As summarised in Figure 3.1, Cabinet (or appropriate Cabinet sub-committee) approvals and Gateway Reviews are required at certain tender milestones and project gates.
At each milestone, Cabinet (or appropriate Cabinet sub-committee) will consider any proposed material changes in the risk allocation, proposed (particularly bespoke) contract terms, estimated costs and funding, accounting and budget impact on the Responsible Agency and State, project scope, public interest and/or likely value for money outcome.
A Responsible Agency will be required to seek additional Cabinet approvals, during PPP procurement, if there are, at any time, material changes in the following, which may also affect the business case conclusions:
■ forecast construction, operating or maintenance costs (particularly due to changes in project scope);
■ revenue estimates or proposed or maximum user charges;
■ significant additional funding is required from Government or from internally generated funds of the Responsible Agency, including funding for PPP procurement processes;
■ there is significant change in likely or actual development approval conditions that requires additional public funding outside the Responsible Agency allocated contingency provision;
■ there is a need to provide greater actual or contingent funding for exposure to State-borne risks;
■ there is a material change in debt and/or equity financial markets that affects the viability and/or cost of the project; and/or
■ there is any other material change to the agreed risk allocation or project costs and funding.
A further Cabinet approval will be required prior to signing a contract if any material aspect of the negotiation terms previously approved by Cabinet cannot be met.
Responsible Agencies must inform NSW Treasury if at any time during procurement affordability issues arise.
Responsible Agencies should consult NSW Treasury for guidance on whether a proposed/likely change would be considered material or significant.