· web viewrequirements to disclose information to the commonwealth parliament and its...

Discussion Paper:Design of the Commonwealth On-Farm Further Irrigation Efficiency (COFFIE) Program

New South Wales pilot (Lachlan Valley)

_____________________________________________________Draft as of 29 October 2015____________________________________________

1

2

3

4

5

67

Draft for public comment – New South Wales pilot

Purpose of the consultation process

This discussion paper and the attached draft Statement of Requirements for delivery partners (SoR) contains information to assist you in providing feedback on the proposed design of the Commonwealth On-Farm Further Irrigation Efficiency (COFFIE) program.

The discussion paper outlines why the COFFIE program is proposed to have certain structures or specifications. The SoR is the primary document that sets out the proposed design features and delivery arrangements for the COFFIE program.

While the general design parameters for the COFFIE program have been determined, the Department of Agriculture and Water Resources (the Department) is seeking your comments and suggestions to improve the operational and delivery arrangements proposed in the draft SoR. This is your opportunity to influence the design and delivery of the COFFIE program. By seeking feedback the Department hopes to benefit from industry expertise and ensure that the SoR describes the best way of delivering the COFFIE program.

What you need to do to participate in the consultation process

Participation in the consultation process is entirely voluntary. Not commenting on this SoR will not affect your eligibility to submit a tender in response to any future Request for Tenders.

Responses should be in writing and should total no more than 2500 words. All responses should include a cover sheet, available at: www.environment.gov.au/water/rural-water/coffie/consultation

Please send responses to: [email protected]. Submissions close at 5:00pm (AEDT) on 11 December 2015, when the Department will remove the draft SoR from the website and AusTender.

When referring to text in the draft SoR, please identify the line number against the line on which you are commenting, or the number of the first line in the paragraph to which you are referring. Due to the possible volume of material we will receive, no attachments outside of the 2500 word limit can be considered in reviewing responses.

Next steps

Following feedback from this consultation period the design of the COFFIE program within the SoR will be updated. We will also publish a response to thematic issues raised in the consultation process on the SoR on the Department’s website.

The Department will then conduct pilots of the program over 2015-16 and talk further to peak industry bodies and potential delivery partners prior to finalising the design of the COFFIE program and extending it across the Murray-Darling Basin. It is anticipated that the program will commence across the Basin in late 2016 and run until 2024.

___________________________________ Draft as of 29 October 2015______________________________________

89

10111213141516171819202122232425262728293031323334353637383940414243444546474849

http://www.environment.gov.au/water/rural-water/coffie/consultation


Statement of Requirements and the approach to market process

Delivery of pilots and the broader COFFIE program will generate three versions of the SoR:

1. A draft SoR for comment (this document)2. The SoR for delivery partners for the delivery of the pilots of the COFFIE program 3. Revised draft of the SoR taking into account the lessons from the pilots and public comment.

The attached draft SoR is the first of the above three versions. Do not lodge a tender in response to this draft Statement of Requirements.

Once the SoR has been settled for each of the pilots it will be incorporated into tender documentation. The Department may invite eligible organisations to submit a proposal following a limited tender process for the pilots. Proposals will be sought between November 2015 and February 2016.

Detailed information on the pilot tender process and the evaluation method, including eligibility requirements, will form part of the Department’s Approach to Market (ATM). Organisations wishing to tender for the pilots will be required to register with AusTender to access relevant documentation. Registration will be available through the AusTender website at www.tenders.gov.au. It will be a requirement of the ATM process that tenders must be lodged through AusTender. Interested parties should check AusTender regularly from November 2015 - February 2016.

How the Department will use your feedback

The Department will use your responses to ensure the COFFIE program and ATM documentation better aligns with industry capabilities and needs. The information gathered will be used to inform pilots, which, in turn, will inform the COFFIE program scheduled to commence during 2016-17.

The Department will not formally provide feedback or conduct any short listing process as a result of this consultation process.

Terms governing participation in the consultation process

By participating in the consultation process and providing a response, you are deemed to have acknowledged and agreed to the following terms governing the process:

1. Publication of responses and confidential information

All responses will be treated as public documents, unless it is agreed that part or all of the response is ‘confidential information’.

If a respondent believes that any information contained within its response is confidential including ‘commercial-in-confidence’ information, the respondent must clearly identify this information and provide reasons why this information should be treated as confidential.

The Department will only consider a request for confidentiality where:

a. the information to be protected is identified in specific rather than global terms;

b. the information is by its nature confidential; and

c. disclosure would cause detriment to the Commonwealth, the respondent, or a third party identified by the respondent.

The reason we ask this

Respondents should be aware that the Department must comply with a range of legal and administrative requirements of the Commonwealth designed to promote transparency and accountability, including


50

51

525354

5556

575859

606162636465

6667

686970

7172

73

7475

76

7778

798081

82

83

84

8586

87

8889


requirements to disclose information to the Commonwealth Parliament and its Committees. This means that despite any agreement by the Department to maintain confidentiality over information provided by a respondent, the Department may be required (and reserves the right) to disclose, or allow at any time the disclosure of, any information contained in or relating to any response:

a. to its advisers, employees or internal management for purposes related to developing the SoR and implementing the COFFIE program;

b. to the Minister responsible for the COFFIE program;

c. in response to a request by a House or a Committee of the Parliament of the Commonwealth;

d. within the Department, or with another agency, where this serves the Commonwealth’s legitimate interests;

e. where the information is authorised or required by law to be disclosed, noting that information submitted to the Department is subject to the Freedom of Information Act 1982 (Cth) and its requirements; or

f. where the information is already in the public domain otherwise than due to a breach of any agreement to maintain confidentiality over information by the Department.

The Department may (but is not obliged to) publish responses in full on its website and / or circulate responses to State and Territory agencies for program purposes (including any personal information of the author and / or third parties contained in the response).

If any part of the response should be treated as confidential then please provide two versions of the submission, one with the confidential information removed for publication and / or circulation.

Cover sheets will not be published.

2. Privacy notice and consent to use personal information

In submitting a response, respondents consent to the Commonwealth using any personal information* submitted for the purpose of:

a. developing and administering the program (including the further development of the draft SoR and pilots);

b. providing respondents with updates and information on the program;

c. any disclosure of personal information that the Department is required to make by law;

d. disclosure of personal information in the response by the publication of the response on the Department’s website;

e. disclosure to State and Territory agencies for program purposes (which may relate to development, assessment and review of the program); and

f. any purpose related or incidental to those purposes specified in paragraphs (a) to (e) (inclusive).

Where a response includes personal information of a third party, respondents are responsible for ensuring that the relevant third party is aware of and understands this privacy notice, and consents to use and disclosure of his or her personal information by the Commonwealth for the purposes specified in this notice. Where a respondent is unable to obtain the consent of a third party to do this, the respondent must not include the personal information of the third party in the response.

The Commonwealth will store and use the personal information collected during this consultation process in compliance with its obligations under the Privacy Act 1988 (Cth) and the Department’s privacy policy. A complete copy of the Department’s privacy policy is available at: http://www.agriculture.gov.au/about/privacy. The privacy policy details how respondents may access personal


90919293

9495

96

97

9899

100101102

103104

105106107

108109

110

111

112113

114115

116

117

118119

120121

122

123124125126127

128129130131

http://www.agriculture.gov.au/about/privacy


information the Department holds about the respondent and seek to make corrections to it. The privacy policy also details how respondents may make a complaint about a breach of an Australian Privacy Principle and how the Department will deal with the complaint.

* Note: For the purposes of this consultation process, the term ‘personal information’ has the meaning given in section 6 of the Privacy Act 1988 (Cth), i.e. information or an opinion about an identified individual, or an individual who is reasonably identifiable, whether or not the information or opinion is true or recorded in a material form.

3. Consideration of responses limited to consultation process

Responses to the draft SoR will only be considered in relation to this consultation process and will not be used or considered in the evaluation process as part of any subsequent approach to market (ATM) process.

4. No prejudice to any future ATM process

Participation in this consultation process is voluntary and will not impact on the ability of a person or organisation to participate in any subsequent ATM process. Participation in this consultation process will not provide any advantage or disadvantage in any subsequent process.

5. Intellectual property rights

Participating in this consultation process won’t affect ownership of any intellectual property rights in responses, namely:

a. where a respondent owns intellectual property rights in his/her/its response, the respondent will continue to own those intellectual property rights; and

b. where a third party owns intellectual property rights in material included in the response, the third party will continue to own those intellectual property rights.

In submitting a response to this consultation process, respondents:

a. in the case of intellectual property rights owned by the recipient in the response, are deemed to have granted to the Commonwealth; and

b. in the case of intellectual property rights owned by a third party in the response, must procure for the Commonwealth a grant of,

a perpetual, irrevocable, world-wide, royalty free, non-exclusive licence to use, reproduce, adapt, modify and communicate the content of the response for developing, administering and evaluating the program (including the further development of the draft SoR) and any other incidental or related purpose.

Further information

For further information on the consultation process, please contact the Department on 1800 218 478 or email [email protected].


132133134

135136137138

139

140141

142

143144145

146

147148

149150

151152

153

154155

156157

158159160161

162

163164

165

mailto:[email protected]


Overview of the COFFIE program

The Commonwealth On-Farm Further Irrigation Efficiency Programme (the COFFIE program) is the first of a series of irrigation infrastructure programs designed to run until 2024. The program will assists irrigators in the Murray-Darling Basin to modernise their on-farm irrigation infrastructure while returning water savings to the environment. For further information on the structure of the program, see the Statement of Requirements for delivery partners and the associated fact sheet on the design of the COFFIE program.

Indicative timeline for the COFFIE program

Fourth quarter 2015 Release of draft Statement of Requirements

Fourth quarter 2015 Consultation period

November 2015 to early 2016

Progressive release of expressions of interest (EOI) for delivery partners for pilot/s for the COFFIE program and contracting of suitable organisations

Late 2015 Commencement of pilots*

Mid 2016 Design of COFFIE program finalised

Third quarter 2016 Request for Tender (RFT) for delivery partners for the COFFIE program

Fourth quarter 2016 – June 2024

Project selection, assessment and approval*

Late 2015 – June 2027 Total period of project delivery

* Indicates the period when a delivery partner can bring forward projects. Projects may be brought forward at any stage during this period. The delivery of projects will occur over the three years following agreement to the project by the Australian Government and transfer of the water entitlement. Note that eligibility requirements may also expand during this time depending on progress of existing programs.

Proposed arrangements for delivering the projects

The Department will be seeking a number of delivery partners so irrigators have a choice of who they work with. Once the panel of delivery partners is established each approved delivery partner will be working with irrigators to put projects together. Before a project is submitted to the Department for approval the delivery partner will need to be confident that the project will provide real benefit the irrigator, make real water savings that can be put forward to the Commonwealth and that the person making the application holds the appropriate water entitlements.

Once the individual project is approved by the Department the delivery partner and the irrigator will need to sign a contract to undertake the works and the irrigator will need to transfer the water to the Commonwealth. Once these requirements are met, the delivery partner will ‘project manage’ the undertaking of the required works by the irrigator or the irrigators contractors to ensure that the works are undertaken and water savings made.

Proposed stages of the COFFIE program

There are eight key steps in the COFFIE program. These are:

1. An approach to market is announced. The draft Deed of Standing Offer is released and the requirements of the service to be provided confirmed.

