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To View Asset VOLUME 1 - MAIN REPORT State Government of Victoria VOLUME 1 - MAIN REPORT State Government of Victoria Printed on recycled paper Contents – Volume 1 – Main Report VOLUME 1 – MAIN REPORT CONTENTS PRINCIPAL FINDINGS AND RECOMMENDATIONS............................................................ 1 OVERVIEW........................................................................................................................... 1 VOLUME 1............................................................................................................................ 2 1. PRIVATISATION AND CONTRACTING: 1992-99 .................................................... 2 2. OBLIGATIONS AND LIABILITIES OF THE STATE................................................... 2 3. PROBITY AND DISCLOSURE .................................................................................. 3 4. DISCLOSURE OF EXISTING CONTRACTS.............................................................. 4 VOLUME 2............................................................................................................................ 4 GENERAL FINDINGS FROM THE CASE STUDIES ............................................................. 4 INTRODUCTION – VOLUME 1 ............................................................................................. 5 CHAPTER 1 VICTORIAN GOVERNMENT PRIVATISATION AND CONTRACTING 1992-99.............................................................................................. 7 1. BACKGROUND, OBJECTIVES AND SCOPE OF CONTRACTING........................... 7 1.1 Background – The Position in 1992 ............................................................................ 7 1.2 Objectives of the Former Government in Contracting and Privatisation ..................... 11 1.3 Scope of the Contracts Entered into by the Previous Government ............................ 13 2. SOME KEY OUTCOMES OF THE CONTRACTING AND PRIVATISATION PROCESS ................................................................................... 16 2.1 Financial and Economic Outcomes .......................................................................... 16 2.2 Policy Framework .................................................................................................... 18 2.3 Debt Reduction ........................................................................................................ 19 2.4 Restored Credit Rating............................................................................................. 19 2.5 Social and Environmental Outcomes........................................................................ 20 2.6 Regional Impacts ..................................................................................................... 22 2.7 Impacts on Governance and Regulation................................................................... 23 2.8 Impact on the Size and Role of the Victorian Public Service ..................................... 25 2.9 Assessment of the Overall Impact of Previous Government’s Contracting................. 27 3. SOME LESSONS FOR THE FUTURE ..................................................................... 28 3.1 The Nature of Contracting ....................................................................................... 28 3.2 The Decision to Contract.......................................................................................... 28 3.3 Strengths and Weaknesses of Contracting ............................................................... 31 3.4 Need for Prior Economic, Environmental, Social and Regional Studies..................... 32 3.5 The Potential Contribution of Parliamentary Committees .......................................... 36 3.6 Cabinet and Treasury Consideration ........................................................................ 36 3.7 Assessment of Previous Government’s Approach to the Pre-Contract Phase............ 37 3.8 Benchmarking.......................................................................................................... 37 3.9 Performance Measurement ...................................................................................... 39 i. Contents – Volume 1 – Main Report 3.10 Financial Management and Reporting ...................................................................... 42 3.11 Concluding Comments............................................................................................. 43 CHAPTER 2 OBLIGATIONS AND LIABILITIES.................................................................. 45 1. INTRODUCTION ..................................................................................................... 45 1.1 Interpretation of Term of Reference.......................................................................... 45 1.2 Reporting of Obligations and Liabilities..................................................................... 46 1.3 Confidentiality .......................................................................................................... 47 2. ELECTRICITY ......................................................................................................... 48 2.1 Distribution Businesses............................................................................................ 48 2.2 PowerNet Victoria .................................................................................................... 48 2.3 Generators............................................................................................................... 49 2.4 Herman Research Laboratories................................................................................ 51 2.5 Residual Liabilities of SECV ..................................................................................... 51 3. GAS ........................................................................................................................ 52 3.1 Gas Distribution/Retail Businesses........................................................................... 52 3.2 GFE Resources ....................................................................................................... 54 3.3 Heatane................................................................................................................... 54 4. PORTS OF PORTLAND AND GEELONG ............................................................... 54 5. MISCELLANEOUS ASSET SALES......................................................................... 55 5.1 State Plantations...................................................................................................... 55 5.2 Aluvic....................................................................................................................... 55 5.3 Grain Elevators Board.............................................................................................. 56 5.4 TABCORP Float....................................................................................................... 57 6. TRANSPORT .......................................................................................................... 57 6.1 Passenger Trains and Trams ................................................................................... 57 6.2 V/Line Freight .......................................................................................................... 59 6.3 West Coast Railway and Hoys (Cobram Line) .......................................................... 59 6.4 OneLink ................................................................................................................... 59 6.5 Buses ...................................................................................................................... 61 6.6 VicRoads Plant ........................................................................................................ 61 7. CITYLINK................................................................................................................ 62 8. PRISONS ................................................................................................................ 64 9. HOSPITALS AND HEALTH SERVICES .................................................................. 64 9.1 La Trobe Hospital..................................................................................................... 64 9.2 Mildura Base Hospital .............................................................................................. 65 9.3 Health Services Contracts........................................................................................ 65 9.4 Hospitals Cogeneration Project ................................................................................ 66 10. INFORMATION TECHNOLOGY OUTSOURCING ARRANGEMENTS..................... 66 10.1 Traffic Camera Office/Enforcement Management Unit .............................................. 66 10.2 Victoria Police IT Outsourcing .................................................................................. 67 10.3 VicRoads IT Outsourcing and PTC IT Outsourcing ................................................... 67 ii. Contents – Volume 1 – Main Report 11. MAJOR PROJECTS................................................................................................ 68 11.1 Federation Square ................................................................................................... 68 11.2 Multi-Purpose Venue................................................................................................ 69 11.3 Museum..................................................................................................................
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