Program 1.1—Infrastructure Investment (continued)
Detailed report on performance
The following report is against the components of Program 1.1 as set out in the 2010–11 PBS. Please note that for this program, the section ‘(i) Major Cities Unit’ has been added to address the movement of this function from reporting to the Infrastructure Australia coordinator to a division of the Department during the 2010–11 year.
(a) Infrastructure policy initiatives
The Department led the development of a number of key reforms driven by the Council of Australian Governments (COAG) Infrastructure Working Group. This included significant national reform such as a national agreement on pre-qualification regimes, important to procurement and reducing transaction costs in bidding and project development. It also provided policy input into a range of infrastructure initiatives, primarily the development of the 2010–11 Budget infrastructure financing package, which will help to remove some impediments to private sector investment in infrastructure, by establishing tax provisions for infrastructure projects designated to be of national significance, and the delivery of a National Infrastructure Construction Schedule to provide information on major infrastructure construction across all levels of government.
The Department's Bureau of Infrastructure, Transport and Regional Economics (BITRE) is leading work to help reduce risk associated with inaccurate traffic forecasts, which can undermine confidence in private road investment. A symposium of key industry, academic and government stakeholders was held in June 2011 to examine these issues.
The Department also developed the implementation framework for the proposed $6.0 billion Regional Infrastructure Fund, $5.6 billion of which will be funded from the Minerals Resource Rent Tax, subject to the passage of the necessary legislation. The Regional Infrastructure Fund will invest the proceeds of the resurgent resource boom to address urgent infrastructure needs, while supporting the mining industry, boosting export capacity and developing and growing regional economies.
(b) Raising the standard of land transport infrastructure
In 2010–11, works began on a total of 51 land transport infrastructure projects, including projects managed under the investment and off-network programs. Work was completed on 38 land transport infrastructure projects, 32 road and six rail, as shown in Tables 3.4 and 3.5.
Table 3.4 Details of road infrastructure projects completed in 2010–11
|New South Wales||Pacific Highway—Coopernook to Herons Creek|
|Newell Highway—Moree Bypass|
|New England Highway—Weakleys Drive pedestrian bridge overpass|
|Optimisation of the Sydney Coordinated Automated Traffic System (SCATS)|
|Bruxner Highway—Alstonville Bypass|
|Port of Eden Development Business Case|
|Queensland||Flinders Highway—Higher Mass Limits|
|Pacific Motorway Upgrade—Coomera Interchange|
|Pacific Motorway Upgrade—Mudgeeraba Interchange|
|Ipswich Motorway Safety Works|
|Sealing of Wills Development Road|
|Remote Community Access Road Upgrade in Cape York—Pormpuraaw Access Road|
|Remote Community Access Road Upgrade in Cape York—Aurukun Access Road|
|Intelligent Transport System Research and Development
(Bruce Highway Cooroy—Gympie)
|Heavy Vehicle Progression and Access Project|
|Victoria||West Gate Bridge Strengthening|
|Western Highway—Realignment of Anthonys Cutting|
|Western Australia||Mandurah Entrance Road|
|Reid Highway and Alexander Drive Interchange|
|Great Northern Highway—Lennard Street to Muchea|
|Great Northern Highway—Floodway Road Closure Monitoring and Traveller Information System (Kimberley Region)|
|South Australia||Northern Expressway and Port Wakefield Road Upgrade|
|Sturt Highway—Duplication from Gawler to Greenock Road|
|Main South Road, Victor Harbor Road and Seaford Road Intersection Upgrade|
|Tasmania||Midland Highway—Bridgewater Bridge Refurbishment and
Lyell Highway Junction upgrade
|East Tamar Highway—Dilston Bypass|
|ACT||Lanyon Drive Stage 2|
|Northern Territory||Tiger Brennan Drive—Stuart Highway Intersection|
|NT Community, Beef and Mining Package—Plenty Highway|
|NT Community, Beef and Mining Package—High Level Bridge over the
McArthur River at Borroloola
|NT Community, Beef and Mining Package—Upgrade of the Maryvale Road and Hugh River Stock Route|
Table 3.5 Details of rail infrastructure projects completed in 2010–11
|Victoria||Port of Melbourne Rail Access Improvement Project|
|The Wodonga Rail Bypass|
|The Wodonga Bypass Duplication|
|Tasmania||The Tasmanian Rail Rescue Package|
|Cross-jurisdictional||The Melbourne to Brisbane Inland Rail Alignment Study (Victoria, New South Wales and Queensland)|
|Cootamundra to Crystal Brook New and Extended Loops (New South Wales and South Australia)|
Revitalisation of the interstate rail network through the Australian Rail Track Corporation (ARTC)
The Department has continued to oversee the delivery of the Australian Government's significant investment in rail infrastructure through the ARTC. Equity investments from the Australian Government, complemented with ARTC funding and capital-raising, are facilitating infrastructure enhancements across the interstate network and the Hunter Valley network, through expanding and modernising tracks and signalling systems.
