As part of the Queensland State Budget, the Palaszczuk Government has introduced new market-led proposal guidelines (MLP Guidelines), aimed at harnessing the knowledge and expertise of the private sector in developing their market-led proposals (MLP) through the provision of a transparent and accountable methodology. The Government intends that these MLP Guidelines will allow government to engage more seamlessly with industry to secure new projects and investment, by providing proponents with consistency and clarity about the Government's assessment process.

The MLP Guidelines provide a similar process to the unsolicited, or market-led, proposal regimes that have been updated in New South Wales and Victoria in the last 18 months, both of which promote the development of market-led proposals for private sector investment in State infrastructure. Queensland's previous regime for unsolicited proposals, or 'exclusive mandates', was brief, set a high benchmark, and described a strong preference to maximise competition to gain value for money, with 'exclusive mandates' only to be considered in exceptional circumstances.

Market-led Proposal Guidelines 2015

The MLP Guidelines set out a three stage process consisting of:

  1. Initial Proposal;
  2. Detailed Proposal; and
  3. Final Binding Offer.

The MLP Guidelines also make provision for an optional, but strongly recommended, pre-submission review stage, where private sector proponents can formally explore with Queensland Treasury as to whether the proposal is likely to meet the Stage 1 assessment criteria, having regard to key attributes, benefits, requirements and assumptions.

Stage 1 consists of a tiered evaluation, where the MLP must satisfy the 'Stage 1A - Preliminary Assessment' criteria, and may be progressed to 'Stage 1B - Strategic Assessment' if additional information is required. During Stage 1, the MLP Panel will form an assessment team, which will include consultation with Building Queensland where the proposal relates to infrastructure, to identify benefits to Government and determine whether or not a recommendation will be made to Government.

Stage 2 of the MLP Guidelines requires the proponent to prepare and submit a detailed proposal, as well as additional information on request, which will be assessed and a recommendation will be made to the MLP Panel, which will in turn make a recommendation to Government.

Stage 3 will consist of the Proponent, Queensland Treasury and the Line Agency negotiating legal and commercial terms (including an 'exclusive mandate contract'). Queensland Treasury and the Line Agency will then complete a comprehensive assessment of the Final Binding Offer executable documentation, which will then be prepared for consideration by Government.

The Government will have regard to the following criteria when assessing a market-led proposal and considering whether to provide an exclusive mandate:

  1. community need / government priority;
  2. value for money;
  3. uniqueness and intellectual property;
  4. benefit of proponent's preliminary investment;
  5. risk / cost allocation;
  6. capacity and capability of proponent;
  7. feasibility;
  8. public interest and benefits to the government; and
  9. competing proposals.

The MLP Guidelines specifically reserve Government's right to subject any MLP to competitive processes, or not proceed at all, if the proposal fails to meet any of the criteria to the Government's satisfaction at any point during the assessment process.

As part of the new MLP Guidelines, an online portal will be introduced, enabling proponents to put forward proposals for priority consideration. This will be particularly important for complex proposals, with interest from multiple government departments. The portal is expected to go live this week.

Comment

These MLP Guidelines are particularly important for Queensland, where an ever increasing need for public infrastructure and a constrained fiscal environment highlight the importance of encouraging private sector involvement in the investment in infrastructure. The Government has opened the doors for private sector investment in infrastructure, and in doing so, Queensland will obtain the benefit of innovation and opportunities that MLPs can present.