The delivery Project Director, Responsible Agency representative and senior management of the Responsible Agency must comply with the requirements of Appendix 5 when administering PPP contracts from contract close.
The Responsible Agency must consult with NSW Treasury prior to negotiating and agreeing to proposed contractual or commercial changes to existing PPP projects. This consultation may be formal or informal. Depending on the materiality of the proposed change, limited or no further consultation with NSW Treasury may be required after the initial notification, as agreed with NSW Treasury at the time.
NSW Treasury will:
• provide expert commercial and financial advice, and avoid setting undesirable precedents and unnecessary deviations from the Template Project Documents (refer to section 6.5.1)
• assist in resolving disputes prior to escalation
• assist in retaining external experts if appropriate; and
• advise on approval processes and the application of these Guidelines.
Some proposed changes or events are automatically considered material and will likely require ongoing NSW Treasury consultation and advice, in addition to possible Ministerial, Treasurer and/or Cabinet approvals. These include:
• changes to conditions precedent
• changes to environmental and planning approval conditions
• refinancing (refer to section 7.5)
• changes of control
• omission of services
• breaches
• defaults
• step-in; and
• termination events.
Other proposed changes or events may or may not be considered material depending on specific circumstances. These may include changes to project scope, performance issues, disputes, relief and compensation events, and changes to the payment mechanism.
NSW Treasury should be consulted on changes so that it can determine whether the proposed change is material (refer also to section 4.5.3). Material amendments and modification orders should be managed by an appropriately resourced procurement team to ensure timelines are achieved.
In evaluating likely or proposed material contract or commercial changes to a PPP project, the Responsible Agency and NSW Treasury will, at a minimum, evaluate the changes against the following criteria:
• value for money
• benefits and costs of the changes to Government and the private party
• impact on the State budget and project affordability
• impact on the allocation and management of risks and the likelihood of creating undesirable precedents
• continuing viability of the project; and
• external market forces.