Future Building 2025

futurebuilding

futurebuilding

Minister’s address | The Hon. Gabrielle Williams

Demographer address | Infrastructure for tomorrow – planning for Australia’s demographic shift, Simon Kuestenmacher, The Demographics Group

Editor: Kirsty Timsans

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Panel discussion | 20 years of reform

Keynote interview | Shemara Wikramanayake, Managing Director and Chief Executive Officer, Macquarie Group

Panel discussion | Delivering more with private investment in public infrastructure

Panel discussion | Energy: from ideas to electrons

Keynote interview | Greg Boorer, Founder and Chief Executive Officer, CDC

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Chairman’s foreword

In September, Infrastructure Partnerships Australia’s flagship conference, Partnerships, returned to Melbourne.

As the premier infrastructure event in the nation, Partnerships 2025 once again brought together a host of infrastructure and business leaders to directly engage on the critical issues shaping our sector now and into the future.

I am delighted to present this year’s edition of Future Building, which captures these conversations for your reflection and insight.

Partnerships 2025 carried particular significance, coinciding with the broader milestone of 20 years since the establishment of Infrastructure Partnerships Australia. It marked two decades of advancing our mission – to shape public debate, connect the sector and drive reform towards good infrastructure policy. This mission underpins the purpose of Partnerships each year.

Opening the conference, the Hon. Gabrielle Williams MP, Victorian Minister for Transport Infrastructure, and Minister for Public and Active Transport, outlined a suite of major projects defining Victoria’s infrastructure program. She reaffirmed the importance of a strategic, long-term approach to meeting the needs of the State’s growing population.

Building on this theme, demographer Simon Kuestenmacher painted a compelling picture of Australia’s population trajectory over the next decade. He noted that continued growth will place increasing pressure on housing, transport networks and essential services, underscoring the need for coordinated, and enduring, infrastructure planning.

The day’s discussions were further enriched by insights from respected leaders across the sector. Among these was Macquarie Group Managing Director and Chief Executive Officer Shemara Wikramanayake, who explored the macro-economic forces shaping markets at home and abroad.

This year’s Partnerships also brought together senior leaders for a series of panel discussions exploring how organisations are addressing the sector’s most pressing challenges – from bridging the perception gap around private sector participation in public infrastructure, to accelerating Australia’s energy transition.

In recognition of our milestone year, a special panel reflected on the last two decades of policy reform, featuring some of the key figures who have been influential in driving this reform, as well as shaping the Infrastructure Partnerships Australia story.

Amid growing demand for digital infrastructure, Partnerships closed the event with a dedicated session on data centres, featuring Founder and Chief Executive Officer of CDC Greg Boorer. This discussion highlighted the pivotal role of data centres as critical infrastructure underpinning national security and economic prosperity, and reaffirmed Australia’s emerging potential as an artificial intelligence hub.

As we look to the year ahead, may these reflections spark new ideas, deepen understanding of the challenges before us, and inspire continued commitment to strengthening the future of our industry.

Sir Rod Eddington AO Chairman Infrastructure Partnerships Australia

Transforming waste management for a sustainable future

Cleanaway is Australia’s leading waste management and resource recovery company, but to label it solely as a garbage collection company is rubbish.

Far from pivoting away from waste, Cleanaway’s transformation

aims to enhance efficiency in the way domestic and commercial waste is viewed. To Cleanaway, waste is a resource to be managed and benefited from, and through the adoption of this mindset and investment in cutting-edge technology

and infrastructure, it is transforming a sector that touches every Australian.

With a fleet of approximately 5,900 trucks, Cleanaway serves around 130 local councils, and more than 150,000 industrial and business customers around Australia.

‘A modern economy needs fit-for-purpose waste management. This shift is about building stronger and resilient infrastructure that delivers sustainable, low-carbon solutions for our customers, all while maintaining top-notch service and competitive prices,’ says Preet Brar, Executive General Manager – Energy From Waste, Cleanaway.

A commitment to decarbonisation is at the heart of Cleanaway’s mission. The company has set ambitious internal emissions targets, aiming for a 43 per cent reduction in carbon dioxide emissions and a 34 per cent reduction in methane emissions by 2030. These targets align with the Intergovernmental Panel on Climate Change’s 1.5 degrees Celsius scenario and the Global Methane Pledge.

‘We’re focused on reducing our own emissions, but also on decarbonising the waste industry as a whole. We are proud to be the only waste management company in Australia with such ambitious emissions targets,’ says Brar.

Changing perceptions of waste are behind Cleanaway’s refocused strategy. No longer viewed as having no value, waste is now recognised as a valuable resource that can be recovered, reused or recycled.

Consequently, Cleanaway is reimagining the waste hierarchy, which includes domestic recycling initiatives such as Circular Plastics Australia1 and partnerships for soft plastics recycling. The waste leader is also spearheading international recycling efforts that send materials like aluminium cans to overseas smelters for repurposing. Downcycling to transform waste into products like park benches and clothing is also a priority.

A critical component of Cleanaway’s strategy is its investment in energy from waste (EfW) facilities that convert non-recyclable waste into clean energy. Governments across Australia have adopted landfill diversion targets in an attempt to

dramatically reduce the amount of waste being landfilled – reducing greenhouse gases and protecting existing airspace. One EfW facility with a feedstock of 760,000 tonnes per annum has the capacity to power up to 140,000 homes and provide steam for heating 31,000 homes, or the equivalent industrial applications.

Valuable materials such as metals and aggregates can be recovered from the ash produced during combustion, further reducing the need for virgin materials and preventing waste from ending up in landfill. Additionally, EfW facilities require less land than traditional landfills, with a footprint of less than 10 hectares compared to the hundreds of hectares needed for landfill operations.

‘EfW facilities, as an example, reduce greenhouse gas emissions by diverting waste from landfill. The energy generated from these facilities offers a low-carbon-intensity electricity source, contributing to carbon savings over the asset’s life span,’ says Brar.

‘Closing the loop on waste creates cost and environmental efficiency. It is a win-win and there are myriad opportunities across the waste life cycle where we can do this.’

Cleanaway also plans to develop circular energy recovery precincts, where EfW will act as a catalyst for investment, providing opportunities for industries to co-locate, creating an ecosystem of symbiotic industries supporting local manufacturing, innovation and long-term job creation. The partners involved in the precinct will use the electricity, heat, steam and cooling produced by EfW facilities onsite and for neighbouring industries.

‘These precincts will be a place where solutions are provided for the most complex challenges, including the energy transition, onshore manufacturing, food and water security, recycling, circularity and waste management,’ says Brar.

An example is the Melbourne Energy and Resource Centre (MERC), which is being designed to

process residual waste that would otherwise be sent to landfill. In August 2025, Cleanaway received a cap licence from Recycling Victoria, allowing the MERC to process up to 760,000 tonnes of waste annually.

‘This enhances the project’s economic and operational viability, supporting environmental benefits, lower waste management costs and improved energy recovery at scale,’ says Brar.

The facility will process 760,000 tonnes of waste each year, diverting 13 per cent of Victoria’s waste from landfill. It is expected to produce enough energy to power 140,000 homes and businesses, while recovering 200,000 tonnes of ash and metal resources that would otherwise be discarded.

