The Queensland Government recognises that infrastructure or service delivery projects delivered under the policy fundamentally bring the private and public sectors together for mutual benefit. It is also recognised that these contractual relationships can take a variety of forms and that there is no single preferred form.
However these projects will generally have a number of common features;
- Clear articulation of the government's responsibilities particularly with respect to the monitoring of outcomes
- Contractual terms that include mechanisms for delivering ongoing value for money throughout the duration of the contract
- Specified outputs and measurable performance standards
- Payment mechanisms that apply only on the delivery of the specified services at the required standards
- One or more private party that is fully accountable to the government for the delivery of the specified services
- Clear and enforceable risk allocation between the contractual parties with consequential financial outcomes
- A long term commitment, with the term dependent on the specific nature of the project.
Before being offered to the private sector, the individual project's required outputs would be clearly specified by the government. This will allow bidders to compete through the creative development of their proposals for delivering the output, with a view to reducing project delivery costs. Consequently the government is likely to limit its detailed specification of an infrastructure project's input or the means by which the service outputs are generated, specifically to avoid any stifling of the potential to secure value for money through private sector innovation.
In consideration of the private sector proposals received in response to the specified outputs, the government will be open to solutions through which proponents may derive additional benefit or revenue, subject to the overall value for money delivery of the project and the public interest test.
The government may require the responsible agency to undertake a market sounding of the potential project which if required will be undertaken under an appropriate probity process through a relevant sample of the industry practitioners.
The seeking of private sector participation under these relationship contract arrangements will only be considered once the responsible agency is confident that value for money can be attained, and that there is sufficient market interest willing to accept the associated project risks.