This Circular clarifies when and under what circumstances Treasury's Infrastructure and Structured Finance Unit (ISFU) should be consulted regarding likely or proposed commercial or contractual changes to PPP projects. This Circular is consistent with the requirements of the NSW PPP Guidelines and the Treasurer's approvals to enter into joint financing arrangements (that is, public private partnerships) under the Public Authorities (Financial Arrangements) Act 1987 (PAFA Act).
In considering commercial or contractual changes, government entities and the ISFU should take into account value for money, the benefits and costs of the changes to Government and the private party, impact on the State Budget, the impact on the allocation and management of risks, avoiding creating undesirable precedents, project viability and external market forces. Material commercial changes may or may not lead to a change in the contract but may lead to a change in risk allocation, such as waivers of abatements and waiving conditions precedent. In some cases these likely or proposed changes may also require the Treasurer's or Cabinet approval.