Corporate Plan - IPFA · Corporate Plan at a glance Core Activities • Valued and independent,...

Corporate Plan2019-20 to 2022-23

Contents

Chief Executive Statement 01

Our Purpose 04

Our Environment 06

Measuring Performance 08

Our Capabilities 13

Our Corporate Structure 14

Risk Oversight and Management 16

CORPORATE PLAN 2019–20 TO 2022–23

Infrastructure and Project Financing Agency

Australia’s infrastructure requirements continue to grow with our increasing population, freight bottlenecks, urban congestion, the need to modernise our energy grid, secure our water needs and support our regions to secure their economic future.

The Australian Government is responding to these challenges with a substantial infrastructure investment program across the energy, water, cities, social and transport sectors, with $100 billion committed for transport infrastructure alone over the 10 years from 2019.

Working in partnership with the private sector, states and territories and local governments, the Australian Government seeks to build the infrastructure and deliver the services Australians need.

IPFA supports the Australian Government to implement its investment decisions and deliver on its infrastructure priorities and commitments. We do this by providing independent, whole-of-government commercial and financial advisory

services, program management services and capability building to support Australian Government infrastructure investments.

Our client service-operating model recognises IPFA’s work with a diverse range of Australian Government clients as the preferred commercial and financial advisor for Ministers as well as Commonwealth departments and agencies.

Our project and commercial advisory teams provide a suite of services that cover the full spectrum of infrastructure across the economy and all phases of a project or program’s lifecycle, from business case development through to procurement and delivery.

We support our Australian Government clients in identifying and implementing Commonwealth funding and financing opportunities, undertaking project and program management related activities, such as due diligence reviews, market sounding processes, project governance facilitation, project reviews and monitoring, complex commercial negotiations and financial and commercial risk analysis.

I am pleased to present the Infrastructure and Project Financing Agency Corporate Plan for the period 2019-20 to 2022-23.

This Corporate Plan sets out the purpose and priorities of IPFA and outlines the environment in which we work.

Chief Executive StatementMs Leilani Frew CHIEF EXECUTIVE OFFICER

PAGE 01

Looking forward over the period of this Corporate Plan and beyond, IPFA’s strong relationships across government and the private sector will consolidate its position as the Commonwealth Government’s advisor of choice for commercial and financial matters in infrastructure.

I am confident that IPFA is well positioned to continue delivering quality and valued advisory and program management services to support our purposes and outcomes. We will continue to remain:

• Client and services focused.

• Independent with a view to the right outcome.

• Commercial, financial and infrastructure specialists and experts.

• A high performing, dynamic and diverse workforce.

I am proud to be leading IPFA as we perform the breadth of commercial functions required by the Australian Government to deliver its major infrastructure commitments and work to deliver the activities outlined in this plan over the year ahead.

Leilani Frew Chief Executive

“IPFA supports the Australian Government to implement its investment decisions and deliver on its infrastructure priorities and commitments. ”



CapabilitiesEnvironment P E R FO R M A N C E

Corporate Plan at a glance

Core Activities

• Valued and independent, commercial and financial advisory services

• Specialist infrastructure project governance and program management services

• High quality knowledge sharing forums and capability building activities

Strategic Goals

• To be sought after for our people, influential advice and quality services

• To support commercial excellence in the Australian Government’s investment in and delivery of priority projects and infrastructure programs

• To be a great place for people to work and develop

• To have best practice corporate and governance arrangements

Enabling Activities

• Client service and outcomes focussed mindset

• Collaborative and trust-based stakeholder and client relationships

• High performing and dynamic people

• Strong and sustainable organisational health

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PAGE 03

IPFA supports the Australian Government in making commercially astute decisions on nationally significant infrastructure projects and programs.

Our Purpose1

We do this through three core activities:

As the Australian Government’s independent infrastructure and project finance executive agency, our purposes are to:

Provide independent commercial and financial

advice to support the delivery of Australian Government

infrastructure projects and programs

Build the Australian Government’s capability

to deliver its infrastructure priorities

Strengthen confidence in the Australian Government’s investment through better-

informed decisions, and improved governance and investment management arrangements

We achieve our purpose through our vision and goals and by working collaboratively with Australian Government stakeholders and client agencies, state and territory counterparts

as well as with our industry and private sector partners.

