NSW Audit Office - Awareness - Issue 2003 08 - September 2003

AWARENESSccounting and Auditing Developments Issue 8 SEPTEMBER 2003AUDIT OFFICE 1AUDIT OFFICE UPDATEUPDATESYDNEY WATER CORPORATION: ACCOUNTING 2NORTHSIDE STORAGE TUNNEL PROJECTUPDATEProviding public infrastructure is a fundamental role of government. Unfortunately, governments do not always handle this role as well as they should. All too often, URGENT ISSUES 5projects are completed late and/or over budget, do not deliver the benefits GROUP UPDATEexpected, or are subject to continuing litigation.INTERNATIONAL 6This audit examined a major sewerage infrastructure project - Sydney Water’s UPDATE$466 million Northside Storage Tunnel. It focuses on the form of the contractual relationship with the private sector. The Tunnel represents the first major MISCELLANEOUS 8construction project in NSW delivered through an ‘alliance’ between the public and PUBLICATIONSprivate sectors. LEGISLATIVE 10Major infrastructure projects delivered under the traditional approach can be CHANGES UPDATEplagued by costly and time-consuming disputes. In an alliance, the asset owner and its partners adopt a team approach. They share both the costs of underachievement TREASURY 10and the rewards of a job well done. They seek to resolve problems, rather than UPDATEallocate blame. An alliance, however, brings its own risks. One is not getting the incentives and sanctions right. Another is that the parties become too close. The PREMIER’S 11owner needs to ensure that the ...