Contact Officer

[Agency Logo]

[Agency Title]

Disposal Plan

[Date]

Approval

Contact Officer

Version Control

Executive Summary

This section summarises the main results and advice from the plan and lists the recommendations for which approval is sought from decision-makers.

Advice is provided on the:

·  assets proposed for disposal in the shortterm (13 years), mediumterm
(35 years) and longterm (510 years);

·  the strategic justification and the overall benefits, costs, risks and schedule for the proposed disposal items; and the

·  main risks involved in the disposal action such as renewed stakeholder engagement and any improvements to the property prior to sale.

The remainder of the plan provides the necessary backing.

In finalising the plan, the best approach is to summarise the substance of the work done for each section, to articulate the underlying logic and assumptions, and to answer the sorts of key issues and questions provided.

Strategic Justification

This section provides an overview of the disposal items and explains why they would be consistent with the agency’s future service delivery model.

A strategic asset plan clarifies the asset-related demand drivers, service delivery objectives and model for an individual agency, and for the agency in cooperation with others over the next ten years. This provides the point of reference for a strategic approach to the disposal of assets that will no longer be required.

The disposal plan does not repeat the detail in the strategic asset plan on the agency’s service delivery model. Instead, advice is provided on the overall reasons and timing for the disposal action. For example, if an agency intends to dispose of a land block in the next four years, confirmation is provided that similar land will not be required at higher cost in the next 510 years.

To support the proposed disposal action, advice is provided on its consistency with longterm State plans for urban and regional development; for example, it may be appropriate to dispose of a facility and land in the short term if they are in locations far removed from future population and activity centres or transport corridors.

Questions

·  How would the disposal of an asset affect the practical service delivery objectives and model in the strategic asset plan?

·  Are there assets that are clearly surplus to the service delivery model – and for which there is no need to further test their relevance or viability?

Evidence

References are provided to the advice in the strategic asset plan which supports the conclusion that an asset will not be relevant to an agency’s service model.

Analysis

Retain or Dispose Tests

This section provides the results of the analysis on whether an asset should be disposed of, or retained.

Each asset is examined closely on its merits from four perspectives: financial viability; market failure; stakeholder views; and public interest.

Questions

·  What value for money would be gained from the retention and continued investment of State funds in the asset? Which assets would not be retained if financial viability was the only test to be applied?

·  Is there potential to retain and reuse the asset for the agency’s purpose, or a shared purpose with another agency?

·  Would disposal undermine the State’s or an agency’s future finances, for example by resulting in the need to reacquire a similar asset at higher cost?

·  Why does market failure dictate that the asset should be retained? Are there no options to deliver priority services through other means such as nongovernment use of the asset?

·  Are there stakeholders in the community or in the public and private sectors who are strongly opposed to the disposal? Should the asset be retained on that basis alone? If not, what approach should be taken to address stakeholder concerns?

·  What risk assessment has been done on the opposition to disposal – for example, how representative is it, and how long is it likely to last?

·  What is the compelling public interest that outweighs the conclusion that an asset should be disposed of because it is not strategically justified or financially viable?

Evidence

The following information is available:

·  financial return and benchmark rates used for the financial viability test, and the details of the senior officer in Treasury with whom the rates were agreed;

·  dates and scope of stakeholder consultation, opinion testing and analysis, including options to address any opposition to disposal; and

·  future market potential and commercial advice.

Summary

The results of the ‘retain or dispose’ analysis are summarised in a table similar to the following, fictitious example:

Table A: Retain or Dispose – Summary

Proposals

Section One: Disposal Priority and Sequence

This section provides the shortlist of proposed asset disposals, based on the preceding advice.

The shortlist covers disposal items over the short, medium and long-term. The main arguments, logic and assumptions that underpin the shortlist are explained.

A simple presentation is used similar to the following table which provides fictitious examples for land and other assets.

Table B: Disposal Shortlist

Questions

·  On balance, what is the best timing for the disposal items, based on the advice in the preceding section of the plan?

·  What were the main reasons, logic and assumptions on the timing?

Section Two: Transition to Disposal

This section identifies the main action and indicative costs, risks and timing involved in disposing of the assets listed above.

Key transition to disposal issues include:

·  the disposal type envisaged (such as outright sale, lease or excision);

·  residual maintenance or refurbishment activity that may be essential to ensure staff safety and amenity for the remaining life of the asset, and to obtain the best sale price for the State (without over investment);

·  land preparation, such as to remove contamination and to obtain approvals;

·  administrative costs, such as for legal services;

·  extent of consultation with stakeholders who will be affected, including members of the public, lobby groups and public or private sector agencies; and

·  any other issue that may prevent or delay the disposal action as planned.

Evidence

Copies of the reports that justify the requirements and indicative cost estimates for the transition to disposal are available.

Section Three: Sale Proceeds

This section estimates the proceeds that will be obtained from the disposal of real property over the next ten years.

The proceeds are the entire amount (for Crown land) or the net amount (for other real property). The information is provided in a spreadsheet similar to that at Appendix A.

Concise advice in support of each estimate is also provided; for example to explain why market analysis indicates that the best time to sell an asset would be in three years.

Evidence

Information is available to explain the basis for the sale estimates (minus the transition to disposal costs identified in the preceding section of the plan).

Section Four: Risks and Mitigation

This section identifies the main risks to the successful implementation of the disposal plan and the mitigation steps envisaged.

Potential risks include that:

·  an agency will require the asset after all, for example, due to a change to its service delivery objectives or model;

·  the transition to disposal tasks (such as residual maintenance, management and land assembly) will not be completed on time and budget; and that

·  the sale price will not be achieved, or the transaction completed on schedule.

The highest risks are identified and explained, and a mitigation strategy outlined. Benchmarking and lessons learned from similar disposal action by the agency or by other agencies are used to develop the risk mitigation.

Questions

·  What is the overall risk that the disposal plan will not be achieved as proposed: high, medium or low?

·  What were the main lessons learned from similar disposal action? How were these lessons applied in developing the risk profile?

1

Appendix A: Disposal Spreadsheet

7