The assessment of a project's suitability to be a PPP should be based on quantitative and qualitative factors. In New South Wales, any public infrastructure project or bundled projects (e.g. a number of new and/ or brownfield school projects) with a total estimated capital value over $200 million must be assessed for possible PPP procurement as part of the Strategic Business Case having regard to value for money drivers. Projects with an estimated capital value of $200 million or less may still be considered for a PPP procurement based on other factors such as project complexity (e.g. High Profile / High Risk status), the need for new technical or outcomes-based solutions, whole-of-life costs, and other value for money drivers.
Responsible Agencies must consult with NSW Treasury as early as possible when developing a Business Case (ideally before a Strategic Business Case, if applicable) or Procurement Strategy for an infrastructure project or bundled projects with a total estimated capital value above $200 million or if it is a project which is either:
1. High Profile / High Risk; or
2. complex project scope or service outputs which may need technical or other solutions not previously procured by Government.
This consultation should occur prior to engaging external consultants (for example, to prepare a procurement options analysis, preliminary risk allocation or Commercial Principles) or engaging with the private sector.
An assessment template to assist agencies to undertake a qualitative assessment is included in Appendix 4 of these Guidelines.
NSW Government maintains schemes and panels with appropriately qualifies consultants with commercial, legal, accounting and probity expertise.
Currently, all major capital works projects which include PPP components, or which are procured via a PPP, are exempt from the requirements of TC16-11: Mandatory Principal Arranged Insurance for all major capital works projects10 to obtain principal arranged insurance from iCare. Appropriate mechanisms for procuring insurances should be considered early taking into account:
• the availability of the relevant insurances
• anticipated cost of procuring those insurances; and
• best value for money solutions.
Responsible Agencies should engage early with their insurance adviser and iCare to identify the most appropriate allocation of risk on a project-specific basis.
Amongst other policies, Responsible Agencies must comply with TPP21-14 Government Financial Risk Management Policy (as amended from time to time)11 to identify, report and monitor financial risk exposures such as interest rate, foreign exchange (FX), commodity price and re-financing risks. Once identified they must be monitored, and if material, managed in conjunction with TCorp.
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10 Available at https://arp.nsw.gov.au/tc16-11-mandatory-principal-arranged-insurance-pai-all-major-capital-works-projects.
11 Available at https://www.treasury.nsw.gov.au/sites/default/files/2022-02/tpp21-14_nsw-government-financial-risk-management-policy.pdf.