These projects also create jobs and broader economic uplift for local communities. The MERC, for example, is expected to create around 800 jobs during construction and employ up to 50 people during regular operations, including expert engineering roles, helping support the Victorian economy.

In addition to the MERC, Cleanaway also has plans to build the Bromelton Energy and Resource Centre in Queensland. Just like MERC, this facility will use internationally proven technology to convert waste into energy, similar to successful operations in cities across Europe, North America and Japan. Community consultation is underway.

‘Through these initiatives, we are transforming our business model and leading the way in sustainable waste management,’ says Brar. ‘Our focus on circularity, integrated infrastructure and decarbonisation sets a new standard for our industry, demonstrating that waste is a valuable resource.’ ♦

End note

1 Circular Plastics Australia (PET) is a joint venture between Cleanaway, Pact Group, Asahi Beverages and Coca Cola Europacific. Circular Plastics Australia (PE) is a joint venture between Cleanaway and Pact Group Home | Circular Plastics Australia | Remade in Australia

Welcome address Adrian Dwyer, Chief Executive Officer, Infrastructure Partnerships Australia

Good morning and welcome to Partnerships 2025, returning this year to Melbourne. I’m delighted you could join us for one of Infrastructure Partnerships Australia’s signature events.

Today, we bring together a host of senior business and public sector leaders to directly engage on the critical questions our sector must answer, and to debate the challenges and opportunities before us.

Each year, Partnerships offers a chance to reflect on where we have been, and to look ahead to where we

are going. For me and many others in this room, this pause for reflection feels especially significant as it coincides with the twentieth anniversary of the establishment of Infrastructure Partnerships Australia.

Our organisation was founded on the belief that the cause for good infrastructure could be advanced by stronger engagement between the public and private sectors.

In the last two decades, Infrastructure Partnerships Australia has transformed from a startup operation into the

Infrastructure Partnerships Australia Chief Executive Officer Adrian Dwyer welcomes attendees to Partnerships 2025

national voice for infrastructure policy and dialogue. And this would not have been possible without the guidance and mentorship of our early supporters.

I would like to acknowledge the presence of several of these individuals in the room – our Chairman, Sir Rod Eddington AO, and the broader Advisory Board; previous Chairs the Hon. Mark Birrell AM and Adrian Kloeden; and their fellow Patron Tony Shepherd AO – all of whom have played a pivotal role in our story.

I’d also like to welcome, from our host state, the Hon. Gabrielle Williams MP, Minister for Transport Infrastructure, and Minister for Public and Active Transport, who will open today’s proceedings. Many of our longstanding supporters are also among today’s event sponsors.

Macquarie Capital, which has sponsored Partnerships from its inception, deserves particular recognition as our Platinum Sponsor once again. Macquarie’s contributions over the years have helped this event go from strength to strength, and we are proud that this enduring partnership continues to deliver for the sector.

Macquarie Capital is joined by our Gold Sponsors, Transurban, Schneider Electric and Herbert Smith Freehills Kramer – all of which have generously supported this event and our broader program of work throughout the years.

And finally, thank you to our Silver Sponsors – The APP Group, the Victorian Department of Treasury and Finance, Mizuho | Greenhill & Co., and Transgrid.

In many ways, the Infrastructure Partnerships Australia story reflects the broader reform journey of the sector itself. Both can be captured in this aphorism: much done, much to do. As a sector, we can stand tall on the work of recent years – from delivering global-scale transport projects and

unlocking innovative financing, to cultivating institutional strength and maturity, and leading the decarbonisation effort. But we must also acknowledge that we stand in the midst of a productivity challenge – one that has been steadily, and insidiously, tightening its grip since the mid 2000s.

At its core, this flagging productivity is driven by fragmented regulation, sticky approval processes, high input costs, labour skills gaps, unnecessary government intervention into otherwise functioning markets, and shifting demographics.

Spurred by a strong majority at the May Election, this has prompted the Federal Government to put productivity back onto the agenda, as reflected in August’s Economic Reform Roundtable. Following more than a decade of advocacy, we are finally seeing the green shoots of reform on an issue close to our hearts, with governments agreeing to work together to implement a road user charge.

Amid the productivity challenge, the sector finds itself at a crossroads. As the mega-transport pipeline recedes, the national pipeline enters a new era: one that is defined by energy and, increasingly, by digitalisation, fuelled by the rise of artificial intelligence and the data centres that power it.

Yet, this is a very different world from the one that delivered the transport boom. If anything, today’s challenges are even more formidable – shaped by increasing uncertainty at both economic and geopolitical levels.

And so, today’s agenda is designed to bring focus to that uncertainty, and to chart a pathway forward. Each year, we endeavour to set the bar high by bringing our members the discussions and insights they can’t get anywhere else. And today is no different.

Infrastructure Partnerships Australia’s Partnerships 2025 conference

Next generation of sound protection

Traditional, high-rise noise barriers along train tracks are often an eyesore, obstructing views for both residents and passengers. The most effective way to reduce noise is to address it at its source, as close to the tracks as possible. STRAILastic has developed an optimal solution with its product line, offering a variety of sound protection systems that maintain clear views.

The STRAILastic systems are designed to be installed as close to the rails and the track clearance gauge as possible. By tackling noise at its point of origin, these systems can be much lower in height. The smallest sound protection wall is just 55 centimetres high, which allows it to be placed very close to the source of the noise.

Variants with heights of 73 centimetres and 125 centimetres have been developed and are in production. This low-profile design ensures that the noise barriers are far less visible than conventional ones, blending seamlessly into the landscape. This also allows passengers to enjoy the view from the train despite the presence of the sound protection.

In addition to their unique shape, the high effectiveness of these products comes from their material: high-quality, fibre-reinforced rubber with a highly absorbent acoustic surface. The systems are also extremely durable, shatterproof, and resistant to UV rays and ozone. They can easily withstand the pressure

and suction forces created by passing trains, which prevents material fatigue and ensures a long product life span.

For exposed sections of track like bridges or retaining walls, STRAILastic offers special sound protection elements. These elements, called infill panels, can be mounted directly onto existing, structurally suitable railings. This eliminates the need for an additional support structure and its corresponding building permit. These elements effectively shield the tracks from the surrounding area without being obtrusive. The infill panels are installed vertically and can be customised with printed panels to mimic, for example, the appearance of a hedge or a stone wall. ♦

STRAILastic mini sound protection wall

Ecological awareness has grown strongly in recent years. Green tracks contribute to the reduction of fine dust pollution and to improvement of the microclimate in inner-city areas.

STRAILastic protects the superstructure from stray current. In addition, noise emissions are considerably minimised.

¬ insulates stray current

¬ quick and easy installation possible, can be installed during on-going operation

¬ available for all superstructure types by encapsulating the rail, the primary airborne noise is considerably

¬ reduced compared to an open construction method

Fight sound before it is generated dampens the vibration using its weight

Camden Council’s strategic push for investment

As one of Australia’s fastest-growing local government areas, Camden in South Western Sydney is at a crossroads. Its population is projected to surge by 81 per cent to over 257,000 by 2046 – a growth rate that demands immediate action to ensure a liveable, connected, and sustainable future.

With the 2027 state elections approaching, Camden Council has ramped up advocacy through its campaign, ‘The Time Is Now’. The program outlines urgent calls to action across public transport, roads, education and health care – areas critical to Camden’s prosperity.

