For some projects, the procuring agency may require the private sector to have full flexibility in design and construction to achieve the most innovative and best value for money infrastructure. This may be the case, for example, for large scale property developments, where the Government could run master planning design competitions in order to maximise the value of the land for Government. In these situations, the preferred proponent is selected before the proponent can seek either concept approval or full development approval, and before the project is defined in detail.
In these circumstances, it is recommended that the path to final planning approval be done in stages in order to mitigate planning risk to both the Government and the private party. The process outlined below should be followed:
• First stage - this should commence as early as practicable, preferably at the Request for Detailed Proposals phase. At this stage the sponsoring agency should undertake a preliminary assessment of environmental constraints and opportunities likely to influence the development of preferred options. This should be done in consultation with the Department of Planning and the local council and may involve some public consultation.
As part of the engagement and clarification process with bidders at the RDP stage, the sponsoring agency must arrange consultations between bidders and the Department of Planning so that both parties are fully informed of each other’s assumptions, parameters and constraints. The Department can inform bidders of the planning implications of their proposal, including what can or cannot be done within the constraints of the bidder’s timetable and proposed contract price. Bidders in turn will be able to obtain a greater degree of certainty about planning approvals and conditions.
While this does not entirely eliminate planning risk, it greatly minimises post-contract award risks associated with planning approvals. This enables the transfer of risk from the Government to the preferred proponent, as the latter would have greater confidence that they can deliver the project within the proposed timetable for the quoted bid price, and with fuller knowledge of the extent and nature of the planning risks that they have accepted.
• Second stage - commences after contractual agreement, which is made subject to planning and environmental approval. At this stage the formal process of seeking planning approval can begin. As a general rule the private party should take responsibility for obtaining planning approval. However, in some circumstances, it may be appropriate for the approval to remain the responsibility of the agency. For example, where the project involves a complex combination of both private and public facilities.