27 minute read
The Hon Mark Birrell | Chairman, Infrastructure Australia
The Hon Mark Birrell
Infrastructure Australia Chairman the Hon Mark Birrell provides his observations on the outlook for Australia’s infrastructure market, and how the reformed Infrastructure Australia will bring a much stronger focus to the principal constraint facing infrastructure in Australia: funding.
Key points:
• Infrastructure Australia’s new structure better provides the resources and independence needed. • The national infrastructure audit will be released by year’s end, providing the first robust top-down assessment of national requirement. • The audit will be used to develop a robust 15-year national infrastructure plan. • Beyond the audit and plan,
Infrastructure Australia will bring a stronger focus on process, regulatory and structural reform to infrastructure markets.
Our nation needs a period of good policymaking and substantial reform if Australians are to secure the real benefits they seek from the infrastructure of today and tomorrow.
Infrastructure is fundamental to the national economy, and it underpins both economic and social wellbeing. It helps to define our national identity, because our infrastructure aspirations are a reflection of our ambition as a country.
Australia is already acknowledged as having one of the world’s most sophisticated infrastructure and construction sectors. Correctly so, given our national legacy of past reforms to the procurement and regulation of infrastructure assets, and especially the creation of infrastructure markets.
But it is increasingly obvious to users, providers and policymakers that infrastructure reform must go further. There is now something of a national consensus that infrastructure is an economic and social policy opportunity that Australia has to seize during this decade.
Therefore, the challenge to each of us, and the guiding challenge for Infrastructure Australia, is to distil this infrastructure consensus into an actionable programme of well-led and carefully articulated enabling policies, which progressively deliver muchneeded projects across the Federation.
While I am optimistic about the outlook for infrastructure, and our collective opportunity to drive change and win real benefits, I am also realistic about the degree of change that will be needed.
Since Federation, Australia’s infrastructure has been viewed within a context of state assets and state requirements. This is a legacy of a Constitution that limited the Federal Government’s infrastructure responsibilities to those few sectors that affected commerce between the states, or were transnational in nature (even in 1901).
In effect, the Constitution left us a legacy where the national government’s role for infrastructure was limited to telecommunications, interstate freight and aviation.
While these neat divisions were often overridden by the practicalities of Commonwealth-State Financial Arrangements, the role of the national tier of government as the dominant source of funds (and increasingly as a source of formal project approvals) has only become clear to all in recent years.
But the rise of the central government, and the imperative of national networks and markets, has not always been matched with corresponding corrections to structural accountabilities, funding sources or project management capabilities.
This has been compounded by the recent problems of declining state government budget settings. And while Canberra has emerged as a welcome source of alternative budgetary allocations, it has not always had the inherent skills to choose project recipients, let alone actually deliver such projects itself.
This legacy adds rich complexity to the issues before us. That is why Infrastructure Australia is an important structural reform – because if we perform our role well, we will better equip Australia to fully address the costly shortfalls in infrastructure.
These shortfalls have for too long depressed productivity, and resulted in business performance and employment creation being compromised. Let us never forget our collective national experiences of: • transport networks failing to keep pace with demand • state-owned water and electricity utilities being unreliable or unreasonably costly • hospital facilities confounded by lengthening waiting lists • freight corridors being neglected.
Observations like this are now so common, and immediately familiar, that they necessitate a strategic, national response.
But, there is one particularly compelling reason for us to act: if we get our infrastructure right, we will protect Australia’s quality of life at a time of sustained population growth and global economic change. continued on page 20
Not all advisors are the same. Sure, they all have the professional education and intellectual understanding you’d expect. But you need advisors who don’t just understand your industry from a textbook. You need advisors who have got their hands dirty too...
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Against this historic federal context, Infrastructure Australia has been given a special mandate from the Prime Minister to resolve and advise on the range of solutions to better address the country’s infrastructure task. Our role is all the more substantive given the benefit of the agency’s permanence and independence under our new Act of Parliament.
Our foundation roles are the completion of a fresh national audit of existing infrastructure, then using this assessment to distil a 15-year vision for Australia’s infrastructure. The audit is being produced with the engagement and support of all state and territory governments.
Ideas will be invited from the public, capturing the aspirations of those who are direct consumers of the many services that infrastructure delivers.