Arranging high quality knowledge

sharing forums and capability

building activities

Delivering specialist

infrastructure project governance

and program management

services

Providing valued and

independent, commercial and

financial advisory services



VISION

Enabling commercial excellence in Australian Government infrastructure

investment for the benefit of all Australians.

STRATEGIC GOALS

By measuring our success against these goals, we demonstrate the achievement of our purpose and fulfillment of our role.

4To have best practice corporate and governance arrangements.

3To be a great place for people to work and develop

2To support commercial excellence in the Australian Government’s investment in and delivery of priority projects and infrastructure programs.

1To be sought after for our people and influential advice

PAGE 05

This section sets out the nature of the IPFA’s broader operating environment over the four-year period of this corporate plan, how the operating environment may affect our operations and how it may influence the focus of IPFA’s advisory and program management services.

Significant public infrastructure commitments across the nation requiring a delivery focusAll governments of Australia have committed to the delivery of significant public infrastructure pipelines aimed at addressing the population growth challenges, ensuring access to the essential services for Australian communities and citizens and supporting the growth and productivity of our nation.

Delivery of the program will involve a collaborative effort from all parts of the infrastructure sector involving the states, territories, local government and the private sector as well as the Commonwealth government. The delivery challenge this poses for our institutions is obvious: to retain the community’s confidence, governments must keep improving their capacity to deliver infrastructure on time, on budget and to the highest possible standards of service provision.

In an environment where the Australian Government is actively partnering on major infrastructure projects with other governments and through its government owned enterprises, and is therefore exposed to implementation and delivery risks, we have seen demand for our advisory services significantly grow. This growth has been experienced both within transport sectors, as new projects were added to the government’s Infrastructure Investment Program, and beyond into the industrial, energy, water, health, education, arts, communications and sports infrastructure sectors.

To meet this demand, IPFA is focussed on retaining the right expertise to meet our clients’ needs. We work actively with our clients to prioritise their requirements and to implement the Australian Government’s infrastructure investment decisions.

We are also maintaining our focus on delivering our knowledge sharing activities to continue to strengthen the Commonwealth’s partnership capability.

Our Environment2



Pressure continues on infrastructure funding Australian governments are investing record amounts in infrastructure planning, development and delivery over the next 10 years.

Despite this, there is continued pressure for increased infrastructure expenditure to drive economic growth and national productivity, risking increased government budget pressures, both immediately as projects are procured, constructed and delivered, and over the longer term as service delivery commences requiring operational and maintenance funding.

The scale of its current financial commitment provides the Australian Government with a greater opportunity to play a significant role in the collective infrastructure sector to pursue investment and funding sustainability.

IPFA’s strategic investor principles seek to address sustainability of infrastructure funding by looking to be smarter with our current funding sources and supporting the pursuit of new funding sources.

In particular, we will continue to work with our Australian Government clients to seek opportunities for private sector investment, government funds, public finance or returnable grants utilising our strategic investor principles:

• for “others” to fund projects where possible and therefore eliminate or minimise the need for Commonwealth funding;

• to bridge market failure and/or risks through public finance or returnable capital, allowing whole or partial recovery of Commonwealth’s funding in the future;

• to use conditional grants to ensure outcomes are delivered, even though a capital return may not be possible; or

• for a combination of the above.

As this shift continues to be realised, IPFA will need to ensure it remains agile and responsive to continue providing advisory, project and program management services to assist our clients in their management of these arrangements.

The shape and approach of infrastructure sector is changingIn an environment where technology advancement is affecting the way citizens access and utilise services, and influencing shifts towards community-centred planning and a build for tomorrow mindset, the approach of infrastructure sector itself is changing. Change is also being influenced by the challenges of skills shortages and cost escalation being experienced as the current infrastructure program is being delivered.

To ensure we maintain relevant and valued advisory services, it is important that we remain up to date on how the changes to the infrastructure sector may influence the role our Australian Government clients consider and implement their infrastructure investments and decisions.

Critical to achieving this is our ability to maintain long-term, productive and trust-based relationships with key industry stakeholders. To do this we will continue to engage regularly with other Commonwealth infrastructure bodies, notably Infrastructure Australia, the Clean Energy Finance Corporation and the Northern Australia Infrastructure Fund, as well as with our counterparts in the states, territories and local governments and the infrastructure business, finance, and advisory sector.

We will also look for opportunities where how our expertise and experience can be utilised to assist our clients in their consideration of how to best plan for, manage and respond to the changing nature of the infrastructure sector.

PAGE 07

Our success measures and targets explain how we measure our performance against our goals and purposes.