2. Tenders are received, assessed and delivery partners are selected and categorised.

3. A water entitlement value or project cost per megalitre is set.


166

167168169170171

172

173174175176

177

178179180181182183

184185186187188

189

190

191192

193

194


4. The delivery partner works with an irrigator to provide a proposal to the Department that meets all relevant eligibility requirements (for example, technical and legal) and conducts an initial assessment of the project. This step is repeated for each individual project.

5. The Department conducts a final check and approves the project, then provides a Project Order to the delivery partner directing it to engage the irrigator under a Works and Transfer Agreement to perform the individual project works.

6. The delivery partner contracts the irrigator as a project proponent under a Works and Transfer Agreement and the irrigator transfers the water entitlement to the Commonwealth.

7. The works are undertaken, the Department makes payments as required, the delivery partner reports as agreed.

8. The project is finalised and evaluated.

Steps 4 – 8 are part of a continual process for projects as they arise over the life of the Deed, there is no closing date for project application rounds within the life of a Deed.

COFFIE program design – proposals and rationale for comment

Below is a description of the key elements of the COFFIE program as currently proposed within the SoR. They have been broken down into the following categories:

A. The Department will establish eligibility requirements for delivery partners

B. Department will identify delivery partners through a tender process

C. The Department will announce the price for water and projects

D. The Department will limit project management fees by the delivery partner E. Delivery partners are to advertise their price and conditions on their website

F. Delivery partners seek projects and provide the Department with a proposed project for approval G. Delivery partners will undertake technical assessment

H. The delivery partner manages the projectThe Department to evaluate projects on an on-going basisThe irrigator’s role considers the sort of project they want and the sort of delivery partner they need

I. The irrigator’s role in ensuring they meet all of the eligibility of the program

J. The irrigator works with the Department to transfer the water entitlement to the CommonwealthK. The irrigator works with the delivery partner to undertake the works as approved.

We have outlined what is being proposed for the COFFIE program and the current thinking behind those proposals. Any comments you have on the program design as outlined here and in the SoR are welcome.

A. The Department will determine eligibility requirements for delivery partners

A.1. Qualifying delivery partners where they meet eligibility requirements

What is being proposed:

The Department conducts a tender to ‘qualify’ delivery partners by determining which delivery partners have the capacity to ‘find’, project manage and deliver projects. The closest analogy to the qualification would be delivery partners meeting many of the ‘merit criteria’1 in the guidelines of the current Australian Government On-Farm Irrigation Efficiency Program (OFIEP). The ‘project-specific’ merit criteria – for example the technical criteria – would be replaced with eligibility requirements that require a delivery partner to show it has the

1 OFIEP Round 5 guidelines pp11-13 or OFIEP Round 4 guidelines pp8-10


195196197

198199200

201202

203204

205

206207

208209210211

212

213

214

215216

217218

219220221222

223224

225226

227

228

229

230231232233234

1


capacity to find/develop/prove up appropriate projects, rather than require ‘proof’ about the projects themselves.

Rationale:

This is both a standard approach to the procurement of services and an approach that has worked well in previous irrigation efficiency programs.

The approach of using delivery partners to source and manage a range of projects provides significant assurance to both the Commonwealth and individuals that are looking to undertake projects that projects are being undertaken that are appropriate and will be delivered effectively and efficiently.

A.2. Delivery partners of different shapes and sizes


The current SoR allows for a broad range of organisations to be delivery partners, including smaller businesses or individuals.

Rationale:

Different delivery partners will have the capacity to manage different loads of projects. Some delivery partners may have very strong systems enabling good management of large numbers of projects. However there may be small businesses or individuals that may have the capacity to manage a relatively small number of projects. It would be desirable to have some delivery partners provide low cost/low service offers, where irrigators are largely required to design and undertake their own projects, while others make more services available for a higher cost to give irrigators choice when determining what delivery partner is appropriate for them

A. 3. Consortium organisations as delivery partners


Consortiums are eligible to be delivery partners.

Rationale:

Our current view is that the consortia approach, with specialist organisations partnering with the delivery partner, can work well as this system has worked in OFIEP.

A.4. Irrigation equipment suppliers and installers as delivery partners


The current SoR provides a potential pathway for irrigation equipment suppliers and installers to be delivery partners (part 2.7.5).

Rationale:

The SoR supports an approach where delivery partners are part of the community in which they operate and who are able to provide impartial advice and a range of solutions to irrigators. However this approach also restricts the number of businesses that can be delivery partners. The SoR provides an alternative approach that could allow businesses to participate as delivery partners but places requirements on those businesses. The Department is interested in views on whether such an approach would enable delivery partners to provide impartial advice and a range of solutions to irrigators, which is an important requirement.

A.5. State or Local government agencies as delivery partners



235236

237

238239

240241242

243

244

245246

247

248249250251252253

254

255

256

257

258259

260

261

262263

264

265266267268269270

271

272


The current SoR does not prevent state or local government agencies from being delivery partners.

Rationale:

State or Local government agencies were excluded as delivery partners in OFIEP. However we are interested in whether there are potential delivery partners who are Local or State government agencies that would consider tendering.

B. Department will identify delivery partners through a tender process


The first stage in establishing the program will be a Request for Tender from the Department which will be accompanied by the Statement of Requirements (which sets out the task and standards to be met) and a draft Deed of Standing Offer (the draft contract).

Organisations interested in being delivery partners will respond to tender documentation outlining how they meet the requirements for financial viability, project management and governance expertise, risk management expertise, Workplace Health and Safety (to the extent required) requirements, and environmental impact avoidance. Assuming the delivery partner is found suitable, the Department would contract with the delivery partner.

The closest equivalent is the documentation that delivery partners currently provide about their capacity to deliver in Stage 1 of OFIEP.

They would also need to show a capacity to deliver an ‘expert’ technical due diligence of proposed projects which is discussed next.

Rationale:

This approach enables the selection of a range of delivery partners independent of particular projects or groups of projects being approved. It enables the widest range of delivery partners to come forward and is a key component in reducing the time irrigators are engaged in developing projects before they are approved.

C. The Department will announce a price for water and projects


The Department will make its values for the various water entitlement types available to delivery partners at regular intervals. The current proposal is that the interval is six monthly. It is proposed that the water entitlement value per megalitre will be based on the average market price of equivalent entitlements over the previous three months (with values outside the norm removed from the analysis).

The maximum project value will be 1.75x (the market multiple) of the water value established by the Department.

Rationale:

Efficiency measures are funded from the Water for the Environment Special Account (WESA)2. The WESA will have $1,775 million appropriated to it over the 10 years to 2023-24 to fund both constraints measures and efficiency measures3. Of this $1,575 million has been identified as being to recover the additional 450GL of environmental water through efficiency measures4. This equates to $3,500 per megalitre.

The funding model is different to OFIEP - the new program will be a model where all of the minimum water savings from the project is returned in exchange for the funding of the infrastructure (any additional water

2 The Water for the Environment Special Account is established through Part 2AA of the Water Act 2007 (cth).3 Water Act 2007 (cth) sections 86AA-86AD (in particular s 86AA(3))4 Intergovernmental Agreement on Implementing Water Reform in the Murray Darling Basin cl 4.6


273

274

275276277

278

279

280281282

283284285286287

288289

290291

292

293294295

296

297

298299300301

302303

304

305306307308

309310

234


savings are retained by the irrigator). The 1.75x market multiple had its origin in the basis of many existing infrastructure programs which involved providing ‘at least’ half the saved water in exchange for the infrastructure grant. In some programs there has been the opportunity to sell the second half of the infrastructure saved water to the Commonwealth.5 There have also been regular instances where irrigators have sold the remaining saved water on the open market.

The project funding formula used to determine the quantum of funding available for efficiency measures is:

(50% of saved water (2.5x market value))

+ (50% of the saved water (1x market value))

= 1.75x market value of the saved water (maximum)

It is clear from consultation to date that the multiple (the 1.75x) is of more interest than how it is derived. All the water being exchanged for the grant is water savings from infrastructure, but it is clear that irrigators giving up all of the minimum water savings is also a concern for some stakeholders.

Often under OFIEP more than ½ the water ‘saved’ by the infrastructure is returned to the Commonwealth; sometimes all the water is returned to the Commonwealth. The current average is that 80% of the water saved is returned to the Commonwealth at an average market multiple now of ~2.05x the market value of the water. As a point of comparison, an irrigator would have to give up approximately 84% of the water savings under average OFIEP arrangements to receive the same funding as they would under COFFIE – giving up 100% of the minimum water savings.

The Department already monitors the water market and has a well established process for determining a market price for most entitlement types (where there is an active market). These would be made available on the Department’s website. The Department currently uses water value evaluations that are less than six months old in setting its water values when assessing value for money. Under a continuous process the Department would need to consider the entitlements market value at regular intervals in order to keep up with market movements. However reassessing market values too regularly would create uncertainty and may lead irrigators to put off decisions in the hope that values might rise.

It would also be apparent that an irrigator’s contribution to a project would not be part of the value equation. The requirement would be that the request for Australian Government funding fit within the funds available for a project recovering the volume of an entitlement type of water offered by the irrigator.

D. The Department will limit project management fees by the delivery partner


The Australian Government is proposing to cap the project management fee by the delivery partner at 8% of the project cost.

Rationale:

The cap under OFIEP is 8% of project funds6. Many delivery partners don’t ‘charge’ 8% under the competitive process currently available under OFIEP, but some do.

Under the proposed approach it will be quite transparent that the delivery partner’s fee is part of the water entitlement/project cost that the Department sets (see below). In OFIEP the delivery partner’s fee was part of the consideration of the competitiveness of each sub-project type bid. However it was not transparent to the irrigators that to be competitive they might receive a smaller sum of money if the delivery partner’s fee was higher. Under COFFIE the delivery partner’s fee is part of the value of the project the Department pays.

5 Senate Environment and Communications Legislative Committee report on the Water Amendment (Water for the Environment Special Account) Bill 2012 (Nov 2012) cl 3.526 OFIEP Round 5 guidelines p4


311312313314315

316

317

318319320

321322323324325326

327328329330331332333

334335336

337

338

339340

341

342343

344345346347348

567


E. Delivery partners will advertise their price and conditions on their website


The ‘tender’ will pre-qualify delivery partners but it won’t set a fee (other than a cap) for delivery partners to manage projects. What the Department is considering is requiring delivery partners to have a 1 page set of ‘terms and conditions’ on their web pages that would enable irrigators to compare the fees delivery partners are charging with the service they are offering.

Rationale:

There are two aims for this requirement:

Transparency - enabling irrigators to identify what services they will receive for what fee Competition - enabling irrigators to check whether they are getting value for money compared to

other delivery partners.

The funding for managing the project comes from the level of funding agreed for a project and the fee arrangements determined by the delivery partner.

EXAMPLE

If the water market value set by the Department for an entitlement is $1,500/ML, the delivery partner is charging 5% as the management fee, the project is saving 100ML, and the project being funded at a multiple of 1.75x, then the payment structure would be:

total funding of $262,500, with the irrigator receiving $249,375 and the delivery partner $13,125.

1.75 x 1500 x 100 = 262,500 (total funding)

0.05 x 262,500 = 13,125 (delivery partner fee)

262,500 – 13,125 = 249,375 (irrigator funding)

F. Delivery partners seek projects and provide the Department with a proposed project for approval


Delivery partners seek out projects, develop them with irrigators and, once ready, provide the Department with a project proposal for approval. Provided that the proposal meets the Department’s eligibility requirements it will have a good chance of approval; it will not be subject to a competitive process against other project proposals.

Rationale:

By this stage, the following process would have occurred:

1) The delivery partner has responded to the Department’s tender, been found suitable and a Deed has been signed by both parties. The Deed sets out the services to be performed by the delivery partner, the way in which it is to operate and the approach to payments.