Transport remains a top priority. Council is pushing for the Sydney Metro Southern Extension (Macarthur Metro) – linking Campbelltown, Oran Park, Narellan and Bradfield – alongside the South West Rail Link Extension from Leppington to Bradfield, connecting directly to Western Sydney International Airport. Following advocacy ahead of the 2025 Federal Election, Council welcomed the Federal Government’s $1 billion commitment to secure land

corridors for a future rail link connecting Bradfield Aerotropolis, Leppington and Macarthur – a key priority of The Time Is Now.

Road infrastructure is equally critical. Projects like the Camden Bypass Extension, the second stage of the Spring Farm Parkway, and the Leppington Road Network are essential to unlock housing, reduce congestion, and improve safety. Camden Council is also calling for upgrades to Camden Valley Way, Raby Road and Rickard Road. Complementing these is the Western Sydney Rapid Bus project, which would deliver a fast, reliable service linking Camden with the new airport and major employment hubs.

Education and health care remain urgent priorities. With a significant shortage of schools, Council is advocating for new primary and secondary schools with adequate open space, expansion of early childhood services, and relief for overcrowded schools. The recently announced school at Emerald Hills addresses only a fraction of Camden’s need. In health

care, Council seeks redevelopment of Camden Hospital, a major new public hospital between Oran Park and the airport, and integrated health hubs in Oran Park and Leppington to bring care closer to home.

The Time Is Now delivers a clear message – without urgent investment, Camden risks being left behind. With the Western Sydney International Airport opening in 2026 and the population surging, every project must be delivered in a coordinated and timely way to create an integrated and resilient infrastructure network.

Although some progress has been made, such as the $12.3 million committed to planning the second stage of the Spring Farm Parkway, these efforts fall short of what’s needed. The entire project, which is vital to delivering a critical east–west transport link for the Macarthur region, is expected to cost almost $600 million. ♦

For more information on Camden Council’s The Time Is Now campaign, visit camden.nsw.gov.au/advocacy

THE TIME NOW

Camden Council is advocating for our growing community. In the lead-up to the Federal election—and in preparation for the next State election — ‘The Time Is Now’ calls for urgent government investment to support our region’s rapid growth.

ADVOCATING FOR CAMDEN

Our Advocacy Priorities include:

• Essential Rail Services

• Western Sydney Rapid Bus

• Critical Road Infrastructure

• Investment in schools and education

• Investment in new and existing healthcare

Learn more about our ongoing advocacy efforts and read ‘The Time Is Now’ publication in full at www.camden.nsw.gov.au/advocacy or scan the QR code.

Minister’s address

The Hon. Gabrielle Williams MP, Minister for Transport Infrastructure, and Minister for Public and Active Transport

Minister for Transport Infrastructure, and Minister for Public and Active Transport the Hon. Gabrielle Williams MP delivers the opening address at Partnerships 2025

Key points:

• Transport should no longer be planned in isolation, but strategically integrated with housing and land-use planning to manage urban sprawl, ensure cohesive service delivery, and create well-connected, liveable communities.

• Investments in other transport modes, alongside the opening of the Melbourne Metro Tunnel, will enable buses and active transport to better integrate into the rail system, and reshape the culture of public transport use in favour of an interchangebased network approach.

• All levels of government must take a forward-looking approach to deliver sustainable projects that can accommodate Victoria’s growth, while fostering social cohesion, enhancing productivity and strengthening the State’s long-term resilience.

This conference is a great opportunity for people to share their expertise and experience, and to have that important contest of ideas and debate, which always leads to better outcomes. We should never shy away from those difficult conversations and from challenging each other’s opinions on the best way to move forward. It’s a very healthy endeavour.

2025 is a big year in Victoria’s infrastructure calendar, and many of you are familiar with this as you have been our partners who have delivered some of the projects that have been a somewhat disruptive part of Victoria’s landscape for a very long time. Later this year, we’ll be switching on the West Gate Tunnel project and the Metro Tunnel project, which we have spent the last decade building, and so far has been largely conceptual to the public. These are transformational projects, which have effectively created a decade’s worth of disruption that our community has been weaving around without yet fully realising the benefits that will be delivered – not just in the here and now, but for generations to come.

Over the last decade, we have had a $100 billion infrastructure pipeline with 50,000 direct jobs attached to it, and we’ve embarked upon those projects knowing that we would be statistically unlikely as a government to be the ones cutting the ribbon on them.

We now find ourselves here and being able to do that, but it does beg the question in a world where governments and politicians are rightly criticised for thinking in short-term

political cycles: Why would we sign up to projects that we know, and knew when we signed up to them, had a life that most likely would’ve extended beyond the life of the government at the time?

The answer was simple: if we didn’t, we would go backwards and to stand still was also to go backwards. If we didn’t invest back then it would not only have got more expensive, but the economic and social costs of delay would have been massive.

Underpinning all that thinking was one major challenge, and it’s a challenge that is not unique to Victoria, or even Australia – it’s a challenge that all governments should be occupied with and from many different vantage points. That is the story of growth.

Melbourne will be the size of London by the 2050s. You have all probably heard that statistic bandied around quite a lot. It means when we look to how we prepare for that, we need to rethink the way we use land, our planning settings and, of course, what we need to invest in in terms of infrastructure to be able to support that level of growth.

Alongside that, there is now an elevated conversation about housing – confronting what can be a difficult truth, that endless urban sprawl just doesn’t make sense.

The cost of endless urban sprawl is that we need to continue to be able to deliver the infrastructure and services that preserve liveability to do that. That’s becoming increasingly harder.

Growth sets a key challenge for all governments, regardless of their political persuasion, and that is preserving our liveability. If you can’t guarantee to the community that you are delivering to that end, the conversation around growth turns very dark, and we are seeing that occur around the world, and in certain pockets in Australia.

As somebody who has served in social services portfolios for five years before getting into infrastructure, I believe that we should never lose sight of that social imperative to get this right, which goes to the heart of social cohesion.

The work that you all do, and your partnership with government, is really important. This is not only for building the infrastructure that we need to sustain the growth projections, ensuring a productive economy, and a strong social fabric in our State and nation, but also in order to foster a more cohesive community.

Part of the conversation we’re now having in Victoria around our transport infrastructure is to remind people that we only invest in projects like the Metro Tunnel, for example, because it enables us to add more services.

The end goal is adding more services and better reliability across our public transport network. The Government doesn’t build for the sake of it. Instead, the Government builds because it enables the delivery of something that’s

meaningful and tangible to the everyday lives of Victorians. That’s what these projects are all about.

Later this year, we’ll be in a position to deliver upon that vision, and be able to let people experience, in some very real terms, what that means in their daily commute. Whether that is travelling by road or around our rail network, Victorians will see how the Metro Tunnel project changes their journey and what it has enabled us to unlock across our rail network – not only in the Metro Tunnel corridor itself, but also along every other rail line in our network.

A population the size of London by the 2050s means that our transport network will need to support an extra 12 million trips a day by 2056 and an 80 per cent increase in private vehicle trips – that’s about 19 million trips a day. That’s a big challenge, and it is incumbent upon all governments to ensure that they are looking ahead at what we need to do across our networks to be able to sustain that. To dither will lead to significant delays and cost increases.

