Environmental and Planning Approval (EPA) requirements are separate from the PPP Cabinet approval requirements for project funding and PPP procurement tender phases. However, the processes for attaining EPAs should happen in parallel with the PPP business case and procurement processes, as shown in Figure 3.1. Risks and associated costs with gaining development approvals should be considered at the outset from the Business Case development stage and updated as required throughout procurement and project delivery.
Under the Environmental Planning & Assessment Act 1979 (EPA Act), the Minister for Planning (or their delegate, e.g. the Planning Assessment Commission) provides consent for all State Significant Developments or Infrastructure under Parts 4 and 5.1, respectively. Generally, service-enabling infrastructure PPPs are either State Significant Developments or State Significant Infrastructure based on project scope and capital investment value.
In all cases, an appropriate level of environmental assessment and community consultation must be undertaken as part of the assessment process. Final EPA will not occur until details of the project to be actually delivered are known.
Cabinet should be informed of the planning process that will be followed prior to the Responsible Agency calling for EOIs. The planning approval process can be flexible enough to accommodate outcomes-focused approaches to allow innovation.
A Responsible Agency should, as early as practical in the project planning and procurement phases:
■ engage an internal or external planning expert and community consultation expert; and;
■ consult with the appropriate Planning Approval authority, including discussions regarding the likely development approval conditions.
This will assist in mitigating overall procurement costs for the Government and private parties. In addition, it will mitigate cost, affordability and time risks associated with the Planning Approval process.
Likely development approval conditions and their associated costs need to be updated at the various project approval phases, in consultation with NSW Treasury. These costs may impact materially on business case conclusions, project budget, affordability and timing and commercial risk allocation. This may trigger the need to seek further Cabinet approvals (see sections 3.2 and 3.3). The allocation of risks and costs relating to the securing of EPA and complying with any approval conditions must be detailed in the Project Contract, and for Social Infrastructure PPPs, be consistent with the NSW Treasury Template Project Documents. The Template Project Documents refers to a suite of template contractual documentation.
An appropriate contingency amount for cost risk associated with planning approval conditions should be separately identified as part of the Responsible Agency's overall Budget funding for the project. Management of contingency funding should comply with Treasury Circular TC14-29 Management of Contingency Provisions for Major Projects.