Output 8.1 Infrastructure Finance and Capital Works

Overview

The directorate, through Infrastructure Finance and Capital Works (IFCW), brings together specialist capability in the management and delivery of capital works as well as the support of selection, funding, implementation and delivery of complex and major infrastructure projects.

The directorate enables and facilitates the planning, financing and delivery of infrastructure for the Territory, core functions comprised:

• supporting and advising on Public Private Partnership transactions, including procurement;
• advising the government on procurement and related construction industry policy;
• supporting Procurement ACT in the development and implementation of the government’s procurement related policies;
• managing the delivery phase of major projects on behalf of partner directorates;
• developing and implementing the Capital Framework and the Partnerships Framework: Guidelines for Public Private Partnerships and the Guidelines for Unsolicited Proposals;
• establishing and managing a number of WoG contracts and panels;
• reviewing Public Private Partnerships contract management arrangements;
• providing whole-of-life project transaction support;
• providing commercial support on the assessment of unsolicited proposals; and
• progressing infrastructure reform through new delivery models, improved governance, and better allocation of project risks.

The directorate’s IFCW Division comprises members with deep industry experience and professional capabilities in the provision of project management, procurement, governance, commercial and project finance advice.

Highlights

During 2018-19, the directorate continued to administer and update the following policy frameworks:

• the Capital Framework;
• the Partnerships Framework, including:
  • The Guidelines for Public Private Partnerships; and
  • The Guidelines for Unsolicited Proposals.

The directorate was involved in the following projects:

• ACT Courts PPP Project – provided support and project management by providing advice through its membership of the Executive Steering Committee and Senior Representative’s Group;
• Light Rail Stage 1 and Stage 2 – provided support and advice to the project team of Light Rail Stage 1, in addition to support for Light Rail Stage 2 such as various workshops and commenting on the development of the business case;
• Canberra Hospital Single Photon Emission Computed Tomography (SPECT) Replacement Project –(Project Budget $1.6 million). This project involved replacement of existing CT scanning equipment at Canberra Hospital with new technology to provide improved accuracy for diagnostic purposes. The project was delivered on time and in budget with construction completion in January 2019. The SPECT became operational in February 2019;
• Gunghalin Nurse Led Walk in Centre – (Budget $2.925 million) The project was completed on programme, with construction completion in August 2018. The facility became operational in September 2018;
• Canberra Hospital Centenary Hospital for Women and Children Aluminium Composite Panel Facade Replacement Project – (Budget $1.625 million).This project involved the replacement of aluminium composite facade panels with non-polyethelene core products. This project was completed on time and in budget in July 2018;
• Supported the Education Directorate to deliver schools – project management and delivery of the new Margaret Hendry school in Gungahlin, the modernisation of Belconnen High School and the expansion of several schools in the Gungahlin region;
• Supported Venues Canberra to provide the Manuka Oval Media Centre – worked closely with Venues Canberra to ensure that the media centre was ready in time for the first International Test;
• Supported the delivery of Transport Canberra and City Services capital works and BIF programs – undertook procurement and contract management activities to assist the Transport Canberra and City Services Directorate (TCCS) to meet its commitments and to ensure value for money was obtained by the Territory. Major activities include Gungahlin road network expansion, active travel programs, support for land development in Molonglo, as well as capital upgrades throughout Canberra;
• Supported Environment, Planning and Sustainable Development Directorate – as the contract manager for the ACT Healthy Waterways project, under a Managing Contractor delivery model. This project comprises the construction of nineteen water quality improvement facilities within six priority catchments co-funded by the Commonwealth and ACT Governments;
• Unsolicited Proposals – continued to review and assess proposals under the Guidelines for Unsolicited Proposals, in addition to providing secretariat and governance support to the Unsolicited Proposal Steering Committee (UPSC);
• The Capital Framework – continued to support the Capital Framework by assisting Directorates to develop stronger business case submissions, enabling more thorough planning, appraisal and evaluation in the formative stages of the investment lifecycle;
• Loose Fill Asbestos Insulation Demolition Program – supported EPSDD to safely demolish houses in 2018–19 under budget and ahead of schedule;
• Secure Local Jobs Code – finalised the development of the legislation and assisted the introduction of the legislation with the new Code requirements coming into effect on 15 January 2019. IFCW has complied with the requirements of the legislation and has assisted to ensure that projects are managed in accordance with its requirements; and
• Project Management and Reporting System (PMARS) – continued the implementation of PMARS. The technical solution was delivered by the supplier, Open Windows Software in June 2018. User Acceptance and Testing has been finalised and the system is now ready for implementation. Training has commenced with project delivery officers in Major Projects Canberra (MPC) and Capital Works of the TCCS Directorate, ACT Health and CMTEDD. The implementation of Phase 1 of PMARS, for the three Directorates identified in the government response, was completed by the end of June 2019.