2) The Department has advised delivery partners of the price it is willing to pay for particular entitlements and delivery partners have placed on the web their fees and the service they are offering irrigators.

The delivery partner is now in a position to develop up projects with irrigators to put to the Department. The key points here are that the Department wants project proposals that:

1) meet the Department’s eligibility requirements


349

350

351352353354

355

356

357358359

360361

362

363364365

366

367

368

369

370

371

372373374375

376

377

378379380

381382383

384385

386


2) are developed enough that the Department is able to respond rapidly and with confidence3) has accurate and complete information on the technical due diligence and water entitlement.

The Department would not look to dictate how a delivery partner chooses which projects it puts forward and when. However what is important is to recognise that the efficiency measures funding is secured from 2015-16 to 2023-24, a period of nine years, so there is sufficient time for interested irrigators to be involved in the scheme without there being a need for competition between irrigators (so long as they are able to meet the eligibility critieria of the program).

As pointed out earlier delivery partners will need to undertake technical due diligence of the project, and given there will be a short period between the submission of the project proposal and the Department approving the project, the Department will need to be quick in undertaking its due diligence on the water entitlement proposed to be exchanged. Clearly, in seeking to rapidly assess and approve a project, it would be helpful if the information on the water entitlement to be exchanged is complete and accurate.

Once the project is approved the Department will provide the delivery partner with a ‘Project Order’ (a short document that sets out the specifics of the project being approved) that sits under the Deed.

The next step is for the irrigator to undertake the conveyance of the water entitlement to the Commonwealth. At that time the Department will make a major payment to the delivery partner. The Department is considering just how much of the total funding should be available at that point, but given the value of the water entitlement the payment at that point will be at least a significant majority of the total funding.

EXAMPLE

If we take the example from earlier (entitlement value of $1,500/ML, 5% delivery partner fee, water saving of 100ML), then the value of the entitlements being provided to the Commonwealth in exchange for the funding equal to 57% of the total value of the project. If the value of the delivery partner’s fee (which is usually paid very early in the process) is taken into account then the total early payment is $155,625 or 60% of the total project value.

Given the high early payment (made largely in exchange for a real asset) the Department considers that a maximum of three payments, preferably less than three, should accompany each Works and Transfer Agreement. We are interested in views on the best options for this.

EXAMPLE

Again using the earlier example, the project could have the following payments:

- first payment – a payment to the delivery partner fee ($13,125) and a payment of the value of the water entitlement ($142,500) – total $155,625

- second payment - at a progress point in delivering the infrastructure ($106,875).

A single payment approach would combine all three payments to an irrigator at conveyance. If this last course was adopted then there would need to be significant late reporting consequences to give the Department confidence that while it had made its payment to the delivery partner the delivery partner was only making payments to the irrigator in line with infrastructure progress (remembering that the program will undoubtedly be audited by the Australian National Audit Office). The Department has proposed the following approach which links regular reports from the delivery partner with payment of half of the delivery partners management fees.

This option would be for delivery partners to receive management fee funding as they report, even if the project payment is made in a single lump sum. For example, a delivery partner could receive 50% of the management fee up-front, 6% on delivery of every six monthly report (say on 1 September and 1 March – where all projects are reported on in a single report), and 14% with the completion report. If a project was


387388

389390391392393

394395396397398

399400

401402403404

405

406407408409410

411412413

414

415

416417

418

419420421422423424425

426427428429


completed in less than 3 years then the outstanding reporting-based fees would be paid with the fee for the completion report.

G. Delivery partners will undertake a technical assessment of irrigator proposals


There are two components to the delivery partner’s role in delivering a project that delivers water savings to an irrigator. The first is working with an irrigator to enable them to come to a well informed decision about what sort of project they wish to undertake in terms of scale, irrigation method and other relevant factors. The second is for a person with relevant expertise but who wasn’t involved in coming up with the proposed project to agree that the project is practical and applicable to the property in question and will achieve the water savings being stated.

Unlike under the current OFIE program, the Department will not undertake a technical assessment of the project proposal in the COFFIE program, other than in exceptional circumstances. As such, the onus is on the delivery partner to ensure that any finalised proposals they submit to the Department are technically sound.

Rationale:

Under OFIEP delivery partners are required to ensure that:

each farm where a project is to be conducted has a technically valid farm irrigation plan in place7 the proposal is technically feasible and has been reviewed by a competent irrigation professional the proposal is suitable for the farm site, crop type and soil type the proposal is reasonably priced for the type and scale of the infrastructure the water savings are within the expected range for the proposed infrastructure8.

The Department relies on a ‘program’ developed by SKM in its assessment under OFIEP for the technical feasibility, suitability and water savings of proposals. The Department undertakes this work to:

1) ensure that the project being proposed by the delivery partner and the irrigators is suitable and in the best interests of the irrigator, and

2) ensure that the proposal being funded by the Department will genuinely recover at least the amount of water being offered and to protect the Department’s reputation.

The Department is proposing to not undertake this assessment of proposals (except in the most unusual of circumstances) but rather to require delivery partners to make a declaration by a qualified individual that the proposed project is technically feasible.

There are a number of methods that could be relied on as a basis for the judgement. For example, relying (in the case of standard proposals) on State government-developed irrigator water requirements. This approach would require the Department, as part of its due diligence on a delivery partner, to agree the state government standards proposed to be used by the delivery partner and for the ‘independent’ certifier to ascertain that the proposal was following those state government-developed requirements, and that it was appropriate to rely on those requirements for the project being proposed.

The SoR requires delivery partners to have access to a person with a particular qualification. This qualification requires the person to have completed a number of subjects that would equip them well in undertaking the task required. However it is not clear that there are many people with the qualification and whether there are other qualifications that, while not nationally recognised, would cover the same subjects and hence be a reasonable substitute.

H. The delivery partner manages the project

7 OFIEP Round 5 guidelines p78 OFIEP Round 5 guidelines pp11-12


430431

432

433

434435436437438439

440441442

443

444

445446447448449

450451

452453454455

456457458

459460461462463464

465466467468469

470

89



The delivery partner contracts with the irrigator, manages the payments associated with the undertaking of works and the exchange of water, and reports on progress and finalisation of the project.

Rationale:

We anticipate the contract held between the delivery partner and the irrigator may be similar to those currently used under OFIEP.

Whilst managing a single contract and its reporting requirements with an operator is reasonably simple, it is expected that major delivery partners will have many – possibly hundreds – of contracts with irrigators. If the system is not designed correctly, each of these contracts would have individual approval dates, payment dates from the Department and reporting dates. This would be burdensome on both delivery partners and the Department and would largely undo the benefits of moving to a new process.

There are two ways we can see of addressing the issue:

1) disconnecting payments between the Department and reporting, or2) aligning all the orders and contracts.

Disconnection would enable the single payment approach discussed above - the Department would make a single payment to the delivery partner at a particular early point in the process and then reporting could occur at regular agreed intervals – say six monthly on all the projects in one single report.

Alignment would involve having all order/contracts/reports have a fixed date no matter when they came in, or when they were approved, or when the water entitlement was transferred to the Commonwealth.

The SoR generally adopt the first of these options but there may be other options.

I. Department to evaluate project proposals on an on-going basis

What is being proposed?

The Department will evaluate the proposals as they come from delivery partners and then approve the projects as appropriate. The current design of the COFFIE program is not to have ‘rounds’ of proposals (such as the multiple rounds under OFIEP), but to evaluate each project as a delivery partner and irrigator develop it. The closest approximation to the current process is that a delivery partner will work one-on-one with an irrigator on what would be considered a ‘stage two’ application under OFIEP, submit that application independently of the delivery partner working with other irrigators, and then the Department will review that application independently of other applications.

We expect that over the eight year life of the program (2016-17 to 2023-24) three separate deed processes will be undertaken (probably of 2 – 3 – 3 years) to enable delivery partners to be engaged during the life of the programs in different areas and to allow organisations to join the program at regular intervals. Delivery partners that wish to continue once being engaged may be extended through the Deeds ‘Option to extend Deed’ process.

Rationale:

While OFIEP is generally viewed positively there are a few criticisms of its delivery which the Department would like to address (but not in a way that creates another problem). Two of the recurring themes of concern are:

1) the time between the calling of stage one applications and the signing of funding agreements with delivery partners and then between delivery partners and irrigators; and


471

472473

474

475476

477478479480481

482

483484

485486487

488489

490

491

492

493494495496497498499

500501502503504

505

506507508

509510


2) the reporting requirements for ‘sub-project types’, which can see a delay in payment to a delivery partner where a single sub-project has not made progress. This may then delay payments from a delivery partner to an irrigator for work done on their farm.

It is preferable that we can provide greater ‘confidence’ that a proposal is likely to meet the Department’s eligibility requirements before it is submitted. The program is designed so the Department can provide ‘yes/no’ answers at this stage wherever possible to enable a quick response to the proposal. This approach involves trusting and ensuring delivery partners put forward appropriate proposals. It also means that the Department will have more time to maintain relationships with delivery partners, review and analyse reports and undertake compliance and evaluation as it won’t be assessing projects that should already really have been assessed by delivery partners.

J. The irrigator’s role in considering the sort of project they want and the sort of delivery partner they need


The requirement is for a delivery partner to facilitate the irrigator reaching a well informed decision.

Rationale:

Our focus in delivering this program must be that the irrigator receives the best project for them, which delivers the water savings and provides for on-going business efficiencies. The Department’s approach above – irrigators only go through the process once in developing the detailed plan (rather than coming up with a competitive bid and then months later coming up with a plan as with other programs) – may assist in their engagement in delivering the best project they can and in reducing the number of drop outs.

K. The irrigator’s role in ensuring they meet all of the eligibility of the program


The irrigator should take care in ensuring that the owner or legal representative of the entitlement holder approves the project application. As with the current OFIEP the irrigator will need to consider what project is in their interests and document the proposal. The irrigator will also need to consider whether they are able to remove any encumberance on their water entitlement to allow its transfer.

Rationale:

Eligibility requirements will be available in the SoR and the Deed and its schedules and should also be communicated by delivery partners. The cost of not meeting the requirements is immediate. For example, if the eligible surface water entitlement is not legally owned and registered to be used by the irrigator when the project is submitted for approval, the application will be rejected. The responsibility for the due diligence on entitlements is with irrigators and delivery partners to ensure issues of ownership are dealt with.

Irrigators are to work with the delivery partner to provide the Department with a proposed project. For example:

preparing a technically valid farm irrigation plan providing information relating to technical assessment requirements determining the potential suppliers and costings for each project providing all relevant business/company details including name/s, address/es, ABN/ACN, etc providing evidence of ownership of a current, unencumbered eligible surface water entitlement.

L. The irrigator works with the Department to transfer the water entitlement to the Commonwealth



511512513

514515516517518519520

521522

523

524

525

526527528529530

531

532

533534535536

537

538539540541542

543544

545546547548549

550

551


The irrigator works with the Department to transfer the water entitlement to the Commonwealth.

Rationale:

The Department is aiming for a short turn around on the decision on the project. In part this will depend on the application having the correct entitlement details and having the correct people sign the application form – the ‘correct people’ being those who are able to agree to the transfer of water to the Commonwealth.

M. The irrigator works with the delivery partner to undertake the works as approved


The irrigator works with the delivery partner to undertake the works as approved.

Rationale:

This step is principally dealt with between the delivery partner and the irrigator, but the Department has a large interest in it being completed on time and on budget to bring the maximum benefit to the irrigator, and for the completion of the project to be promptly reported by the irrigator to the delivery partner.