If we want to maintain the liveability of our State, and that which Melbourne is famed for and really prides itself on, then we have to have an honest conversation about how we grow and what that growth looks like. That conversation is happening right now and, interestingly, it’s not a conversation being driven by governments, but rather by the community.

We are now partnering with the community to work out what those best solutions are, and we’re drawing on industry expertise to help us problem solve to ensure the Victorian Government continues to invest in meeting the demands of that growth.

On that backdrop of growth, I would now like to talk about a few projects, starting with the Metro Tunnel – not only because it

happens to be a personal favourite, but because it is the single biggest transformation of our rail network in more than 40 years, since we built the City Loop.

It’s extraordinarily important for our ongoing ability to be able to add services across our network. So much of the attention so far on that project is focused on the brand-new, shiny stations under Melbourne, which are granting access by rail to parts of our city that have never had rail access before. That’s really exciting as it includes important zones like our health precinct and The University of Melbourne. For example, Anzac Station is significant, providing better connections to the Shrine of Remembrance and major events, including the Formula One Grand Prix. These are projects that have been in the minds of some of our biggest thinkers for decades, and we’re finally able to deliver them. Of course, they’ve had their challenges along the way and, sadly, they have been caught up in politics. In a perfect world, we’d rather not have key enabling infrastructure politicised when we recognise how important it is to our productivity and growth; on these occasions, governments need to just lock in and deliver.

The most important part of the Metro Tunnel project is really the capacity that it unlocks. It takes three of our busiest lines out of the existing City Loop, and doing so not only enables the delivery of turn-up-and-go services along the Cranbourne, Pakenham and Sunbury corridors, but also frees up capacity around the rest of the network.

What does that mean? We can add more services around the network – not just now, but for generations to come – and that’s really important. It also unlocks the potential for future projects because on every single rail line in our network,

The Hon. Gabrielle Williams MP provides an update on Victoria’s transport pipeline

similar to every single rail line around the world, there are things that you’d like to do that need to be done in sequence.

Until now, it didn’t necessarily make sense to do some of those things when the benefits could not be realised because of the choke point in the City Loop. By addressing that choke point, all of a sudden you open up a new wave of opportunities for continuous improvement, and I think that should be celebrated.

Later this year, we’ll be opening the West Gate Tunnel, a vital and alternative connection point, and a key freight corridor, across the Maribyrnong River from the west.

The west is not only one of Victoria’s fastest-growing regions, but it’s also one of the country’s. Therefore, having a single connection point over the river is just not going to cut it for much longer.

This tunnel will take 9,000 trucks off local roads, so it’s also a story of amenity for local communities in our west, and it will greatly improve the commute times for those coming in from the outer west, significantly cutting their commute in and out of the city by about 20 minutes. So again, it’s a project about meeting the needs that come with substantial growth.

Along the way, it’s allowed us to do some other exciting things, such as upgrading and adding 14 kilometres of cycling and walking paths. That’s also a parallel story to Victoria’s Big Build agenda more broadly – that for each project, we consider how we can also improve active transport connections in those areas. In this way, the Big Build agenda has allowed us to open new opportunities for people to walk and cycle to important transport hubs.

While we’re talking about enabling infrastructure, I will touch on the works occurring at Sunshine. This is an important project in that futureproofing story because it does three things.

Firstly, it’s the first stage of the Melbourne Airport Rail, as it requires track to be moved aside to create the spur line to the airport.

For similar reasons, it is also the first stage of the Melton line electrification, and it addresses probably the biggest single choke point and barrier to being able to add more services to Victoria’s western suburbs and region. It is untangling one of the biggest choke points or complex junctions in our network that exists right now and, by doing so, it will create dedicated pathways for suburban rail, regional rail, and freight access.

It’s incredibly important if we are going to be able to continue to add more services to that fast-growing part of our State. When it is complete, it will enable the running of up to around 40 trains an hour through that very important hub. For me, it is on the same plane as projects like the Metro Tunnel in terms of what it then enables us to do. These are forward-thinking projects, as they need to be.

As this work is being completed, we continue with our now long-running project of removing level crossings, and much of

that project has gone hand in glove with some of the other Big Build projects – in particular, the Metro Tunnel.

Shortly, the Sunbury to Cranbourne-Pakenham Corridor will be boom gate–free, and that’s important if we’re going to deliver those turn-up-and-go services down the line that we promised as a part of that project. We need to take out those intersection points – those relics of the past.

What we know from the 87 boom gates that have already been removed is that they are already paying dividends, and on many different fronts. This includes savings of about 55 hours of boom gate downtime in every morning peak, and reductions of 80 per cent of vehicle/train collisions or near misses that were sadly a feature of our network for far too long.

Therefore, from a safety, as well as an efficiency and productivity perspective, the boom gate removals are incredibly important, and our work on that program continues.

The North East Link is another project that captures the attention and hearts of those of us who love the project as much as I do. This is a 6.5-kilometre tunnel from Watsonia to Bulleen, which effectively fixes that missing link in our freeway network. Once completed, it’s going to take 15,000 trucks off local roads and reduce travel times by up to 35 minutes. Again, this is a very important project in our road network, and is a great contributor to boosting productivity not only through the movement of people, but also through the movement of freight.

There has been much discussion about the Suburban Rail Loop (SRL). It seems to me that every major project – in particular, rail project (and the Metro Tunnel is an example of this 10 years ago) – seems to have an infancy steeped in controversy and conjecture where everybody has an opinion, and there always needs to be somebody who outright opposes the project. Such is the case for the SRL. But much in the same way as we stood by the need for the Metro Tunnel, we stand by the need to make sure we have that wheel to the hub and spoke network of our rail network in Melbourne. The SRL is a transport project, but it is also the nation’s biggest housing project, with 70,000 homes planned across the corridor as part of a housing agenda that is focused on how we meet the needs of growth and how we deal with liveability. Ensuring that the homes we’re building are close to transport connections, education opportunities and job opportunities along these new rail corridors is at the heart of that vision.

The SRL will connect, for the very first time, to Monash University, which has been a long time coming and will be welcomed by the significant number of students that use that world-class educational facility. It will also connect Deakin University to rail.

There are currently 3,000 people working on that project, with work underway at all of the six station sites and tunnel boring due to commence next year. That’s just the first stage of

the SRL East, with the vision to deliver a full orbital link around the city.

For the first time, there is now a designated title in my portfolio for active transport connections, which aligns well with our broader housing agenda. There has been a lot of discussion led by my ministerial colleagues – including Minister Kilkenny and Minister Shing – around the creation of activity centres and precincts, and the planning of communities properly. This includes thinking about how people move and where we can add volumes of homes to deliver a good quality of living – and transport is at the heart of that.

This has allowed us to think of transport in a couple of different ways, and to bring life into areas of our transport network that have, up until now, probably not enjoyed the same level of sentimental attachment as others.

The first part of that is thinking about our active transport links, including how we encourage people to leave their cars at home for short trips, and understand how people move within their localised communities.

The second part is allowing our bus network to come into its own. Last year, we made the single biggest investment in buses in the State’s history: $180 million. This was backed up in our 2025–26 Budget with another $160 million, largely focused on our fast-growing communities in the north and the west. Alongside that is this opportunity to look at how we ensure our bus networks are doing more of the heavy lifting, both in those localised trips, and also in connecting people to other modes of transport, including heavy rail.

