20 Aug 2015

WA's proposed framework for unsolicited proposals

by Simon Taskunas, Laura Clarke

The unsolicited proposals framework should benefit developers and investors wishing to engage the WA Government with innovative ideas.

The Western Australian Government's debt reduction policy is creating new opportunities for property investors and developers in Australia's largest State.

The State Government has already identified a number of State-owned land assets that are currently being marketed or being prepared for sale through a public process under the Department of Lands' land asset sales program.

In addition to this, the Government recently announced that it is developing an unsolicited proposals (USP) framework that will apply to other State-owned assets. The USP framework will allow the private sector to submit proposals to the Government outside of the usual tender process. The Government's objective is to encourage the private sector to submit unique proposals for the development of under-utilised State-owned assets for the benefit of the WA economy.

It is expected that WA's USP framework will be announced in the next few months, and will be based on USP frameworks set up in other Australian States. A common feature of the USP frameworks is that if certain criteria are satisfied, the Government can enter into exclusive negotiations for a particular project with the private sector proponent.

In determining whether a USP will be successful, a key requirement of other States' frameworks is that the proposal offer a unique advantage ‒ that is, the Government will ask itself, "What advantage is to be gained from the government entering into exclusive negotiations with the proponent?". [1] The experience of other States suggests that this can be a tough hurdle to overcome, with proponents needing to establish a value proposition that shows they are better placed than their competitors to deliver the project.

We expect that when assessing a USP the WA Government will also take into account the extent to which the proposal is consistent with a strategic direction set out in the WA State Planning Strategy 2050. In the comprehensive Strategy, the Government identified five broad directions for the future development of the State: economic development, physical infrastructure, social infrastructure, the environment, and security. Of relevance to the property industry, and perhaps urban regeneration projects in particular, the Policy recognises opportunities for growth in tourism, community infrastructure and affordable living.

The USP framework should benefit developers and investors wishing to engage the WA Government with innovative ideas, as the framework is expected to provide clarity on key issues such as how those ideas should be pitched, the circumstances in which Government is likely to enter into exclusive negotiations, and protection of the proponent's IP.

[1] Government of South Australia, Guidelines for Assessment of Unsolicited Proposals, November 2014, p 6. Back to article

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.