buc, looks like you may be on to something, with a federal...

buc, looks like you may be on to something, with a federal election due later this year Rudd will be looking for election sweeteners.

Infrastructure Australia unveils its project wish list

* Annabel Hepworth
* From: The Australian
* June 07, 2010 12:00AM

INFRASTRUCTURE Australia plans to outline a bold regulatory reform agenda when it releases a new list of priority projects at the end of this month in a bid to tap the private sector to help address the country's $770 billion infrastructure backlog.

The body, set up by the Rudd government to end the nation's infrastructure woes and chaired by former British Airways and Ansett boss Rod Eddington, is understood to be planning to release its updated national infrastructure priority list on June 30.

The decision to release an updated version of the document annually on June 30 was made at a recent meeting of the high-powered Infrastructure Australia council and will mean the list is available to federal and state governments when they begin framing their budgets.

It is understood the next document will identify major reform in areas such as water, the ports and freight networks.

A key aim of the document will be to tap private sector funds to co-invest in plugging the hole in the nation-building program.

The Rudd government's Building Australia Fund has been largely exhausted and the states with the most constrained budgets have the most critical infrastructure needs.

The government is under growing pressure from business leaders to press ahead with a new round of infrastructure reform.

Former NSW premier Nick Greiner, who chairs Citigroup Australia and is deputy chairman of Stockland and on private company boards, said infrastructure "seems to have slipped well down the priority list of the federal government".

"It's been swamped by other issues, and I think that's a pity because the real notion of having Infrastructure Australia and trying to get similar state bodies was to not have it go up and down like a yo-yo, but get a long-term list of projects, long-term funding, some predictability in terms of the pipeline of projects and so on," Mr Greiner said.

Infrastructure Australia's last major list -- which was used to guide the carve-up of the BAF -- was released with the 2009 federal budget last year, but several projects on the list are unfunded.

Infrastructure Partnerships Australia estimates the national backlog of projects is worth $770bn.

It is understood the updated list will have several new projects added as state governments have pushed for projects such as a road freight tunnel linking to the Port of Melbourne, to attract federal funding. Bilfinger Berger Australia chief executive Peter Brecht said the projects that had commenced were largely "low-hanging fruit" and that another round of initiatives was needed.

"We really need a second round, a continuing pipeline," Mr Brecht said.

He said this was needed "so that it's not boom and bust, and the industry can train up its people, retain its people and be in a position to respond".

"In the boom and bust environment, we are forever starting again."

United Group chief executive Richard Leupen said it would take decades to fix the infrastructure backlog in areas such as transport, water and energy. "What we need is a long-term (approach) instead of short-term band-aids that go to the hottest spots . . . We really need a 10 and 20-year, or even longer, strategic plan that we execute . . . We need something that's apolitical, that isn't just being driven by one party or the other based on what the problems of the next election are about."

But Mr Leupen emphasised that projects still faced more difficult funding conditions, given that the global financial crisis had triggered a major deterioration of monoline insurers that had been used to keep funding costs down.

"Governments are constrained in how much money they've got. And they don't have access easily to the private sector until we come up with a private sector funding model that can supplement government spending that will impact on the rate at which these projects get done."

Royal Bank of Scotland country executive Stephen Williams said public-private partnerships were an option as lenders were willing to lend to the projects in Australia as they look to avoid the uncertainty in Europe and the US.

But he said in the wake of the global financial crisis, loans were shorter and prices were higher.

Business leaders have slammed the pace of improvements to the nation's infrastructure.

Toll chairman Ray Horsburgh said that the problem was "it's just not happening fast enough".

"There's been a lot of talk about road works and road plans . . . there hasn't been much evidence that much has been happening yet. It's much needed," Mr Horsburgh said.

Wesfarmers and Boral chairman Bob Every said business wanted improvements across a wide range of assets.

"It's still a major problem: the infrastructure in Australia is in a terrible position. You look at the last 30 years and the great times we've had in this country. It's really not a great compliment that we find our infrastructure in the state it's in."

Linfox chief executive Michael Byrne said his truck drivers were suffering from traffic snarls, undermining their productivity. "It's not the driver's fault," he said. "They get less work done in their shift. They don't do as many loads or cover as many kilometres."

While there had been some upgrades to major roads, this was failing to keep pace with the growing population, particularly in Sydney, he said.

"You don't have to be a rocket scientist to see that the M5, the M7, are parking blocks of a morning and an afternoon, and peak hour gets longer and longer and longer," Mr Byrne said.

"I suspect the governments are spending money and doing some good work on infrastructure, but it's not up to the level of population growth."

Rod Sims, who was an economic adviser to former prime minister Bob Hawke and is an adviser to the Business Council of Australia, said he hoped for more focus on reform rather than spending. A failure to address infrastructure problems could "seriously hamper economic growth", Mr Sims said. "The agenda is going to move to basically an economic reform spree rather than a spend spree. That's what I think has to happen."

Infrastructure Partnerships Australia executive director Brendan Lyon said the government needed to define its infrastructure policy to shorten the current project backlog.

"If Canberra is going to be a long-term partner in addressing Australia's infrastructure shortfalls then it needs to spell out how and when it will fund the next round of nationally significant infrastructure projects," he said.

"This year's budget was very modest in its commitment to infrastructure.

"The Infrastructure Australia process has been very positive, but more projects need to come off the shelf if the federal government is going to show that it's serious about enhancing productivity and addressing Australia's infrastructure backlog."