Measuring Performance3

Evolution of our performance measurementIPFA’s performance measures are reflective of a client focused advisory services organisation where our value is best demonstrated by the satisfaction of the Australian Government clients that we were established to work for.

Our performance measurement approach measures what we did, how well we did it and what impact our work had for our clients. We collect data to support our performance reporting through a variety of methods, including stakeholder and client surveys and external feedback.

We have used the baseline data we measured in our first year of operation, as well as the additional data collected in our second year, to inform targets for 2019-20. From this broader data set, we have also included performance targets for the forward years, where we did not previously.

As we strive for excellence and value accountability, this Corporate Plan also has two new strategic goals, which reflect our commitment to our people and best practice corporate health:

• To be a great place for people to work and develop.

• To have best practice corporate and governance arrangements.

Continual improvementWhile our performance measurement has evolved, we will always focus on our purposes. Over the forward years of this plan, we will continue to review the effectiveness of our targets and measures that show IPFA’s contribution to achieving our goals and demonstrating our purposes.

Reporting our performanceThis corporate plan is IPFA’s primary planning document from which our annual priorities flow into our business plans and individual performance and development plans. We report on our activities and achievement of our purposes against the performance criteria in this Corporate Plan through our annual performance statement in our Annual Report.

IPFA operates in a contestable environment and is committed to demonstrating transparency of its operations. The quality based measures are intended to assist in the demonstration of effective use of taxpayer resources and IPFA’s commitment to quality in its work.



1. Our partners seek our commercial and financial advice

The value of IPFA’s advice is evident when we are the trusted adviser and first point of call for our Australian Government clients for their nationally significant infrastructure projects and programs.

We have seen strong engagement across the Australian Government for the services we provide to our client departments. The demand for our commercial and financial advisory services has grown significantly since IPFA’s establishment, reflecting the quality of IPFA’s client focussed approach and service offering:

• Initially, our key clients were the Australian Government’s central agencies and key divisions in the Infrastructure, Transport, Cities and Regional Development Portfolio.

• Our clients now also include the Departments of Environment and Energy, Industry, Innovation and Science, Home Affairs, and Foreign Affairs and Trade.

• Into the future, we anticipate additional client agencies seeking IPFA’s expertise and are currently pursuing discussions with the Departments of Communications and the Arts, Defence, and Health.

In 2018-19, 93% of our work originated from unsolicited approaches from stakeholders and our Australian Government clients.

Against a target of 30%, this result is a testament to the commitment of IPFA staff in nurturing and maintaining strong client relationships but more importantly, delivering advisory services that are valued. We have therefore increased the target to 50% in 2019-20, with further year on year increases reaching 80% in 2022-23.

2. Our involvement improves outcomes for and our advice is valued by all stakeholders

A successful engagement on a project is evident if it can be seen that our advice was adopted and/or it is acknowledged that we played a significant role in supporting decision making on delivery of the project.

In the two years since establishment, IPFA has provided advice on over $55.7 billion worth of Australian Government infrastructure investments, covering some of the biggest infrastructure projects being undertaken in Australia, including Inland Rail, the Western Sydney City Deal, Snowy 2.0 and the Underwriting New Generation Investments program.

Driven largely by demand from our clients, our activities have expanded to support our clients in a number of areas including representation on project governance committees, leading negotiations with

project sponsors and assisting with financial asset administration and analysis.

In 2018-19, 89% of feedback from stakeholders was positive, against a target of 75%. This is testament to the quality of our advice. We have increased the target for stakeholder satisfaction to 80% in 2019-20, with further increases year on year reaching 90% in 2022-23.

KPIsOur advice is proactively sought by government and agencies

2019-20 Targetof our work is sought proactively through unsolicited approaches from agencies and/or government

50% Forward Years Target2020-21 – 60%2021-22 – 70%2022-23 – 80%

KPIsStakeholders are satisfied with our service and involvement

2019-20 Targetof our stakeholders are satisfied that we are improving outcomes and provide valued service80%

Forward Years Target2020-21 – 85%2021-22 – 90%2022-23 – 90%

PAGE 09

KPIsDelivery of agreed activities and positive stakeholder/market regard for our contribution

2019-20 Targetof committed activities completed within agreed time frames100%

Forward Years Target2020-21 and beyond - 100% of committed activities completed within agreed time frames

of feedback from external parties regarding our contribution is positive80% 2020-21 – 85%

2021-22 – 90%2022-23 – 90%

3. Our contribution increases confidence in the Australian Government’s infrastructure investment decisions and processes

We surveyed our Australian Government clients to best understand the key attributes that they valued in commercial and financial advisers. In addition to high quality advice, the timely provision of our advice and services were critical to enabling our clients to support the implementation of the Australian Government’s infrastructure investment decisions and processes.