The Department has some requirements that it places on delivery partners to pass on to irrigators, for example project reporting and workplace health and safety requirements. We are aware that this is quite likely the hardest part of the process, has the most points of tension, and the Department will work with delivery partners to ensure its requirements are practical for delivery partners to implement.


552

553

554555556

557

558

559

560

561562563

564565566567

Draft

Attachment

Commonwealth On-Farm Further Irrigation Efficiency (COFFIE) Program

Draft Statement of Requirements for Delivery PartnersNew South Wales pilot (Lachlan Valley)

_____________________________________________________Draft as of 29 October 2015____________________________________________

568569

570

571


Commonwealth On-Farm Further Irrigation Efficiency Program

Draft Statement of Requirements for Delivery Partners

ContentsChapter One – Overview of the COFFIE program.....................................................................3

1.1 Introduction to the COFFIE program...........................................................................................3

1.2 Objectives of the COFFIE program...............................................................................................3

1.2.1 Strategic governmental objectives...........................................................................................3

1.2.2 COFFIE program objectives......................................................................................................4

1.3 Key components of the COFFIE program.....................................................................................4

1.3.1 Program agreements and relationships...................................................................................4

1.3.2 Key steps..................................................................................................................................5

1.3.3 Water savings..........................................................................................................................6

1.3.4 Location...................................................................................................................................6

1.3.5 Delivery partner capabilities....................................................................................................6

1.3.6 Funding....................................................................................................................................7

1.3.7 Timing......................................................................................................................................7

Chapter Two – Statement of Requirements: The Commonwealth On-Farm Further Irrigation Efficiency Program...................................................................................................................8

2.1 Introduction.................................................................................................................................8

2.2 Delivery partner eligibility...........................................................................................................8

2.2.1 Consortium members...............................................................................................................9

2.3 Roles and responsibilities of delivery partners............................................................................9

2.3.1 Delivery partner response to approach to market (ATM)......................................................10

2.3.2 Governance............................................................................................................................10

2.3.3 Identifying eligible irrigators..................................................................................................10

2.3.4 Submitting a project proposal for approval...........................................................................11

2.3.5 Contracting irrigators as project proponents.........................................................................11

2.3.6 Project implementation.........................................................................................................11

1

Draft as of 29 October 2015

572

573

574

575

576

577

578

579

580

581

582

583

584

585

586

587

588

589

590

591592

593

594

595

596

597

598

599

600

601

602


2.3.7 Monitoring and compliance...................................................................................................12

2.3.8 Reporting...............................................................................................................................12

2.3.9 Project finalisation and evaluation........................................................................................12

2.3.10 Mandating.............................................................................................................................12

2.4 What is not the role or responsibility of a delivery partner.......................................................13

2.5 Irrigator eligibility......................................................................................................................13

2.6 Irrigator/proponent roles and responsibilities...........................................................................14

2.7 Irrigation efficiency projects......................................................................................................15

2.7.1 Activities and items eligible for funding.................................................................................15

2.7.2 Activities NOT eligible for funding..........................................................................................15

2.7.3 Number of projects................................................................................................................16

2.7.4 Project assessment................................................................................................................16

2.7.5 Independent certified irrigation professionals.......................................................................17

2.7.6 Project commencement.........................................................................................................17

2.7.7 Withdrawal of project proponents.........................................................................................17

2.8 Monitoring and managing projects...........................................................................................18

2.8.1 Risk Management..................................................................................................................18

2.8.2 Work health and safety..........................................................................................................18

2.8.3 Insurance...............................................................................................................................19

2.8.4 Information Technology.........................................................................................................19

2.9 Payments to delivery partners...................................................................................................20

2.9.1 Service Fees............................................................................................................................20

2.9.2 Costs......................................................................................................................................20

2.10 Performance Framework...........................................................................................................21

2.10.1 Measurement of Performance, Service Delivery and Compliance..........................................21

2.10.2 Key Performance Indicators (KPIs).........................................................................................21

2.10.3 Reporting and data management..........................................................................................22

GLOSSARY OF TERMS.............................................................................................................23

2


603

604

605

606

607

608

609

610

611

612

613

614

615

616

617

618

619

620

621

622

623

624

625

626

627

628

629

630

631

632


Chapter One – Overview of the COFFIE program1.1 Introduction to the COFFIE program

The Department is working together with Murray-Darling Basin States to deliver on the commitments of the Murray-Darling Basin Plan (Basin Plan) to restore the Basin’s rivers and wetlands to health while supporting strong regional communities and sustainable food production.

The Basin Plan sets long-term average sustainable diversion limits (SDLs) that reflect an environmentally sustainable level of water use (or 'take') and requires the recovery of 2 750 GL of water for the environment. To optimise the outcomes achieved by the Basin Plan, state and Commonwealth governments included an SDL adjustment mechanism (SDLAM), to make sure all water is used efficiently, and to its full effect. For example, if further investment can make water delivery systems for irrigation even more efficient (actions known as efficiency measures) more water could be recovered for the environment.

As part of SDLAM, the Australian Government is making $1,575 million available through the Water for the Environment Special Account (the Special Account) between 2014 and 2024 to fund infrastructure projects. These ‘efficiency measure’ projects improve water delivery systems and in doing so return additional water for the environment — meaning a healthier river environment without adverse effects on Basin communities.

The programs funded by the Special Account will be in addition to the Australian Government’s current programs that are funding irrigation infrastructure modernisation. The current programs, such as the ‘On-Farm Irrigation Efficiency Program’ (OFIEP), are similar except that the water savings that will go towards the recovery of 2 750 GL of environmental water. Those programs are in their later stages and due for completion by 2019.

The Commonwealth On-Farm Further Irrigation Efficiency program (COFFIE program) is the first of a series of irrigation infrastructure programs funded by the Special Account and will continue until 2024. It will assist irrigators to modernise their on-farm irrigation infrastructure while returning water savings to the environment.

The Basin Plan identified that on-farm irrigation efficiency was a key, but not the only, means of implementing the efficiency measures component of the SDL adjustment mechanism. Discussions with State governments and industry have highlighted that, in their views, there is likely to be on-going demand for on-farm irrigation efficiency and that there is likely to be some demand for other programs.

During the period where both COFFIE and existing programs operate, COFFIE will operate to complement existing programs and will be limited to areas or ways which are not covered by existing programs. For example, in areas where the SDL has been met, in areas not currently serviced by existing programs or with eligibility requirements that enable participation by irrigators not eligible under current programs. Once current programs are finalised, the eligibility requirements for the COFFIE program will expand to allow broader participation.

1.2 Objectives of the COFFIE program

The design of the COFFIE program has been informed by a number of objectives, as outlined below.

1.2.1 Strategic governmental objectives

The following strategic governmental objectives will be delivered through the COFFIE program:

Strategic Objective 1: Water Reform

3


633

634

635636637

638639640641642643644

645646647648649

650651652653654

655656657658

659660661662

663664665666667668

669

670

671

672

673


Help communities, irrigators and businesses, use water resources sustainably and efficiently by progressing national water reforms.

Improve the health of rivers and freshwater ecosystems and water use efficiency through implementing water reforms, and ensuring enhanced sustainability, efficiency and productivity in the management and use of water resources.

Strategic Objective 2: Commonwealth Environmental Water

Protect and restore environmental assets in the Murray-Darling Basin through the management and use of Commonwealth environmental water.

1.2.2 COFFIE program objectives

The following program-specific objectives will also be achieved:

Contribute, through the efficiency measures element of the SDLAM, to enhancing the environmental outcomes of the Basin Plan by protecting and restoring the environmental assets of the Murray-Darling Basin and by protecting biodiversity dependent on Basin water resources so as to give effect to relevant international agreements.

Meet the requirements of the Intergovernmental Agreement on Implementing Water Reform in the Murray-Darling Basin and the Water Act 2007.

Encourage an increase in water use efficiency. Projects will allow irrigators to manage their water allocations more efficiently enabling at least the same production with less water and so achieve social and economic benefits, thereby assisting dependent irrigation communities to adapt to a future of reduced water availability.

1.3 Key components of the COFFIE program

1.3.1 Program agreements and relationships

The COFFIE program will be delivered through:

the procurement of delivery partners that meet the requirements outlined in the SoR; and

the selection and delivery of on-farm irrigation ef ficiency projects.

Organisations will need to undergo a tender process to become a delivery partner for the COFFIE program and demonstrate they meet the eligibility requirements set out in this SoR (see part 2.2 for full details).

Once selected delivery partners are responsible for a range of both ongoing and project services. This includes working with irrigators to develop project proposals, and then managing approved projects (see part 2.3.6 for full details). Neither the delivery partner tender process nor the project approval process are competitive; they will be assessed on whether they meet the relevant eligibility requirements.

It is anticipated that a delivery partner will work with multiple irrigators on water saving irrigation infrastructure projects. The key relationships and agreements between parties involved are represented in the diagram below:

4


674675

676677678

679

680681

682

683

684685686687

688689

690691692693

694

695

696

697

698

699700701

702703704705706

707708709

Commonwealth Delivery Partner Irrigator(‘Proponent’ upon entering Works & Transfer Agreement)

Deed of Standing Offer

(Deed)(Project Order creates Project

Agreement)

Works & Transfer

Agreement

Water Transfer Deed

Multiple irrigators contracted to Delivery PartnerMultiple Delivery Partners on panel


1.3.2 Key steps

The key steps in the COFFIE program are:

Approach to market is announced

The delivery partners for the COFFIE program will be selected through open tender. An approach to market will be announced. The Deed of Standing Offer (Deed) is released and the requirements of the service to be provided confirmed.

Delivery partners are selected

Tenders are received, assessed and delivery partners are selected and categorised.

The Department will contract with delivery partners through Deeds.

Water value determined

A water entitlement value or project cost per megalitre is set. Market value for most entitlement types will be determined by the Department every six months using its existing process (where there is an active water market) and placed on its website.

Developing irrigation proposals

The onus is on delivery partners to locate potential irrigation infrastructure projects and work with irrigators to provide final project proposals to the Department that meet all eligibility requirements. Irrigators may also approach delivery partners with a proposal.

Delivery partners will assess the project proposals to ensure they meet program eligibility requirements before passing them to the Department for approval (irrigators do not submit proposals directly to the Department). That includes getting independent expert advice that the proposal is technically feasible, checking the application is signed by the holder(s) of the entitlement(s) being offered, that the entitlement is correctly identified on the application form.

Determination by the Department

The Department conducts a final check and approves the project. Should a project proposal be approved, the Department will issue a ’project order’ to the delivery partner to require them to provide the services to undertake the project.

The delivery partner will then negotiate a Works and Transfer Agreement with the irrigator. The Works and Transfer Agreement must be signed and dated by both parties, and relevant approvals and insurance must be obtained before the water entitlements can be transferred and the works commenced (including ordering project materials).

Transfer of water entitlement

The irrigator transfers the agreed water entitlement to the Commonwealth within six months of the Department approving the project (through the project order), facilitated by the delivery partner, by following these steps:

5


710711

712


o The irrigator signs a Water Transfer Deed with the Commonwealth to provide them with the water entitlement.

o The irrigator ensures that the water entitlement is free of any encumbrances.

o The irrigator transfers the water and the Department provides the funding to the delivery partner.

Project implementation

Once the water entitlement is transferred, the irrigator (or their sub-contractor if agreed in the Works and Transfer Agreement), undertake the works. Through this process the delivery partner will provide the irrigator with funding as agreed in the Works and Transfer Agreement enabling the project to be implemented as per that Agreement.

