[Agency Logo]
[Agency Title]
Disposal Plan
[Date]
Approval
Name/Title
Signature
Date
Chief Executive Officer
Chief Finance Officer
Senior Asset Manager
Other
Contact Officer
Name/Title
Email
Phone
Version Control
Version
Draft 1
Draft 2
Final
Date
Status/Action/Change
Approved By
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 short-term (1-3 years), medium-term
(3-5 years) and long-term (5-10 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 5-10 years.
To support the proposed disposal action, advice is provided on its consistency
with long-term 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?
1

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
2

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
non-government 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
Land Block A
Heritage Building B
Description/
Status
Large vacant Crown land
15km east of regional Town C.
Old two storey museum on CBD
fringe.
Strategic
Outlook
Beyond easy public access for
future service delivery by
owner agency.
Consistent with ten year delivery
model for services by owner
agency.
Agency C has high interest as
part of its long-term transport
strategy.
Financial
Viability
Low retention costs / low
current or future service
delivery benefit.
Increasing maintenance costs, but
high usage rates and benefits.
Public
Interest
No environmental protection
issues.
High heritage value.
Market
Failure
Private sector may buy, but
would preclude service
delivery by Agency C.
Private sector would buy, but would
not develop for public service
delivery.
Stakeholder
Engagement
No current/established
services.
Very strong opposition to significant
structural change.
Low public concern in favour of
retention.
Conclusion
Dispose
(via transfer to
Agency C at market value)
Retain and refurbish
3
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
Proposal/Priority
Reasons/Benefits
Short-term
(1-3 years)
1.
Land Block A
High value for another agency’s service delivery
model.
2.
Agency-wide video
conference system
Technology obsolete/not well supported in four
years.
Medium-term
(3-5 years)
3.
Truck fleet
End of useful life/prohibitive maintenance costs.
Long-term
(5-10 years)
4.
Central offices
Decision required in five years on whether to
re-lease/refurbish/dispose/relocate.
Questions
4

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).
5
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
6

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?
Appendix A: Disposal Spreadsheet
Budget
Year
FE 1
FE2
FE3
Yr 5
Yr 6
Yr 7
Yr 8
Yr 9
Yr 10
Amount
to CA
Amount
to CA
Amount
to CA
Amount
to CA
Amount
to CA
Amount
to CA
Amount
to CA
Amount
to CA
Amount
to CA
($m)
Asset Description
Land Block A
Amount
to CA
0
0
10
0
0
0
10
10
7