10. Approval process

Underlying Partnerships Victoria is a commitment to thorough initial project preparation and an efficient Cabinet approval process. In accordance with the national PPP guidelines and these Partnerships Victoria requirements, the key approval steps for budget sector agencies include:

Stage	Approval Required
Review of project proposal	DTF review of initial project development, business case and procurement options analysis, preliminary public sector comparator (PSC) and public interest test. DTF must agree budget impacts of the project in accordance with the budget process requirements. The relevant Gateway reviews are Gate One: Strategic Assessment and Gate Two: Business Case.
Government approval of project and procurement method	Government to approve: a) the investment decision (budget funding) based on a business case (including the public interest test); and b) the procurement model based on the procurement options analysis/strategy.
Government approval of EOI	Government to approve release of EOI document. Following release of EOI and evaluation of responses, government or ministers may approve or endorse the short-list of bidders.
Government approval of PSC	Government to approve the public sector comparator (may be earlier than this point).
Government approval of request for proposal	Government to approve release of request for proposal to short-listed bidders. This signals that the Government is prepared to proceed with the project provided that a conforming bid offering value for money is received. The relevant Gateway review conducted prior to seeking approval is Gate Three: Readiness for Market.
Approval of preferred bidder	Following evaluation of responses, government or ministers may approve or endorse the appointment of a preferred bidder.
Government approval of contract execution	Following negotiations, government or the portfolio minister in consultation with the Treasurer to approve contract execution and note financial close.
Ministerial approval of project contract summary publication	The portfolio minister in consultation with the Treasurer to approve the release of the project contract summary within three months of financial close.
Government approval of contract administration plan	The portfolio minister in consultation with the Treasurer to approve the contract administration plan within three months of financial close.
Commissioning	Gateway Review: Gate Five Readiness for Service to be conducted.
Government approval of material contract variations during operations	Subject to existing delegation authority, there is an ongoing requirement for material contract variations to be considered and approved by Government.
Operations	One or more Gate Six: Benefits Evaluation Gateway Reviews should be conducted. The procuring agency should discuss the timing of these reviews with DTF.

In Victoria, the government approval of the business case (investment decision) involves an associated capital financial commitment and approval by the Expenditure Review Committee of Cabinet. In this way-should the PPP procurement process determine that value for money can not be obtained via a private sector bid-the project can still go ahead under an alternate procurement method as the funding has already been allocated towards the infrastructure project.

Additional government approvals are also required in certain situations, such as:

• where there is a material change to the project including an amendment to the key project objectives, scope of services, or the conclusions, or major assumptions of the business case (including the economic and financial appraisals) significantly change;

• there is any material change in the impact of the risk profile on the project which was last approved by government;

• an amendment to the budget funding is required; and

• where significant issues relating to the public interest arise.

Unless otherwise declared to suit the requirements of a particular project, this accountability structure and approval process will be applied consistently for PPP projects. Exceptions to this may be considered for GBEs, for example the Partnerships Victoria Non-Metropolitan Urban Water Authority Approval Process which is a streamlined process for smaller capital value projects (see Annexure Nine).

Government business enterprise approval process

The table below outlines the slightly different approval processes for projects being delivered by GBE's and the streamlined process for GBE's.

Project stage	Government Business Enterprise	Streamlined for Government Business Enterprise
Project Development/identifying service need	Usual GBE planning and reporting processes.	Usual GBE planning and reporting processes.
Review of project proposal	DTF review documents and agree budget impacts.	DTF review of documents and agree budget impacts
Government approval of project and procurement method	If the project required budgetary funding (either directly or indirectly) for associated works, the project will need to be considered by ERC and must be supported by a business case. If no budget funding required proposal likely to be considered by EDC or another Cabinet committee. Once budget matters are considered, the project is also referred to the ESDC of Cabinet for approval.	If the project required budgetary funding (either directly or indirectly) for associated works, the project will need to be considered by ERC and must be supported by a business case. If no budget funding required proposal subject to joint governance arrangements and a streamlined approval process applies.
Government approval of EOI	DTF to review EOI document. Cabinet (normally the ESDC) must approve the EOI prior to release.	DTF to review EOI document. Portfolio Minister endorses EOI and Treasurer approves release of EOI.
Government approval of Request for Proposal	DTF to review RFP document. Cabinet approval is required before releasing the RFP. Following receipt of bids, the Portfolio Minister (and Treasurer if appropriate) must endorse the preferred bidder recommendation before any parties are advised. During negotiations, Cabinet approval must also be sought before varying any conditions or principles previously agreed.	DTF to review RFP document. Portfolio Minister endorses RFP and Treasurer approves release of RFP. During negotiations with the preferred bidder, approval of Treasurer must also be obtained before varying any conditions or principles previously agreed.
Government approval of contract execution	The Portfolio Minister advises the Treasurer that the final contact conforms to the business case before the contract is executed.	DTF requires sign-off that VFM has been achieved. Portfolio Minister to endorse contract execution and Treasurer approves execution of contract. (Responsible Minister signs contract).