The delivery partner will provide progress reports to the Department. The project is finalised and evaluated.

1.3.3 Water savings

The COFFIE program requires all technically feasible minimum water savings proposed in a project to be transferred to the Commonwealth in the form of unencumbered entitlements. Additional water savings will be retained by the irrigator (also known as the proponent once their project is approved and the Works and Transfer Agreement has been signed). Transferred water savings will be managed by the Commonwealth Environmental Water Holder (CEWH) to protect and restore environmental assets for environmental purposes.

The method for identifying water savings will form part of the eligibility requirements for funding.

1.3.4 Location

The COFFIE program will operate across the Murray-Darling Basin (though pilots will be confined to certain catchments or project types). However care will be taken to avoid competing with existing bridging the gap programs, many of which will be completed by 2019. While both COFFIE and existing programs operate, COFFIE will operate to complement existing programs and will be undertaken in areas or in ways that are not covered by existing programs. For example, by being operated in areas where the SDL has been met, in areas not currently serviced by existing programs, or with irrigators who are not eligible under these programs.

Hence delivery partners may be initially restricted in the geographic spread of the projects they can deliver or the types or size of projects they can deliver within the southern Murray-Darling Basin in order to avoid any overlap with these existing programs.

Once current programs are finalised the COFFIE program will expand to allow broader participation until it finishes in 2024.As the COFFIE program is seeking to provide maximum opportunities for irrigator participation, the Department is seeking to engage delivery partners with strong links to irrigators in the Basin. Delivery partners may deliver the COFFIE program in one or more states/territories or one or more catchments or areas according to the geographic limitations of the SoR.

1.3.5 Delivery partner capabilities

When applying to enter into a Deed with the Department, a delivery partner will be assessed against the eligibility requirements contained in this SoR and their capabilities as demonstrated in their response to the request for tender. These capabilities will reflect their ability to deal with project loads, geographically diverse and/or complex projects. The eligibility requirements cover matters such as: value for money; the proper use of Commonwealth resources; due accountability and transparency;

6


713

714715716717718719

720

721

722723724725726727728

729730731

732733734735736737

738

739740741742743


adequate management of risk; ability to source appropriate expertise; and approved procurement methods. The requirements are covered in full in part 2.2.

When selecting a delivery partner, the Department is looking for well-governed and financially viable organisations with project management experience that can demonstrate links to eligible irrigators in the Basin.

The Department accepts that delivery partners may demonstrate differing but equal capabilities and/or a willingness to limit the size or complexity of their project load. These issues will form part of the negotiations around the Deeds of Standing Offer and the resultant Project Orders.

Delivery partners may develop, assess and submit as many projects for approval as they are capable of managing, and as agreed, with the Department. The Department will continue to ensure that each delivery partner is capable of continuing to provide the agreed services to a high standard through a robust performance framework.This may involve ongoing discussions between the Department and the delivery partner regarding the number or type of projects the delivery partner brings forward for approval.

1.3.6 Funding

Funding will be available for irrigators, through a delivery partner, to improve their farm-based irrigation infrastructure. In return, irrigators will transfer the water savings achieved by these projects to the Commonwealth.

Total funding for projects is prescribed by the funding available to the Special Account. The pilots begin in 2015/16 and funding will not exceed $35 million (GST exclusive). The Special Account funding available for all efficiency measures projects through until 2024 is $1,575 million.

For each project, the funding available will be 1.75 times the prevailing average market price of the water access entitlements to be recovered.

This funding will include project management fees charged by the delivery partner – limited to 8% of the total project cost – as well as the payment for the irrigator. Market value for most entitlement types will be determined by the Department every six months using its existing process (where there is an active water market) and placed on its website.

Payment of funding for delivery partners and irrigators will be according to the payment and milestone schedules agreed to in the Deed (for the delivery partner) and the Works and Transfer Agreement (for the irrigator / project proponent).

1.3.7 Timing

Once a project is approved by the Department and a Project Order issued, the water entitlements need to be transferred within six months. The project is considered to have commenced when these entitlements have been transferred. Projects would then need to be finalised within three years of commencement. They also need to start and finish during the period of the Deed.

7


744745

746747748

749750751

752753754755756757

758

759760761

762763764

765766

767768769770

771772773

774

775776777778


Chapter Two – Statement of Requirements: The Commonwealth On-Farm Further Irrigation Efficiency Program 2.1 Introduction

This chapter describes the eligibility requirements for organisations wishing to become delivery partners, and the on-going and project services to be provided by successful delivery partners.

Successful tendering organisations will become delivery partners. The first pilot will commence delivery of projects from late 2015. The aim is for the broader COFFIE program to go to an open tender from mid 2016. The Deeds with delivery partners will continue for up to three years, with the possibility of extension, and then another tender round for delivery partners will be run.

2.2 Delivery partner eligibility

The COFFIE program is available to organisations and businesses wishing to become a delivery partner and are able to meet the eligibility requirements detailed in the Deed developed by the Australian Government and outlined below.

Delivery partners will have a critical role in managing projects designed to improve on-farm irrigation efficiency and the facilitation of the transfer of the resulting water savings to the Australian Government.

Delivery partner applicants under the COFFIE program must meet the following eligibility requirements:

An entity with direct and demonstrable links to eligible irrigators in the Murray-Darling Basin such as, but not limited to:

o an Irrigation Infrastructure Operator

o a Catchment Management Authority

o a commodity or agricultural industry group

o a regional irrigation body

o an individual irrigator capable of meeting all delivery partner eligibility requirements

o local government or State government bodies capable of meeting all delivery partner eligibility requirements.

Able to demonstrate it has the authority under organisational governance arrangements to be the lead organisation responsible for the delivery of projects proposed by irrigators and be able to enter into contractual arrangements with irrigators/project proponents to implement projects.

Financially viable as demonstrated through the provision of financial statements and related documents. Able to demonstrate on-going financial viability as an entity in the absence of receiving funding under the COFFIE program.

A legal entity capable of entering into a Deed of Standing Offer with the Department and that have the appropriate legal authority to enter into contractual arrangements with irrigators/project proponents to implement irrigation efficiency projects. Note: unincorporated associations are not eligible.

Able to establish a separate interest bearing bank account for receiving payments relating to the completion of projects.

8


779780

781

782783

784785786787

788

789790791

792793794

795

796797

798

799

800

801

802

803804

805806807808

809810811

812813814815

816817


Registered with the Australian Taxation Office for Goods and Services Tax purposes with a valid Australian Business Number (ABN).

Able to meet the requirements on mandating the use of an irrigation equipment supplier’s products and/or services. Please see later part on mandating.

Able to meet legal and policy requirements that may apply to Commonwealth contracts depending on the circumstances of the applicant and proposed projects. For example, requirements around recordkeeping and auditing, conflict of interest, privacy, workplace gender equality, indigenous opportunities, work health and safety and workplace relations in the building and construction industry. See the Deed for full details.

Able to demonstrate how the projects they develop and manage make economic and social contributions to the region (for example by using local subcontractors).

Able to demonstrate how the projects they develop and manage will significantly minimise any adverse environmental impacts.

Able to source the expertise of an independent certified irrigation professional to assess the technical feasibility of the project proposal.

Able to source irrigation experts to provide technical assistance to irrigators as desired during the development of draft project proposals.

Able to demonstrate experience in project management.

Organisational governance arrangements that enable the organisation to undertake the required delivery partner services.

Able to facilitate transfer of water entitlements

Able to assume risks for the project and manage them appropriately.

2.2.1 Consortium members

Applicants may choose to invite other organisations and entities to become part of a consortium to enhance their capacity to identify, develop and manage projects more effectively. Consortium members may achieve this by:

providing links to a wider or different range of irrigators; and/or providing expertise and capacity the delivery partner requires.

Various types of organisations are able to join the consortium but any conflicts of interest must be declared and a management program must be published and maintained to ensure irrigators are free to choose products and services. Please see mandating part below.

While other bodies may be involved in, or make a contribution to an overall delivery partner project as a member of a consortium, the Commonwealth will only engage with a single legal entity under each Deed of Standing Offer (being an eligible delivery partner as detailed in the ATM process). This means that despite any collaborative or consortium-based arrangements for completing projects, each delivery partner will be responsible to the Commonwealth for delivering all projects for which it has been issued a Project Order by the Commonwealth.

2.3 Roles and responsibilities of delivery partners

Delivery partners will be required to undertake a range of roles and responsibilities at different stages of the process. The services to be provided fall into two categories – on-ongoing services and project services. On-going services include identifying eligible irrigators and submitting a project proposal for approval. Project services cover the implementation of a project following the issue of a Project Order by the Department.

9


818819

820821

822823824825826

827828

829830

831832

833834

835

836837

838

839

840

841842843

844845

846847848

849850851852853854

855

856857858859860


2.3.1 Delivery partner response to approach to market (ATM)

The delivery partner must prepare a tender which meets the eligibility requirements outlined in part 2.2.

During this phase all costs of preparing the response to the ATM will be borne by the tendering organisation. Once selected as a delivery partner certain costs for further steps in the process can be claimed against agreed administrative costs/service fees.

2.3.2 Governance

Establish and maintain governance structures commensurate with the scope of projects being managed. This includes structures and strategies to deal with actual or potential conflicts of interest.

Ensure irrigators, consortium members and proponents are aware of the governance standards set by the delivery partner and as advised on their website.

2.3.3 Identifying eligible irrigators

Delivery partners will be required to develop and implement a strategy to attract sufficient and suitable irrigators. The Australian Government encourages targeted and innovative strategies and processes that maximise opportunities to engage a diverse range of potential irrigators.

Promote the COFFIE program and seek project proposals from interested eligible irrigators.

Establish a website that will be linked to the Department’s website and that will communicate their services and role in the COFFIE program, all their administration costs, management structure and governance. Draft documents (such as Works and Transfer Agreements) will be made available to irrigators/proponents upon request via the website so a full assessment of the suitability of a particular delivery partner can be made. Websites should be regularly updated to reflect potential changing conditions under which projects will be operating.

Discuss with irrigators the options available under the COFFIE program and the services that will be provided.

Development of a transparent selection process, based on the Deed, to consider the suitability of an irrigator’s draft project proposal/s.

Identify projects and assist irrigators to develop these project proposals using the selection process and in line with the objectives and eligibility requirements of the COFFIE program. This must include a process to enable a proponent to reach a well informed decision (defined term) on the type and scale of irrigation upgrade they wish to undertake, including by providing access to an irrigation expert as desired.

Conduct a technical assessment by a certified irrigation professional of the project. This assessment must be completed to a high and thorough standard by competent and certified irrigation professionals, as required by the Department in the Deed.

Complete an overall project assessment before submitting the final project proposal to the Department for consideration for approval. This assessment will include the independent technical assessment but will also cover:

o information regarding the volume, ownership and other details of eligible surface water entitlements to be transferred to the Commonwealth (taking all reasonable measures to ensure that eligible surface water entitlements offered to the Commonwealth are unencumbered and are available to be transferred within the specified timeframe after a project is approved);

10


861

862

863864865

866

867868869870871

872

873874875

876

877878879880881882

883884

885886

887888889890891

892893894

895896897

898899900901902


o the costing for each project, focussing on value for money through meeting the cost-related eligibility critieria; and

o collecting all relevant business/company details including name/s, address/es, ABN/ACN, etc of irrigators.

All publicity of the COFFIE program and any projects need to give appropriate recognition to the support provided by the Australian Government. This includes invitations to participate in formal project openings or launch ceremonies and publicity events.

