After the BCC approves procurement of a project and it is being considered for delivery via private finance, it is developed in a five-phase process as outlined in Table 3.1. These phases are based on BCC approval points. The Treasurer must also approve any final contract under the PAFA Act.
With respect to PFPs procured by Stated-owned corporations or other public trading enterprises that have a Board of Directors, approval by the Board is required prior to requesting BCC approval to proceed to the next phase as outlined in Table 3.1. This approval process is required for all PFPs regardless of whether the project falls under other guidelines, such as the Guidelines for Assessment of Projects of State Significance.
Phase 1 requires the procuring agency to prepare a public interest evaluation as per Appendix 2. The evaluation includes an assessment of the value for money of the project for the user and taxpayer. An initial evaluation must be submitted to and considered by the BCC prior to proceeding to market. The public interest evaluation must be updated:
• Prior to the issue of the call for detailed proposals, with any significant variations reported to the BCC;
• After finalising the evaluation of the call for detailed proposals, with the public interest evaluation submitted to the BCC for consideration; and
• Prior to the Government signing the contract documents, with any significant variations from the previous evaluation reported back to the BCC.
The BCC may require updates to be submitted at other points during the tender process.
In addition to the five phases outlined in Table 3.1, an agency will be required to seek BCC approval to continue the project in any of the following situations:
• At any time prior to signing the contract, the conclusions or major assumptions of the business case (including the economic and financial appraisals) significantly change, including:
- forecast construction, operating or maintenance costs, or forecast revenues changing by more than 10%
- likely development approval conditions
- proposed or maximum user charges changing by more than 5%
• Budget funding is required from Government or from internally generated funds of the Agency which is additional to that previously approved
• Any previously set BCC conditions of approval are unlikely to be met
• There is a material change in the risk allocation from that which was last approved by BCC
• Procuring the project or procuring the project as a PFP is no longer in the public interest or would not represent value for money.
Furthermore if the agency wishes to renegotiate any significant areas of a PFP contract after it has been approved and signed by Government, the agency is required to obtain BCC approval prior to commencing renegotiations. A further BCC approval will be required prior to signing a contract if any of the negotiation terms previously approved by BCC cannot be met.
In the case where the agency wishes to renegotiate or amend any element of a previously signed PFP contract without materially changing the workings of the contract, the agency is required to consult with Treasury prior to commencing renegotiations. Treasury will determine whether it would be appropriate to inform the Treasurer or the BCC.
Any amendments to previously signed PFP contracts may require the Treasurer’s approval under the PAFA Act.