In the context of alliancing, the project Owner is either a department or an agency. The full or partial funding of the project may be from a state and/or the Commonwealth (which will involve a Parliamentary appropriation); and/or user charges.
Major departmental projects are normally approved by the Portfolio Minister and Cabinet following a formal whole-of-government budgetary process that is informed by recommendations from Treasury and often the Department of (the) Premier and Cabinet, and in the case of the Commonwealth, the Department of Prime Minister and Cabinet. Non-departmental projects are generally approved by the Board of the relevant agency (noting that the Board is appointed by the Government). Significant agency capital projects also require specific government approvals, typically by the Portfolio Minister and Treasurer and/or Cabinet. Such approvals will have various mandated minimum thresholds that indicatively range from $5 m to $50 m.
The Business Case is the critical document that forms the basis of the investment decision. The Business Case is prepared by the Owner, who submits it to the government for approval. Unless explicitly stated otherwise, the terms and conditions of the government's support and approval to fund the project are set out in the approved Business Case. It is not unusual for the government's budget process to impose additional requirements for a Business Case. Once approved, these additional conditions, and indeed any other subsequent approved conditions or variations, become part of the approved Business Case.
Government policies and guidelines require the Business Case to have a robust assessment of the proposed service benefit to the community, resourcing requirements (capital and non-capital) as well as a robust assessment of alternative procurement delivery options to satisfy project requirements. Therefore, the Owner will submit a Business Case that includes a request approval for both a funding allocation and its preferred procurement strategy option.
| The roles of the government and Owner: To understand the roles of the government and the Owner in approving and allocating funds for a specific project, it is useful to think of the Owner as 'selling' the Business Case to the government, and the government making the decision to either 'buy or not buy' the Business Case, with consideration of other project proposals, available funding and its wider infrastructure policy objectives. In this context, the 'sale contract' is the Business Case. |