2.3.4 Submitting a project proposal for approval

Once an irrigator’s project proposal has been independently assessed and confirmed by the delivery partner as meeting the eligibility requirements of the COFFIE program, the delivery partner will be responsible for submitting the final project proposal to the Department for a final check and approval.

Assessment by the delivery partner does not guarantee that a project will be selected by the Department for completion under the COFFIE program. Incomplete, sub-standard or ineligible submissions, or those not meeting the eligibility requirements, including those on cost, will be rejected by the Department.

2.3.5 Contracting irrigators as project proponents

Once the project has been approved by the Department, the delivery partner will:

Advise the irrigator of the suitability of their project for participation in the COFFIE program and negotiate a Works and Transfer Agreement that includes:

o the expected start and end dates of the project;

o a description of the works to be undertaken;

o a milestone schedule for the works and the payments attached to those milestones;

o reference to whether any monetary or in-kind support will be contributed by the proponent;

o rights, roles and responsibilities of the delivery partner and the irrigator;

o a requirement for the irrigator to transfer the approved surface water entitlement to the Commonwealth (via a separate agreement approved by the Commonwealth); and

o other provisions and clauses as required by the schedules to the Deed.

The Works and Transfer Agreement must be in a form approved by the Department and be signed and dated by both the irrigator and the delivery partner before each irrigator can commence infrastructure works. An irrigator is considered part of the COFFIE program and becomes a proponent when the Works and Transfer Agreement is signed. However, works should not start and will not be deemed to have ‘commenced’ until the water transfer to the Commonwealth is settled. The settlement must occur within six (6) months of the approval of the project by the Department for the approval to remain valid.

Prior to the commencement of works, ensure all relevant state, territory or Commonwealth legislation or regulation approvals have been obtained by the irrigator.

The contract can not include any confidentiality obligations applying to irrigators.

2.3.6 Project implementation

Facilitate the transfer of eligible surface water entitlements from the irrigators to the

11


903904

905906

907908909910911

912913914915916917918919

920

921

922923

924

925

926

927928

929

930931

932

933934935936937938939

940941

942

943

944


Commonwealth.

Act as the recipient and manager of funds provided by the Australian Government, including where the delivery partner is part of a consortium.

Institute project and financial management systems as set out in the Deed and the Project Order.

Implement a legally binding contract (i.e. a Works and Transfer Agreement) between the delivery partner and each irrigator receiving funds, including the relevant requirements as set out in the Project Order. The contract will also outline the acquittal of funds for each irrigator project.

Ensure that the overall program of activity as set out in the Project Order and the individual Works and Transfer Agreement is effectively undertaken within the agreed period and budget and consistent with the objectives of the COFFIE program.

Make payments for works in line with infrastructure progress and in compliance with the Deed, Project Order and individual Works and Transfer Agreements.

2.3.7 Monitoring and compliance

Monitor and evaluate the project as it progresses.

Ensure compliance with all relevant statutes, regulations, by-laws and requirements of any Commonwealth, state, territory or local authority including those arising under the work, health and safety laws in respect of occupational health and safety during the delivery of the project.

2.3.8 Reporting

Provide financial and progress reports on a project to the Department as required in the Deed and Project Order.

These reporting requirements include a six-monthly progress report covering all projects being managed by the delivery partner.

2.3.9 Project finalisation and evaluation

Close the project. This needs to be done within three years from commencement of the project.

Provide the Department with a final report on the project, reporting on the outcomes.

2.3.10 Mandating

There are two alternative approaches to mandating being put forward for consultation:

A) No delivery partner, members of the delivery partner’s consortium, or any other person or body

holding any authority as/with the delivery partner, such as a Board member of the delivery partner organisation, can mandate the use of particular products or services. While the delivery partner can explain options available for particular projects, irrigators must be free to choose all products and services throughout the period of their involvement with this program.

Delivery partners must ensure a competitive process is conducted (i.e. attempt to source at least three quotes) before an irrigator selects the products or services that the delivery partner or anyone working for or with the delivery partner, may supply or recommend as part of its business.

12


945

946947

948949

950951952953

954955956

957958

959

960

961962963

964

965966

967968

969

970

971

972

973

974975976977978979

980981982983


In circumstances where the irrigator chooses to purchase a delivery partner’s products, the irrigator must sign a declaration outlining why they purchased a supply from the delivery partner and record details of the supply (including recording details of other quotes sought and received).

A delivery partner cannot require or mandate that an irrigator make a payment for any purpose where the requirement for that payment has not been disclosed on the delivery partner’s website and at the first meeting between the delivery partner and the irrigator.

OR

B)

Delivery partners, members of the delivery partner’s consortium, or any other person or body holding any authority as/with the delivery partner, such as a board member of the delivery partner organisation, can only require irrigators to use particular products and/or services (including using a particular irrigation infrastructure, e.g. only use gravity or low pressure systems - flood irrigation or pipes and risers or other systems, or only use sub-surface drip or centre pivot ) if:

1) this requirement is made clear to all potential irrigators at the first meeting or communication between the delivery partner and the irrigator;

2) as part of the well informed decision part of the process; and3) prior to their entering into a formal arrangement with the delivery partner.

Proponents must be free to choose the products and services used in their project and must sign a declaration stating, at each of the above three stages, they were aware of the requirements of that delivery partner to use particular products and services in their project and any fees or charges for any service that would be performed by any member of the consortium, or any business associated with any member of the consortium, prior to, during or after the project.

The irrigator must be free to determine whether they wish to proceed with a particular delivery partner at each of the above three stages.

A delivery partner cannot require or mandate that an irrigator make a payment for any purpose where the requirement for that payment has not been disclosed on the delivery partner’s website and at the first meeting between the delivery partner and the irrigator.

2.4 What is not the role or responsibility of a delivery partner

The delivery partner may or may not (depending on the Works and Transfer Agreement) be responsible for selecting suppliers and services to design and deliver the irrigation efficiency project (see mandating at part 2.7.5)

Obtaining all relevant state, territory or Commonwealth legislation or regulation approvals in order to undertake the project. Although the delivery partner is responsible for ensuring approvals have been obtained, it is the irrigator’s responsibility to obtain the approvals.

Take on the water transfer responsibilities on behalf of an irrigator. It is the delivery partner’s role to facilitate this process and ensure the irrigator is actively enacting the transfer.

2.5 Irrigator eligibility

The COFFIE program is available to all irrigators in the Murray-Darling Basin, subject to the eligibility requirements for irrigators outlined under the Deed developed by the Department, and as outlined below. Delivery partners must ensure irrigators and their project proposal meet the following eligibility requirements:

13


984985986987

988989990

991

992

993994995996997998

999100010011002

10031004100510061007

10081009

101010111012

1013

10141015101610171018101910201021

1022

1023102410251026


Be the registered owner/s (a range of ownership structures are eligible) of an eligible surface water entitlement within an eligible catchment as defined by the Deed and can discharge any encumbrances that may be held over this entitlement at the time of the project’s submission for approval to the Department.

Put forward projects that each generate a set minimum water saving volume. The Department may set different minimums under some circumstances but in most circumstances the requirement will be to transfer a minimum of 10ML from any one eligible water surface entitlement. Irrigators will also be required to have a sufficient volume of water on each entitlement to enable the transfer being offered to the Australian Government. The Department may offer periods of lower minimum volumes for some eligible entitlements where the Department and the delivery partners have agreed a separate Deed that provides for the delivery partner to manage those projects for a higher fee. For example the Department and a delivery partner could agree a Deed for a certain volume of water from small block irrigators where the percentage of the project cost may be greater than 8 percent due to the low individual project value.

Be able to transfer all minimum feasible water savings as unencumbered water entitlements to the Commonwealth within six months of their project proposal being approved and prior to receiving project funding.

Only propose projects on properties that have a water metering system for the irrigation works that is compliant with the National Framework for Non-urban Water Metering or can demonstrate that the installation of such a meter is imminent. Only projects that require the installation of new or upgraded meter/s to meet the National Framework for Non-urban Water Metering as part of their infrastructure upgrade can include these costs in their proposed project cost.

Be able to provide evidence to show a connection (or imminent connection) to an irrigation supply system, and/or an approval and capacity to take water for irrigation purposes directly from a river.

Be able to complete the project within a maximum of 36 months of commencement.

Be able to provide access (including site visits and access to all relevant financial statements) to projects during the construction of the project and up to 24 months following the completion of the project.

Be able to comply with relevant Commonwealth, state, territory and local authority environmental, heritage, workplace health and safety, and planning laws, including the building code. This requirement is specified in the Deed and the Works and Transfer Agreement, and action may be taken to cancel the project or retrieve project funds where such laws have not been complied with.

2.6 Irrigator/proponent roles and responsibilities

The range of responsibilities of irrigators in preparing a project proposal and as proponents once their project proposal is approved is outlined in the Deed (and the Guide for Irrigators). They include:

Preparing a technically valid farm irrigation plan

Preparing an application

Providing information enabling a technical assessment of the proposal

Determining the potential suppliers and costing for the proposal

14


1027102810291030

10311032103310341035103610371038103910401041

104210431044

104510461047104810491050

105110521053

1054

105510561057

10581059106010611062

1063

10641065

1066

1067

1068

1069


Providing evidence of ownership of a current, eligible surface water entitlement with sufficient volume that can be made free of any encumbrances prior to receiving project funding, to enable a minimum of 10ML to be transferred to the Commonwealth should the proposal be successful.

Entering into a Works and Transfer Agreement with the delivery partner, which requires the irrigator/proponent to carry out the project as detailed in the project proposal. The proponent will be paid for these against milestones identified in the Agreement by the delivery partner.

Entering into a Water Transfer Deed with the Commonwealth to permanently transfer at least 10ML of unencumbered water entitlements to the Commonwealth

Undertaking the works to implement the project (or sub-contracting the task)

Providing information and access as required to enable the delivery partner to provide their project services (including reporting) and to enable auditing if undertaken.

2.7 Irrigation efficiency projects

The sections below provide some guide as to what is or is not eligible.

2.7.1 Activities and items eligible for funding

Activities and projects need to be primarily infrastructure-based and on-farm and assist an existing irrigated farm. If the majority of works are on-farm, upgrades for delivery systems to farms or other works outside the farm gate are possible. The project must also be able to achieve expected real water savings commensurate with the proposed project cost.

There are no specific exclusions of items that cannot be included as a project cost (though there are ineligible activities – see part 2.7.2). As a non-exhaustive guide, items/work forming part of budgeted project costs could include the following:

Improving irrigated area layout or design to improve on-farm irrigation efficiency (e.g. preparing an irrigation plan or decommissioning old irrigation infrastructure as part of enhancing the overall efficiency of the system).

Installing new or upgrading existing irrigation infrastructure or technology which will improve decision-making and so irrigation efficiency (e.g. automated water management systems and sensing equipment ).

Upgrading or installing water metering systems that are compliant with the National Framework for non-urban Water Metering

Other improvements that improve the operation of the farms irrigation and leads to water savings or socio-economic benefits (e.g. soil moisture holding capacity improvements).

Other equipment necessary for new or upgraded irrigation systems to function (e.g. computer equipment or pumping equipment)

Pre-construction activities including: building/environmental/cultural heritage approvals, engineering design and environmental impact statements (provided they do not commence prior to project approval).

Training, where this is important to the success of the project. However, training on how to use new irrigation infrastructure equipment should be provided by the supplier as part of the installation costs.

The cost of preparing a farm irrigation plan, which is required for submitting a project proposal.

