Approval for Government Guarantees under section 22AA or 22B of PAFA Act

It is not always necessary for performance guarantees to be granted in relation to PPP contracts. NSW Treasury should be consulted regarding the appropriateness of providing guarantees in relation to the performance of an agency's obligations under the contract, under either section 22AA or 22B of the PAFA Act. Where a guarantee is appropriate, a section 22AA guarantee is the preferred mechanism to ensure transaction costs for all parties are minimised.