While evolutionary rather than revolutionary, the changes are welcomed and assist the private sector to better understand the State's drivers.
It has been two years since Queensland Treasury introduced the Market-Led Proposal (MLP) Guidelines and they have now been updated taking into account industry feedback as well as learnings from other jurisdictions.
We have provided a snapshot of the changes below.
What are the MLP Guidelines?
The MLP Guidelines provide a framework for the private sector to engage with the State government in relation to proposals for commercial arrangements that provide services or infrastructure which meet the community's needs.
The key changes to the MLP Guidelines
The updates to the MLP Guidelines are intended to further streamline the process and clarify the requirements for the private sector.
One of the more significant changes is to make the Preliminary Assessment stage mandatory. It is now at this very early stage that the MLP Panel first becomes involved.
The MLP Panel comprises senior representatives from Treasury, Department of State Development, Department of Infrastructure, Local Government and Planning, Department of Premier and Cabinet as well as supplemental agency representatives as needed).
This enables the State to give very early feedback to the proponent as to whether the proposal should progress through to Stage 1 of the MLP process or whether the proposal is more suited to alterative government programs.
The nine criteria previously applied have been streamlined to six:
- government policy, priority and community need;
- justification for direct negotiation;
- value for money;
- capacity and capability of the proponent;
- risk and cost allocation; and
- feasibility of the proposal.
Significantly, the ambiguous "uniqueness and intellectual property" criterion has been replaced with "justification for direct negotiation".
Another sensible change is the removal of "competing proposals" as a criterion, given proponents are unlikely to have the relevant knowledge to address this issue.
Why these changes matter
Since the introduction of the MLP framework in July 2015, the State Government has engaged with proponents from a range of industries. Over 40 proposals have been submitted for "Stage 1: Initial Proposal", with six currently in "Stage 2: Delayed Proposal" and one project having reached "Stage 3: Final Binding Offer".
While evolutionary rather than revolutionary, the changes are welcomed and assist the private sector to better understand the State's drivers in a process that, by its very nature, needs to have some flexibility. Encouraging the private sector to initiate and fund infrastructure projects in this fiscally constrained environment is to be applauded.
Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.