2.7.2 Activities NOT eligible for funding

Activities that are not eligible for approval as a project under the COFFIE program or forming part of budgeted project costs include, but are not limited to, activities that acquire water savings generated by the following:

Upgrading existing or installing new irrigation systems for urban or industrial land uses.

15


107010711072

107310741075

10761077

1078

10791080

1081

1082

1083

1084108510861087

108810891090

1091109210931094109510961097109810991100110111021103110411051106110711081109

1110

111111121113

1114


Equipment that does not directly contribute to the efficiency of the project (e.g. laser grading machines, juicing sheds).

Projects only generating improved irrigation efficiency and savings from applying different management approaches (e.g. crop rotation or use of new plant types requiring less water).

Projects converting irrigated land to dryland agriculture. This does not include changes within farms (e.g. changing some irrigation areas to dryland and other areas from dryland to irrigation) where it is consistent with a farm irrigation plan.

Projects where the total water use is increased as a result of the project activity by the irrigator.

On-going labour and maintenance costs associated with operating new or existing infrastructure.

Irrigation infrastructure works that have been completed or have already commenced (i.e. funding will not be provided to cover infrastructure expenditure that has already been incurred or committed by a delivery partner or an irrigator).

Any metering system that is not compliant with the National Framework for non-urban Water Metering.

Projects where the irrigation footprint is expanded to the detriment of the environment.

Any activity (including designs and planning and approvals for irrigation) not relevant to the project.

Equipment that does not directly contribute to the efficiency of the project (e.g. laser grading machines, juicing sheds).

Projects involving increased access to groundwater and/or supplementary entitlements, except where it can be demonstrated that any replacement water is recycled/reused.

Outstanding financial commitments to the relevant water authority.

Research and development projects.

2.7.3 Number of projects

There is no limit to the total number of projects that can be brought forward under this program although there may be a limit to the number of projects brought forward by an individual delivery partner depending on their capacity. One of the eligibility requirements for delivery partners will be their capability to deliver projects of differing size, diversity and number. A delivery partner may develop, assess and submit for approval as many projects as they are capable of managing and as agreed with the Department.

There is no limit to the number of projects that can be brought forward by individual irrigators (through delivery partners).

Please note that projects will be assessed, submitted and approved individually and will each have their own Project Order (between the Department and the delivery partner) and Works and Transfer Agreement (between the delivery partner and the irrigator), including individual project milestone and payment schedules.

2.7.4 Project assessment

Delivery partners will be required to collaborate with irrigators to develop draft project proposals. Delivery partners are encouraged to assist irrigators with the development of a project proposal, to ensure it aligns with eligibility requirements specified in the Deed and to ensure the project’s viability.

16


11151116

11171118

111911201121

1122

11231124

112511261127

11281129

1130

11311132

11331134

11351136

1137

1138

1139

114011411142114311441145

11461147

1148114911501151

1152

115311541155


Once the draft project proposal has been developed and independently assessed by a certified irrigation professional, delivery partners will submit final project proposals to the Department for consideration for approval.

The Department will check final project proposals against eligibility requirements outlined in the Deed. The Department’s role will be to test that the delivery partner has undertaken the requirements of the Deed and either accept or reject the project proposal as submitted by the delivery partner on behalf of the irrigator.

As well as meeting the irrigator eligibility requirements covered in part 2.5 and the Deed, the project proposal should include:

A proposed milestone and payment schedule Details of the works and infrastructure (the majority of which are on-farm and will make water

savings while maintaining the production potential of the property)

A technically valid farm irrigation plan for the project The assessment of the technical feasibility of the project proposal and its water savings by an

independent certified irrigation profession

A signed ‘consent to search’form A signed consent form for the water entitlement transfer (if appropriate) Project costs which show that the total project cost, including delivery partner fees do not

exceed 1.75 times the Department’s published estimated market value of the water entitlements to be transferred to the Commonwealth

Strategies to eliminate or minimise any adverse environmental impacts from project activities.

Final project selection will be at the discretion of the Minister for Agriculture and Water Resources or their delegated representative.

Detailed information on the process for selecting projects will be provided in the Deed.

2.7.5 Independent certified irrigation professionals

A delivery partner must identify a certified irrigation professional who will assist the delivery partner with providing a technical assessment of the project, including that the proposal and its water savings are technically feasible and the engineering solutions are appropriate to the needs of the irrigation system and project site. This person must not be the person that worked with the irrigator on their project and must bring an independent view to the proposal. The minimum certification required is a Diploma of Irrigation Management (AHC51610) to ‘sign off’ on the technical feasibility of a project.

Eligibility requirements will encompass the technical feasibility, suitability and water savings of proposals. The assessment is key to ensuring that the project being proposed by the delivery partner and irrigator is suitable and in the best interests of the irrigator and ensure the project will genuinely recover at least the amount of water being offered.

2.7.6 Project commencement

Projects may commence once the Works and Transfer Agreement is signed between a delivery partner and an irrigator and the water entitlement transfer/s with the Commonwealth have been settled.

2.7.7 Withdrawal of project proponents

While it is acknowledged that a proponent may exit the COFFIE program the Department’s intent is to keep such withdrawals to a minimum. Withdrawals occurring prior to the transfer of the water

17


115611571158

1159116011611162

11631164

116511661167

116811691170

11711172117311741175

1176

11771178

1179

1180

118111821183118411851186

1187118811891190

11911192

11931194

1195

11961197


entitlement/s to the Commonwealth will be a matter for negotiation between the irrigator and the delivery partner.

Withdrawals occurring after the transfer of the water entitlement/s and before the commencement of project works or after the transfer of the water entitlement/s and after works have commenced will be subject to negotiation between the Department, the delivery partner and the project proponent. Delivery partners are expected to have Works and Transfer Agreements that minimise such withdrawals.

2.8 Monitoring and managing projects

2.8.1 Risk Management

To ensure that risks are identified and suitable measures are in place to reduce impacts, the delivery partner will be required to develop a risk management plan for delivering the suite of projects, including in relation to on-ground project management and administrative arrangements, and have this plan approved by the Department. In addition, a risk assessment (including work health and safety risk) must be completed by the delivery partner or the irrigator proponent for each project. The risk assessment must identify and provide management responses for identified risks that take into account the particularities of individual projects. Delivery partners must make the risk assessment/s available to the Department upon request. Projects must not commence prior to the completion of the risk assessment. Where new risks or increased risks become apparent during the project the risk assessment must be modified accordingly and provided to the delivery partner.

2.8.2 Work health and safety

Delivery partners must: Have a work health and safety management system that adheres to AS4801;

Ensure that work health and safety issues are a primary concern and are addressed in a program work health and safety management plan and site/project specific work health and safety plans (including activity safety analysis and other relevant documentation).

Ascertain and communicate to proponents, sub-contractors, suppliers and all those involved in projects the work safety standards of the relevant Commonwealth, state or territory authorities required for particular activities.

Comply, and use reasonable endeavours to ensure that irrigators and other subcontractors comply, with the provisions of all relevant statutes, regulations, by-laws and requirements of any Commonwealth, state, territory or local authority in respect of work health and safety.

Comply, and use reasonable endeavours to ensure that irrigators and other subcontractors comply, with any of the Commonwealth’s policies about work health and safety referred to, or made available, by the Department to the delivery partner in writing.

Report notifiable incidents (as defined in relevant work health and safety legislation) to the regulator/authority responsible for that legislation arising out of any works undertaken as part of a project, and:

o at the same time, or as soon as is possible in the circumstances, give notice of the incident to the Department, along with copies of any written notice or other correspondence provided to the delivery partner by the regulator/authority, to the Department; and

18


11981199

12001201120212031204

1205

1206

12071208120912101211121212131214121512161217

1218

12191220

122112221223

122412251226

122712281229

123012311232

123312341235

1236123712381239


o within such time as is specified by the Department, give the Department a report detailing the circumstances of the incident, the results of the investigations into its cause, and any recommendations or strategies for prevention in the future.

Inform the Department of the full details of:

o any suspected contravention of relevant work health and safety legislation relating to a project, within 24 hours of becoming aware of any such suspected contravention;

o any cessation or direction to cease work relating to a project due to unsafe work, immediately upon the delivery partner being informed of any such cessation or direction;

o any workplace entry by a representative of a regulator / authority to any place where a project, is being performed or undertaken, within 24 hours of becoming aware of any such workplace entry; and

o any proceedings against the delivery partner, its officers, the irrigators or the irrigators’ officers, or any decision or request by a regulator / authority given to the delivery partner, its officers, the irrigators or the irrigators’ officers, under work health and safety legislation, within 24 hours of becoming aware of any such proceedings, decision or request.

Further information on what will be expected from delivery partners in relation to the welfare and safety of irrigators will be provided in the Deed.

2.8.3 Insurance

Delivery partners will be required to obtain and maintain adequate insurances during the period of the Deed, and ensure its irrigators obtain and maintain adequate insurances during the period of the Project Order. These may include:

workers compensation insurance as required by law;

public liability insurance to the value of at least $20 million per claim;

insurance over any asset (including works completed during the project) acquired, constructed or created using funding amounts provided for the project until such time as the project is completed; and

to the extent that the delivery partner or irrigator is providing a professional service or product, professional indemnity insurance for an amount of not less than $10 million per claim; and

personal accident insurance.

In the event of an incident causing injury to an irrigator or third party, or damage to a third party’s property by an irrigator, the delivery partner will be required to complete an incident report and submit it to the Department and/or insurer within a specified timeframe.

2.8.4 Information Technology

Delivery partners may be required to have access to, and use, government IT systems, which will include websites and may include transactional systems and or technical assessment systems.

The Department will advise and give delivery partners sufficient advance notice and any necessary training regarding access to, and security requirements around, any such systems.

As described in part 2.3.3, delivery partners are also required to establish a website to communicate their services and role in the COFFIE program, all their administration costs, management structure and governance.

19


124012411242

1243

12441245

124612471248

124912501251

12521253125412551256

12571258

1259

126012611262

1263

1264

126512661267

12681269

1270

127112721273

1274

12751276

12771278

127912801281


2.9 Payments to delivery partners

2.9.1 Service Fees

A delivery partner will be paid a fee for providing the services detailed in this SoR, subject to the Deed and subsequent Project Orders to be entered into between the delivery partner and the Department.

The COFFIE program will provide up to 8% of the total requested project payments as a service fee to a delivery partner to cover administration and project management costs. Payment of this fee will commence on approval of each project and in accordance with the Project Order issued under the Deed for the particular project.

The Department will use a project based payment structure as follows:

start up - 50%;

on delivery of each biannual report – 6%; and

completion - 14% plus any fees due to the delivery partner as a result of the project being completed in less than 3 years and therefore not being included in 6 biannual reports.

2.9.2 Costs

Costs directly associated with the administration and project management of projects will be met by delivery partners. The following activities are regarded as possible costs for managing a project and should be considered when a delivery partner calculates their service fee:

Salaries and labour expenses

Consultants and specialists

A delivery partner may wish to engage consultants or contractors with relevant knowledge and/or specialist expertise required to complete the project.

Administrative support and overheads

o Project coordinationo Office accommodationo Office equipmento Phone/internet costso Electricity costso Printing/photocopyingo Insurance costso Website management/development

Vehicle and travel costs

o Vehicle lease and running costs associated with the management of projects and travel costs, including food and accommodation.

Audit/accounting costs

o Yearly certification and audit costs for the delivery partner’s activities. Certification and audit costs for individual projects will be met by irrigators and should be articulated in the respective Works and Transfer Agreement. Certification and audit costs for an individual project will only be required at the finalisation of each project.

