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16 Apr 2020

Delivering better infrastructure, faster

By Kathryn Pacey

Rather than being seen as a short cut, project facilitation mechanisms and government support can be an opportunity to extract better and more strategic value from infrastructure projects.

While we have never seen anything like current circumstances in our time, a tried and true response to an economic downturn is for governments to support delivery of infrastructure projects – they deliver jobs, legacy infrastructure (think Hoover Dam, Somerset Dam) and a stable basis for recovery.

Since those great legacy projects were constructed, environmental assessment requirements, approvals timeframes and the rights of third parties to participate and challenge projects have presented enormous challenges for governments and proponents to be able to quickly deliver infrastructure projects and those much needed jobs to market.

Project facilitation mechanisms

There are a range of project facilitation mechanisms that can be relied upon by Government in special circumstances in order to bring projects to market quickly. These include:

Statutory exemptions: there are some exemptions available in times of emergency or where in the national interest. For example, the Commonwealth Environment Protection and Biodiversity Conservation Act 1999 allows the Minister to grant exemptions from certain provisions if satisfied that it is in the national interest, which may include consideration of defence, security of a national emergency. A number of State and Territory jurisdictions have existing exemptions for emergency situations, and have also recently enacted amendments to allow short term changes to approvals or other authorisations.

Special directions: some State legislation provides Government the ability to issue special directions for the delivery of works, which comes with inherent exemptions and streamlining.

Special development areas: some State legislation allows for the declaration of special development areas that are not subject to the standard planning and development assessment process. These areas generally have a streamlined project assessment system, and in some cases particular land acquisition powers that can facilitate project delivery.

Special legislation: special legislation, although generally not preferred, is available to facilitate delivery of projects, and can deal with issues including land access, approvals and governance. Special legislation may be considered as a more generic facilitation mechanism, to provide specific exemptions or designed for delivery of a particular project.

Co-ordination: sometimes it is simply a matter of administrative streamlining that can deliver a project to market quickly. Project facilitation roles within Government can assist greatly in quickly identifying and resolving barriers to projects, allowing projects to progress quickly through the standard process.

An opportunity to add value?

Project facilitation mechanisms and the provision of government support can also extract better and more strategic value from infrastructure projects.

There are opportunities for government to consider:

  • social benefits for local communities, such as support for local suppliers, labour and creation of complementary development opportunities;
  • directing projects to specific locations or localities, where economic support is needed most, and where environmental constraints are least;
  • promotion of projects with long-term economic and social benefits that respond to demonstrated need, such as transport and logistics, water supply, health and education;
  • requiring construction materials and methodologies to consider principles of the circular economy, sustainability principles, low-energy technologies and use of new technologies that demonstrate efficiencies;
  • look at opportunities for better planning of infrastructure location, maximising infill opportunities and contributing to strategic rehabilitation and offset requirements across multiple projects;

What does this mean?

Project facilitation and government support during a period of uncertainty can result in many opportunities, including:

  • deliverability and speed: if projects cannot be commenced on the ground quickly, the trust of government and the community in allowing a facilitated process is lost. Projects that are brought forward may have an opportunity to commence immediately, so that the economic benefits of the project facilitation can be quickly realised.
  • land: where private land needs to be acquired or resumed for projects, that will inevitably add timeframes and risk. For large projects, consideration may be given to staging, so that certain components on available land can be brought forward. Alternatively, land negotiations and land resumption may be accelerated.
  • Native Title and cultural heritage: Native Title and cultural heritage cannot be ignored, whatever the benefits of the project. However, native title issues may be resolved through land analysis, and cultural heritage obligations and duties maybe met through delivery.
  • scale: while mega-projects take time in terms of impact assessment, engineering and delivery, early works or early stages may be completed in a quicker timeframe. Components of large infrastructure projects may be commenced, while the more substantial components are being finalised.
  • taking advantage of existing work: the prime candidates for project facilitation are projects that are already proceeding through project approvals and for which impacts and benefits are already well understood. It may be that consideration can be given to changing the delivery model or bringing forward project components.
  • proponent: in some instances, government (or government-like) bodies can take advantage of exemptions and particular functions and powers that are not available to private entities. If those exemptions and functions facilitate project delivery, consideration may be given to the most appropriate delivery mechanism for works (including delegations and contractual arrangements).
  • environment and amenity: management of environmental risks and impacts, including impacts on local communities remains important. However, facilitated delivery mechanisms can provide opportunities for more strategic environmental gains, and greater influence by Government in delivering a greater and a more holistic environmental outcome, including through offsets, rehabilitation opportunities and use of Government land to provide optimum location (and co-location) benefits.
  • social licence: while there may be a more generous balance in terms of economic benefits, the social licence remains a significant priority for projects. Facilitated projects still need to balance economic, social, environmental and community benefits and impacts. However,the objective of delivering jobs and infrastructure may substantially increase the value of the project.

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Disclaimer

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.