The directorate met or exceeded all 2018-19 accountability indicators against this output. The accountability indicators met and exceeded were:

• Proportion of relevant projects supported by Infrastructure Finance and Capital Works that have had WHS audits performed in accordance with the Active Certification Audit Program – the target was ‘greater than 90%’, and 100% was achieved;
• Capital Works Projects:
  • Percentage of construction projects completed on budget – (Target ‘greater than 85%’ - outcome 100%);
  • Percentage of construction projects completed on time – (Target ‘greater than 85’% - outcome 92%);
  • Percentage of contracts awarded to prequalified contractors/consultants – (Target ‘greater than 95%’ - outcome 100%); and
• Proportion of relevant contracts managed by Procurement that include the requirement for the contractor to hold IRE Certification – (Target ‘greater than 90%’ - outcome 100%).

Future Direction

The government created Major Projects Canberra (MPC) which commenced operation on
1 July 2019. MPC will be the key body responsible for the delivery of the ACT Government’s major capital works projects.

In 2019-20 the directorate, through Infrastructure Finance and Reform, will continue to:

• assist agencies in the development of infrastructure projects within the Capital Framework, including policy responsibility for this framework;
• provide independent advice to agencies and within Treasury on the needs and economic analysis within business cases for selected Tier 1 projects;
• be responsible for Post Implementation Reviews of selected Tier 1 projects and an emerging role of overseeing reporting on the realisation of benefits of major projects;
• provide financial and commercial advice on the development and procurement of Public Private Partnerships and other major, complex infrastructure projects; manage or advise on life-of-project transactions for PPP projects; and have policy responsibility for the Guidelines for Public Private Partnerships;
• manage the process for considering Unsolicited Proposals and have policy responsibility for the Guidelines for Unsolicited Proposals; and
• provide governance and secretariat support for various executive level, cross-directorate committees relating to infrastructure.

In 2019-20 the directorate will continue to:

• assist directorates in planning and procuring capital works projects by advising on the processes within the Capital Framework: Investment Logic Workshops, Risk Workshops, Delivery Model Workshops, Early Project Overviews and Business Cases;
• manage the assessment of unsolicited proposals within the government’s guidelines;
• advise on the completion of the ACT Law Courts and Light Rail City to Gungahlin projects and on any life-of-project transactions;
• completing the review of the Capital Framework and implementing its recommendations; and
• facilitate a review of the capital delivery that will examine contingency estimation and management, and in particular the appropriate retirement of contingency associated with procurement risk. Additionally, the review will consider the reporting on progress of project delivery, including milestone achievement, and in particular the reporting against project value rather than funds appropriated.

In 2019-20, the directorate will assist MPC to:

• deliver capital works;
• undertake WHS Active Certification; and
• deliver the rollout of PMARS.

Further information can be obtained from

Shaun Strachan
Deputy Under Treasurer
Commercial Services and Infrastructure
+ 61 2 6207 1001
Shaun.Strachan@act.gov.au

Adrian Piani
Executive Group Manager
Infrastructure Finance and Capital Works
+ 61 2 6207 8944
Adrian.Piani@act.gov.au