Infrastructure and Asset Projects - what’s in your kit bag?

LG Leader April 2020

It’s been a common theme in local government for as long as I have been advising councils, that the pressure to do more with less is ever-present and, if anything, continues to increase. The current environment illustrates this position. It also seems that whilst the expectation is to ‘do more, with less’, it is a simultaneous expectation to generate economic activity and to push forward with projects that form part of councils strategic plan as ‘future works’.  As a result, I am already being asked to advise on innovative projects and to find new ways to work with third parties, both in the public and private sector, to achieve outcomes that may not, otherwise, be achievable.

This also means that councils are being asked to advance projects that have not yet been fully considered or funded. Sometimes the concept is in its infancy and a primary consideration is the proper governance framework for the project. This is a critical consideration in structuring a project, properly, from the outset. This includes many considerations including when and how to involve other parties, the financial arrangements or funding model, the risk profile of the council and who will ‘own’ the asset upon completion. Within the local government framework there are some ‘tried and tested’ models, such as single council or regional council subsidiaries but, amongst these considerations are alternate models that may be more innovative and suitable for project structuring. These might include incorporated associations, unincorporated joint ventures, unit trusts and long-term leases. However, it is important to remember that just because something is ‘new and shiny’ doesn’t make it the best option – sometimes a well-known and reliable option will do a job which is as good, or better.

If you are thinking about embarking on a major project, or working with other parties (and that could include a business, community group, or a state or local government body), it is important to identify your objectives since that will go a long way to understanding the options available to you. Some relevant questions include: whether the project is intended to return a profit; whether the partners are all councils; how decisions will be made; what the project is and what assets are involved and what is intended to happen at the end of the arrangement.

Of course, you may not know the answers to all of these questions. In that case, we are always happy to have a chat and help you to frame the project, to take it from that ‘thought bubble’ to ‘shovel ready’.