditionally provided providing expert advice to government and professional services to government agency clients and manages a range of large and small projects and facilities contracts with an annual value of more than $1 billion.
But Minister for Finance, Services and Property Dominic Perrottet has expressed grave concern about whether the agency can withstand the trending behaviour of many agencies and councils to seek advice elsewhere.
Mr Perrottet said the growth of contestable markets and decisions by cluster agencies to use the business community for large infrastructure projects has significant implications for the sustainability of the NSW Public Works business model.
To counter this problem, the government has announced a series of reforms to the agency beginning on 1st July 2015 to “optimise” the delivery of the state’s public infrastructure, more effectively leverage private sector partners and “ultimately secure the future of the organisation”.
Mr Perrottet said Public Works would leverage its history of overseeing the state’s infrastructure to now re-position as a ‘smart buyer’ of infrastructure services, particularly for agencies and councils.
“Over the next two years, Public Works will shift its core focus to providing expert strategic advice and commissioning capabilities,” he said.
He said this will ensure market sourced construction-related services are risk managed and provide value for money.
“For the last 150 years, NSW Public Works has played an important role in public infrastructure and I want that to continue.”
“These reforms will ensure we will retain expert knowledge within government, save taxpayer dollars and cease crowding out the private sector,” he said.
The Office of Finance and Services (OFS) gave a rundown of what will and won’t be changed in NSW Public Works.
According to the OFS, the Engineering Emergency Management role will continue unchanged, with a dedicated full time Engineering Services Coordinator. Regional and Rural services also remain unaffected.
However, some services currently provided by NSW Public Works that can be obtained from mature private sector markets will be transferred, sold, or “progressively discontinued”.
The government has ensured that affected employees, clients and other stakeholders will be consulted before business unit plans are finalised.
It also made clear that client contracts will not be impacted by these changes.
