In accordance with Appendix 5 of these Guidelines, a proposal to materially vary an existing PPP with an incumbent Project Company (or member thereof), requires consultation with NSW Treasury and relevant approvals (including Cabinet and Treasurer approvals) prior to:
• entering into direct negotiations with a Proponent
• signing any Memorandum of Understanding or Heads of Agreement
• materially changing any commercial terms previously approved by Cabinet or the Treasurer; and
• signing amending documents.
The Responsible Agency, in consultation with NSW Treasury, must:
• Establish an appropriate PPP Governance Framework, with NSW Treasury representation, and a Negotiation Plan at the outset; and
• Assess the proposal, at the very least, against the 'Minimum Criteria for Evaluating Commercial or Contractual Change' as set out in Appendix 5, relating to:
- value for money
- the benefits and costs of the changes to NSW Government and the incumbent Project Company (or part thereof)
- impact on the State budget and project affordability
- the impact on the allocation and management of risks and creation of undesirable precedent
- continuing viability of the project; and
- external market forces.
Material amendments to project documents for financial arrangements are also likely to require approval from the Treasurer under the GSF Act.