That touches on a very key part to round back to my point on the Metro Tunnel project, and that is transforming our transport networks, as well as the culture of our transport use, into one of interchange.

That is a feature of every major public transport network in the world. In Melbourne and Victoria, it is not something that we have been particularly well-versed in until recently. But Metro Tunnel and our population growth are changing this. Increasing density and demand means you can start to deliver a frequency and a service level that makes intermodal transition more effective – because there are great efficiencies to be had by changing modes or, indeed, just by being on the same mode but changing trains.

Of course, this works best when you don’t have to wait too long between services, and that’s what we are building; that’s the change that comes online with Metro Tunnel.

In terms of the Metro Tunnel project, we will always be compared to Sydney Metro or to Crossrail in London, but ours is quite a unique project because it is not a discrete rail line and it’s integrated with the rest of our network.

That means in turning on the Metro Tunnel, we have to re-timetable the entire public transport network. This is not just trains, but also involves a lot of re-timetabling of buses.

Again, this is about starting to introduce our community to a culture of interchange in a much greater way. This will be through better service levels and alignment between our bus and rail services to ensure that that interconnection piece is activated, and that we can genuinely deliver an integrated public transport network.

All of the aspects of our transport, particularly our public transport agenda, have been to deliver upon that vision, and ultimately to make it easier for people to get around and make our public transport more accessible. We want young people to become fluent in the use of our public transport network, and we want them to carry that into adulthood. This is about cultural change. It’s not just about the infrastructure – it’s also about how we encourage the use of that infrastructure for a long time to come.

In closing, never has it been more important to have governments that look ahead, that take the challenge of growth head-on, and invest to meet the demands, as well as to utilise the opportunities for job creation that comes with growth.

It wasn’t that long ago when the civil construction sector here in Victoria was on the decline, but that’s not been the story for the last 10 years. We’ve had a very healthy employment profile in government projects, and that’s how it should be.

It would’ve been really easy for a politician to stand and admire the challenge of growth, to point the finger at others for it, and to capitalise politically by making it other people’s problem. But that would not have been the right thing to do.

Whatever the political colour of the government, we must always prioritise policy over politics and delivery over delay. That’s how you bring down the costs and ensure we’re continuing to preserve the liveability that not only Melbourne, but our country, is famed for.

That’s also how we can continue to preserve the social cohesion that we have overwhelmingly enjoyed in this country and boost productivity, which we all know we have to do. It all takes investment and partnerships.

Governments can’t do it alone. We’re reliant on your expertise, and the contest of ideas to help us navigate the best option for the time.

As a policymaker in a government, I’m extraordinarily grateful for the level of investment, interest, and energy that we have in our development and transport sector broadly. To that end, we are put in very good stead as a consequence of your passion, knowledge and expertise, and I hope that is long the case.

I’ve spoken a lot about the projects that are underway, but there is still much more to do. There will always be more to do. That is the job of a good government – looking ahead and working out what that next frontier is, and the pathway to deliver upon a vision that ultimately keeps our community strong, and ensures that we can continue to enjoy the levels of prosperity that we do right now for generations to come.

M7-M12 Integration Project transforms transport to Western Sydney

NorthWestern Roads Group (NWR), whose shareholders include QIC, CIPPB and Transurban, is hard at work building and managing Sydney’s transport infrastructure of the future as part of its responsibilities operating and maintaining two of the city’s most significant motorway assets, Westlink M7 and NorthConnex.

Westlink M7 is a 40-kilometre electronically tolled motorway that forms part of Sydney’s orbital network, connecting the M5 South-West Motorway at Prestons with the M4 at Eastern Creek and the Hills M2 at Baulkham Hills. The M7 Motorway

facilitates efficient travel across Western Sydney, while driving social and economic growth along the corridor.

Meanwhile, NorthConnex is a state-of-the-art twin tunnel system that links the M1 Pacific Motorway at Wahroonga to the Hills M2 Motorway at West Pennant Hills. Spanning nine kilometres, it serves as a crucial bypass for heavy vehicles off Pennant Hills Road while improving overall network traffic flow.

Together, these motorways enhance connectivity across Greater Sydney and contribute

Ian Whitfield, Executive General Manager, NorthWestern Roads Group

to environmental sustainability by reducing vehicle emissions, and improving local air quality. They are also a linchpin in Sydney’s future development

‘The M7-M12 corridor is vital to Sydney’s vision to shift its city centre and heart to its west. This is supported by the incredible development happening across the western suburbs, underpinned by the soon-to-be-opened Western Sydney International Airport,’ says NWR’s Executive General Manager, Ian Whitfield.

‘We are proud to partner with Transport for NSW to build the roads that help facilitate this exciting new era for Australia’s greatest city,’ he says.

Closing the gaps

At the moment, NWR is fully focused on the M7 widening and M7-M12 Integration project, which is set to transform the transport landscape of Western Sydney. With an estimated cost of approximately $1.7 billion and an expected opening in 2026, this ambitious initiative will widen 41 bridges along the M7 Motorway, and significantly enhance access to key commercial centres and residential areas.

A notable project achievement has been the opening of a realigned Wallgrove Road to traffic. This is a

crucial step in linking the M7 to the future M12 corridor, paving the way for improved connectivity in the region. The project employed innovative construction techniques, such as the incremental launching method for two bridges over live traffic, allowing work to progress while maintaining access for motorists.

This year, the Stage 2 Design and Landscape Plan was published on the M7-M12 Integration project’s website.

This plan highlights the proposed shared user path upgrades to rest areas, and artistic installations along the project’s footprint. Everything has been thoughtfully designed to enhance the public’s experience and the infrastructure’s aesthetic appeal.

On completion, the integrated M7 widening and M7-M12 corridor is expected to reduce travel times by 30 per cent between Marsden Park and Liverpool. Right now, the Continuous Reinforced Concrete Pavement and bridge construction is complete. Work has started on the asphalt for the new third lane, and milling and resheeting of existing lanes began in September 2025.

Installation of Intelligent Transport System devices and tolling gantries is already underway.

In the broader context of NWR, the M7 widening and M7-M12 Integration complements the existing NorthConnex asset. Together, these projects represent a significant investment in the future of Sydney’s transport infrastructure, promising to deliver improved efficiency, connectivity, and accessibility for all road users.

Next-generation infrastructure

NorthConnex serves as a vital component of Sydney’s transport infrastructure, and game-changing connection between Greater Sydney and the Central Coast. This impressive project connects the M1 Motorway in Wahroonga to the Hills M2 Motorway through twin nine-kilometre tunnels, designed to the highest safety standards and equipped with next-generation technology.

The benefits of NorthConnex extend far beyond connectivity. By diverting more than 6,000 trucks per day off Pennant Hills Road, the project significantly improves local air quality and returns local streets for community use. Motorists can bypass up to 21 traffic lights, and experience travel time savings of up to nine minutes or 20 per cent faster travel, during peak hours. This enhances trip reliability for individuals and businesses while streamlining freight transport, contributing to regional logistics efficiency.

The nine-kilometre twin tunnels each accommodate two large 3.5-metre lanes, along with an additional breakdown lane for emergencies. The tunnel’s alignment generally follows that of Pennant Hills Road, but eliminates sharp

corners and steep hills, making journeys faster, safer, and more efficient. This reduces operational and maintenance costs for motorists, further enhancing the appeal of this critical infrastructure.

