Term | Meaning |
The executive branch of the Government of New South Wales, is made up of a number of departments, state-owned corporations and other agencies1 in accordance with the Government Sector Employment Act 2013 (NSW) (GSE Act) (and other relevant legislation). |
A PPP project where the Government pays the private party a Service Payment for the availability of an asset. The Service Payment also covers the provision of ongoing maintenance and operational services to the asset for the duration of the PPP contract. Typically, the private party will be responsible for designing, building, financing, maintaining, and operating the asset. |
Project Company's audited financial model for the PPP project. |
Bid costs, as defined in NSW Treasury's Bid Costs Contribution Policy (updated from time to time), are expenses borne by a tenderer during the procurement phase of the project prior to the appointment of a preferred tenderer. Bid costs can include: • design costs, • technical modelling, • legal advice; and • specialist reports required to develop a conforming bid. These can include costs internal to the tenderer, such as the cost of an in-house design team. Eligible bid costs do not include: • consortium members' overheads, • costs incurred after the appointment of a preferred tenderer; or • mobilisation costs. |
A respondent to an EOI request or an invitation to submit a bid in response to a RFP. Typically, a bidder will be a consortium of parties, each responsible for a specific element, such as constructing the infrastructure, supplying the equipment, or operating the business. |
A documented proposal to meet the Government's objectives that is used to inform an investment and/or policy decision and complies with the NSW Government Business Case Guidelines. It contains analyses of the costs, benefits, risks and assumptions associated with various investment, and policy options linked to policy or program outcomes. It also informs future implementation, monitoring and evaluation. |
A generic term for an asset. Capital sometimes refers to financial investments and at other times to physical capital, such as land and buildings, earthworks, machinery and vehicles. |
NSW Government capital contributions to the project during the construction period. |
Set out the NSW Government's preferred risk allocation for privately financed infrastructure projects. |
Refer to Project Steering Committee. |
Certain conditions that are required to be satisfied prior to the majority of the project agreement becoming effective. |
A bullet lump sum repayment from the NSW Government during the operations phase to pay down a significant proportion of private debt finance used to fund a project. A CDPD is normally conditional on the project achieving proven operational performance. Flexible triggers may be appropriate for the State to extract maximum value from its commitment. |
Those private party entities who together intend to deliver a PPP. |
A tool to implement and manage the contract as agreed. It gives an overview of the governance of the contract from an operational, financial and performance reporting perspective. |
The date when contracts are executed. |
The rate used to calculate the present value of future cash flows, usually determined on the basis of the cost of capital used to fund the investment from which the cash flow is expected. |
A PPP where the private party derives revenue from third parties (for example, user charges) and therefore takes on the demand risk. Typical examples of economic infrastructure are networks of roads and telecommunications facilities, airports, ports, water storage and sewerage, railways, electric power generation and distribution facilities, and the Regulated Asset Base (RAB) Model. |
Procurement Board Direction PBD 2019-05 Enforceable Procurement Provisions (EPP Direction) establishes legal requirements for NSW Government agencies arising from international procurement agreements2. |
The tender phase used to shortlist bidders to proceed to submit more detailed proposals. |
The primary document for a Gate 2 review under the NSW Gateway Policy that justifies the project scope and investment as an appropriate and deliverable response to the established service need, and which will maximise benefits at optimal cost and complies with the NSW Government Business Case Guidelines. |
The date of satisfaction of the last Condition Precedent is known as Financial Close. Whilst a contract is binding once signed, a contract only becomes completely effective at Financial Close. |
The initial capital source (i.e. equity and debt) used to pay for the upfront capital costs for a project. |
The sources from which funds are obtained to pay for project costs during the term of the project. The contributions of the public sector in PPP projects are primarily funded from the general budget allocation (or user fees) from the revenue line. |
