Infrastructure Australia

Australian Government Department of Infrastructure and Regional Development logo

The Hon Warren Truss MP
Deputy Prime Minister
Minister for Infrastructure and Regional Development
Parliament House
CANBERRA ACT 2600

Dear Deputy Prime Minister

I am pleased to present the Infrastructure Australia Annual Report for the year ended 30 June 2014.

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 of The Hon. Mark Birrell Chairman of Infrastructure Australia

The Hon. Mark Birrell

Chairman
Infrastructure Australia

Programme 1.1—Infrastructure Investment

Highlights

Infrastructure Australia received twenty project submissions for the infrastructure priority list in 2013–14. Following consideration of the submissions, five projects were added to the Infrastructure Priority List.

In 2013–14 Infrastructure Australia worked further to develop a National Urban Transport Strategy. In addition, it also published the paper State of Play on Australia's Key Economic Infrastructure Sectors and completed work on developing improved practices for infrastructure corridor protection.

The Australian Government's Infrastructure Tax Incentive was launched during 2013–14 and Infrastructure Australia organised a number of information sessions for key stakeholders as well as industry consultations. As inclusion of a project on the infrastructure priority list is a requirement of the incentive, a number of private sector project submissions were presented for Infrastructure Australia's consideration.

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 number of reports released in 2013–14.

In addition to the above, Infrastructure Australia is preparing for fundamental reforms to its organisational structure.

The Infrastructure Australia Amendment Act 2013 was passed in Parliament in June 2014. The Act gives Infrastructure Australia greater independence, expands the organisation's functions, and confirms its role within the infrastructure sector.

Overview

Elements of Programme 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 the development of regulatory frameworks, and more efficient operation and delivery of infrastructure to promote productivity improvements.

At at 30 June 2014, Infrastructure Australia's members were:

photographs of Infrastructure Australia's members: The Hon Mark Birrell Chairman, Dr Ian Watt AO, Dr Martin Parkinson PSM, Mr Jim Hallion, Mr Anthony Kannis, Dr Kerry Schott, Professor Peter Newman, Mr Phil Hennessy, Ms Elana Rubin and Ms Nicole Lockwood

The Acting Infrastructure Coordinator was Mr John Fitzgerald.

Summary of Performance

Tables 7.1 and 7.2 summarise Infrastructure Australia's results in delivering Programme 1.1 against the key performance indicators and deliverables and their targets published in the 2013–14 Portfolio Additional Estimates Statements.

Table 7.1 Summary of performance-Programme 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. 2013–14
Achieved
2012–13
Achieved
2011–12
Achieved
2010–11
Achieved

This was achieved through Council of Australian Government's adoption of asset recycling reforms that had arisen as a result of Infrastructure Australia's policy advice and advocacy.

Assessment of 25 project submissions took place to develop the 2013 infrastructure priority list. Work was conducted on strategies across the spectrum of infrastructure-related issues: corridor protection, ports, land freight and asset sales.

Integrated infrastructure and urban system priorities are identified to address the local, regional and national needs of Australians. Initiatives endorsed by Australian governments. 2013–14
Substantially
Achieved
2012–13
Achieved
2011–12
Achieved
2010–11
Achieved
Infrastructure Australia released the national urban transport strategy in December 2013.
Demonstration projects and initiatives promote infrastructure efficiency and urban sustainability. Initiatives endorsed by Australian governments. 2013–14
Substantially
achieved
2012–13
Achieved
2011–12
Achieved
2010–11
Achieved

Notably through making the case (over several years and in 2013–14) for the protection of future infrastructure corridors, more attention has been given to corridor protection than in the past.

Access issues to Chullora Intermodal Terminal were resolved. Trial of B-Triples on Hume Highway continued.

Result Key
Achieved All targets for 2013–14 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 2013–14.

Did you know?

Total freight volumes have quadrupled over the past four decades, predominantly due to significant growth in road freight and, more recently, strong growth in mining-related rail freight volumes.

Source: Freightline 1.

Table 7.2 Summary of performance-Programme 1.1 deliverables

Deliverable Target Result
Analysis and prioritisation of infrastructure projects and reform initiatives. Recommendations considered by Australian governments. Assessment of 25 project submissions to develop the 2013 infrastructure priority list.
Infrastructure Australia's remote Indigenous infrastructure framework Recommendations considered by Australian governments. The policy framework for planning, prioritisation, funding and delivery of infrastructure in remote Aboriginal and Torres Strait Islander communities was developed through extensive consultation. The policy framework is supported by a tailored cost-benefit analysis tool. In 2013–14, Infrastructure Australia presented the framework to the Council of Australian Government Senior Officials Meeting where the framework was noted.
Infrastructure Australia's public transport strategy. Recommendations considered by Australian governments. A report on a broader urban transport strategy (including public transport) was published in January 2014.
Tax loss incentive for designated infrastructure projects. Incentive implementation. Extensive consultations were undertaken during the implementation of the tax loss incentive for designated infrastructure projects.

