Administrative processes for the development of the Priority Lists (Chapter 3)
39. As previously indicated, the Priority List was developed through a submissions‐based process, with 675 project submissions received. There were some administrative issues in the way in which submissions were registered and controlled within the Office of the Infrastructure Coordinator, as well as in relation to the maintenance of records of correspondence and discussions with proponents. A key factor in these circumstances was that the Office of the Infrastructure Coordinator was developing and implementing administrative processes at the same time as commencing its substantive work on the National Infrastructure Audit, the development of the Infrastructure Priority List and production of Public Private Partnership guidelines, each of which had tight timeframes. The Office of the Infrastructure Coordinator has advised ANAO of a range of improvements that have now been adopted with respect to its administrative processes.
40. Infrastructure Australia's assessment framework, which was not a tender process, drew from international and national‐based practices and research, and was published in the form of a document called the Prioritisation Methodology. The Prioritisation Methodology was endorsed by the Infrastructure Australia Council at its meeting on 1 October 2008.
41. Amongst other sources, Infrastructure Australia's approach drew on the National Guidelines for Transport System Management (National Guidelines) which were endorsed by the Australian Transport Council in November 2004, and updated in December 2006. As outlined in ANAO Audit Report No. 29 2008-09, Delivery of Projects on the AusLink National Network, the National Guidelines advocate that all proposed projects should be subject to the same appraisal process and that appraised proposals should be prioritised to develop a forward program of preferred initiatives through a transparent process that is founded on sound economic and business investment principles.23 The framework set out in the National Guidelines uses a three‐ stage appraisal process, illustrated in Figure S 2. The intention is that the projects that pass through all filters, demonstrate strategic merit and fit, and perform well in a detailed appraisal, which is to be a:
comprehensive analysis of the impacts and merit of an initiative. A detailed appraisal usually involves detailed Benefit‐Cost Analysis, a financial or budget assessment, and specific impact analyses and impact statements (for example, environmental, social, regional, employment, equity). All relevant monetised and non‐monetised impacts need to be assessed.24
Figure S 2 Three-stage appraisal process for infrastructure projects
Source: Australian Transport Council, National Guidelines for Transport System Management in Australia, Volume 2-Strategic transport planning and development, December 2006, p. 54.
42. The application of the Prioritisation Methodology involved self‐ assessment by proponents, with the Office of the Infrastructure Coordinator scrutinising the claims made by proponents in their submissions. In this respect, the published Prioritisation Methodology document contained three proformas to assist project proponents in providing information to Infrastructure Australia. The Prioritisation Methodology also outlined that there were three phases to Infrastructure Australia's process:
• profiling, being an analysis of the project's 'strategic fit'-how well the project would meet Infrastructure Australia's strategic priorities25;
• economic appraisal, which combined monetised cost‐benefit analysis of candidate projects (measured principally through a projects Benefit‐Cost Ratio, or BCR). The purpose of the economic appraisal assessment phase was to critique the BCRs submitted with candidate initiatives so as to identify whether the proponent's economic analysis could be relied upon in developing the Interim Priority List; and
• selection, in which the outputs of the preceding profiling and appraisal phases were to be used to create a priority list of initiatives to enable informed decision‐making for the allocation of funding.
43. Infrastructure Australia's published Prioritisation Methodology had regard to the practical circumstances faced in the context of developing the first Infrastructure Priority List. In particular, it allowed for project proposals to be at different stages of development. Nevertheless, the Prioritisation Methodology required that robust information (including economic analysis) appropriate to the development maturity of the project be submitted for the Office of the Infrastructure Coordinator's analysis. This was consistent with the Government's stated intention (see paragraph 8) that Infrastructure Australia's advice be based on rigorous analysis of the costs and benefits of various infrastructure proposals.
___________________________________________________________________________________________
23 Australian Transport Council, National Guidelines for Transport System Management in Australia, Volume 1-Introduction to the Guidelines and Framework, December 2006, pp. 18-20.
24 ibid., p. 19.
25 These were: expand Australia's productive capacity; increase Australia's productivity; diversify Australia's economic capabilities; build on Australia's global competitive advantages; develop our cities and/or regions; reduce greenhouse emissions; and improve social equity and quality of life in our cities and our regions.