1. Auditing regulatory frameworks for economic assets post-privatisation Bob Holbert, Director Performance Audit Services Group

2. Overview Presentation in three parts –Sydney Airport –Development, regulation and privatisation –Key accountability issues Audit Focus –Five related audits in last ten years

3. Sydney Airport Australia’s busiest airport – a significant economic infrastructure asset located in urban environment Privatised in June 2002 – leasehold sale Residual risk of liability as landlord and owner Significant ongoing economic and environmental public policy interests

4. Regulatory Framework Economic –Trade Practices Act 1974, Airports Act 1996 Safety –Navigation, Air Traffic Control Operations –Infrastructure requirements, specific requirements at designated airports

5. Operational Regulation at Sydney Airport Curfew Act Long Term Operating Plan Sydney Airport Demand Management Act

6. Issues for Accountability Framework legislation – possible issues –Have procedural requirements for the making of the delegated legislation have been observed? –Is the subject matter of the legislation authorised by the Act and does it only deal with matters so authorised? –Does the legislation only makes provisions that are consistent with the terms of the Act? –Is the legislation is certain, in the sense that a certain meaning is able to be given to the functions to be performed, or the obligations to be complied with, under the legislation? –Are the necessary elements, envisaged by the framework legislation for the proposed regulatory environment, present?

7. Issues in outsourcing regulatory functions Records and Accountability –Ownership of records –Access to records Performance and Accountability –Specifying, monitoring and reporting on performance –Technical compliance

8. Conclusion Privatisation often accompanied by increased complexity in regulatory frameworks Challenges for accountability and transparency continue to evolve Effective regulatory action best served by a robust legislative framework and the active identification and management of risks by policy agencies