The Australian Government is investing $996.0 million into ARTC to deliver seven projects that will bring about improved productivity and environmental outcomes across the interstate rail network. These projects include re-railing tracks to a stronger gauge to allow higher axle loads, additional passing loops and curve easing. During 2010–11, construction work began on five projects, and the remaining two projects are in the planning stage. The first payment of the package of $375.0 million was delivered on 9 July 2010, the remaining amount to be paid in 2011 ($409.3 million) and 2012 ($211.7 million).
This investment builds on the Australian Government's $1.2 billion equity investment as part of the Nation Building—Economic Stimulus Plan (NB-ESP). The investment has delivered 11 of 17 projects, and the remaining six projects are well under way. In 2010–11, two projects were completed:
- Cootamundra to Crystal Brook New and Extended Loops, and
- The Wodonga Bypass Duplication.
This investment is delivering benefits across its interstate (North-South and East-West) and Hunter Valley (New South Wales) networks including:
- increased Hunter Valley rail network to keep pace with expected improvements to the mine and port capacity for coal exports
- reduced transit times by nearly half an hour between Melbourne and Sydney, and by as much as an hour between Sydney and Perth, and
- reduced maintenance and train-operating costs by improving the quality of the infrastructure.
The Department also manages grants totalling $44.7 million made to the ARTC under the Nation Building Program to improve access and operational efficiency at Port Botany and Geelong Port, and to improve train signalling and communications throughout the network through projects funded under the program.
Overall, ARTC's capital works program is delivering enhanced rail transport performance, environmental benefits through reduced greenhouse gas emissions, and consequently, improvements to economic productivity within the transport sector.
As part of the governance framework for the Australian Government's investment in the ARTC, the Department has an oversight role over the ARTC. This is achieved through, among other things, rigorous quarterly reporting against key performance indicators and compliance with the company's statutory obligations.
Infrastructure Statistics Yearbook
In March 2011, Minister Albanese launched the BITRE's new flagship publication, the Australian Infrastructure Statistics Yearbook. The yearbook was initiated in order to make infrastructure statistics more accessible—existing data holdings were often incomplete and fragmented over a range of agencies or industry associations. It is the first publication in Australia to draw together detailed national, long-term series statistics for the major forms of Australian economic infrastructure: transport, energy, communications and water supply.
The yearbook presents infrastructure statistics in a coherent framework that enables comparisons across the four forms of infrastructure and the activities associated with each form of infrastructure. The yearbook provides a comprehensive evidence base that informs policy development, regulation, research and analysis in the transport, energy, communications and water sectors. By providing long-time series of data it also enables the analysis of past interventions to inform better future decisions.
With the number of agencies compiling their own specific infrastructure measures, it was important that BITRE was able to identify and access the most robust datasets available and develop a common set of definitions and standards. BITRE consulted widely on the yearbook project and established an advisory Project Board that included relevant experts from the:
- Australian Bureau of Statistics
- Australian Bureau of Agricultural and Resource Economics and Sciences
- Australian Communications and Media Authority
- Bureau of Meteorology
- Department of Broadband, Communications and the Digital Economy, and
- National Water Commission.
The Australian Infrastructure Statistics Yearbook supersedes the Australian Transport Statistics Yearbook as BITRE's flagship publication; maintaining the old yearbook as the transport chapter of the new yearbook.
(c) Remedial road projects to improve safety and productivity
Black Spot Projects
Black Spot Projects improve the safety of road sites which have been identified as high-risk areas for serious crashes. Most funding goes to projects to treat sites that have a record of at least three accidents involving casualties over a five-year period and can demonstrate a robust benefit to cost ratio of at least 2:1.
In 2010–11, the Department continued to work with state and territory agencies to ensure that the program was administered efficiently and cost-effectively across all jurisdictions.
The number of Black Spot Projects approved varies each year depending on the cost of approved works. A total of 343 new projects were approved for treatment in 2010–11. The total payment made to Black Spot Projects in 2010–11 was $50.4 million.
Heavy Vehicle Safety and Productivity
Through the Nation Building Heavy Vehicle Safety and Productivity Program, the safety of the drivers of heavy vehicles is addressed through fatigue management and road-enhancement projects, such as rest areas and bridge upgrades. A total of 257 projects have been approved for delivery over the life of the program and 171 of these have been completed. The total payment made to Heavy Vehicle Safety and Productivity Projects in 2010–11 was $21.3 million.
