Three’s a crowd: Vic infrastructure bodies keep growing

By David Donaldson

Monday September 12, 2016

Victoria is well-known for its love of machinery of government changes, and almost two years on from the election the final infrastructure MoG is at last being bedded down.

Following the recent creation of the Office of Projects Victoria, the Victorian government has appointed infrastructure expert and former East West Link agency boss Ken Mathers as its chair.

What exactly is Projects Victoria and why is it different from the others?

The creation of OPV in July represents the final plank in the Andrews government’s two year effort to reorient the state’s infrastructure governance. Since the election Victoria has added two new bodies to guide and oversee its existing delivery arm, Major Projects Victoria.

There are now three organisations with interlinked roles: the creation of the Office of Projects Victoria follows the establishment of Infrastructure Victoria last year, joining Major Projects Victoria, which has been around since 1987.

Apart from establishing these additional authorities, the government has abolished another. OPV’s new chair, Ken Mathers, was previously in charge of the Linking Melbourne Authority, which was wound up after being left without work when the Andrews government announced it would scrap the authority’s main project, the East West Link road.

The government established OPV “to oversee how major infrastructure projects are developed, contracted for and implemented”. OPV will build capability and skills in project development and delivery to complement the work of the Department of Treasury and Finance, within which it sits, as well as Infrastructure Victoria.

It will provide advice on cost, scope and technical matters for asset investment decisions and project delivery arrangements, monitor all major projects and advise on potential interventions.

New agencies altering infrastructure landscape

If you’re slightly confused by the tripartite structure of Victoria’s infrastructure and projects setup — well, tripartite as long you’re not counting the agencies created to oversee specific major projects: the Level Crossing Removal Authority and the Melbourne Metro Rail Authority — you’re not alone.

Last year, Public Transport Minister Jacinta Allan explained the relationship thus:

“The difference there is Major Projects is the delivery arm. Projects Victoria is about looking at project delivery across the public service.”

Infrastructure Victoria is responsible for analysing business cases for big projects and is in charge of the state’s 30-year infrastructure strategy detailing short, medium and long-term infrastructure needs and priorities.

Basically, Infrastructure Victoria will come up with ideas, MPV will deliver them, and OPV will oversee them.

The new structure should improve capacity to iron out the “lumpy” infrastructure pipeline — highlighted by MPV head Tim Bamford as a key challenge for government. It should also inject more transparency into how major projects are prioritised, a controversial issue for any government, and one that came to prominence with the much-debated decision to build East West Link.

It remains to be seen whether this drive to reform the sector will improve management and delivery of public infrastructure. A 2015 auditor-general’s report found Major Projects Victoria had failed to implement the recommendations of an earlier audit. Then-auditor John Doyle argued MPV displayed “weaknesses” in project management, anti-fraud measures, performance reporting and value for money in engaging contractors.

Doyle concluded that “given the diminishing number of major projects that MPV has to manage, there are significant questions about the value it provides to Victoria”.

The tripartite structure means responsibilities are divided between different parts of the VPS. While OPV sits within the Department of Treasury and Finance, MPV remains within the Department of Economic Development, Jobs, Transport and Resources (the government announced after its election MPV would join the Department of Premier and Cabinet, but later changed its mind). Infrastructure Victoria is an independent statutory authority; the secretaries of DPC, DELWP and DTF sit on its board alongside members from outside the public sector.

OPV will help ensure the government gets infrastructure right, said Treasurer Tim Pallas. “Ken Mathers has a long history of contributing to major infrastructure projects, leading the way in the evolution of public private partnerships and progressive procurement models.”

The government plans to finalise an OPV advisory board in the near future.

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