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

signature

Sir Rod Eddington
Chair
Infrastructure Australia

Program 1.1—Infrastructure Investment

Highlights

During 2012–13, Infrastructure Australia consolidated gains in infrastructure planning, priorities, financing and pricing. Dr Ian Watt AO and Dr Martin Parkinson PSM joined the Infrastructure Australia Council following the retirement of Mr Terry Moran AC and Dr Ken Henry AC.

Infrastructure Australia presented its fifth annual report, the National Infrastructure Plan, 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 community 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 79 project submissions for the infrastructure priority list in 2012–13. Fifty three were new submissions; of these 34 projects have been included on the priority list. The 2013 priority list includes projects with estimated capital expenditure of between $82.0 billion and $91.2 billion. The infrastructure priority list has $11.0 billion of ‘ready to proceed’ projects and a further $20.3 billion to $22.3 billion of projects in the ‘threshold’ category.

The Regional Infrastructure Fund provides for funding assistance to priority infrastructure projects as well as improved infrastructure planning. Infrastructure Australia prioritised four regional planning initiatives for assistance under the Regional Infrastructure Fund in 2012–13. These covered regional supply chains in northern and central Queensland, a Hunter Valley (New South Wales) economic infrastructure plan, and a regional mining and infrastructure plan in South Australia.

In addition, Infrastructure Australia worked with jurisdictions, regional bodies and others, inviting submissions on 13 proposals eligible for funding from the Regional Infrastructure Fund.

In 2012–13, Infrastructure Australia worked further to develop a National Urban Transport Strategy.

Following publication of the National Ports Strategy last year, Infrastructure Australia continued to work through COAG in 2012–13 to action the implementation plan linked to the strategy.

In 2012–13, Infrastructure Australia completed further work on developing improved practices for infrastructure corridor protection.

Further, Infrastructure Australia completed work on the National Land Freight Strategy in consultation with government and private sector stakeholders. This strategy is now being led by the Department of Infrastructure and Transport.

Infrastructure Australia consulted key stakeholders in private and public sectors to develop benchmarks for major infrastructure procurement that will provide incentives for more efficient procurement.

The advantages of adopting a ‘sell and build’ strategy as a means of raising funds for new infrastructure were highlighted in a report released in late 2012. Further work in this area is under way.

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 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. At 30 June 2013, 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, Mr Michael Deegan, 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 2012–13 PB Statements.

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. 12–13 Achieved 11–12 Achieved 10–11 Achieved 09–10 Achieved
All of the ‘ready-to-proceed’ projects in Infrastructure Australia's first priority list and other ready-to-proceed projects, such as Cross River Rail in Brisbane, received funding from the Australian Government, and state and territory governments. Assessment of 79 project submissions to develop the 2013 infrastructure priority list. Fifth 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 conference held on infrastructure planning.
Integrated infrastructure and urban system priorities are identified to address the local, regional and national needs of Australians. Initiatives endorsed by Australian governments. 12–13 Achieved 11–12 Achieved 10–11 Achieved 09–10 Achieved
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. 12–13 Achieved 11–12 Achieved 10–11 Achieved 09–10 Achieved
Access issues to Chullora intermodal terminal resolved. Trial of B triples on Hume Highway commenced.
Result Key
Achieved All targets for 2012–13 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 2012–13.

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 79 project submissions to develop the 2012 infrastructure priority list. Four regional plans funded under the Regional Infrastructure Fund. Fifth annual report to COAG and infrastructure priority list completed and submitted.
Infrastructure Australia's national Indigenous infrastructure strategy. Recommendations considered by Australian governments. The policy framework for planning, prioritisation, funding and delivery of infrastructure in remote Indigenous communities was developed through extensive consultation. The policy framework is supported by a tailored cost-benefit analysis tool.
Infrastructure Australia's public transport strategy. Recommendations considered by Australian governments. National Urban Transport Strategy continues to be developed. Negotiations with jurisdictions are well advanced.
Infrastructure Australia's national land freight strategy. Recommendations considered by Australian governments. In 2012–13 Infrastructure Australia completed its work on proposing a national land freight strategy for Australia. The initiative has subsequently been led by the Department of Infrastructure and Transport. The Department is chairing an intergovernmental working group to progress the implementation of the strategy with all governments and industry.

Detailed Report on Performance

The following report is against the applicable component of Program 1.1 in the 2012–13 PB Statements.

(a) Infrastructure Australia

National Ports Strategy—Implementation Plan

During 2012–13, following publication of the National Ports Strategy, Infrastructure Australia continued to work with jurisdictions and local bodies to action the implementation plan linked to the strategy. The strategy was developed to improve planning at the state and territory government, precinct and port levels and to provide for closer integration of supply chain stakeholders. A key focus was working with selected port communities to develop 50-year plans for ports and their hinterlands.

National Land Freight Strategy Update

In 2012–13 Infrastructure Australia completed work on proposing a national land freight strategy for Australia. The initiative has subsequently been led by the Department of Infrastructure and Transport. There has been no formal response to specific recommendations made by Infrastructure Australia. These included a review of roads governance and adjustments to the national land transport network so that it more accurately meets its purpose of linking strategic and nationally significant centres, for example inclusion of Newcastle and the north-west coastal highway.

Infrastructure Australia began testing the land-freight ideas proposed in the land-freight strategy through a proof-of-concept program. This entailed a trial for ‘B triples’ on the Hume Highway with New South Wales and Victorian Governments, resolving access issues to the rail terminal at Chullora with Bankstown City Council and the New South Wales and Australian Government ministers, and testing the concept of a road asset manager with the Australian Rural Roads Group and Gwydir and Moree shire councils.

The office, with Regional Development Australia Hunter and Infrastructure New South Wales, advanced an economic plan for the Hunter region, including an inbound logistics model based on the port and related road and rail links. As a result, several important projects were placed on the national infrastructure priority list.

National Urban Transport Strategy

In 2012–13, Infrastructure Australia furthered the National Urban Transport Strategy, which aims, among other things, to improve public transport service standards through better use of existing infrastructure and investment in new infrastructure.

Sell and Build

During 2012–13, Infrastructure Australia released a policy paper Sell and Build-Australia's Public Infrastructure: Part of the Answer to Removing the Infrastructure Deficit. The purpose was to identify additional sources of infrastructure funding as a result of the sale or long-term lease and recycling of government-owned assets. A follow-up paper was considered for release in 2013–14.

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

In 2012–13, Infrastructure Australia released new benchmarks for infrastructure procurement. They are designed to promote more consistent application of best practice in procurement time and costs. The benchmarks were developed in conjunction with key players in major infrastructure procurement.

Indigenous Infrastructure Policy Framework

In 2012–13, Infrastructure Australia developed a policy framework for planning, prioritisation, funding and delivery of infrastructure in remote Indigenous communities. This was through extensive consultation with Indigenous leaders, state, territory and Australian Government agencies as well as Indigenous infrastructure experts. The policy framework is supported by a tailored cost-benefit analysis tool. In 2013–14, Infrastructure Australia will be seeking commitment from all jurisdictions to adopt the policy framework.

Approaches to National Infrastructure Corridors

In 2012–13, Infrastructure Australia worked towards a coordinated strategy on national infrastructure. This involved extensive negotiations with jurisdictions and key stakeholders.

Public Education Programs and Conferences

In 2012–13 Infrastructure Australia held a joint conference with the Australian Academy of Technological Sciences and Engineering on infrastructure planning.

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

Other Work

During 2012–13, Infrastructure Australia progressed research and engagement with stakeholders in other key infrastructure areas, including energy and water sectors.

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Last Updated: 10 December, 2014