(d) Increasing the ability of local councils to improve land transport infrastructure
Roads to Recovery
The Nation Building Roads to Recovery program provides funding for projects at a local level. Each local authority across Australia is guaranteed a share of the program funding. Funding is provided directly by the Australian Government to each council. Decisions on projects to be funded are made locally and reported to the Australian Government. In 2010–11, a total of $350.0 million was paid under the program to local councils, three state governments, the Northern Territory and Australian Capital Territory governments and the Indian Ocean Territories.
A total of $350.0 million was also provided in 2009–10, and 57 per cent of this funding was used by councils and other funding recipients on projects which either improved road safety or assisted in the achievement of their asset-maintenance strategies.
Councils are required to maintain their own source expenditure on roads (for example, the amount of money they spend on roads which is generated from council revenues such as rates, but excluding grants from state or territory governments and project-specific developer contributions) at or above a specified level. This expenditure is audited as part of each council's annual report to acquit the program funds received. The requirement aims to ensure that Roads to Recovery funded projects are additional to the road works local governments would normally deliver.
The most recent data available to the Department shows that local government is required to spend $2.0 billion on own source-funded road works each year from
2009–10 to 2013–14. Total own source roads expenditure in 2009–10 was $2.9 billion.
Own source expenditure is monitored at the council level, and individual councils which do not meet the requirement in a given year are able to apply for a waiver of the funding condition for the relevant financial year. At the time of writing, 14 of the 571 eligible funding recipients for 2009–10 had received a waiver for an expenditure maintenance breach, and a further 22 had yet to finalise their annual reports.
(e) Major projects facilitation
Five projects received Major Project Facilitation (MPF) status or had status renewed in 2010–11, in the sectors of infrastructure, petroleum development and renewable energy. These projects represent a potential investment of around $29.0 billion. The Department provides facilitation services to all approved MPF proponents, by helping to coordinate all necessary Australian Government approval processes, and ensuring that those processes are coordinated with relevant state and territory government processes so they occur simultaneously, with minimal duplication. The program also ensures that other government agencies respond promptly to any issues that proponents raise during the approval process, so projects can proceed to development as quickly as possible.
(f) COAG Infrastructure Working Group and COAG Business Regulation and Competition Working Group
The Department coordinated and led a number of COAG transport reforms through the Infrastructure Working Group. These reforms work towards the delivery of a seamless national economy that aims to contribute to: reducing costs incurred by business in complying with unnecessary and inconsistent regulation across jurisdictions; enhancing Australia's longer-term growth, improving workforce participation and overall labour mobility; and, expanding Australia's productive capacity over the medium term through competition reform, enabling stronger economic growth.
Reforms that the Department has coordinated and led include: the introduction of a single National Prequalification System, introduced on 1 January 2011, which removes barriers to competition and reduces duplication and red tape for contractors wishing to tender for the delivery of infrastructure projects; the development of National Policy and Guidelines for Alliance Contracting, which gives rise to cost saving and creates a consistent national standard; the development of National Public Private Partnership policy and guidelines, aimed at encouraging greater participation by the private sector in delivering key infrastructure projects; the review of major infrastructure approvals processes, which has led to major reform and changes to legislation and administration by all levels of government, ensuring infrastructure projects are delivered more efficiently; and the publication of Infrastructure Planning and Delivery: Best Practice Case Studies and the development of a second publication in the series, in order to drive continuous improvement in major infrastructure procurement.
(g) COAG Road Reform Plan
The Department continues to provide ongoing policy guidance to the COAG Road Reform Plan (CRRP) Project Directorate and project oversight through participation on the CRRP Project Board. Two key milestone reports were submitted to COAG for consideration in December 2010 and June 2011 respectively, and work continues on schedule to develop the final feasibility study of options for heavy vehicle charging and funding reform by December 2011.
(h) Office of the Commonwealth Coordinator-General
Responsibility for the Office of the Coordinator-General (OCG) was transferred from the Department of Prime Minister and Cabinet to the Department of Infrastructure and Transport on 28 October 2010. On 15 November 2010, Ms Lyn O'Connell, Deputy Secretary, Department of Infrastructure and Transport, was appointed the Coordinator-General.
Since early 2009 the OCG has monitored the implementation of the building and construction programs under the NB-ESP. The NB-ESP incorporates elements of both the December 2008 Nation Building Package and the February 2009 Nation Building and Jobs Plan. On 5 February 2009, at a special meeting of COAG, the Prime Minister, State Premiers and Territory Chief Ministers signed a National Partnership Agreement (NPA) which covers the elements of the NB-ESP. Key performance indicators for the NB-ESP are the milestones set out in the NPA.
