Industry News, Up front

Understanding the message

Two experts give their insights into several infrastructure investments in the 2016/17 Federal Budget and some of the considerations for the future of Australia’s wider infrastructure network.

Two experts give their insights into several infrastructure investments in the 2016/17 Federal Budget and some of the considerations for the future of Australia’s wider infrastructure network.After years of planning, Inland Rail – the mammoth undertaking to open up the freight corridor between Melbourne and Brisbane via New South Wales – is moving ahead.

In the Turnbull Government’s first Federal Budget, released in May, the project received $594 million in additional equity funding to acquire the land for the rail corridor and to continue pre-construction works.

Many significant state infrastructure projects received a piece of the Federal Budget pie. Melbourne’s M80 Ring Road, WestConnex, NorthConnex, the Ipswich Motorway, the Perth Freight Link and Tasmania’s Midland Highway are just a handful of the major developments included in the infrastructure spend.

However, if Infrastructure Australia’s (IA) Infrastructure Priority List is anything to go by, many of these projects have been on national radar for some time.

Key messages

“When you look at the new infrastructure spending commitments in the budget, there weren’t that many of them,” says Anthony King, Practice Lead, Victorian Government Advisory at AECOM.

Like last year’s Budget, Mr. King asserts that there weren’t too many surprises in exactly what infrastructure projects and incentives have received Federal funding.

The Roads to Recovery, Black Spot, Bridges Renewal and Heavy Vehicle Safety and Productivity Programs will continue after allocations of millions of dollars in funding.

Australian cities are better supported in this Budget, thanks to the government’s Smart Cities Plan, which sees more than $3.4 billion invested in urban rail projects across the country.

One of the main implications to take from infrastructure spending in this Budget, however, is a clear message to state governments.

“The key message to the states from the Federal Government is that state-based projects are their responsibility: ‘deal with it and we’ll do what we can to help’,” says Mr. King.

He adds that taking this into consideration, it is not surprising that the two big infrastructure items in this latest budget – the $594 million for Inland Rail and $2 billion to establish a National Water Infrastructure Load Facility – are national projects.

Inland Rail is already tipped to be a major economic booster, the financial benefits of which will be “felt across the nation”, according to a joint statement from the offices of the Minister for Infrastructure and Transport Darren Chester, Minister for Regional Development Fiona Nash and Minister for Finance Mathias Cormann following the Budget announcements.

The statement said that the east coast freight corridor between Melbourne and Brisbane already generates 75 per cent of Australia’s gross domestic product. It is also responsible for commodity exports of more than $260 billion a year. Inland Rail is expected to deliver almost $22.5 billion of direct and indirect benefits to Australia.

Mr. King agrees that Inland Rail, as an example, will have great economic benefits for the nation down the track. However, he questions whether it is the best investment in the short term.

“A lot of land acquisitions will happen between now and when it’s to be built. It will be an important national project, but it’s not for some time,” he says. “You’d think that in the interim there would be other projects across the nation that could use the investment.”

The significance of the national-based infrastructure project for Australia is clear in the national government’s eyes and, as Mr. King asserts, that forms part of the message Federal Government is trying to send to states.

Many major state transport infrastructure projects already funded by their respective governments were covered in the Budget, including Melbourne Metro and Sydney Metro, which have been flagged for $857.2 million and $1.7 billion funding respectively.

Again, Mr. King says that this exemplifies the Federal Government’s role, giving assistance to major state projects that are already on track.

Mr. King says that many of the infrastructure investments in the Budget also show there is a focus on facilitating exports and how Australia moves its resources offshore. Take Inland Rail, the Perth Freight Link and the Murray Basin Freight Link, for instance.

“When you look at other budget announcements, it’s certainly about that – it’s helping the external gateway.”

Future considerations

Since the first Australian driverless vehicle trial in South Australia last November, autonomous technology has been a hot topic of conversation. The impacts it may have on how roads are used as an asset are many, as are those of other new systems or technology, including user-pays road models or new intelligent transport systems (ITS).

While the Federal Budget has prioritised national infrastructure and major freight projects around the country, consideration for how new technologies may change Australia’s road and transport infrastructure is not so prevalent.

Mr. King explains that new technology and innovation in transport infrastructure will need to be driven by state, not national government. “A lot of it will need to be developed by states by starting to work with the private sector,” he says.

AECOM, for instance, has been involved in international projects that are implementing driverless trains in transport infrastructure.

“Driverless trains have been around for a long time. That technology is here and it’s being practised.”

He says the reality is that driverless vehicle technology is moving fast, but that it will almost certainly be pushed and developed by the private sector.

Gerard Waldron, Managing Director of ARRB, sees the Federal Government’s investment in the significant freight projects around Australia as a big positive.

“From our perspective, I’m pleased to see investment in transport and freight because Australia definitely needs that for its overall productivity,” he says. However, he asserts that future road and transport technologies now need to start being considered by government at a national level.

He highlights intelligent transport systems (ITS) and autonomous technology, and how the evolution to driverless vehicles will impact Australia’s road networks as a whole.

“There are a whole lot of things we can do now using currently available automated driving technology. I’d like to see us understand that first, then look toward improving infrastructure designs to prepare us for the next levels,” he says.

“Getting the most productive outcomes from that large network of roads is a pretty important priority for government,” he adds. “By having a thorough economic analysis of how we might best benefit from using autonomous techniques.”

Freight infrastructure, like the major projects flagged for funding in this latest Budget, for instance, are some of the best networks to benefit from ITS and autonomous technology if it is planned.

Dedicated freight lines will take heavy vehicles away from urban corridors, and the introduction of autonomous technology will help to make freight routes safer and more efficient.

“All over the world the technology is moving much faster than the regulation, so it’s pretty important for government to provide leadership in demanding proponents demonstrate benefit and risk management, rather than prescriptive design,” he says. “Getting the maximum benefits out of technology as it emerges is a really tricky role for government.

“Fully autonomous vehicles are still probably 20 years away. The semi-autonomous technologies are all the things coming through in new cars today that provide insight into the future. It just needs thinking about to ensure we get the best outcome for Australia.”

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