In the Victorian public sector, a business case is used to describe the anticipated benefits that a major capital project is expected to deliver and how the agency responsible for the project will measure them.
A sound business case or equivalent documentation should clearly identify:
Originally budgeted at $4.32 billion, with an expected final cost of $3.65 billion, the RRL project was, at the time of approval and delivery, one of the largest and most expensive rail projects ever to be built in Victoria.
The RRL was designed to improve the capacity and reliability of rail services by:
The Regional Rail Link (RRL) project was, at the time of its approval and delivery, one of the largest and most expensive rail projects ever built in Victoria, with an estimated final cost of $3.65 billion.
Since its official opening in mid-2015, the RRL has transformed public transport journeys in key growth corridors to the west of Melbourne.
| DEDJTR | Department of Economic Development, Jobs, Transport and Resources |
| DOT | former Department of Transport |
| DPC | Department of Premier and Cabinet |
| DTF | Department of Treasury and Finance |
| HVHR | High Value High Risk |
| IA | Infrastructure Australia |
| KPI | Key performance indicator |
Ordered to be published
VICTORIAN GOVERNMENT PRINTER March 2018
PP No 384, Session 2014–18
Dear Presiding Officers
The table below lists the contractual improvements or 'negotiation benefits' described by DJR in the contract administration manuals for the new contracts, and our comments on the validity of the claimed improvements and benefits.
Figure D1
Improvements in the new contacts
|
Claimed feature or improvement |
Description and VAGO comment |
|---|---|
|
Long-term contractual arrangements |
CV granted concessions to both operators on the measurement of their performance against SDO 23 (prisoner case management) in 2016–17. The circumstances leading to this decision demonstrate the importance for CV to consider any contractual implications for the state and private operators when planning any substantive changes in system-wide standards, initiatives or performance measurement approaches.
SDOs and KPIs are the key measures of prison performance.
SDOs apply to both public and private prisons, although not all SDOs apply to all prisons.
KPIs only apply to the private prisons—18 of the KPIs apply to Port Phillip, and 16 to Fulham.
The SDO and KPI thresholds use various measures:
We have consulted with DJR, DTF, G4S and GEO, and we considered their views when reaching our audit conclusions. As required by section 16(3) of the Audit Act 1994, we gave a draft copy of this report, or relevant extracts, to those agencies and asked for their submissions and comments. We also provided a copy of the report to DPC.
Responsibility for the accuracy, fairness and balance of those comments rests solely with the agency head.
Responses were received as follows:
The original service contracts for Fulham and Port Phillip were due to expire in 2017. DJR recommended negotiating long-term contract extensions with the incumbent operators, partly because other options would involve significant costs to 'buy out' the site leases held by the operators which extended for many years beyond 2017. DJR maintained alternative options, such as re-tendering the contracts, as a fallback in case the negotiations did not achieve a value‑for‑money outcome.