| Background The long-term nature, and high dollar-value, of a Public Private Partnership (PPP) contract warrants a rigorous assessment of private sector bids and an effective procurement process. This provides assurance that the process to appoint the successful bidder is beyond challenge and that the state has achieved value for money. Key findings • The procurement approach complied with the expected elements of Victorian Government Purchasing Board policy and guidance and with the Partnerships Victoria guidelines. • The planned timelines for the procurement process were met, which was commendable, given the scale and complexity of the project and procurement task. • The risk allocation in the project agreement is broadly in line with Partnerships Victoria guidelines. • Expected standards of probity were maintained and enforced throughout the procurement process. • The impact of the downturn in global financial markets has created uncertainty about whether $35 million in promised donations will be paid to the RCH Foundation. • The final adjusted Public Sector Comparator was determined as $1.016 billion with the net present cost of the successful bid at financial close at $946 million, representing a cost saving for the state of $70 million, or 6.9 per cent, over 25 years. |