There are three Gateway Coordination Agencies: INSW - Responsible for Gateway Reviews of capital infrastructure projects. The Department of Customer Service (DCS) - Responsible for Gateway Reviews of information and communications technology (ICT) projects. NSW Treasury - Responsible for Gateway Reviews of major recurrent projects. NSW Treasury is the Policy Owner and is responsible for the overall Gateway Policy. For capital or ICT projects to be delivered by INSW or the ICT and Digital Government Division of DCS respectively, NSW Treasury is the GCA. This is to maintain the separation and independence of the GCA role from the delivery role. |
A project assurance process that mandates independent peer reviews at critical decision points in a project life cycle. |
Agencies funded mainly by taxation revenue, and providing conventional government services |
The grantor does not have a contractual obligation to pay cash to the operator, and instead grants the operator of the service concession arrangement the right to earn revenue by charging third-party users. For example, where the operator of a toll road is given the right to toll users of the road. |
The ITC contract prioritises collaboration between the parties as a key enabler of successful delivery. The shared risk regime allows for a joint management approach and is structured to provide time certainty. The ITC includes incentives and KPIs to encourage collaboration and efficiencies. |
Inventions, original designs and practical applications of good ideas protected by statute law through copyright, patents, registered designs, circuit layout rights and trademarks; trade secrets, proprietary know- how and other confidential information protected against unlawful disclosure by common law and through additional contractual obligations such as Confidentiality Agreements. |
The process of conducting workshops and consultations with short-listed bidders and the project team, generally during the RFP phase. |
The suite of guidance (Policy Overview and Volumes of Detailed Guidance) that form the national guidance on PPPs. See: https://infrastructure.gov.au/infrastructure/ngpd/index.aspx |
The equivalent cost at a given time of a stream of future net cash outlays (calculated by discounting the actual values at the appropriate Discount Rate). |
The equivalent value at a given time of a stream of future net cash inflows (calculated by discounting the actual values at the appropriate Discount Rate). |
Published by NSW Treasury as TPG22-12 dated March 2022 (as updated from time to time)3. |
Published by NSW Treasury as TPP 18-064 dated August 2018 (as updated from time to time). |
The forecast expressed in current dollar, escalated, and inflated terms. Conditions of environmental and planning approval from any consenting authority with jurisdiction over the project. |
A Short-listed Bidder selected following the RFP evaluation to proceed to the negotiation and completion phase. |
Uprightness, honesty, proper and ethical conduct and propriety in dealings. |
A procurement strategy entails an appropriate procurement process and plan that is proportionate to the nature, size, complexity, value, and risk of the service-enabling infrastructure being procured. The Procurement Strategy should consider and document how risk and liability will be apportioned between the parties, based on each party's abilities to manage the risks, and should be in accordance with the EPP Direction. |
An independent expert retained to monitor the procurement process at critical stages, assessing and reporting whether the process has been conducted to the required standards of probity. |
A company created by the project's private partner, usually in the form of a Special Purpose Vehicle (SPV), to develop and manage the project. |
The PCG provides high level leadership to oversee the delivery of the project. It generally provides direction in relation to the monitoring and control of time, cost, quality and safety objectives of the project, and ensure mitigation and corrective actions are implemented. |
The person appointed by the Responsible Agency with overall accountability for procuring and/or managing the project during delivery and operations. The procuring Project Director may differ from the delivery and operations Project Director. |
The Committee or Board of departmental/agency representatives, including NSW Treasury, chaired by the Responsible Agency, established by the Responsible Agency and/or Cabinet to oversee the Procurement, delivery and operation of the PPP project and deal with key issues. |
The document that sets out the key aspects of the project, including key contract terms. It is released to the public after the contract has become effective. |
The group of specialists and departmental/Agency representatives, established by the Responsible Agency, that is responsible for assisting the Project Director to deliver the project (including developing project documentation and undertaking evaluation processes). |
See Bidder. |
An assessment prior to a PPP procurement, and updated throughout the procurement process, that the PPP is in the public interest. |
