Chapter 5: Infrastructure Australia

Australian Government Infrastructure Australia logo

The Hon Anthony Albanese MP
Minister for Infrastructure and Transport
Parliament House
CANBERRA ACT 2600

Dear Minister

I am pleased to present the Infrastructure Australia Annual Report for the year ended 30 June 2012.

This report has been prepared in accordance with section 26 of the Infrastructure Australia Act 2008, which also requires that you table the report in the parliament.

Yours sincerely

Sir Rod Eddington
Chair
Infrastructure Australia

Program 1.1—Infrastructure Investment

Highlights

During 2011–12, Infrastructure Australia consolidated gains in infrastructure planning, prioritisation, financing and pricing. We welcomed Ms Elana Rubin and Ms Nicole Lockwood to the Infrastructure Australia Council and farewelled Mr Gary Weaven and Mr Ross Rolfe. Ms Heather Ridout resigned from the council following her appointment to the Board of the Reserve Bank of Australia.

Infrastructure Australia presented its fourth report to the Council of Australian Governments (COAG) during the year, outlining the need for continued action on infrastructure prioritisation, financing, funding and pricing. The report highlighted the continued disconnect between the community's expectations for our infrastructure networks and the capacity of our institutions to achieve difficult reforms. Against that background, Infrastructure Australia reported that some progress was being made towards securing a more efficient environment for infrastructure financing, planning and delivery.

Infrastructure Australia received 42 project submissions for the infrastructure priority list in 2011–12. Fourteen were new submissions, and applicants substantially updated the remaining 28 projects after detailed feedback from Infrastructure Australia. The 2012 list includes projects with estimated capital expenditure of $76.53 billion, including five projects in the ‘ready to proceed’ category with combined capital expenditure of $11.83 billion, and five in the ‘threshold’ category with a combined capital expenditure of $6.56 billion.

The Regional Infrastructure Fund provides for funding assistance to priority infrastructure projects as well as improved infrastructure planning. Infrastructure Australia prioritised three regional planning initiatives for assistance under the Regional Infrastructure Fund in 2011–12, in the Hunter Region of NSW, North Queensland (Mount Isa and Townsville), and South Australia.

Infrastructure Australia supports wide-ranging, sustained reforms that attract private investment in infrastructure markets. In April 2012, the nine-member Infrastructure Finance Working Group, established by the Minister for Infrastructure and Transport in June 2011, released its recommendations on options to reform infrastructure financing. They included a review of government balance sheets to create capacity to invest in new infrastructure assets; co-funding between the Australian Government, states and territory governments and private sector on nationally significant Public-Private Partnership (PPP) projects; opening the infrastructure market to alternative sources of finance, such as superannuation funds; and improved use of user charges.

Infrastructure Australia and the National Transport Commission submitted the National Ports Strategy to COAG in April 2012.

Infrastructure Australia further developed the National Land Freight Strategy in consultation with government and private sector stakeholders.

In 2011–12, Infrastructure Australia consulted key stakeholders in the private and public sectors to develop benchmarks for major infrastructure procurement that will provide incentives for more efficient procurement processes.

Overview

Elements of Program 1.1 were delivered by Infrastructure Australia, a statutory body which advises governments, investors and infrastructure owners on a wide range of issues. These include: Australia's current and future infrastructure needs; mechanisms for financing infrastructure investments; policy, pricing and regulation; and their impact on investment and on the efficiency of the delivery, operation and use of national infrastructure networks. The Infrastructure Australia Council also advises on development of regulative frameworks and more efficient operation and delivery of infrastructure, to promote productivity improvements.

Infrastructure Australia has 11 members, appointed by the Minister for Infrastructure and Transport. For 2011–12 the members were:

Images of members: Sir Rod Eddignton, Mr Terry Moran AO, Dr Ken Henry AC, Mr Jim Hallion, Mr Anthony Kannis, Dr Kerry Schott, Professor Peter Newman, The Hon Mark Birrell, Mr Phil Hennessy, Ms Elana Rubin and Ms Nicole Lockwood

The Infrastructure Coordinator is a statutory office-holder.

Summary of performance

Tables 5.1 and 5.2 summarise Infrastructure Australia's results in delivering Program 1.1 against the key performance indicators and deliverables and their targets published in the 2011–12 PBS.

Table 5.1 Summary of performance—Program 1.1 key performance indicators

Key performance indicator Target Result
Infrastructure and urban system initiatives are promoted in order to maximise economic development and productivity. Initiatives endorsed by Australian governments. 11–12 Achieved 10–11 Achieved 09–10 Achieved
All of the ‘ready to proceed’ projects in Infrastructure Australia's first priority list received funding from the Australian Government, and state and territory governments. Assessment of 42 project submissions to develop the 2012 infrastructure priority list. Fourth annual report to COAG and infrastructure priority list submitted. Work conducted on strategies across the spectrum of infrastructure-related issues: corridor protection, ports, land freight, and asset sales. Well-attended conferences held on private investment in infrastructure, infrastructure in remote Indigenous communities, ports and cities, and user pays approaches.
Integrated infrastructure and urban system priorities are identified to address the local, regional and national needs of Australians. Initiatives endorsed by Australian governments. Priorities identified for nationally significant infrastructure. Priorities identified for regional planning initiatives under the Regional Infrastructure Fund.
Demonstration projects and initiatives promote infrastructure efficiency and urban sustainability. Initiatives endorsed by Australian governments. Two Victorian Managed Motorway projects assessed as ‘ready to proceed’ in the infrastructure priority list. Route 86 transit corridor project completed.
Results Key
Achieved All targets for 2011–12 were met or exceeded.
Substantially achieved Targets were mostly met, and any issues are being managed.
Partially achieved Some targets were met, and any issues are being managed.
Not achieved None or minimal progress was made against targets in 2011–12.