As at 30 June 2011, 99 per cent of the 48,712 major construction projects in the NB-ESP have begun, with 89 per cent of them completed.
In May 2011, the Coordinator-General released the two-year progress report which is available on the NB-ESP website at www.economicstimulusplan.gov.au.
(i) Major Cities Unit
The Major Cities Unit was established to provide coordinated action across all spheres of government, the private sector and the community to improve the productivity, sustainability and liveability of our cities, and to help secure the nation's economic, social and environmental wellbeing. The Unit's primary focus during 2010–11 was the development of a national urban policy.
Building on data in the State of Australian Cities 2010 report, the Major Cities Unit released in December 2010 a discussion paper, Our Cities—building a productive, sustainable and liveable future, accompanied by a background and research paper, Our Cities—the challenge of change. The State of Australian Cities 2010 has been heavily downloaded from www.infrastructure.gov.au/infrastructure/mcu/soac.aspx. The Major Cities Unit, with support from BITRE, progressed work on a State of Australian Cities 2011 update.
The release of Our Cities, Our Future—a National Urban Policy for a productive, sustainable and liveable future, in May 2011, establishes the first long-term national framework to guide policy development and public and private investment in Australia's cities. The National Urban Policy contributes to the COAG cities reform agenda by:
- establishing national principles and priorities to guide states and territories in the development of strategic planning systems to ensure our cities become more productive, sustainable and liveable
- articulating how the Australian Government will coordinate its own policies, investment and activities in cities, in partnership with state, territory and local governments, the private sector and communities, and
- outlining how the Australian Government will uphold the COAG agreement through its policies, investment and activities.
The Major Cities Unit has progressed work on an Australian Urban Design Protocol. The protocol will establish a common language for urban design and provide a framework to measure, implement and improve best practice. This will enable delivery on COAG's planning system criterion of encouraging world-class design and architecture. The Urban Design Protocol is due for release in the 2011–12 financial year.
(j) High Speed Rail
A High Speed Rail Unit was established within Policy and Research Division to implement the Australian Government's commitment to an implementation study into a high speed rail network along Australia's east coast. The study is drawing on expertise from the public and private sectors, as well as international experience, growth forecasts and other contemporary data.
The first phase of the two-phase study provided indicative corridors, options for station locations, high level costs, and forecasts about patronage, and was released in August 2011. Phase two will include identifying a preferred alignment geotechnical analysis, more detailed estimates of capital costs, and an analysis of financial viability and staging options.
National Urban Policy
On 18 May 2011, the Australian Government released Our Cities, Our Future—a national urban policy for a productive, sustainable and liveable future (the National Urban Policy). To view an online version of the policy go to www.infrastructure.gov.au/infrastructure/mcu/index.aspx
The National Urban Policy articulates the Australian Government's objectives and priorities for the nation's 18 major cities (those with a population of more than 100,000) and sets out the Government's strategies, programs and actions to deliver its urban agenda. It establishes, for the first time, an overall framework to guide national policy development and public and private investment in cities.
The goals of the National Urban Policy are:
- to harness the productivity of Australia's people and industry, by better managing our use of labour, creativity and knowledge, land and infrastructure
- to advance the sustainability of Australia's natural and built environment, including through better resource and risk management, and
- to enhance the liveability of our cities by promoting better urban design, planning and affordable access to recreational, cultural and community facilities.
The Major Cities Unit undertook an extensive research and consultation process to develop the National Urban Policy.
In March 2010, the Australian Government released the State of Australian Cities Report. The report establishes a benchmark for reporting on the productivity, sustainability and liveability of Australia's major cities and provided an evidence base for further policy development. It highlighted emerging trends and issues to promote discussion and debate on managing growth and change in our urban centres.
In December 2010, the Australian Government released a discussion paper Our Cities—building a productive, sustainable and liveable future, accompanied by a background and research paper Our Cities—the challenge of change. The Major Cities Unit conducted workshop meetings in all 18 major cities, attracting around 450 participants including industry and professional associations, community groups, state, territory and local governments. Nearly 230 written submissions and survey responses to the Our Cities discussion paper were received.
This National Urban Policy sets a vision for our cities to deliver future prosperity and wellbeing for our communities and reinforces the COAG national objective to ensure Australian cities are globally competitive, productive, sustainable, liveable, socially inclusive and well placed to meet future challenges and growth.
Importantly, the National Urban Policy also complements the Australian Government's Sustainable Population Strategy and the ongoing focus and commitment to regional Australia. It recognises the strong interrelationships between cities and regions. The policy does not focus on capital cities alone, but recognises the important role that our major regional centres also play, and the substantial challenges that they also face in dealing with the complexities of the modern economy.