The 15-year plan, and the audit that informs it, are key outputs for Infrastructure Australia and form the immediate focus for the agency. These documents, done comprehensively and in a real partnership with governments and the broader business sector, will provide a much clearer picture of where the national interest is best served, and what projects need to be fast-tracked.
Our infrastructure plan should give national economic policymakers renewed confidence and urgency toward enlarged and accelerated infrastructure investment.
It should also provide the community with a deeper understanding of the scale of the infrastructure task, and allow the community to directly share in the trade-offs to see why substantial reform is meritorious.
Our approach to the audit and the national infrastructure plan will be driven by our positive belief that Australia’s infrastructure gap can be filled. Indeed, smarter regulation and more efficient investment could equip Australia to get substantially more from the infrastructure that we already have – and marshal a measurably larger capital funding envelope to deploy to major projects.
In our work, we will be seeking to bring forward infrastructure that: • strengthens our role as a globally focused economy, helping Australians to export valueadded products, services and resources • meets our needs as a highly urbanised nation, enhancing the livability of our cities, and fostering the skilled jobs and innovative businesses that cities create • underpins Australia’s prospects for sustainable growth, utilising the best of new technology, and encouraging strategic planning and integrated land-use decisions.
Our success as an agency relies, in part, on the degree of rigour and the transparency that we are able to systemise into the selection of major projects.
A welcome aspect of the growing community understanding and consensus on infrastructure has been the expectation that governments undertake appropriate due diligence on each major project. A focus on the relative benefits and costs, together with clear articulation of the objectives that a project is expected to achieve, will drive better decisions and maximise the practical and economic effect of projects that are brought forward.
With our new legislation now in place, Infrastructure Australia will be required to record evidence of cost/ benefits and reasons for the inclusion of any major projects on our national infrastructure pipeline. Infrastructure Australia’s toolkit assessment will look at economic, social and environmental factors.
Evolving out of all of this will be an observable and better-respected prioritisation process, and a highly credible pipeline of nationally significant projects.
Across the nation, we should be able to ensure that new infrastructure is constructed for the right reasons, at the right time.
While the development of a well-evidenced and ambitious 15-year national infrastructure plan forms our foundation output, it is only the beginning of our programme of reform.
We know that the missing piece in infrastructure is as much about our capacity to pay for it as it is about shortfalls in planning, procurement or operational efficiencies. For this reason, Infrastructure Australia, under my leadership, will bring a much stronger focus to canvassing the great constraint on progress: funding.
With the guidance of the new Board, the wisdom of the national and state treasuries, and the contribution of the business sector, Infrastructure Australia will seek to provide wise answers on what is needed in infrastructure, and what can be afforded.
A primary task must be to expand the total funding base for new infrastructure, and to create effective market mechanisms that signal efficiently for, and sustain, new capital investment.
The current debate about funding sources and privatisations should be encouraged. Australia can certainly better utilise private sources of capital, including superannuation funds, particularly through their appetites for privatised assets.
Selling or leasing old assets like ports and energy facilities allows the proceeds to be immediately redeployed to fund new projects, like public transport systems or freight networks. Handled well, the multiplier effect of these initiatives will be considerable and long-lasting.
Of critical importance, the consumer price benefits in markets like electricity will also be substantial because of the better disciplines and incentives that have been proven to apply to utilities under private ownership.
So, the discussion about asset recycling is vital, because it offers the breakthrough that we need in the immediate term.
No one would pretend that the sale of capital assets and reinvestment of the proceeds is the sole solution to infrastructure funding. This initiative must be accompanied by a longer process to realign costs and revenues on public sector balance sheets to increase general fiscal capacity, together with targeted reforms in specific infrastructure markets to create better linkages between access prices and investment.
Australia is lucky in this regard, because of the benefit that we will derive from the array of substantial national policy reviews that are underway.
Processes like Professor Ian Harper’s Review of National Competition Policy, the committed reviews of the tax transfer system, and the White Paper on Reform of the Federation look set to be very important, and many will require a high degree of community education before implementation can become politically or practically feasible.
This is where Infrastructure Australia will play a much more substantial role over the medium term, because we are the standing agency for infrastructure reform – meaning that we will help to interpret these recommendations into a logical and ambitious reform programme.
We can remain a national champion for complex changes long after the momentary media or political focus has moved from these reports and their complex recommendations, and on to new issues.
Infrastructure Australia was designed purposefully to have two roles: the interrogation and articulation of national project priorities, and as a standing commission on the efficiency of key infrastructure sectors.
