Pursuant to section 6.27 of the GSF Act, the State may guarantee the due performance of any obligations incurred by a Responsible Agency as a result of, or in connection with, the Responsible Agency entering into an authorised financial arrangement (Guarantee).
To avoid the process of the State simply guaranteeing its own obligations, Guarantees may be considered only for those GSF Agencies3 which (i) are a legal entity separate from the State (e.g. a special purpose vehicle), and (ii) whose liability is not already covered by the Crown Proceedings Act 1988 (NSW).
A Guarantee is entirely discretionary and should be provided on a case-by-case basis where there is a clear cost-of-financing benefit demonstrated by a tenderer to the State. In accordance with section 6.27 of the GSF Act, the Treasurer (or a person appointed by the Treasurer) has the authority to enter into a Guarantee. NSW Treasury must be consulted regarding the appropriateness of providing such a Guarantee.
In the event a Guarantee is considered appropriate, the NSW Treasury template PPP Deed Poll of Guarantee must be used. The list of 'Guaranteed Documents' is to be limited to those core project documents which form the basis of the financial arrangement and which contain the key financial obligations of the Responsible Agency. Responsible Agencies must consult with NSW Treasury prior to proposing or agreeing to changes to the:
• Template Deed Poll of Guarantee
• Beneficiaries of the Guarantee; or
• documents covered by the Guarantee.
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3 As defined in section 2.4 of the GSF Act.