Warwick Agnew - Queensland Treasury - Understanding the market-led proposal process

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26 October 2015

8 December 2015

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Understanding the market-led proposal process

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Definition

A submission or request initiated and submitted by a private sector proponent to government, where the specific proposal has not been requested by the government. www.treasury.qld.gov.au/mlp

December 2015 | Market-led Proposals |

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Drivers for revision

Build market confidence

Increase proposal quality

Grow the economy

Market-led Proposals | Bringing good ideas to life |

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Key changes

A clear, staged assessment process efficient conversion of good ideas


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Current status


The market is responding to our public commitment to MLPs

Quality Volume

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What support is sought from government?

What benefits will the

proposal provide?

Why the proposal is uniquely

positioned?

Proposal basics


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State support

deliver services to or on behalf of the government

secure responsibility for design and or delivery of infrastructure projects

access government assets

access government information

secure an exclusive mandate to undertake commercial activities

A clear request helps us assess the high-level cost to government December 2015 | Market-led Proposals |

May include a request to:

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Benefits

•  Benefits to government may include: –  delivery of new or improved services or products –  improved delivery time or quality –  development of new industries –  identification and application of new revenue

streams

November 2015 | Market-led Proposals |

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•  Other potential benefits include: –  improved use existing infrastructure –  delivery of new infrastructure –  decreased demand for certain services.


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Assessment process


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represent value for money

Assessment criteria


A strong proposal will clearly:

meet a community need or government priority

be unique in its ability to deliver a specific outcome and be unable to be replicated by a competitor

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Assessment criteria


A strong proposal will also:

have a proponent with the financial and technical capacity and capability to successfully complete the project

provide adequate detail to demonstrate the potential benefits to government

have an acceptable risk/cost allocation for the State

be feasible on a technical, commercial and practical basis.

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Whole of government decision making


Queensland Treasury

Infrastructure Local Govt &

Planning

Proposal specific

agencies State

Development

Premier & Cabinet

MLP Panel

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What makes a proposal unique?

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Competitive processes traditionally

increase value for money

Dealing exclusively with

a proponent may be warranted in

unique circumstances

Why is uniqueness important?


Uniqueness gives us confidence that another proposal could not deliver the same outcome

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What is uniqueness?

•  If we enter into an exclusive mandate with you, we need to justify our position


A unique ability to deliver an outcome

A proposal that is able to deliver an outcome in a way that cannot be replicated by

a competitor

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Combining attributes


Delivers an outcome in a way that cannot be replicated by a competitor

Quality

Cost Time

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Intellectual property & uniqueness


While IP may strengthen uniqueness

IP is not a prerequisite for

uniqueness

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Logan Motorway Enhancement Project

•  One of first examples of the framework in action - Transurban’s detailed proposal in late 2016.

•  Government will decide whether to proceed with proposal, modify it, or consider other options.

•  Proposed benefits include a safer and more efficient motorway, reduced travel times, and enhanced connectivity with other major road networks.

First project to move to Stage Two – Detailed Proposal


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Queensland


Brisbane Airport Rail Link (Airtrain) •  100 trains each weekday, linking

Brisbane Airport to the public network. •  Airtrain granted an exclusive mandate

to develop a detailed proposal. •  Appointed to design, construct,

operate, maintain and repair the rail line, and return it to the state in 2036.

•  Commenced operation in May 2001.

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Interstate

•  NorthConnex (Sydney) –  design, build, operate, and finance project

delivering the longest road tunnel in Australia –  financial close in February 2015, with completion

of the $3 billion project due in 2019

•  Queen Mary Building (Sydney) –  Sale of building to University of Sydney –  Provides alternative accommodation options for

University of Sydney students


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Other opportunities

•  The government may take a market-led proposal to the market via a competitive mechanism

•  This may occur where a proposal clear addresses a government priority but is not found to be unique

•  The original proponent can participate in the competitive mechanism


May result in a competitive procurement process starting sooner

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Commercial opportunities

We want proposals that: •  identify mechanisms to capture and repurpose savings •  present attractive risk allocations •  leverage Queensland’s competitive and comparative advantages •  respond to Queensland’s unique challenges


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State Infrastructure Plan (SIP)

•  Features 5-15 year opportunities •  Innovative market-led proposals may

address these opportunities •  www.dilgp.qld.gov.au


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Future priorities

•  Government is not the sole source of good ideas

•  Industry expertise may help predict future demand and challenges

•  Science and technology is important for Queensland’s economic future, as are the other diverse strands of our economy

•  Emerging high-growth sectors present further opportunities


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Video

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Queensland Treasury MLP Team: www.treasury.qld.gov.au/mlp 07 3035 1832 [email protected]


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Warwick Agnew - Queensland Treasury - Understanding the market-led proposal process