The Premier asked the state’s pricing regulator to investigate the ”planning, delivery and maintenance” of all public infrastructure in September, to recommend ”which capabilities should be retained within government”.
The existence of the review has not been made public.
But Fairfax Media can reveal the Independent Pricing and Regulatory Tribunal’s recommendations would result in thousands of job cuts in just one department.
Draft recommendations to the state’s road authorities, for instance, demand the wholesale outsourcing of all roadwork and road design across the state apart from emergency and incident responses.
The review, however, also makes recommendations to other government agencies.
In response to IPART’s recommendations, Roads and Maritime Services says the agency already plans to get rid of about 30 per cent of its workforce in the next three years.
”The reforms will reduce full-time equivalent staff numbers over a three-year period from 7415 (2013-14) to 5260,” RMS says in a draft dated March.
The RMS response to the IPART review was included in a parliamentary call for papers initiated by Greens MP Mehreen Faruqi for documents relating to the business case for the WestConnex motorway.
But the IPART review would include recommendations relating to other agencies as well as RMS.
A spokeswoman for IPART referred questions about the review to Mr O’Farrell’s office but confirmed IPART had not released any information about the review. A spokesman for Mr O’Farrell confirmed the government asked for the report.
Asked why the government did not announce it had commissioned the report, the spokesman said: ”The government commissions a range of reports to ensure value for money.”
According to briefing notes prepared this month by RMS for a meeting with Roads Minister Duncan Gay, ”the objective of this review is to recommend options to improve cost effectiveness of government across all aspects of planning, delivery and maintenance of public infrastructure”.
RMS says it largely agrees with IPART’s recommendations. One area it expresses reservations in is ”balancing efficiency savings” against the large numbers of
employees who work in regional areas of the state.
Almost half of RMS staff work in regional areas.
The WestConnex documents demonstrate most of the planning and design for the motorway is performed by consultants and contractors.
They include invoices from Macquarie Capital, which is providing financial advice for the project.
Macquarie billed the government $490,903 for two months’ work in April and May last year, including $19,465 for out of pocket expenses. These expenses include $10,565 in airfares and $2617 in taxis.
Paul Davies, the NSW director of Professional Engineers Australia, said RMS had already cut 20 per cent of its engineers in the past two years.
Mr Davies said outsourcing often led to waste.
”When you contract out you’ve still got to run those contracts and control your costs, and you need engineers to do that and unfortunately they are cutting that capacity,” he said. ”Poorly scoped projects that come from diminished engineering capability [are] a burden for all.”
A spokeswoman for RMS said there would be no reduction in services as a result of the reforms. Of the 2000 fewer jobs, she said about 850 positions would transfer to new Service NSW ”one stop shops”.
About 700 positions would be affected by the outsourcing of road maintenance in Sydney. In November, the government signed 10-year contracts worth about $2 billion with Leighton Boral Amey and DownerMouchel to maintain roads in Sydney.
RMS says it expects to save 5 to 10 per cent from the road maintenance contracts. The RMS spokeswoman said the department had lowered consultant costs by more than 50 per cent in three years.
IPART’s recommendations to RMS call on it to commercialise and outsource ”advisory and strategic planning services”; ”project development, including land entry and acquisition” and ”contract management and procurement” as well as all road design, construction and maintenance.