28/03/2012 - 10:59

What’s scary about going private?

28/03/2012 - 10:59


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The labour movement’s increasingly strident campaign against privatisation obscures valid questions.

The labour movement’s increasingly strident campaign against privatisation obscures valid questions.

THE state Labor Party seems convinced it is on a winner with its constant attacks against privatisation.

It is standing arm in arm with the union movement, particularly United Voice, which has always been opposed to privatising government services.

The tone of the union’s campaign was illustrated by a media release issued this week, headlined: ‘Prisoners to work in Fiona Stanley Hospital under Serco regime’.

United Voice assistant secretary Carolyn Smith raised the scary prospect of Serco using prisoners with violent criminal histories as cheap labour in the state’s flagship hospital.

“This is a good example of the stupid things that happen when you privatise essential services,” Ms Smith claimed.

The only problem is, her claim’s very wide of the mark.

It came just a few days after Labor’s water spokesman Fran Logan tried his own scare campaign, claiming to have exposed the Barnett government’s “secret water privatisation campaign”.

Mr Logan was trying to stir controversy over a proposed alliance contract between the Water Corporation and a private joint venture, led by Transfield Services and including two experienced international water companies.

Transfield announced in December that it had been selected as the preferred tenderer, yet Mr Logan insisted the government was trying to hide the proposed deal.

He claimed the contract – which has not yet been signed but is likely to proceed – would result in “the private sector controlling and running our critical water and sewerage plants.”

Once again, an assertion that is very wide of the mark.

Looking at the details of the Serco and Transfield contracts, the reality is much more mundane than the union or Labor would have us believe.

There is nothing to be scared of, if the right regulatory regime and performance measures are maintained; and nobody seems to have suggested that will not be the case.

In Serco’s case, it is contracted to run non-clinical services at Fiona Stanley Hospital. It will not be delivering health services, as United Voice repeatedly implies.

Serco has also been contracted to run the Rangeview juvenile detention centre, located next door to the hospital.

Finding meaningful and constructive work for prisoners is an important part of their rehabilitation program. This typically involves tasks like roadside rubbish collection, landscaping and council projects.

Would it be so terrible if their work options included some gardening or cleaning in the grounds of the hospital?

Should this be the basis for a union scare campaign?

In Transfield’s case, its consortium will be replacing contractor Wood Group PSN, which has been providing services to the Water Corp for more than a decade.

The scope of the new alliance contract will be wider than the current arrangement, including some operations and asset management tasks.

Is that the basis for a scare campaign? Surely not.

The Water Corporation has won awards for its success with alliance contracting, which it has used extensively to deliver major capital projects such as new wastewater and desalination plants.

It has also used alliance contracts to deliver routine maintenance services; contractor Programmed recently took over this task from Thiess and UGL, which had been doing the work for the past 10 years.

The Water Corp is not alone.

Western Power uses private contractors, such as Thiess, and also has an alliance contract with Transfield.

Main Roads has its own variation on alliance contracts, called term network contracts, with half a dozen private consortia across the state.

The Public Transport Authority has established an alliance with John Holland and GHD to sink the railway in Northbridge.

There is no guarantee that these alliances will be successful. Nor is there any guarantee that public servants will efficiently deliver the same services.

That is just one reason why government departments and agencies should employ a range of contracting models.

It gives them more flexibility, enables them to tap into the skills and expertise of the private sector, and enables them to evaluate competing procurement and contracting models.

Smart contracting enables all of these goals to be achieved.



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