NorthConnex’s scale is remarkable. It is Australia’s deepest tunnel, reaching depths of 60 metres, and is one of the longest tunnels in the country. The project has seen an investment of around $3 billion and, over its lifetime, NorthConnex has created approximately 8,700 jobs for New South Wales, showcasing

its significant impact on the local economy.

Delivered in partnership with the New South Wales and Australian governments, and constructed by the Lendlease Bouygues joint venture, NorthConnex exemplifies a commitment to sustainabilty and community benefit.

As the M7 widening and M7-M12 Integration progresses, the synergy between these two major infrastructure projects promises to further enhance the transport network in Western Sydney, ultimately benefiting residents and businesses alike. ♦

Safety management systems help reduce incidents in the heavy vehicle industry

By Matthew Bolin, Manager of Fatigue and Human Factors, NHVR

People are the driving force behind success in the heavy vehicle industry.

As such, everyone in the heavy vehicle industry has a role to play in ensuring that their transport activities are conducted safely.

The most effective way to do this is by integrating safety management principles into everyday operations.

The NHVR defines safety management as the systematic approach to considering how human and organisational performance, technology, and the operational environment interact in effectively managing safety risks.

For any transport organisation, the key lies in adopting a systematic approach to safety management, one that is intentional and well considered opposed to purely ad hoc or reactive activities and processes. This is achieved through the implementation of a safety management system (SMS). Having an SMS in place can be one of the most effective ways to demonstrate that your business is meeting its safety obligations under the Heavy Vehicle National Law.

An SMS is a structured approach to managing safety that includes outlining the necessary organisational structures, accountabilities, policies and procedures, which is integrated throughout the business wherever possible. It also supports the continuous improvement in operational safety, and provides a safer environment for customers, contractors and the public.

The effectiveness of safety management activities is always strengthened when implemented in a formal, systematic manner. The NHVR SMS model provides a framework for this, built around four components that focus on:

► policy and documentation

► risk management

► assurance

► promotion and training.

While this may seem like a lot, an SMS should be proportionate to the level of risk within the business, taking into account its size, type, nature and operational complexity. Many businesses already have elements of an SMS in place (perhaps without knowing it) – a formalised SMS simply brings these components together in a structured manner to ensure that all safety-related elements of the business are considered.

While the safety of equipment, tools and technology has significantly advanced in modern times, the role of people within a system remains critically important and cannot be overstated.

Human performance in safety critical systems is shaped by a range of influences known as ‘human factors’. These include an individual’s capabilities and limitations, as well as the people, technology and environment in which they work. As a result, their interpretation of situations varies as they adapt to meet demands of their work environment, assessing risk and making decisions based on this assessment.

Consideration of the factors that influence performance can optimise the human contribution to safety across all levels of the system. A systematic approach to positively addressing human factors using the four components of an SMS ensures that these principles are integrated into all aspects of heavy vehicle operations.

The NHVR website provides guidance material, tools and templates to help you develop and implement an SMS in your business (www.nhvr.gov.au/sms). ♦

For more information, email info@nhvr.gov.au or phone 13 NHVR (13 64 87).

Demographer address: Infrastructure for tomorrow – planning for Australia’s demographic shift

Simon Kuestenmacher, The Demographics Group

Demographer

Demographer Simon Kuestenmacher provides demographic insights on population growth, skills shortages and infrastructure challenges

Key points:

• While the Australian economy will continue to grow, concurrent population growth –with forecasts of nearly four million more people by 2035 – will place sustained pressure on housing, transport networks and essential services.

• Infrastructure planning will need to account for rapid growth on the urban fringe of major cities, while also preparing for longer-term densification of middle suburbs.

• Persistent skills shortages and an ageing workforce will likely add to bottlenecks in delivering infrastructure.

Before we dive deeper into the Australian population, we need to figure out what we actually do. We are a rather simple economy, aren’t we? In fact, we only do four things that matter to the rest of the world. We export a bit of stuff that we dig out of the ground and we grow a couple of things on top of the ground – mining and agriculture are obviously our two biggest exports. Then, we entertain a few people (that is tourism), and we also educate a few folks (international students) – and that’s it. Those four things cover more than 80 per cent of our exports. This is what drives the wealth and prosperity of our nation.

And we can talk all we want about diversifying the economy, but how would we do it? For instance, we could value-add a manufacturing smelter in the country, and export steel rather than iron ore. But all this value-added manufacturing, of course, needs energy, as it is extremely energy-intensive. Unless we massively lower energy, none of this will happen. So, my forecast for the next 10 years is that Australia will continue to rely on exactly those four things. The economic diversification that we are dreaming about will not occur.

We have been falling in all these big international indexes about global economic complexity. According to the global Economic Complexity Index, Australia ranks 105th out of 130 countries in terms of how complex our economy is, behind Botswana and Uganda. So, it is simple what we do, and I think the idea that we can diversify the economy is a pipe dream at the moment. For now, this is the wealth that we rely on. None of those four things is under structural risk. Our economic business model in Australia continues to deliver wealth, and we can expect much more of the same moving forward.

So, now let’s dive deeper into the population forecasts for Australia. We can see quite a number of people in their 30s now moving into their 40s – that’s the millennial generation, our biggest generation by a long shot. But that’s the status quo.

We want to know what Australia looks like in, let’s say, 10 years’ time. Forecasting our population only a decade ahead is easy because we know how many babies are going to be born; and we also know who isn’t going to make it until the next decade. Lastly, as a country, we dictate migration intake. So, there’s only so much that could go wrong with our forecasts.

So, let’s have a look at Australia in 2035. The first observation is that we’ll be adding close to four million people. That is a lot of growth – these people will need to be housed and supported by a bucketload of infrastructure. So, the good news here is no-one working in the infrastructure sector will be bored over the next 10 years. But this population growth isn’t evenly distributed across the whole spectrum, with some segments seeing much more growth than others. We will see more babies in the next 10 years, despite record low birth rates, driven by the biggest generation ever – millennials – having children. Then, this will slow down because, ultimately, a smaller cohort will be charged with having children.

We will also see the power of migration really start to play out. In Australia, just over 70 per cent of our population growth is imported from overseas. We are well and truly a migration nation. Those who make up our migration intake are young – more than 90 per cent of migrants are under 40 years of age, but the biggest portion of migrants, about 80 per cent, fall into a narrow age band from 18 to 39 years. Just under half of all international migrants are international students, around the 18 to 23 age range. Of course, Australia wants the skilled migrants, and wants them as young as possible – we want them to be productive worker bees in the economy for as long as possible. That leads us to a situation that is extremely rare around the developed world. Despite the millennial cohort pushing from their 30s into their 40s, we still see population growth in the 30s age group. That is unheard of. It’s a privilege to have this because that ensures we have economic activity, and we have workers in the system.

The single year of age that will see most growth in the coming decade is 43. And that’s significant because at 43, statistically, people spend more money than at any other point in their lives. By this stage, they’ve had a couple of promotions, they’ve had all the children they’re going to have, and they still haven’t paid down their mortgage. This means that every penny they earn is going straight out the door back into the economy.

