Australia: New state-specific guidelines for Public Private Partnerships (PPPs) in NSW

In brief – New PPP guidelines supercede 2006 guidelines

The NSW government has released the NSW Public Private Partnerships Guidelines (2012) to guide the delivery and procurement of infrastructure and services.

These state-specific guidelines came into effect on 15 August 2012 and supercede the NSW 2006 Working with Government: Guidelines for Privately Financed Projects in integrating principles of the National Public Private Partnerships Policy and Guidelines.

Guidelines aim to streamline approval process for PPPs

The 2012 guidelines are substantially based on the 2006 guidelines in streamlining the approval process for any procurement of infrastructure and associated services through public private partnerships.

These guidelines aim to provide government agencies, the private sector, advisors and other stakeholders with a transparent mechanism to deliver improved services and better value for money.

In NSW, the PPP guidelines generally apply to all government agencies, state owned corporations and public trading enterprises that are not state owned corporations.

Further, any public infrastructure project with a total estimated capital value exceeding $100 million must be assessed having regard to value for money drivers.

PPPs require standard approval processes and statutory approvals

Prior to procuring a PPP project, standard government infrastructure procurement approval processes (cabinet approval) must be undertaken in considering the investment and procurement decision.

In obtaining cabinet approval for PPP delivery, the Cabinet Infrastructure Committee (CIC) and Expenditure Review Committee (ERC) of cabinet must consider the infrastructure investment proposal.

In addition, prior to the procurement and execution phases PPPs also require statutory approvals subject to the Public Authorities (Financial Arrangements) Act 1987 and, if applicable, the State Owned Corporations Act 1989.

Five-stage approval process for PPPs

The 2012 guidelines detail a five-stage approval process throughout the PPP procurement process which aligns with requirements under volume 2 of the national guidelines.

  1. PPP project planning and definition
  2. Expression of interest
  3. Request for detailed proposals
  4. Negotiations and contract finalisation
  5. Project execution, disclosure and implementation

Specific requirements for NSW continue to apply

Although the national guidelines specify the documentations and procedures required at each phase of the approval process, there are a number of state-specific requirements which continue to apply. This includes the need for:

  • A Public Interest Evaluation
  • A Steering Committee, composed of a procuring agency, an experienced officer from NSW Treasury and any representatives from other agencies or independent advisors jointly approved by Treasury and the procuring agency or Cabinet
  • A comprehensive probity plan and an appointed probity auditor
  • Accounting statements which comply with the Budget and Financial Management of Directorate NSW Treasury policy guidelines
  • Compliance with the Ministerial Memorandum No.2007-01 Public Disclosure of Information Arising from NSW Government Tenders and Contracts and the Government Information (Public Access) Act 2009, which detail disclosure requirements arising from NSW government tenders and contracts
  • Compliance with the NSW Government's Code of Practice for Procurement which governs the ethical and behavioural standards of parties involved in the procurement process

Changes from the 2006 PPP guidelines

Although the 2012 guidelines and their 2006 predecessor recognise the need to deliver the best value for money infrastructure and service solutions to meet the community's needs and aspirations, there have been a few minor amendments to the PPP approval guidelines.

  • To complement the national guidelines, the 2012 guidelines recognise the delivery of all PPPs as opposed to merely PFPs (one type of PPP) as noted under the 2006 guidelines
  • Under the new guidelines, the Infrastructure Financing Unit of NSW Treasury is the first point of contract in NSW for PPPs and is responsible for ensuring that agencies adhere to both the state-specific and national guidelines
  • Infrastructure NSW can be authorised by the Premier to step in to deliver major projects pursuant to the Infrastructure NSW Act 2011
  • The approval process now requires approval to be obtained from the Expenditure Review Committee, as opposed to the Budget Committee of Cabinet at various stages of the procurement and execution phases
  • The Treasurer's approval must be obtained under section 20 of the Public Authorities (Financial Arrangements) Act 1987 for the procurement
  • Departures from the approval process must be approved by NSW Treasury

Guidelines demonstrate commitment to value, quality and appropriate allocation of risk

The NSW Public Private Partnerships Guidelines (2012) reflect the NSW government's recognition of the need to develop an efficient procurement process for large scale projects.

These updated guidelines affirm the government's support of the national guidelines and, together with NSW specific requirements, aim to deliver a PPP procurement process that ensures value for money, innovative solutions for improved services and appropriate allocation of risk between the parties.

Brendan Maier Jackie Cheung
Infrastructure, major projects and PPPs
Colin Biggers & Paisley

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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