In 2018-19, 92% of our advice was delivered within pre-agreed timeframes, against a target of 100%.

For 2019-20 and beyond, we have retained a target of 100% of activities completed within agreed timeframes, reflecting the importance that our clients and stakeholders place on timely delivery of our work.

A key area of success for the Commonwealth is where external stakeholders and industry participants acknowledge the value of having a more commercially astute Australian Government and how we have contributed to a greater level of confidence in the Australian Government’s decisions and processes.

In providing our advisory and program management services, we work closely with other Commonwealth infrastructure bodies, notably Infrastructure Australia, the Clean Energy Finance Corporation and the Northern Australia Infrastructure Fund, our counterparts in the states, territories and local governments as well as our partners in the infrastructure business, finance and advisory sector.

In 2018-19, 100% of the feedback we received from external parties was positive, against a target of 75%. We have therefore increased target for external feedback to 80% in 2019-20, with further increases reaching 90% in later years.



KPIsFacilitation of quality knowledge sharing and development programs, events and forums

2019-20 Targetknowledge sharing

activities10 Forward Years Target2020-21 and beyond - 10 knowledge sharing

activities

satisfaction with the quality of the activity80% 2020-21 – 85%

2021-22 – 90%2022-23 – 90%

4. Our work strengthens the commercial and financial capability of the Australian Government

A more sophisticated and expert public service better supports the Australian Government in its infrastructure investment decisions, reduce dependency on external advisers and improving retention of critical commercial knowledge.

We are strengthening the commercial and financial capabilities across the Commonwealth, better equipping it to deliver better value for money for taxpayers. We do this by delivering a program of knowledge sharing events (“ ”) and by providing an active inbound and outbound secondment program with our client departments.

In 2018-19 we completed 11 “ ” events, which focused on understanding aspects of infrastructure finance, governance and project delivery through the lens of practical implementation opportunities and challenges.

Reflecting extremely positive feedback from event participants, throughout 2019-20 and beyond, IPFA will maintain its focus on delivering these events which will remain supported by expert speakers from the Commonwealth, state, territory and local governments and private sector practitioners.

We will also continue our secondment program, which has now seen 3 inbound secondees from other Australian Government agencies, and 2 outbound secondments into specific project teams in other Australian Government agencies.

PAGE 11

6. IPFA has best practice corporate and governance arrangements

IPFA takes its corporate and governance arrangements seriously, which is why we have added this performance measure in this Corporate Plan. IPFA’s success is only possible when its underlying corporate and governance arrangements are best practice for the nature of our organisation and its activities.

Key facilitators of ensuring that we have best practice corporate and governance arrangements include IPFA’s independent Audit and Risk Committee, IPFA’s integrated risk management framework, and IPFA’s compliance with its legislative and policy obligations.

IPFA is compliant with its legislative obligations, and has in place corporate and governance arrangements that enable it to perform at its best.

KPIsAppropriate corporate and governance arrangements

2019-20 TargetNo adverse findings from a governance perspective

Forward Years TargetNo adverse findings from a governance perspective

5. IPFA is a great place for people to work and develop

IPFA values its people, and is committed to a diverse, collaborative and inclusive workplace, where all staff feel valued and empowered and clearly understand their contribution to IPFA’s strategic goals. Furthermore, the strength of our people is the key enabler for ensuring that we are able to deliver on our advisory roles to Government.

This is why we have added this performance measure to this year’s corporate plan.

We regularly conduct all-staff surveys, which focus on areas such as staff satisfaction, their level of engagement with IPFA, and workplace flexibility. Our most recent staff survey delivered a Net Promoter score of 88, which demonstrates that staff feel that IPFA is a great place to work and develop.

KPIsStaff are valued at IPFA

2019-20 TargetNet Promoter

score of 80 Forward Years Target2020-21 and beyond – Net Promoter score of 80



Our Capabilities4

IPFA places high priority on ensuring we have high calibre experience and expertise to support the Australian Government and our client agencies. Collectively, the team has significant strategic, commercial, financial and infrastructure experience spanning diverse industries, geographies, transactions and projects, in both the public and private sectors.

