3.3.  Cabinet Approvals during PPP Procurement

Once funding and PPP procurement has been approved by Cabinet, further ERC approvals will be required at certain stages of the tender process as summarised in Figure 3.1 and Table 3.24. In particular, at each milestone, ERC will consider any material changes in the risk allocation and if PPP procurement remains in the public interest and is likely to provide value for money.

In addition, an agency will be required to seek ERC approval:

•  if at any time, the business case conclusion changes significantly, or there are material changes:

-  in forecast construction, operating or maintenance costs (particularly due to changes in project scope), and

-  in revenues or proposed or maximum user charges;

•  if significant additional funding is required from Government or from internally generated funds of the procuring agency, including funding for PPP procurement processes;

•  if there is significant change in likely development approval conditions;

•  prior to any upfront payment being requested from the private sector; and

•  if there is a material change in debt and/or equity financial markets that affects the viability and/or cost of the project.

A further Cabinet approval will be required prior to signing a contract if any of the negotiation terms previously approved by Cabinet cannot be met.

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4 For PPPs costing $5m or less in total, Cabinet have delegated approval authority to the Treasurer [Treasury Circular 98/5]. All other projects still require Cabinet approval.