A Responsible Agency must consult NSW Treasury as early as possible when developing a Business Case and Procurement Strategy for a likely PPP. This consultation should occur prior to engaging external consultants, preparing a procurement options analysis, preliminary risk allocation or Commercial Principles, or engaging with the market (including conducting market soundings). The PPP Assessment Framework (Appendix 4) should be used as a tool to identify qualitative factors of a project's PPP suitability. Refer to Appendix 4 for further details.
As stated in Section 3.5.2, NSW Treasury maintains lists of pre-qualified consultants with PPP, commercial, financial, legal, accounting, and probity expertise.
In New South Wales, a public infrastructure project with a total estimated capital value exceeding $200 million must be assessed for possible PPP procurement, having regard to value-for-money drivers as part of the Procurement Strategy. This threshold also applies to smaller projects that may be bundled together as part of a single bid or tendering offer, for example a number of new and/ or brownfield school projects. Projects below the mandatory threshold may still be considered for PPP procurement subject to project complexity (e.g. High Profile / High Risk status), innovation, and value for money drivers.
Business Cases must be prepared consistent with relevant policies in Appendix 3. In developing the Procurement Strategy, Responsible Agencies may also consider the Procurement Methods Guidelines3, which provides guidance on commonly used contract models for infrastructure delivery, appropriateness for use, and the capability required from the Responsible Agency and private sector party to successfully deliver a project.
During the development of a Business Case (irrespective of the procurement method) a successful procurement will be facilitated by:
• establishing project objectives and outcomes. This involves determining what the Responsible Agency and Government is trying to address, for example:
- greater use of public transport
- reducing pressure on the health or justice system
- improving quality of service
- introducing innovation
- urban renewal
- improving commuter times/information and IT efficiency; and
- removing trucks from surface streets.
• clarity on the appropriate risk allocation for project specific risks; and
• the Responsible Agency committing to a realistic project and procurement timetable that is based on sound facts and assumptions. The timetable should consider:
- constraints for construction start and/or end dates
- land acquisition process
- EPA Act process
- time required to establish a Project Team and engage advisers
- market soundings and interactions with potential and short-listed bidders (particularly for complex projects)
- time required to obtain approvals (including approvals from Cabinet, Treasurer and/ or Ministers, as well as Commonwealth departments and agencies)
- resolving any unique project-specific risk allocation issues and preparation and evaluation of tenders; and
- the number and timing of other infrastructure projects in Australia that may impact bidder capacity.
The Business Case and Procurement Strategy may be informed by a market sounding process to help determine infrastructure and service scope, project and procurement timetable, risk allocation, financing structure, site selection, and project objectives. Responsible Agencies should also consider the principles in the NSW Premier's Memorandum M2021-10 Procurement for Large, Complex Infrastructure Projects to enable sustainable delivery of the infrastructure pipeline as set out in INSW's Framework for Establishing Effective Project Procurement4.
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3 See https://www.infrastructure.nsw.gov.au/media/3031/infr9595-procurement-guidelines-final-web-002.pdf.
4 See https://www.infrastructure.nsw.gov.au/media/2944/procurement-framework_3-june-21_final.pdf.