Detailed Report on Performance

(a) Infrastructure Australia

Infrastructure Australia Council

In April 2014 the Infrastructure Australia Council farewelled its first Chairman, Sir Rod Eddington, who moved onto a role with the Australia-Pacific Economic Cooperation Business Advisory Council.

Sir Rod Eddington achieved a great deal as Chair of Infrastructure Australia; appointed when it was created in 2008. He oversaw the first comprehensive National Audit of Australia's Infrastructure, the publication of annual infrastructure priority lists to create a pipeline of projects, uniform Public Private Partnership Guidelines, along with reforms including the streamlining of bidding for projects.

The Hon. Mark Birrell, an existing Council member, was appointed as Chairman in April 2014.

Infrastructure Australia Audits and 15-year Plan

Infrastructure Australia's current focus is on undertaking a comprehensive audit of existing nationally significant infrastructure across Australia. It has been given this new mandate by the Hon. Warren Truss MP, Deputy Prime Minister and Minister for Infrastructure and Regional Development. The comprehensive audit is using macro-economic modeling to estimate and project the direct economic contribution of various networks and assets to Gross Domestic Product.

Extensive consultation is also being utilised in the audit process. There have been numerous meetings involving a range of agencies from each jurisdiction as well as the appointment of expert panels in each sector. These panels provide guidance and critique work on the audits and plan at each milestone of the development.

The results of the audit will help develop a 15-year national plan on Australia's infrastructure needs and directly address ways to deal with potential future infrastructure gaps. The 15-year plan will recommend both reforms and projects on the basis of rigorous assessment.

Infrastructure Australia is also conducting a specific audit of infrastructure in northern Australia. Its advice will cover water, energy, transport, and communications infrastructure that are considered to be critical to the current and future development of northern Australia.

The results of this audit will feed into the Australian Government's White Paper on Developing Northern Australia which will provide a platform to realising the full economic potential of Australia's north.

Together these packages of work form part of the Australian Government's infrastructure agenda, ensuring that we then have a comprehensive and robust infrastructure plan for Australia's future.

This work is extensive and is expected to be delivered to the Australian Government in 2014–15.

Asset Recycling

Infrastructure Australia released a number of papers for the ‘Sell to Build’ programme.

The Review of Infrastructure Debt Capital Market Financing was released in February 2014 and the paper Australia's Public Infrastructure-Update Paper-Balance Sheet Impacts of Sell to Build was released in December 2013.

Infrastructure Australia is now developing a policy on Asset Recycling which will focus on infrastructure needs defined in the national infrastructure audit and the 15-year project plan.

National Ports Strategy—Implementation Plan

Following the publication of the National Ports Strategy 2012–13, 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

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 Regional Development.

Commencing in 2012–13 and continuing into 2013–14 Infrastructure Australia began testing the land-freight ideas proposed in the land-freight strategy through a proof-of-concept programme. 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.

National Urban Transport Strategy

In 2013–14 Infrastructure Australia published 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 2013–14 Infrastructure Australia released a policy update paper, Balance Sheets Impacts of Sell to Build, which was a follow up to the Sell and Build Australia's Public Infrastructure: Part of the Answer to Removing the Infrastructure Deficit paper which was released in 2012–13. 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.

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

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. The Infrastructure Working Group intends to seek jurisdictions to monitor performance against the benchmarks.

Indigenous Infrastructure Policy Framework

In 2013–14 Infrastructure Australia refined the policy framework for planning, prioritisation, funding and delivery of infrastructure in remote Aboriginal people and Torres Strait Islander communities. This was through extensive consultation with Aboriginal people and Torres Strait Islander leaders, state, territory and Australian Government agencies as well as Aboriginal people and Torres Strait Islander infrastructure experts. The policy framework is supported by a tailored cost-benefit analysis tool. In 2013–14 Infrastructure Australia presented the framework to the Council of Australian Governments' Senior Officials Meeting where the framework was noted.

Public Education Programmes and Conferences

In 2013–14 Infrastructure Australia continued a programme of publishing all reports on its website, in line with the Information Publication Scheme. Infrastructure Australia also provided speakers and papers for numerous industry reports.

Other Work

During 2013–14 Infrastructure Australia released the State of Play paper. The paper discusses Australia's key economic infrastructure sectors. It provides some insight into the level of confidence that the nationally significant infrastructure within the energy, transport, communications and water sectors is meeting the needs of Australian industry, households and individuals.

Infrastructure Australia also progressed research and engagement with stakeholders in other key infrastructure areas, including energy and water sectors.

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Last Updated: 3 February, 2015