This is, of course, wonderful news for businesses – they love us pushing the biggest generation ever through the highest spending phase of the life cycle. Who isn’t a fan of that is the Reserve Bank of Australia (RBA). The RBA still looks at inflation with a bit of a warning look on its face and will consider curbing it by raising interest rates.

However, it turns out that this high-spending cohort of millennials spend every dollar they have regardless. So, that, of course, means that the RBA needs to keep the interest

rates elevated for longer. And who is suffering in the process? Well, the bottom third of society is being bled dry. So, there are important social equity issues to consider when we think about what the future might look like.

Of course, there might be good news as we push the big baby boomer cohort into retirement completely over the next decade. That should be welcome news for the RBA. Traditionally, once a person has stopped earning a wage, they instantly turn into a poor penny-pinching pensioner: a deflationary asset. However, it turns out that’s not actually the case with baby boomers – they’re a different breed. They’re the richest generation who’ve ever lived in Australia, and many are already retired. We have detailed spending data about them available. Baby boomers in retirement increase their spending in every category that we measure except for one: charitable giving, which is significantly down. But in all the other segments, baby boomers spend more money. So, how I read this is that interest rates, on average, must be higher in the next decade than they were in the last decade, just because we have the biggest and richest generation consuming like there’s no tomorrow. So, this will need to be counteracted in some way.

While there’s more that feeds into interest rates than just national consumption levels, it does probably mean that the money for all the wonderful projects that the infrastructure sector wants to build won’t be overly cheap. So, the dream of deliciously low interest rates probably won’t become true. I also want to draw your attention to those on the far side of the population – 85-year-olds. Eighty-five is another important statistical year because it’s called the median age of death. Half of 85-year-olds will need care on a daily basis and, in the next 15 years, we are doubling the 85-plus cohort from 590,000 people today, to 1.2 million people by 2040. Can we double the aged care system in 15 years? Absolutely not. Even if we were to massively increase the migration intake, this is a trainwreck in the making, and it can lead to catastrophe. This is the single most extreme skills shortage Australia is experiencing.

In fact, the skills shortages that many in the infrastructure sector are experiencing now is here to stay and it’s likely to worsen. A large cohort of baby boomers are retiring and, unlike in the past, when we added more people to the workforce, this is not happening this time around. Despite the popular narrative of international students coming to Australia to drive Ubers, the

Demographer Simon Kuestenmacher outlines the demographic trends shaping Australia’s future

million international students do not actually contribute to the workforce at scale, and will need to be discounted. Additionally, more than half of our year 12 graduates head straight into the university system, which means they ultimately only contribute to the workforce once they hit their mid to late 20s. When you consider this, that’s not very many people entering the workforce each year. And finally, of course, the big pile of millennials will add to these pressures, as they leave the world of work, at least for a little bit, to go on parental leave.

For those working in the sector, the skills shortage, and its impact on staffing pipelines and operations, will be the single biggest worry in the decade to come. And of course, that means that all those buzzwords being thrown around – artificial intelligence (AI), automation and robotics – will come to be our friends. While it remains to be seen how much these tools can help us, they will most certainly not lead to high unemployment in Australia. We will continue to operate on low rates of unemployment over the next decade. In periods of low unemployment, wages are higher, and the power balance shifts towards employees, and that’s something employers will need to work with. But wait, there’s more: the skills shortage has an evil twin called ‘the retirement cliff’. This measures what share of the workforce is already at retirement age – that is, five per cent of all workers in Australia are 65 and older – but more importantly, it measures what share of the workforce is nearing retirement, at the 55 to 64 age range. In 10 years’ time, those in this age bracket fall off the proverbial retirement cliff. Nationally speaking, that’s 15 per cent of the population.

Looking at a couple of jobs that well and truly keep the infrastructure system of Australia operating, civil engineers, air traffic controllers and regional planners are faring relatively well. While these roles are being impacted by the skills shortage, they are not further exacerbated by the additional pressure of losing people to retirement. This is more prominent in physically taxing jobs, including bricklayers and fitters resembling the national average, that can’t easily be undertaken by workers well into their 60s and 70s.

Every industry in Australia relies on truck drivers, and we currently have a shortage of 40,000 truckers. This is a significantly ageing workforce, with around 26 per cent of truck drivers aged between 55 and 64 years old. Remember that until a decade ago, we actively pushed truck drivers out of the workforce once they hit 55 when they became an expensive human resource. Now, we beg them to stay on because we don’t know how to solve this, and it is unlikely that we’ll have truck-sized self-driving vehicles on the roads anytime soon. We will still need humans to do this for a long time, and in the meantime, the demand for truck drivers only increases, creating a bottleneck to be dealt with.

Additionally, any job that has ‘machine operator’ in it will face severe shortages, and terrible bottlenecks. Where do

you get your crane operators from? That won’t be automated anytime soon. So, how do you deal with this? There is strong competition for those workers, and it slows the whole system down. The same can be said for jack-of-all tradespersons, which means employers will employ more qualified, more expensive tradies for these tasks, driving up operational costs.

Of the large professions in Australia, bus drivers by far are the oldest, with well over half of bus drivers more than 55 years old. Who is going to be impacted by this bottleneck? Well, it is likely to be the poorer regions of our cities because these are the areas that are more likely to rely on a bus network, rather than a tram network or private vehicles.

So, now that we know how many of us there will be, or how many workers there won’t be, where do we actually live? Where will we settle in the next 10 years? Interestingly, every city in Australia looks exactly the same. Every city in Australia looks like a fried egg, where all the employment opportunities are clustered in the CBD, in the egg yolk of the city, figuratively speaking. Those who want to avoid long commutes pay a premium to live closer to the egg yolk. This means that generally, higher-income households live closer to the egg yolk, compared to lower-income households, which live closer to the edge of the frying pan, so to speak. Then along came the COVID-19 pandemic, which really acted like a spatula, turning our fried egg city into scrambled egg.

During this time, the CBD remained the most dominant job centre, but ultimately, many jobs were spread more evenly across the frying pan – as we worked from our spare bedrooms and our kitchen benches – and we didn’t need to commute to work all that much. For a time, people – especially in Melbourne – realised they could move somewhere more affordable, and get better value for money in the outer suburbs. Once people started doing this, they quite quickly realised that remote work is only a reality for a very small number of people. Nowadays, most people work in a hybrid fashion, which means going into the office at least once or twice a week. So, everyone has stayed within a magical two-hour drive-time tomato sauce radius – and I’m really stretching the metaphor here – around our CBDs. So, anything within the two-hour drive-time radius of any of our major CBDs is absolute boom town for growth.

Outside of the two-hour drive-time radius, cities operate differently. In major centres, people bring their jobs with them – but in regional towns, people rely on the supply of local jobs, local housing, local health care, and a local school or child care. Those regional towns that can provide all four will see growth, and those where even one of the four is missing will struggle. That is the simplistic future of urban settlement in Australia. People will ask how I am so certain that this pattern will continue following the pandemic. This can be explained by the single biggest driver of our moving populations from the inner city to the urban fringe – which

would’ve occurred even without the pandemic. This is simple demographics at play.

