One of the adjustments to the PSC related to the removal of cleaning services from the scope of services to be delivered under the Project Agreement following a decision by government in early October 2006.
As part of this decision, the government determined to exclude cleaning services from the Partnerships Victoria arrangement and to activate steps under agreed protocols in place with the applicable union for the benchmarking and potential outsourcing of cleaning services.
This decision resulted in a reduction to the PSC of around $75 million reflecting the impact of the removal of cleaning services on operating costs over the 25 year contract term.
In other recent public hospital PPPs, cleaning services were included within the scope of the services to be delivered, such as the Partnerships Victoria Project Agreement for the Royal Women's Hospital.
The decision to exclude cleaning services from the scope of the RCH project agreement may have adverse value for money consequences for the state if the results obtained from benchmarking of the potential outsourcing of cleaning services at RCH do not yield positive results.