Infrastructure Australia will play an important role in distilling the recommendations across this constellation of white papers (and earlier documents like the Henry Review, with its excellent consideration of road pricing reform, for example) into an actionable programme of debate, resolution, reform and policy implementation – all of this over the long term.
We will also continue to advise Canberra – which has historically been viewed as remote from the practicalities of project delivery and network operation – on how the national government can evolve in its role as the true, new leader in infrastructure policy.
Indeed, our most transformative impact in Canberra will be by advising on how a smart, wellmotivated national government can use its capital investment priorities and its powers to leave a lasting legacy of major project delivery.
This will be sustained through significant enabling reforms to infrastructure markets, through a sensible review of funding approaches and prioritisation methodologies and, in the immediate term, through Infrastructure Australia being a reform partner to state and national governments.
Australia can now get beyond a talking phase and enter an exciting period of national progress on infrastructure planning and delivery.
The broad public consensus that infrastructure solutions must be found provides powerful strength to the arm of reform-minded policymakers. And failure to reform current practices would mean that we miss the real opportunity to increase the efficiency, quality and reach of the nation’s infrastructure.
Infrastructure Australia has been asked by the Abbott Government to help it and others deliver better practice and better projects. To this end, we will foster a deeper and more sophisticated public policy debate about how to secure ambitious national social and economic policy outcomes.
Our aim can be reduced down to one meaningful goal: to use infrastructure to set Australia up for a higher standard of living. It’s a goal worth getting behind.
The Hon Mark Birrell
Mark Birrell was the founding Chairman of Infrastructure Partnerships Australia, and retired from the role in 2013. He has extensive experience as a company director and lawyer, and from 2002–12 was the national leader of the infrastructure group at Minter Ellison Lawyers. In April 2014, Mr Birrell was appointed Chairman of Infrastructure Australia. Currently, he is also the Chairman of the Port of Melbourne Corporation, Regis Health Care Limited and Post Super Pty Ltd, and is President of the Victorian Employers’ Chamber of Commerce & Industry. Mr Birrell’s earlier roles have included being Deputy Chairman of the Australian Postal Corporation and Chairman of Evans & Peck Limited. He is a Fellow of the Australian Institute of Company Directors.
Previously, Mr Birrell was Minister for Major Projects and Government Upper House Leader in Victoria, working on successful Public Private Partnerships (PPPs) and capital works initiatives like CityLink and the Docklands.
MEGATRENDS – WHAT DO THEY MEAN FOR INFRASTRUCTURE PLANNING?
Modern, reliable and affordable infrastructure is a key driver of economic growth – and of living standards. Estimates of the world’s infrastructure investment requirement over the coming decades run into the trillions of dollars. While developed countries will want more, and more sophisticated, infrastructure systems, developing countries still need the basics – water, energy, sanitation and basic access to education and health facilities.
There are some obvious challenges at a macro level – having the right type and variety of commercial models to deliver the projects, the availability of capability and, most importantly, affordability. Yet, is there a need for a fundamental shift in the way that infrastructure assets are planned, developed, procured and operated? Is it really just about delivering more?
We argue that the impact of the global ‘megatrends’ – changes that will transform the world over the coming decades – will change the approach to infrastructure investment decisions. Megatrends, as identified by PwC, are described in the breakout box.
What do these megatrends mean for infrastructure? Do they mean that we’ll need more of it? If so, will it be affordable? Will more infrastructure come at the expense of scarce resources and environmental health? Or can we be saved by technological breakthroughs? Here, we discuss four challenges to be addressed.
1. Distributed assets – local solutions for modern people
Technological advances and the desire for resource efficiency make the case for moving the infrastructure needed to sustain life (energy, water and food) closer to the demand. Increased urbanisation improves the economics of having such assets ‘embedded’ in our living and working environments.
Energy supply is an easy example. In Australia, the major sources of energy are typically far removed from end users. For example, around 90 per cent of Victoria’s electricity is generated by the four large coalfired power stations located in the Latrobe Valley, around 150 kilometres from central Melbourne, with Melbourne being home to 75 per cent of the state’s population. Long transmission distances require large capital investment in networks and result in large energy losses through transmission. Moreover, Victoria’s generation from old brown coal-fuelled power stations is among the most greenhouse gas (GHG)-polluting on the planet.