IPFA is the only whole-of-government, commercial capability agency within the Australian Government which provides a breadth of infrastructure, specialist commercial advisory and program management services.

PAGE 13

Our Corporate Structure5

At the institutional level, IPFA is an executive agency within the Treasury Portfolio. The CEO of IPFA reports to the Minister for Population, Cities and Urban Infrastructure, the Hon Alan Tudge MP.

IPFA is organised to deliver our core services through the following business lines:

Project and Commercial Advisory ServicesFocuses on client outcomes and the delivery of high quality, independent commercial and

financial advice and program management services through three business units:

Transport and IndustrySupporting our clients with

federally funded infrastructure projects and programs in the land transport and industrial sectors.

Energy and Water Supporting our clients delivering federally funded infrastructure projects and programs in the

energy and water sectors as well our clients in the foreign and

home affairs portfolios.

Cities and SocialSupporting our clients delivering federally funded infrastructure projects and programs in the

health, education, and housing sectors as well as our clients

focussed on infrastructure enabled outcomes in the nation’s

cities, regions and territories.

1



Strategy, Stakeholders and CommunicationsEnsures our organisation maintains its focus on delivering the

advisory and program management services that our clients seek, as well as responsibility for our program

of knowledge sharing events and activities.

Corporate, Finance and PeopleMaintains and strengthens our organisational health and to ensure

we have sustainable resources, policies, systems and processes to deliver on our purposes. Also fosters a diverse, inclusive, high

performance and flexible working culture, supported by an effective governance and corporate structure, to attract, engage,

enable and retain talented staff.

2

3

PAGE 15

Risk Oversight and Management

We take an integrated approach to risk management, with consideration and management of risk forming a key component of our operational work.

6

IPFA’s Risk Management Policy and Framework acknowledges the importance of effective risk management to ensure we achieve our Vision, Strategic Goals and Priorities and outlines our risk appetite and behaviours.

As a non-corporate Commonwealth entity, we have adopted the Commonwealth Risk Management Policy, as required under section 16 of the PGPA Act.

Our framework includes systems, policies, guidelines and processes to ensure the integration of a risk aware and managed culture in the operations and practices of IPFA and our people. It helps ensure that we are well placed to monitor, review, mitigate and communicate appropriately to stakeholders in a timely and effective manner key risks that may impact on our ability to deliver our purpose, and also to communicate appropriately to stakeholders, in a timely and effective manner.

IPFA is guided by its Audit Committee through its role in reviewing IPFA’s risk management framework and documentation, as well its assessment of the effectiveness of IPFA’s risk procedures against IPFA’s risk appetite.

Our risk management framework includes:

• Systems and Structures – Appropriate frameworks are in place to

manage, monitor and mitigate risk

– A leadership and management environment and structure which is supported by an effective delegations schedule and a culture of ethical conduct driven from IPFA’s leadership team

• Policies and Procedures – Policies and procedures which support

compliance with legislative and administrative requirements

– An audit program which aligns with our Risk Management Plan

• People – The fostering of a positive risk

management culture that is built into our day to day practices

– Enabling our people to engage with reasonable levels of risk within appropriate frameworks and behaviours

• Awareness – Education and awareness raising for all

our people in respect of risk management and compliance obligations

– An enterprise risk register which enables active identification, monitoring and management of key risks



IPFA maintains a risk management framework and policy, which are updated regularly and reviewed by its Audit Committee. IPFA has a robust risk evaluation and management strategy. High-level strategic risks are identified and categorised under key areas of:

Risk treatments and treatment owners are outlined in IPFA’s Risk Register and Treatment plan, which is updated regularly.

Client Reflecting risks to ability to support commercial excellence in the Australian Government’s investment in and delivery of priority projects and infrastructure programs

PeopleReflecting risks to our ability to be a great place for people to work and develop

OrganisationalReflecting risks to IPFA’s corporate and governance arrangements

Risks:

• IPFA does not deliver quality/timely advice• IPFA is not independent• IPFA is not trusted, sought or valued

Risks:

• IPFA cannot recruit/retain the right people• IPFA does not have capacity to deliver as required

Risks:

• IPFA is exposed to fraud and/or corruption• IPFA suffers reputational damage• IPFA does not use information appropriately• IPFA lacks financial resources to deliver its outputs• IPFA’s external service providers cannot deliver

as required.

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