As summarised in Figure 4.1, Cabinet approvals, approvals from an appropriate Cabinet sub-committee, and Gateway Reviews are required at certain procurement milestones and key decision points (or 'gates').
At each milestone, Cabinet (or the appropriate Cabinet sub-committee) will consider any:
• proposed material changes in the risk allocation
• proposed (particularly bespoke) contract terms
• forecast costs and funding updates, including contingency
• accounting and budget impact on the Responsible Agency and the State
• project scope; and
• public interest and/or likely value-for- money outcome.
A Responsible Agency will be required to seek additional Cabinet (or appropriate Cabinet sub-committee) approvals during the PPP procurement process, if there are any material changes, including to the Business Case conclusions or project outcomes, or if any of the following apply:
• material changes to the:
- forecast construction
- operating; or
- maintenance costs (particularly due to changes in project scope).
• material changes to the revenue estimates or proposed or maximum user charges
• additional funding (including funding for PPP procurement processes) is required from Government or from internally generated funds of the Responsible Agency
• significant changes in the likely or actual Planning Approval Conditions and these changes require additional funding outside of the Responsible Agency's allocated contingency provisions
• need to provide greater actual or contingent funding for exposures to State-borne risks
• material change in the debt and/or equity financial markets that affects the viability and/or cost of the project; and/or
• any other material change to the agreed risk allocation or project costs and funding.
A further Cabinet (or appropriate Cabinet sub-committee) approval will be required prior to signing a contract if any material aspect of the negotiation terms previously approved by Cabinet (or an appropriate Cabinet sub-committee) has changed or cannot be met.
The Responsible Agency must inform NSW Treasury if affordability issues arise at any time during the procurement.
The Responsible Agency should consult NSW Treasury for guidance on whether a proposed or likely change would be considered material or significant.