TC98/05

PRIVATE INFRASTRUCTURE PROJECTS LESS THAN $5 MILLION

Summary:

The Budget Committee has agreed that the Treasurer be delegated authority to approve, in accordance with the Guidelines for Private Sector Participation in Provision of Public Infrastructure, the progress of smaller private sector infrastructure projects with a total value of $5 million or less.

In light of experience with private sector financing of infrastructure a simplified procedure is to be followed for small value projects. These proposals will still be required to conform with the documentary requirements of the Guidelines. The Treasurer has been delegated authority to approve requests to call for proposals from the private sector and to enter final negotiations with a preferred tenderer.

Privately financed infrastructure projects with total estimated costs greater than $5 million will continue to be considered by the Budget Committee. For projects with a total value less than $5 million, approval should be sought in writing from the Treasurer at the following stages:

1. Before the call for expressions of interest from the private sector - at which time the emphasis is upon the scope of the project, its economic value and financial implications, on the complexity of the arrangements and the likely level of market interest; and
2. Prior to contract finalisation - where the emphasis is upon approving the negotiated arrangements.

The Treasurer's approval may be subject to conditions.