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Projects and Contract Management

Project Management

The Project and Residual Issues Management team has responsibility for legal and commercial matters that emanate from the sale or disposal of Australian Government commercial operations and from personal injury claims made by former employees of those or other Australian Government entities whose functions were taken over by Finance. Nineteen legal cases, a number of them complex, were successfully brought to a close during the year.

On 9 December 2003, the Australian Antarctic and Southern Ocean Profiling Project was transferred from Finance to Geoscience Australia, as all the high risk fieldwork managed by Finance had been completed earlier in the year. The remaining data interpretation and the preparation of a submission to the United Nations Commission on the limits of the Extended Continental Shelf is most appropriately completed by Geoscience Australia, and integrated with its work on the Extended Continental Shelf submissions for the rest of Australia and its territories.

Asbestos-Related Diseases

During 2003–04, Finance chaired an interdepartmental committee comprising the Departments of Defence, Transport and Regional Services, Employment and Workplace Relations, Veterans' Affairs and the Attorney-General, as well as Comcare. The committee was responsible for devising a management strategy for addressing asbestos-related disease personal injury claims made against the Australian Government and for commissioning an actuarial study to assist in quantifying the Australian Government's asbestos-related disease liability. At 30 June 2004, the committee's findings were being considered within government. As a result of the actuarial study, the Australian Government's potential liability for asbestos-related diseases was reported as $0.9 billion in the Consolidated Financial Statements for the Year Ended 30 June 2003.

Private Financing

Several Australian Government departments and agencies considered the potential application of the government's private financing policy to various equipment and infrastructure procurements during 2003–04. This helped to raise the profile of private financing within the government and position it as a procurement option that may, in certain circumstances, deliver the best value for money. During the year, the Private Financing Unit continued to provide advice to agencies that were either in the process of implementing, or considering, privately financed procurements of major assets and services. The Private Financing Unit also represented the Australian Government on the officials-level working group attached to the recently established National Public Private Partnership Forum. The forum is a ministerial-level body designed to deliver better coordination, information sharing and support among Australian governments and to improve the value for money being realised from privately financed projects.

The Australian Government Property Principles suggest the government should only own property where the long-term yield exceeds a "hurdle" rate of return, or where it is in the public interest to do so. The rate of return of 11 per cent that applied in 2003–04 was reviewed during the year and, following consideration by the Cabinet, a revised rate of 10 per cent was adopted from 1 July 2004 and published on the Finance web site. The rate was decreased to reflect lower and more stable rates of interest over recent years as well as lower returns in the equities market.

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