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Project Delivery Panel
the federal agencies, but I think we need to see that
dialogue improve so that they understand what we
are trying to achieve.
BL: So when you went to speak to the federal
bureaucrats, did they speak the same language?
PG: It took some time to get on the same page
about what the project objectives were, but we have
BL: Do you think the Federal Government's
commitment to the appointment of a dedicated
funding, nancing, project-advancing type function
within Infrastructure Australia will give it a more
useful, practical edge?
PG: I think so. It's about getting people in the
room talking, rather than about lling out forms and
sending them in.
BL: What other things could the Government be
doing to assist projects? We hear things like equity,
we hear things like federal procurement and putting
people down into state agencies and so on. Where
does the ef ciency get lost -- where does it become
more of a confusion?
RS: Mine's quite straightforward at the moment,
because it's all state-funded. But I think there is
a real dilemma that, with the Commonwealth
putting money in, they will want to have some say
and in uence. There is a real risk that, in doing
that, they don't quite get what the state is trying to
do with the project, and they can actually delay
things. Putting people into the teams is a really
good thing, but the quality of the people is really
important, and they need to be people who are
going to be constructive and in uence the project
in a positive way.
PG: Those points are correct. We are looking
for more collaboration and a deeper understanding
of the projects, rather than an oversight and
KM: The Commonwealth hasn't been involved
in our three road projects in Victoria to date, but
they have been signi cantly involved in the Regional
Rail Link Authority, and Lyn O'Connell (Deputy
Secretary, Department of Infrastructure and Regional
Development) has been involved in the Board. Lyn
has participated in Board meetings and monitored
the development of that project, and observed how
the Commonwealth funds are being spent. We would
expect that if the Commonwealth comes forward
with $1.5 billion for the East West Link project, then
they would have a representative on the steering
committee within government to overview how the
project is going -- and I'd welcome it.
BL: One of the things that's quite different about
this period of procurement, compared to the last
decade or so, is that the frameworks are being adjusted
in a way we haven't seen since 2000, when Victoria
brought out its Partnerships Victoria framework. How
do you incentivise your public sector to be able to
put forward these different options, to take risks on
procurements like contracting out clinical health --
either within a capital structure, like we're doing in
New South Wales, or outside, like in Queensland?
How do you entrench that into the approach of
procuring agencies and bodies?
KM: It's a fundamental element of our business
case. We know that this project is not going to be
one that is successful as a toll road until the entire
project is delivered. And it's such a costly project,
it's probably up around $12 billion to $15 billion
overall. Naturally, a project of that scale has to be
delivered in stages. So it's not until we get all three
stages linked and operating that it will become a
viable toll road, and that's why it's appropriate
that the state government at this stage holds the
traf c and revenue risk. That was a fundamental
recommendation of the business case to the state
government, and Treasury also played a very key
role in the development of that business case, so
we've got to get the fundamentals right.
PG: Procurement methodology evolves on each
of these big projects. Each of the PPPs have been
quite different when there has been a period of time
between them. In terms of incentivising the public
sector, it's about looking at lessons learned in other
jurisdictions and also overseas, and then looking
at the risks on your particular project and building
a procurement process that works, with industry
engagement to inform that, too.
BL: What makes you, as a public sector project
director, say, 'We're going to try something different;
it could blow up, but it could work'?
PG: With these major projects, you have to try
something different every time, because they are so
different. Things change over time: the scope changes,
they're in different locations, they're not the same.
RS: It's easy to look at a project and adopt the
business-as-usual approach. But when you go down
that path, you need to look at the downside, as
well. You often forget that. You might think it's a safe
approach and that everyone will understand that, but
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