Environmental and planning approval requirements are critical factors for PPP procurements and are separate from the Cabinet approval requirements. However, the processes for obtaining environmental and planning approvals should occur in parallel with the Business Case and procurement processes, as demonstrated in Figure 4.1. Risks and costs associated with obtaining planning approvals should be considered at the outset as part of the Business Case development stage and updated as required throughout procurement and project delivery.
Under the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act), consent must be obtained from the Minister for Planning (or, depending on the development, the Independent Planning Commission) for all State Significant Developments or Infrastructure under Part 4 and Division 5.2 of the EPA Act. Generally, service-enabling infrastructure PPPs are either State Significant Developments or State Significant Infrastructure, based on the project scope and capital investment value.
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.
As early as practical in the project planning and procurement phases the Responsible Agency should:
• engage an internal or external planning expert and community consultation expert. Planning approval pathway advice should be informed by relevant technical specialists (such as environment, heritage etc) where relevant to ensure robustness and that technical matters or matters for consideration are flagged early in the process
• consult with the appropriate planning approval authority, including discussions regarding the likely Planning Approval Conditions; and
• inform NSW Treasury, so it may facilitate these discussions via the NSW Treasury Policy and Budget team.
The Responsible Agency should also keep the private sector regularly informed as to the status of Government processes in relation to environmental and planning approvals. This will assist in mitigating:
• overall procurement costs for the Government and the private sector; and
• cost, affordability, and time risks associated with the planning approval process.
Likely development approval conditions and associated costs must 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 Treasurer, portfolio Minister and/or Cabinet (or appropriate Cabinet sub-committee) approvals (refer to Sections 4.2 and 4.3). The allocation of risks and costs relating to securing environmental and planning approvals and complying with any approval conditions must be detailed in the Project Deed, and for Social Infrastructure PPPs, should be consistent with the NSW Treasury Template Project Documents.
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 must comply with TC14-29: Management of Contingency Provisions for Major Projects.