January 28, 2014

Governments challenged to go ‘back to basics’ on infrastructure planning

 Australia’s decision makers have been challenged to think longer term to meet the infrastructure challenges of the Asian century. 

With Australia’s population set to pass 70 million by the end of this century the SMART Infrastructure Facility at the University of Wollongong, has released a Green Paper 'Infrastructure Imperatives for Australia'; which challenges the status quo and calls for a strategic planning horizon of 50 – 100 years.

 SMART is one of the largest infrastructure research centres in the world and recently brought together experts from the global infrastructure community to examine next generation infrastructure issues.

 The Green Paper identifies three infrastructure imperatives for the nation; 

•  Establish an Australian Infrastructure Market (AIM)
•  Enhance Attractiveness of Infrastructure Private Funding
•  Overhaul Infrastructure for Radical Innovation and Productivity Growth

 SMART CEO Garry Bowditch believes Australia’s strong track record for investing big dollars in infrastructure will not be enough to get it where it needs to be in meeting all the opportunities and challenges of the future. 

Mr Bowditch said Australia has a fundamental reform task ahead of it that involves extracting much more value for every dollar invested in its infrastructure. Further reforms of Infrastructure Australia are sought to improve substantially the quality of planning between Federal, State and Territory governments. Infrastructure needs to be quarantined from the dysfunctional federal – state system and a more cooperative and shared aspirations approach should be a very high priority.

 He believes an Australian Infrastructure Market is urgently needed that ensures markets, land use, planning, financing, delivery and operations can work together over the long life of infrastructure.

 “Short sightedness has yielded low productivity, high costs and an inability to cut through with reforms to deliver the right infrastructure at the right time for Australia, Mr Bowditch said.

 “Governments need to take a more strategic role in infrastructure by articulating what outcomes they want, and allowing the market to bring forward smart solutions without the presumption of building a new asset.

 “Many assets have no clear owner and are not carried on balance sheets like the private sector. This prevents proper operational and financial data being available to decision-makers.

 “Highly productive capital-lite solutions, such as better use of existing assets, must be the new infrastructure norm going forward to enhance investment attractiveness.”

 Mr Bowditch is calling on all governments to go back to basics with infrastructure and to seek answers to simple questions like ‘what is the problem a project is seeking to address’ and ‘are the benefits valued by the community and customers using it’.

 “A stronger customer focus and access to better information will assist decision makers to do a better job choosing what to build new or whether to renovate existing assets,” he said.

 “Projects are getting bigger and more complex, yet Australia has an alarming lack of information and no culture of review for its infrastructure.

 “There is an urgent need to learn the successes and failures of past projects and share them across government and with the private sector so the efficiency and efficacy of future infrastructure is assured.”

 “This will enable governments and private sector to be more productive through sharing information, ideas and innovations.”

 The Green Paper details a framework for reform that will help ensure a better infrastructure future for Australia so it is front footed to meet the opportunities of the Asian Century.