Report 6: 2020-21

Transparency Report: Major Projects

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Appendix 1: Major project approval and delivery

All Western Australian public sector entities that seek funding for major projects are required to implement the Department of Treasury’s Strategic Asset Management Framework (SAMF). The SAMF provides policies and guidelines to improve asset investment planning, advice, and decision-making across the State public sector. Government trading enterprises are not explicitly required to follow the SAMF, but they must ensure their asset planning standards and processes are consistent with the SAMF principles.

The planning phases of the SAMF include a number of iterative approval stages. Each stage builds on the last to minimise the risks and uncertainty around project scope, cost and time.

Report 6_Transparency Report Major Projects - Figure 1

Major projects typically first appear in the State Budget Papers under an entity’s asset investment program. This represents an initial commitment by Government to fund these projects and is updated each year as part of the Budget process. In support of the program, entities submit applications for concept approval for high priority assets, business cases, and project definition plans to Cabinet for initial project funding approval. Entities are also required to seek Cabinet approval for any significant changes to project scope, timing and budgets. Changes to project budgets are published in either the Government Mid-year Financial Projections Statement, released by 31 December each year, or the State Budget Papers depending on when they occur in the annual budget cycle.

The Expenditure Review Committee (ERC), a sub-committee of Cabinet, recommends a course of action to Cabinet on all major project submissions with financial implications for Government. The Department of Treasury assesses these submissions against the requirements of the SAMF and advises the ERC on the financial implications. However, Government can announce major projects and commit Budget funding ahead of a business case and detailed planning.

Projects that receive a Commonwealth Government funding contribution of more than $100 million are required to be submitted to Infrastructure Australia for evaluation. Infrastructure Australia makes recommendations to relevant Commonwealth entities for project funding approval. Steering committees for these projects have State and Commonwealth representatives with monitoring and reporting also occurring at the Commonwealth level.

Many State government entities do not have the legislative authority to undertake the procurement and manage the construction required to deliver major projects. These entities usually engage the Department of Finance (Finance) to manage projects for them. Finance has the necessary powers delegated to them by the Minister for Works, currently the Minister for Finance, under the Public Works Act 1902.

Ideally entities who lack the authority to undertake major construction are encouraged to involve Finance in developing project business cases prior to seeking Cabinet funding approval. However, once funding is approved Finance becomes the project manager through to completion of the project. This includes working with client entities throughout the project life cycle to develop project definition plans, and design and tender documentation, and provide ongoing reporting and oversight.

Entities that have legislative authority to undertake major projects, for example Main Roads and statutory authorities such as the Rottnest Island Authority, usually take on responsibility for delivery of their own projects. However, these entities may seek advice from Finance as required or may choose to engage Finance as contract managers. Entities that have legislative authority can also act as project managers for other entities that do not have the authority to undertake their own major projects.

Page last updated: October 29, 2020
 

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