Underlying Partnerships Victoria is a commitment to thorough initial project preparation and an efficient Cabinet approval process. In accordance with the National PPP Guidelines and these Partnerships Victoria Requirements, the key approval steps for budget sector agencies include:
Stage | Approval Required |
Review of project proposal | DTF Review of initial Project Development, Business Case and Procurement Options Analysis, preliminary Public Sector Comparator (PSC) and Public Interest Test. DTF must agree budget impacts of the project in accordance with the budget process requirements. The relevant Gateway Reviews are Gate 1: Strategic Assessment and Gate 2: Business Case. |
Government approval of project and procurement method | Government to approve: a) the investment decision (budget funding) based on a Business Case (including the Public Interest Test); and b) the procurement model based on the Procurement Options Analysis/Strategy. |
Government approval of EOI | Government to approve release of Expression of Interest document. Following release of EOI and evaluation of responses, Government or Ministers may approve or endorse the short-list of bidders. |
Government approval of PSC | Government to approve the Public Sector Comparator (may be earlier than this point). |
Government approval of Request for Proposal | Government to approve release of Request for Proposal to short-listed bidders. This signals that the Government is prepared to proceed with the project provided that a conforming bid offering value for money is received. The relevant Gateway Review conducted prior to seeking approval is Gate 3: Readiness for Market. |
Approval of Preferred Bidder | Following evaluation of responses, Government or Ministers may approve or endorse the appointment of a Preferred Bidder |
Government approval of contract execution | Following negotiations, Government or the Portfolio Minister in consultation with the Treasurer to approve contract execution and note financial close. |
Ministerial approval of Project Contract Summary publication | The Portfolio Minister in consultation with the Treasurer to approve the release of the Project Contract Summary within three months of financial close. |
Government approval of Contract Administration Plan | The Portfolio Minister in consultation with the Treasurer to approve the Contract Administration Plan within three months of financial close. |
Commissioning | Gateway Review: Gate 5 Readiness for Service to be conducted. |
Government approval of material contract variations during operations | Subject to existing delegation authority, there is an ongoing requirement for material contract variations to be considered and approved by Government. |
Operations | One or more Gate 6: Benefits Evaluation Gateway Reviews should be conducted. The Procuring Agency should discuss the timing of these reviews with DTF. |
In Victoria, the Government approval of the business case (investment decision) involves an associated capital financial commitment and approval by the Expenditure Review Committee of Cabinet. In this way, should the PPP procurement process determine that value for money can not be obtained via a private sector bid, the project can still go ahead under an alternate procurement method as the funding has already been allocated towards the infrastructure project.
Additional Government approvals are also required in certain situations, such as:
- where there is a material change to the project including an amendment to the key project objectives, scope of services, or the conclusions, or major assumptions of the business case (including the economic and financial appraisals) significantly change;
- there is any material change in the impact of the risk profile on the project which was last approved by government;
- an amendment to the budget funding is required; and
- where significant issues relating to the public interest arise.
Unless otherwise declared to suit the requirements of a particular project, this accountability structure and approval process will be applied consistently for PPP projects. Exceptions to this may be considered for GBE's, for example the Partnerships Victoria Non-Metropolitan Urban Water Authority Approval Process which is a streamlined process for smaller capital value projects (see Annexure 9).