O’Farrell outsources management of government offices

By Paul Hemsley and Julian Bajkowski

The NSW government has announced that it will outsource management of its office accommodation requirements after Minister for Finance and Services Andrew Constance called for expressions of interest from private sector suppliers.

The move to outsourcing will send management of what the government estimates is a portfolio of 830 properties covering 1.4 million square metres of office space across the state into the hands of commercial operators as Macquarie Street tries to slash costs.

The state government spends around $7 million a year managing Government Property NSW and the O’Farrell government is now planning to overhaul the way government office space is managed.

Government Property NSW is a state-owned corporation established through the Government Property NSW Act 2006 under the previous Labor government. It replaced the State Property Authority to specialise in the acquisition, management and disposal of government owned property.

The Coalition government says it now wants to give taxpayers a “better deal” by “restructuring” the state’s leasehold and freehold office portfolio by outsourcing business to property specialists and private operators who have the “right skills” in property and facilities management.

Skills detailed by the NSW Government include asset management, leasing management, capital and tenancy works management, financial management and property transaction accounting, acquisitions and divestments capability, procurement and helpdesk capability.

The outsourcing announcement is the latest in a raft of property related savings measures and follows the announcement by Mr Constance’s predecessor, Greg Pearce, of the sale of seven state government buildings for more than $405 million in May 2013.

The $405 million return the government made on this sale has been pledged to fund housing infrastructure, which Mr Peace claimed exceeded the Housing Acceleration Fund by $100 million.

Mr Constance expressed confidence that the “private sector can make a valuable contribution to the more efficient management of government office accommodation”.

“As well as improving efficiency, this private sector tender offers a significant commercial opportunity, one that may provide incentives for small business,” Mr Constance said.

He said by working with the private sector, “we will deliver best industry practice, and we will deliver value for money for the NSW taxpayer.”

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