Projects over the established capital threshold should be accompanied by a detailed business case and submitted to DSE for the Minister's endorsement and then to DTF for the Treasurer’s approval.
The NMU is to follow current guidance on development of a business case (refer to the Lifecycle Guidance material). The business case sets out the project's objectives and how they relate to the NMU's business. It clearly articulates the service delivery requirements and establishes the detailed affordability of the project.
For proposals over the capital threshold of $50 million there must be an examination of whether the potential exists for the private sector to add value to the project through a PPP. Government requires NMUs to consider the option of Partnerships Victoria opportunities in accordance with the Victorian Procurement Strategy Guidance. This procurement analysis will usually form part of the Business Case (or in some cases is done separately).
Where the procurement analysis identifies PPP as the preferred delivery methodology, the business case submitted to Ministers must also cover the:
- preliminary risk allocation;
- preliminary public sector comparator / project costings; and
- public interest test.
The Partnerships Victoria stages outlined in this document apply where projects have a capital expenditure value of $50 million or greater over the proposed contract period (usually 15 to 20 years). Where this value is below $50million, it is expected that the NMU would follow a similar process to that of the Partnerships Victoria stages to ensure the same level of probity and competitive outcomes in the tender process are achieved.