This research has a number of components, including:
• specifying desired outcomes for the project. The 'desired outcomes' are the actual benefits to be secured through the project. The overarching risk for government is that the private party will not achieve these outcomes. The risk analysis conducted by government must focus, first and foremost, on achieving the desired outcomes.
• Application of the public interest test. The public interest test focuses on matters such as the effectiveness of the project in meeting government objectives, honouring the rights of affected individuals, securing public access and equity of access to the infrastructure, preserving community health and safety, protecting consumer rights, and maintaining environmental values. A properly applied public interest test assists government in risk mitigation.
• Confirming legal ability to contract with the private party. To avoid later legal complications leading to challenges and delays, it is also vital to check, before tendering, the legal ability of government or the agency to contract with the private party in the envisaged circumstances, and to perform all of their obligations under the contract. In some circumstances, enabling legislation may be required.
• Public sector benchmarking. Thorough development of the public private partnership business case clarifies the likely infrastructure and service delivery options, the technologies available for achieving the desired outcomes or outputs and confirms achievement of value for money.
• Identifying and facilitating required government approvals. The range of government and agency approvals required and the potential problems in obtaining them should be investigated prior to tender. These may include planning approvals by local councils, approvals under the Environmental Protection Act 1994 (Qld), Integrated Planning Act 1997 (Qld) and State Development and Public Works Organisation Act 1971 (Qld), ministerial consents under various statutes and federal tax rulings or foreign investment review board approval. While federal tax and foreign investment review board approvals (among others) are best left to the private party, government should consider what action it should take to facilitate other approvals.
• Anticipating and identifying appropriate procedures for resolving land tenure issues, including Native Title. Potential land tenure issues should also be investigated early. If, for example, the project requires closure of public roads, the grant of easements over Crown land, or the grant of Crown leases beyond the statutory norm, these may involve lengthy procedures that need to be factored into the project timetable and considered for their possible risks and additional costs. Native Title, in particular, is an area with which private sector are still largely unfamiliar and uncomfortable, and has the capacity to cause major delays and generate unanticipated costs. Government expertise in this area, particularly the ability to give an early indication of expected procedures and default processes, may be critical to risk minimisation. Also, where government chooses the site or region for the project or indicates a preferred site, it may begin community liaison under a community consultation plan. This may address development and environmental concerns and assist in minimising community opposition and its possible flow-on into approvals.
The government agency should undertake this research, to a large extent, during the service identification, preliminary assessment and public private partnership business case development stages of the procurement process. (See the framework Document for details of the steps in a public private partnership procurement process.)