What is a megatrend?
In 2014, at PwC, we worked with our clients to determine the big changes disrupting their organisations, and the economy as a whole. We’ve distilled what we learned into five megatrends that have a major influence today, and will have a major impact over the coming decades: 1. demographic shifts (ageing populations) 2. shifts in global economic power (from West to East – think China and India) 3. accelerating urbanisation (denser cities) 4. climate change and resource scarcity (at what cost?) 5. technological breakthroughs (what’s next?).
Megatrends 1 and 2 have obvious implications for infrastructure in the future. There will be a significant increase in demand for aged care and health facilities, and the shift from West to East will result in a major geographic shift in the concentration of investment. The implications of these shifts will be wide-reaching; however, in this article, we focus on the joined implications of megatrends 3, 4 and 5 – urbanisation, environmental challenges and the opportunities presented by emerging technologies. Following, we provide a brief description of these megatrends.
Urbanisation
In the 20th century, the world’s urban population grew from 220 million to 2.8 billion, with growth expected to reach almost five billion by 2030. Urbanisation means an increased concentration of required infrastructure services – including transport, energy, water and waste disposal. Australia is already the most urbanised country in the world.
Climate change and resources
The scientific consensus with climate change is clear, yet the political prevarication and social equivocation continue to provide a drag on action; however, it is inevitable that the march of environmentally friendlier practices will continue. No-one disputes the sense in not littering or not pumping untreated sewage into our waterways or not using asbestos to build our homes; however, not so long ago, these were accepted practices in Australia. In addition, to combat the scarcity of resources, such as water, energy, minerals and forests, we should expect an increased focus on recycling, multi-using and reducing waste.
Technological breakthroughs
The pace of development, change and proliferation of smart phone devices is visible evidence of the current rate and implications of technological change. We all know the world is changing, but what sort of technological breakthroughs might impact future infrastructure development? Some possibilities, which are under development, include: • artificial intelligence: the rapid growth in the processing power of computers is enabling analysis of data using increasingly complex models to solve problems in ever more ingenious ways – enabling smarter, more informed investment decisions • wireless energy transfer: early technology has been developed that can beam energy from a power source directly into a device without the need for wires. Consider the implications of a world where nothing needs to be plugged in anymore • solar fuel: a technology that creates liquid fuel using only sunlight, carbon dioxide and non-potable water is currently being developed. It mimics the process that plants use to produce energy through photosynthesis, allowing the sun’s energy to be kept in liquid form. The implications for renewable energy storage could be revolutionary.
Yet, there is an existing and proven low-GHG-emitting technology that can be located in heavily populated areas, and that can deliver base-load electricity (unlike solar and wind), as well as heating and cooling to residential district heating and cooling schemes, or to clusters of commercial buildings. Combined heat and power (CHP or cogeneration/trigeneration) – fired by natural gas, waste or biomass – can reduce GHG emissions by about 60 per cent compared with grid-delivered brown coal electricity, can avoid additional expenditure on transmission and distribution networks, and can improve the security of energy supply by being isolated from grid interruptions. Such distributed energy systems are well utilised in parts of Europe and North America where, admittedly, the economics are improved by the cold climate; however, the main obstacle in Australia is the lack of government sponsorship.
In the past, central planning of the energy network was the domain of integrated, state-owned electricity entities, but disaggregation and/or privatisation of the electricity systems across each Australian state has resulted in individual generators, network providers and retailers, each concerned about their own commercial interests, without any incentive to develop options that will erode their existing businesses.
Local city councils have attempted to step up to the plate. Sydney City Council had plans for a major distributed energy scheme with an aim to supply 70 per cent of the city’s electricity needs by 2030, but now these plans have been scaled down to a small fraction of the original intent. A number of other city councils across Australia have lacked success in this space. Arguably, local government needs assistance from higher levels of government to deal with the complex commercial, legal, regulatory, policy, market, planning, technical and risk issues inherent in distributed energy generation and reticulation projects.
Moreover, individual private enterprises are not able to lead market development in an effective way due to the need for government sponsorship and the need to pull together government bodies, private businesses and private residents to participate in the scheme.
2. Multi-use infrastructure assets – killing many birds with one stone
A basic knowledge of 19th- and 20th-century Western history (particularly United States and Australian history) tells us that infrastructure development ran in tandem with the settlement of a country and the evolution of technologies. The model was: wear some rough roads from A to B, then build a railway from A to B, then build a telegraph line from A to B, and then eventually build some electricity transmission lines, possibly along the same route.