Table 5.2 Summary of performance—Program 1.1 deliverables

Deliverable Target Result
Analysis and prioritisation of infrastructure and urban initiatives. Recommendations considered by Australian governments. Assessment of 42 project submissions to develop the 2012 infrastructure priority list. Three regional plans funded under the Regional Infrastructure Fund. Fourth annual report to COAG and infrastructure priority list completed and submitted.
Infrastructure Australia's national Indigenous infrastructure strategy. Recommendations considered by Australian governments. Policy framework for infrastructure in remote Indigenous communities further developed to be ready for submission to the Australian Government in late 2012.
Infrastructure Australia's public transport strategy. Recommendations considered by Australian governments. National Public Transport Strategy developed to be finalised in 2012–13.
Infrastructure Australia's national land freight strategy. Recommendations considered by Australian governments. National Land Freight Strategy considered by government and industry representatives. Updated strategy to be released in mid-2012 and finalised in 2012–13.

Detailed report on performance

The following report is against the headings from the applicable output from the 2011–12 PBS.

a) Infrastructure Australia

Approaches to national infrastructure corridors

Infrastructure corridor protection has historically represented a significant gap in infrastructure planning. In 2011–12, Infrastructure Australia advised the Minister for Infrastructure and Transport on the importance of developing a coordinated strategy on national infrastructure corridors and on ways forward.

National Public Transport Strategy

In 2011–12, Infrastructure Australia further developed a strategy to improve public transport service standards through better use of existing infrastructure and investment in new infrastructure. The strategy is to be released in 2012–13.

National Ports Strategy—implementation plan

During 2011–12, Infrastructure Australia continued to work through COAG to finalise the implementation plan linked to this strategy. The strategy aims to improve planning at the state and territory, precinct and port levels and to provide for closer integration of supply chain stakeholders.

National Land Freight Strategy update

Infrastructure Australia has been working to finalise this strategy and develop an implementation plan for land freight. The objectives of this work are to assist to create a seamless, national freight network, that will increase Australia's competitiveness, lower costs and minimise congestion on our road and rail networks. The strategy and implementation plan are scheduled for release in 2012–13.

The strategy identifies three priorities for improving freight effectiveness and efficiency: better governance of road use; consideration of freight in strategic planning and land-use planning; and moving from commitment to reform to action. Infrastructure Australia recommended two pilot projects to demonstrate the benefits of reform: access to high productivity vehicles on the Hume Highway between Melbourne and Sydney; and increasing mass limits on access roads to the Chullora rail terminal in Sydney.

Sell and Build: Asset Sales Strategy

During 2011–12, Infrastructure Australia undertook research and worked with relevant state and territory departments to identify infrastructure assets on their balance sheets. The purpose was to identify additional sources of infrastructure funding as a result of the sale and recycling of government-owned assets. A policy paper was scheduled for release in 2012–13.

Efficiencies in Major Project Procurement: Benchmarks for Efficient Procurement of Major Infrastructure

In 2011–12, Infrastructure Australia conducted a major research project to develop benchmarks for infrastructure procurement agencies, aimed at decreasing procurement time and costs. The benchmarks are to be released in 2012–13.

Indigenous Infrastructure Policy Framework

Throughout 2011–12, Infrastructure Australia worked with representatives of Indigenous communities and peak bodies, the Department of Families, Housing, Community Services and Indigenous Affairs and experts in the field to finalise a policy framework for the prioritisation, funding and delivery of infrastructure in remote Indigenous communities. The framework is supported by a tailored cost-benefit analysis tool.

Public education programs and conferences

During 2011–12, Infrastructure Australia ran a series of well-attended conferences, aimed at improving knowledge and public debate on key infrastructure issues. The series included a conference on improving private investment in infrastructure (November 2011); Connecting the Dots, focused on reforms to the planning, prioritisation, funding, delivery and ongoing operation of infrastructure in remote Indigenous communities (February 2012); a ports and cities planning conference (March 2012); and a conference on improved user—pays models for infrastructure funding (March 2012).

Infrastructure Australia continued a program of publishing all reports on its website, in line with the Information Publication Scheme.

Other work

In 2011–12, Infrastructure Australia produced or commissioned research into road-freight pricing trials (August 2011); private financing options for upgrades of the M5 and F3-M2 corridors in Sydney (March 2012); the Tasmanian ports and freight strategy report (May 2012); and a review of ports balance sheets capacity (June 2012).

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Last Updated: 17 November, 2014