A concession (usually long-term) arrangement between the public and private sector for the delivery of service enabling public infrastructure, including social infrastructure, economic infrastructure, and joint financing arrangements. The State may contribute to the project by providing land or capital works, through risk sharing, revenue diversion, or purchase of the agreed services. |
An estimate of the net present value of a project's whole-of-life costs and revenues using the most efficient and likely form of Government delivery. The quantitative comparison of the PPP against the PSC is a key component of the overall value for money assessment. |
Government-controlled agencies where user charges represent a significant proportion of revenue and agencies operate with a greater degree of autonomy and commerciality. State-owned corporations are an example of a form of PNFC. |
The basis for calculating the PSC, reflecting Government delivery of the project by traditional means. |
For the RAB model, a private (or corporatised state-owned) entity acts as the infrastructure manager: It owns, invests in, and operates infrastructure assets. The infrastructure manager receives regulated user charges to fund its operations and to recover investment costs. |
The tender phase involving the release of the RFP to Short-listed Bidders for detailed, fully costed RFP responses, followed by evaluation and selection of the Preferred Bidder. |
The Government Agency that is responsible for procuring and/ or delivering and managing the project during construction and operations. The procuring Responsible Agency may differ to the delivery and operations Responsible Agency. |
The allocation of responsibility for dealing with the consequences for each risk to one of the parties to the contract; or alternatively, agreeing to deal with a particular risk through a specified mechanism which may involve sharing that risk. |
A PPP Shadow Bid Model is the Responsible Agency's best estimate of a private party bid price (in net present value/cost terms) to deliver the output specification under a PPP project structure. The SBM should reflect a private party's costs and debt and equity structure, and the project deed terms (including the payment mechanism). The SBM is dynamic and should be updated as new information is received but should be finalised prior to or soon after the RFP release. |
Bidders selected as part of the EOI evaluation to be invited to submit a proposal in response to an RFP issued by Government for a project. |
A PPP where the Government pays the private party a service fee for the availability of a facility/social infrastructure. Examples of social infrastructure include hospitals, schools, police stations, prisons, and transport and road projects involving availability payments. |
Government entities (mostly PNFCs) which have been established with a governance structure mirroring, as far as possible, that of a publicly listed company. NSW State Owned Corporations are scheduled under the State Owned Corporations Act 1989 (NSW) (Schedule 5). |
Infrastructure that is important to the State for economic, environmental or social reasons. State Significant Infrastructure is assessed under Division 5.2 of the EP&A Act and require the approval of the Minister for Planning before they may proceed. |
The primary document for a Gate 1 review under the NSW Gateway Policy that provides a preliminary justification for the program or project, based on an initial assessment of business needs, strategic alignment and overall project benefit(s) and complies with the NSW Government Business Case Guidelines. |
Refers to the NSW PPP toolbox templates, which are available to Agencies from NSW Treasury (ISFU). |
The process of inviting the market to submit bids against a particular project and includes the EOI, RFP and negotiation phases. |
Refer to the NSW Government's Unsolicited Proposals Guide for Submission and Assessment. |
Value for Money is an assessment of procurement outcomes that weighs the cost of procuring infrastructure against the value it provides. In doing so, it balances the whole of life costs against a range of outcomes, including the suitability and quality of goods and services, financial benefits, risk exposure, timeliness of outcomes, and social, environmental and industry impacts. The overarching consideration for the Government's procurement of goods, services, and construction, based on a range of financial and non-financial factors, such as quality, cost, fitness for purpose, capability, capacity, risk, total cost of ownership or other relevant factors. For covered procurements, the EPP Direction also defines value for money. |
The returns or interest rates payable on the different components of a project's or company's deemed capital structure. |
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1 See https://www.nsw.gov.au/departments-and-agencies.
3 See https://www.treasury.nsw.gov.au/information-public-entities/business-cases.