Now, we live in an age of multiple proven infrastructure models and sophisticated emerging technologies. A linear adoption is no longer necessary or appropriate. A current project in the United States (supported by the United States Government and General Electric) is a neat case in point. The plan is to build roads from super-strong glass and solar cells to generate electricity. If the technology was applied to all of the country’s roads, it would produce more than three times the country’s energy needs, using renewable energy instead of coal. This example is real, with prototypes currently being installed in parking lots. The solar road idea, in its simplest form, is the building of an infrastructure asset that provides both a transport function and an energy generation purpose. Yet, the development of the project has led to the consideration of other functions, including light-emitting diodes (LEDs) to illuminate the road lines, heating elements to resist ice and snow and the potential to recharge electric vehicles while moving.
While the solar road may sound futuristic, we already have an increasing focus on ensuring that infrastructure investment is efficient and can serve multiple purposes where possible. Think schools with community facilities, hospitals with health hotels, public housing with integrated private housing, integrated transport, communications and energy transmission corridors.
3. Closed systems – moving towards resource efficiency and zero waste
Where industrial processes consume resources such as water and energy, and produce waste products, there is an opportunity to use new technologies to reduce the impact on the environment. As with multi-use infrastructure assets, increasingly connected thinking is required to deliver innovation and efficient outcomes. Agriculture is a field where we can significantly reduce the ‘leakage’ of resources. Let’s think about it: key agricultural inputs include water, energy and fertiliser; key outputs include food products, plant waste and animal waste. Arable land occupied by farms would otherwise be natural forests or grasslands.
In a closed system, crop waste and animal litter could be used to fuel an anaerobic digester to generate energy to power irrigation systems and to heat greenhouses for growing hydroponic vegetables. The anaerobic process would also produce fertiliser as a byproduct. In addition, part of the farm could be devoted to forestry as a carbon-farming initiative to restore environmental balance.
What does all this mean for infrastructure planning? There is a growing body of research and development recognising that natural systems are incredibly efficient (inherently environmentally optimised!) and provide the best basis for designing man-made systems. It is usual for infrastructure projects to need to comply with environmental regulations, and there might be particular environmental objectives; but how is it best to incentivise, recognise and reward the design of infrastructure systems that do not result in any environmental externalities?
4. Rapidly changing and complex technologies – the future is your friend… or is it?
Where the required infrastructure output is an information technology (IT) service, the pace of technology change and the risk of inefficient resource use and early obsolescence can loom ominous. Large-scale IT projects pursued by governments (and also by the private sector) have been prone to very long development times, very large cost overruns and often sub-optimal outcomes. The problematic overlay is that the rate of project development can be outpaced by the rate of technology development. This can result in a completed project that is dated and unwieldy at the outset.
Moreover, IT projects often fail or deliver sub-optimal outcomes due to a lack of an effective interface between the commercial and technological streams of thinking. For those who are not IT experts, the field can seem like a bewildering array of esoteric concepts – clouds, racks and platforms. This can result in the subject matter experts (the technology specialists) having a much greater say in the project development than what may be the case with a road, school, or hospital. While the opportunities might be exciting, bland commercial questions might rightly override technical considerations – for example, what do budget, cost and risk say about building on top of legacy architectures, rather than starting from scratch with greenfield infrastructure?
It is easy to see why an increasing convergence of technology and commercial thinking is needed in the development and delivery of IT projects. Procurement and contractual models that enable and encourage flexibility will become increasingly valuable.
What does it all mean?
The sponsorship void – policy and planning
Late last year, Sydney City Council made a very detailed submission to the ‘Inquiry by the Public Accounts Committee into Cogeneration/Trigeneration in NSW’.
It makes clear how industry and technological changes can create voids in the policy, legal and regulatory frameworks needed to enable valuable (and environmentally friendly) investment. The challenge for governments is to move quickly enough to allow and, indeed, encourage investment in new infrastructure systems that would otherwise be technically and commercially viable.
Open development processes
Traditionally, governments have determined the need for infrastructure assets. Moreover, projects are normally developed on a departmental or portfolio basis – that is, it might be an energy project, a waste project or a water project. Once a decision has been made, a tender will be issued, seeking bids. The tender process may allow for add-ons to the core infrastructure asset requirement, but the process isn’t designed to and doesn’t easily accommodate the design and delivery of true multi-use assets.