20


1282

1283

12841285

1286128712881289

1290

1291

1292

12931294

1295

129612971298

1299

1300

13011302

1303

13041305130613071308130913101311

1312

13131314

1315

1316131713181319


Domestic travel

Domestic travel should be demonstrably essential to the success of the project and the travel should contribute to specific project outputs and not other activities of the organisation.

Purchase of assets

Purchase of assets should only be undertaken where:

o it is considered essential to the achievement of project outcomes;o it is essential to the completion of on-ground works or to achieve specific project activities;o it is specified in the Deed or Project Order for the project; ando prior written approval of the Department (which will not be unreasonably withheld) is

obtained. The Department will not provide additional funding to cover delivery partners’ costs.

It is possible for a delivery partner and/or a proponent to make co-contributions to the project in the form of cash payments or in-kind services. These contributions can be for any of the above costs or for direct on-farm infrastructure works.

2.10 Performance Framework

2.10.1 Measurement of Performance, Service Delivery and Compliance

Throughout the period of the Deed, the Department will monitor, measure and evaluate a delivery partner’s performance against the requirements of the Deed, including the key performance indicators (KPIs) (see part 2.10.2, Key Performance Indicators).

All information gathered by the Department may be used to assess a delivery partner’s performance and compliance with the Deed. Performance in both the administration and management of projects will be monitored.

The Deed will also require a delivery partner to supply information to the Department for program evaluation purposes.

To inform program monitoring, the Department will undertake client satisfaction and post-program monitoring surveys as part of its assessment of service delivery and quality. Irrigator and proponent complaints will also be investigated by the Department.

The Departmentwill monitor and assess a delivery partner’s performance against both the Deed and in comparison with other delivery partners.

If a delivery partner is not performing adequately against its Deed and the performance of other delivery partners, the Department may take various measures including, but not limited to, seeking repayment of advance payments, withholding payments, reducing the number of contracted projects, and termination. All performance and compliance information will also be considered in future tendering exercises.

2.10.2 Key Performance Indicators (KPIs)

KPIs will be used to assess a delivery partner’s performance during the period of the Deed.

A delivery partner will be required to submit regular reports in accordance with the Deed indicating how the delivery partner has met the KPIs in the context of the project conducted.

KPI 1 (Efficiency)

KPI 1 will measure whether:

21


1320

13211322

1323

1324

132513261327132813291330

133113321333

1334

1335

133613371338

133913401341

13421343

134413451346

13471348

13491350135113521353

1354

1355

13561357

1358

1359


projects commenced and were completed on time, in accordance with timeframes agreed between the delivery partner, the irrigator and the Department

project budgets are adhered to and acquitted as per the requirements of the Deed and the Project Order, and

infrastructure payments to irrigators and suppliers are paid on time and accurately reflect works completed.

KPI 2 (Effectiveness)


projects achieved the outcomes agreed between the delivery partner and the Department

workplace health and safety issues are managed across irrigation efficiency projects, and

the number of irrigation efficiency projects agreed between parties were commenced and successfully completed.

KPI 3 (Quality)


feedback from stakeholders demonstrates the quality of services delivered by the delivery partner; and

feedback from irrigators regarding the quality of services delivered by the delivery partner.

KPI 4 (Social and economic)


the irrigator proponent has a system that enables the same productive output as before construction, and

the local community has benefited from the infrastructure construction.

2.10.3 Reporting and data management

Reporting and data management requirements will be detailed in the Deed. A delivery partner will be required to provide regular reports to the Department for monitoring and audit purposes. Such requirements may include:

a. progress reports covering information such as recruitment and project progress, payments, compliance, and achievements;

b. irrigator proponent details and participation survey;

c. reporting on project water saving outcomes including tangible measurables;

d. end of project reports, including financial reports and reports on socio-economic outcomes;

e. reporting on KPIs;

f. other ad hoc reports required due to any non-compliance, incidents or hazards; and

g. additional reports as required.

22


13601361

13621363

13641365

1366

1367

1368

1369

13701371

1372

1373

13741375

1376

1377

1378

13791380

1381

1382

138313841385

13861387

1388

1389

1390

1391

1392

1393


GLOSSARY OF TERMS

Approach to market (ATM)

The procurement processes through which the Department selects a delivery partner for pilots and the ongoing COFFIE program. This may involve open tenders, prequalified tenders or limited tenders. The principle methods of tendering will involve requests for expressions of interest (EOIs) and requests for tender (RFTs).

AS4801 Australian Standard for implementing a work health and safety management system. It sets out the requirements for the system and is often used for auditing and certification purposes.

Certified irrigation professional

A professional irrigation specialist holding a Diploma of Irrigation Management (AHC51610) or higher qualification, to ‘sign off’ on the technical feasibility of a project.

COFFIE program / program

The Commonwealth On-Farm Further Irrigation Efficiency program, a key component of the Water for the Environment Special Account to further enhance the environmental outcomes of the Murray-Darling Basin Plan. In this document, descriptions of the COFFIE program also refer to pilot/s of the COFFIE program.

Commencement of works

The timing of commencement of works, and therefore the three year limit to complete projects, will be the date of settlement of the water transfer from the irrigator to the Commonwealth.

Commonwealth Environmental Water Holder

The Commonwealth Environmental Water Holder established under section 104 of the Water Act 2007 (Cth).

Consortium member An organisation or entity invited by the delivery partner to assist to identify, develop or manage projects.

Deed of Standing Offer (known as Deed)

A contract between the Department and a delivery partner for the COFFIE program. The Deed describes obligations of the Department and delivery partner in implementing the program, including requirements about reporting, project management, irrigator engagement, and other program documentation such as template project agreements and work health and safety plans. Project orders will be issued by the Department requiring the delivery partner to engage with irrigators to deliver approved projects under this Deed.

Delivery partner An organisation engaged by the Department under a Deed to deliver services in relation to proposals under the COFFIE program.

Department The Commonwealth Department of Agriculture and Water Resources or any other Commonwealth department or agency that administers this Deed from time to time.

Due diligence Due diligence is a measure of prudent activity, or assiduity, as is properly to be expected from, and ordinarily exercised by, a reasonable and prudent person under the particular circumstances.

Eligible surface water entitlements

A surface water entitlement of a type or types from a water system within the Murray-Darling Basin that has been specified by the Department in the Deed as amended from time to time as being eligible to be offered under the COFFIE program.

Eligible catchment A catchment within the Murray-Darling Basin that has been specified by the Department in the Deed within which eligible surface water entitlements

23



are located.Encumbrance in relation to a Water Access Entitlement, means:

a) a mortgage, charge, encumbrance, pledge, lien or other security over the entitlement;

b) a lease, licence, term transfer or transfer for a period of any right, title or interest in respect of the entitlement;

c) a caveat, garnishee order, writ of execution, right of set-off, assignment of income or monetary claim affecting the entitlement;

d) a preferential interest, title retention, or other estate, interest, claim or arrangement affecting the entitlement;

e) a contract of sale or option to purchase or acquire the entitlement; orf) an agreement to grant, create, allow or register any of these,g) and includes the encumbrances listed in paragraphs (a) to (f) (inclusive)

whether or not they are registered, unregistered, statutory, legal or equitable.

Expression of interest (EOI)

A request for an expression of interest from organisations wishing to become a delivery partner may be issued as part of the procurement processes for pilots and the broader COFFIE program. An EOI is used to shortlist potential delivery partners before seeking bids from the shortlisted tenderers.

Farm irrigation plan A technically valid plan that will assist in ensuring the proposed infrastructure project is suitable to the farm layout, soils, systems and water supply to achieve the water savings put forward. Much of the information is often map-based. It will outline the proposed infrastructure improvement, its anticipated efficiency gains and its suitability to the farm’s operations.

In-kind contribution A non-cash contribution to a project, including labour, facilities, or equipment.

Irrigation infrastructure operator

An entity that owns or operates infrastructure for the purpose of delivering water to other persons for the primary purpose of use in irrigation.

Irrigator An individual/s or organisation/s proposing project/s to a delivery partner and the Department for approval under the COFFIE program. Once approved, the Department will issue a Project Order to the relevant delivery partner requiring the delivery partner engage the irrigator as a project proponent under a Works and Transfer Agreement.

Mandate The requirement to use prescribed products and/or services.

Meeting/communication In the context of mandating products and services, this term refers to any face to face meeting, email, phone call, letter box drop, letter or any other form of communication.

Murray-Darling Basin Plan (Basin Plan)

The Basin Plan provides a coordinated approach to water use across the four Basin States and the ACT, and it aims to achieve a balance between environmental, economic and social considerations. The Basin Plan was developed under the Water Act 2007 (Cth) and limits water use at environmentally sustainable levels by determining a long-term average sustainable diversion limit.

Project Order The contract between the Department and delivery partner created under the overarching Deed of Standing Offer between the Department and delivery partner. Once issued by the Department, a Project Order will require provision of services in respect of a project approved for completion under the COFFIE program. A Project Order template will be a schedule to the Deed and completed and issued by the Department for each approved

24



project (meaning there may be multiple Project Order contracts between the Department and delivery partner).

Proponent/Project proponent

Once an irrigator is contracted under the COFFIE program (using a Works and Transfer Agreement between a delivery partner and the irrigator) they become a project proponent, abbreviated to proponent.

Registered owner The person listed on the water entitlement register as the legal owner.

Request for tender (RFT) An invitation to potential delivery partners to bid to supply project management services for the COFFIE program.

Statement of Requirements (SoR)

Statement of requirements for the procurement of a delivery partner for the COFFIE program.

Sustainable Diversion Limit (SDL)

The Basin Plan sets long-term average sustainable diversion limits (SDLs) that reflect an environmentally sustainable level of water use (or 'take').

Tendering organisation An organisation that proposes becoming a delivery partner under the COFFIE program.

Unencumbered Means in relation to any water entitlement that the water entitlement is not subject to any encumbrances (see definition of ‘encumbrance’).

Well informed decision Able to make a judgement on the basis of possessing relevant and reliable information from a variety of sources, including independent sources, and making the judgement in a structured manner that is: free from manipulation or undue influence; addresses goals; based on access to the type and amount of information needed to make the decision; and includes an understanding of the impact of assumptions being made in making the decision. The aim should be for the decision to be the ‘right’ decision for the irrigator considering all the circumstances in their life.

Works and Transfer Agreement

An agreement between the delivery partner and the irrigator for delivery of a project under the COFFIE program, which is agreed once the Department issues a Project Order. It includes a work and payment schedule which has been approved by the Department.

Value for money An overarching procurement principle aimed at the outcome of the entire procurement process and generally assessed against the following criteria:

The past performance of the supplier on similar contracts, The degree to which the response will enhance the capability of

local business and industry, Whether the good and services can be delivered a the required

time, where time is an important requirement, The supplier’s capacity to fulfil the procurement requirements, Whole-of-life costs for the supplies that will result from the

procurement, The quality of the goods and services, Fitness for purpose of the proposal, The degree of innovation and flexibility in the supplier’s response, Environmental sustainability of the proposed goods and services

(such as environmental impact) and Other specific criteria, appropriate to the scope of the procurement.

Water for the Environment Special Account (Special Account)

Established through a special appropriation, the Special Account is established for a 10-year period from the 2014-15 financial year to acquire additional environmental water entitlements and to remove constraints on the efficient use of environmental water for the Murray-Darling Basin Plan.

25


· web viewrequirements to disclose information to the commonwealth parliament and its...

Documents