The evaluation of potential P3s involves a number of complex tasks that require resources from multiple Business Units and disciplines. A clear governance structure is therefore necessary in order to perform these evaluations in a consistent manner that minimizes the potential risks to The City. This governance structure needs to articulate the roles and responsibilities for the different resources required, in particular the responsibility for decision-making. Without a clear delineation of roles and responsibilities, experience from other jurisdictions has shown there is a greater likelihood of P3s not reaching financial close, due to the intensity and resource demands of P3 project lifecycles (planning, transaction and operations). A failed P3 can have a very detrimental effect on subsequent projects and The City's approach to subsequent projects.
While there are significant differences in the governance structure among governments, one unifying factor is a dedicated role for a P3 function that assists in the evaluation of all (or most) P3 projects. At minimum, the P3 function needs to monitor the evaluation process to ensure that all assessments are completed in a consistent manner. A stronger role is envisioned in which the P3 function provides the necessary expertise and the coordination of resources to complete the evaluations which leads to a recommended delivery model. Administration should therefore identify a Corporate P3 function and clearly define the roles and responsibilities of the different resources required in the P3 evaluation and procurement processes.
A P3 Steering Committee is also recommended. This committee performs an oversight role throughout the evaluation and decision-making process, particularly in terms of the strategic and policy implications of the project, consistent with best practices. The ALT, or another subset of the Senior Management Team, could act as the P3 Steering Committee, although legal, financial and procurement expertise and involvement of the Sponsoring Business Unit are also recommended.
City Council has a vital role in the decision to deliver infrastructure through P3s. Council approves all projects to be included in the capital plan and should approve P3 delivery for projects and the initiation of the P3 procurement process. Council may wish to appoint an independent External Advisory Panel, composed of leading experts from industry, academia and other areas to provide advice on the Business Case and assist in the decision-making process.