The NSW Government has released a draft Bill for public comment which seeks to amend the concept proposal pathway for projects under the Environmental Planning and Assessment Act 1979 (NSW) (the Act). The draft Bill has implications for any developers (and other interested parties such as financiers) of large scale projects who have pending, or proposed, applications for concept proposals in NSW.

Concept proposal pathway

The ‘concept proposal’ mechanism was introduced by the NSW Government to assist developers with the delivery of large-scale complex projects. In particular to provide a ‘bankable approval’ at an early stage in circumstances where a project requires material capital expenditure and/or staged delivery over many years.

In practice, developers often relied on the ‘concept proposal’ (or staged development application) mechanism to:

  • obtain approval for the ‘concept proposal’ – to be followed by a single development application to construct the project; and
  • defer assessment of construction impacts to the later development application to construct the project – provided the approval for the concept proposal did not permit any construction work to be carried out.

That approach was recently declared invalid by the Court of Appeal’s decision in Bay Simmer Investments Pty Ltd v State of New South Wales [2017] NSWCA 135 where the Court found that the Act requires:

  • construction impacts to be considered at the concept proposal stage; and
  • a concept proposal must involve two or more subsequent development applications.

The implications of the Court’s decision are material and include, among other matters:

  • proponents being required to provide significant amounts of environmental assessment information at an early stage in circumstances where construction details are typically not confirmed (including supplementary assessment for existing applications for concept proposals);
  • inefficiencies in assessment timeframes – given that construction impacts would be assessed at both the concept and detailed design stages; and
  • mandatory requirements to split projects into multiple sequential stages even if, in practice, it is more economically feasible for the proponent to deliver construction of the whole of the project in one stage.

The Court’s decision also has the potential to expose other approved concept proposals to challenge on similar grounds to those that the appellant relied in Bay Simmer Investments.

Key changes

In light of the above risks and inconsistency with the intended purpose of the concept proposal pathway, the NSW Government has proposed the following key changes to the EP&A Act:

  • ‘staged development applications’ will be renamed ‘concept development applications’ to better reflect what they contain in practice;
  • a concept development application will be able to be followed by only one development application for the site, rather than the multiple applications currently required; and
  • a new provision which will make it clear that the impacts of carrying out the development may be considered when the concept proposals are being assessed, but must be considered where approval to carry out works is sought.

The Bill also includes arrangements to ensure that the new provisions apply to pending development applications, as well as development consents previously granted.

What do the changes mean for your business?

The draft Bill has implications for any developers (and other interested parties such as financiers) of large scale projects who have pending, or proposed, applications for a concept proposal in NSW.

In particular it will be important for proponents to ensure that their applications expressly adopt the language of the proposed changes to the ‘staged development application’ mechanism. It will also be critical for proponents to ensure that supporting environmental assessment comply with the new assessment regime (particularly in relation to construction impacts), while still protecting proponents from challenge based on the principles enunciated in Bay Simmer Investments.

The draft amendments to the Act are on public exhibition until Monday 24 July 2017.