What are the alternatives? Governments can become much more joined-up in their thinking, through interdepartmental think tanks or whole-of-government agencies with a mandate to develop infrastructure concepts without constraints by sector.
The private sector is also well positioned – perhaps even better positioned – to develop infrastructure ideas that leverage technologies and know-how to merge the delivery of multiple service needs. The private sector may also possess certain assets (such as land or existing infrastructure) that governments would not normally factor into their infrastructure planning.
So, should the private sector be encouraged to develop concepts for government? One approach is through a structured tender process, where the private sector’s ideas and asset contributions are sought to solve a broad requirement. For example, if a government wants to improve the quality and quantity of the stock of social housing, they could put out a tender that essentially says, ‘Based on the government’s existing housing stock, we invite privatesector parties to propose ideas and unique contributions that you may be able to make’; however, this leads to the dilemma of ‘comparing apples with oranges’ – that is, comparing two or more proposals that are radically different and achieve different outcomes. While this can be overcome, it is at odds with the typical approach of presetting evaluation criteria that align with very specific service outcome objectives.
This leads to the question of unsolicited proposals. Some governments have established processes for considering unsolicited proposals. The Victorian Government released a new Unsolicited Proposal Guideline in February 2014. It emphasises that the proposal ‘must have a degree of uniqueness [including] a unique idea or IP, being in a unique position or having ownership of strategic assets integral to delivering the proposal’. Should this sort of approach be used to more proactively seek and harness private-sector ideas to inform the infrastructure planning process? It could encourage private sector innovation and participation in the wider scope of planning and delivering infrastructure assets. This would be attractive to the private sector as an outlet for testing ideas and as a means to avoid some of the costs and risks inherent in usual competitive infrastructure bid processes.
Real options and flexibility
So how do we move from a history of ‘lumpy’, one-dimensional investments in infrastructure projects to a more measured and progressive approach, which takes advantage of multisector thinking and innovative technologies to accommodate change?
Traditionally, the value and benefits of infrastructure projects have been measured and compared in terms of net present value (NPV). In structuring and valuing projects going forward, governments may be well advised to augment this with a real-options valuation approach, aimed at capturing the increasing value of flexibility and management of risk in a fast-changing world. Real options are the project-based equivalent of financial options (that convey the right, but not the obligation, to buy or sell a security at a future point in time).
The value of real options may arise from the inherent operational flexibility of different infrastructure configurations, or from being able to delay investments until more information is obtained, or from the up-front building in of the ability to modify or add to the asset in the future.
An interesting and relevant application of real-options thinking is in planning water infrastructure and operating strategies in a world of climate change uncertainty. The Blue Nile project in Ethiopia considers new multi-purpose dam alternatives along the river. The approach incorporates flexibility in design and operating decisions – including the selection, sizing and sequencing of new dams, and reservoir operating rules. The analysis relies on a simulation model that includes linkages between climate change and system hydrology, and tests the sensitivity of the economic outcomes of investments in new dams to climate change and other uncertainties. The real-options framework has been valuable in identifying dam configurations that will deliver robust to poor outcomes and that are sufficiently flexible to capture high upside benefits.
Back home in Australia, it is easy to see that real options could be incorporated into the commercial design of road, rail, utility and health infrastructure assets. Making an unwieldy one-off, long-term investment decision appears increasingly at odds with the rapid evolution of analysis tools, technologies and user demands. Do the traditional business case and decision-making processes need to transform to accommodate the potential of the present and future? Does there need to be an evolution of the public-private partnership (PPP) model? PPPs are beneficial because they take a long-term view of the optimisation of the build, operation and maintenance of an asset within a set of predefined parameters. However, PPPs do not represent a fluid model for long-term asset expansion or evolution, with uncertain add-on dates.
Summary thoughts
The future looks like an exciting place. For infrastructure development and delivery, it will be a time of much activity and rapid change. Innovative thinking (both in government and the private sector) will be required to achieve the best outcomes. Governments need to be aware of where there might be obstacles to investment. Collaborations of public and private intelligence will be increasingly fruitful, and the flexibility to respond to changing circumstances should carry a high premium. The megatrends will march on regardless. Infrastructure development needs to be supported by the commercial models that best exploit the opportunities that those trends present.
