How an IFF project gets underway
The SPV model can be used to fund infrastructure projects if authorised on a case-by-case basis via an Order in Council approved by Cabinet.
Developing levy proposals
Local councils, developers or any other person may propose that an infrastructure project be funded using the SPV model. The proposer of a project will need to develop a levy proposal containing information about the proposed levy and SPV.
Crown Infrastructure Partners (CIP) are acting in a facilitation role for projects that want to utilise the SPV model. CIP will assess the feasibility of potential projects and assist developers, local councils, Māori and iwi, contractors and financiers in developing levy proposals. CIP will use their commercial expertise in structuring and raising finance for projects.
Project proposers can work with CIP to develop or progress proposals and prepare them for submission to the recommender. However, proposers are not required to work with CIP to develop levy proposals and can submit levy proposals directly to the recommender.
Further information about CIP’s process for facilitating levy proposals can be found on the CIP website.
Proposals are recommended to the Government
SPVs do not automatically have powers to charge a levy. Levies must be authorised on a case-by-case basis via an Order in Council approved by Cabinet, following a recommendation by the Minister responsible for the Act.
HUD has been appointed to the recommender role established by the Act. As the recommender, HUD will provide advice to support the responsible Minister’s consideration of levy proposals.
The Minister is required to consider several factors before recommending a levy proposal to Cabinet, including the affordability for levy-payers – both existing and future. This takes into account the existing level of rates and ensures a levy does not make this unaffordable. The council will also need to give their approval to a proposed levy.
The Act also creates a monitoring, reporting and disclosure regime to ensure SPVs are accountable and act appropriately. HUD has been appointed as the Monitor.
Published: January 22, 2021