By sheer demographic dumb luck, around the time the COVID-19 pandemic started, millennials started to grow their families. At this point, the millennials were already partnered up and living in inner-city apartments. Add your 1.5 babies to the mix, which means apartment living becomes cramped quite quickly, and a three-bedroom house is required. However, this housing stock isn’t as widely available in inner-city suburbs, and millennials can’t move to the middle suburbs like their baby boomer parents did when they were younger. This is because the baby boomers are hogging the three- and four-bedroom housing stock as empty nesters and, alongside this, were fantastic NIMBYs over the last few decades, blocking developments. This means millennials must move to the urban fringe where family-sized housing stock is available at scale. With 12 years’ worth of baby-making left in the millennium tank, this is how long we’ll continue to see the population shift to the urban fringe, and shrink in the middle rings as more people in their early 20s move out of the parental home, move to the inner city, and then move to the fringe.

Meanwhile, the downsizing narrative is exaggerated among baby boomers in Australia. For all intents and

purposes, the baby boomer generation is not downsizing less until they start dying at scale, which will happen when the millennials have finished having children in about 12 years’ time. This is when we will well and truly densify the middle suburbs. In the meantime, new overseas arrivals move into the inner city and millennials to the urban fringe. This is the general game of population settlement. In the next decade, we will start bulldozing the quarter-acre blocks in the middle suburbs at scale and build medium- to high-density housing stock wherever we can. Therefore, infrastructure needs to settle on the middle suburbs in a decade’s time – for now, it’s the urban fringe and inner city.

To summarise, this coming decade is going to be defined by strong population growth, our national business model guarantees Australia will continue to be wealthy, and the skills shortage will continue to be an ongoing area of concern. For businesses in the sector, this means you must be an employer of choice; retention is the name of the game. It also means you must embrace all those buzzwords, including AI, automation and robotics, to squeeze a bit more creativity out of your existing workforce. Unfortunately, we must do this while interest rates, in my humble suggestion, will be more expensive than you were secretly hoping for, but that is simply what you need to do.

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Unlocking growth, investment and a sustainable future through transport

Of the numerous challenges affecting Australia’s transport sector, two opposing problems come to mind. One is urban congestion: the traffic bottlenecks that blow out travel times, frustrate commuters and stymie productivity. The other is the ‘tyranny of distance’: the painful isolation of our communities, which, like congestion, impacts negatively on travel times and productivity.

The bulk of Australia’s transport infrastructure is concentrated along our east coast, where population density is highest. While there are widespread rail and road networks in each capital city, there are limited interstate connections.

Increasing traffic is a major issue in many cities. A 2024 transport opinion survey by The University of Sydney’s Business School found that people’s main issues for transport were road

congestion, and the increasing pressure on the road system linked to population change and a rising number of vehicles.1

Australia is crying out for an evolution of the transport infrastructure that shapes our cities and regions. Innovative transport planning has the potential to forge new economic, social and environmental progress. Better

Brisbane Metro. Image courtesy of Brisbane City Council

connections and faster commutes could change the way that Australians have long thought about public transport, and encourage passenger uptake, leading to reduced emissions and a more sustainable future.

To support the needs of a growing population, the Australian Government has outlined future goals around sustainability, economic competitiveness, social connectivity and regional development. This includes the recently announced climate change target of a 62 per cent to 70 per cent reduction on 2005 emissions by 20352, and the National Housing Accord target of 1.2 million new, well‑located homes built in the five years to 20293

There are further opportunities for decarbonised transport and sustainable growth in future focused mega projects, executed in tandem with revamping existing infrastructure and leveraging new transport oriented developments.

Transforming connections between Australia’s eastern major cities

A high speed rail network to connect Brisbane, Sydney and Melbourne, as well as regional communities along the east coast, is a logical place to start in Australia, says Malcolm Smith, Australasian Cities Leader at built environment consultancy Arup.

‘The planned high speed rail connecting Brisbane, Sydney and Melbourne has the potential to redistribute population densities across the east coast by supercharging accessibility. It may take generations to fully realise that change, but it starts with high speed rail and the communities growing from each of the cities that will deliver a build up of value and opportunity,’ Smith says.

An added benefit of high-speed rail is that it can lead to improved air quality and decreased road congestion, especially when powered by renewable energy. Improving mobility between urban centres provides more job opportunities and lifestyle choices, greater housing options and, ultimately, a more productive economy.

Australia stands to reap economic benefits, particularly in small towns where populations are declining, and there is limited access to infrastructure and services. The challenges will lie in the scale of investment, especially when considering recent increases in the cost of labour and construction equipment. Successful funding models for mega projects around the world utilise Public Private Partnerships (PPPs) and other contracts that manage the fiscal burden on the government. Effective PPPs require clear understanding of risk and shared governance, articulating wider economic benefits – like land value uplift and regional growth – beyond just fares.

Bus rapid transit: flexible, scalable urban mobility

Bus rapid tansit (BRT) is another major tool in transforming Australia’s transport networks. BRT leverages existing bus routes and adds service upgrades, including increased frequency of services, dedicated bus lanes, and electric vehicles.

While other forms of transport renewal require hefty investment, BRT offers a cost effective solution to improving connectivity at metropolitan scale. The system uses existing roads,

so it’s quick to implement – there’s no need to lay tracks, build tunnels or construct bridges. From a political perspective, the speed of realised benefits can be particularly appealing.

A BRT network also integrates easily with existing infrastructure such as pedestrian and bike paths, and train stations. For a growing, developing precinct, they offer flexibility since new services can be added and routes can be moved as demand develops over time. In addition to encouraging mode shift from cars to public transport, zero‑emission hydrogen and electric buses offer further sustainable benefits to the community.

Arup’s major transport infrastructure projects worldwide

High Speed 2, United Kingdom

Arup designed the net zero Interchange Station at Birmingham International that will form a major part of the High Speed 2 (HS2) railway line in the United Kingdom. Once operational, the HS2 will transport passengers from London to Birmingham in 49 minutes, which is 35 per cent faster than today’s train network.

Arup is also playing a civil and environmental consultancy role,

High Speed 2, United Kingdom

supporting the HS2 vision to be zero carbon, innovative, and on time.

Watching this development in action, Australia could leverage some valuable lessons – including from the 33,000 jobs created by the project and the more than 3,400 businesses involved in the build.

Hong Kong Mass Transit Railway, Hong Kong

Held up as one of the most efficient and safe urban rail networks, the Hong Kong Mass Transit Rail (MTR) carries more than four million passengers per day around Hong Kong Island to Kowloon and the New Territories. Arup played an essential engineering design role in the delivery of the Shatin-to-Central Link, including the Admiralty Station expansion to become a four-line interchange.

MTR’s business model integrates property development with railway expansion so it can develop land near stations and along railway routes. This means commercial and residential hubs are built near public transport to support local economies and urban regeneration.

TransMilenio, Bogotá, Colombia

TransMilenio’s BRT was set up in 2000 to reduce serious traffic congestion,

road fatalities and pollution. It covers 112 kilometres throughout the city, services more than 2.56 million passengers per day, and is credited with decreasing traffic deaths by 92 per cent and air pollution by 40 per cent.

In recent years, TransMilenio has added 296 new low- and zero-emission buses to its fleet. Despite this update, the TransMilenio has struggled to keep pace with population growth. The city is now planning a metro network to complement the BRT.

Crossrail, London, United Kingdom

Crossrail’s Elizabeth Line opened in 2022 and, with Arup’s technical design engineering support, has delivered more than just a new rail line. Evaluation reports show more than 90 per cent of Elizabeth Line passengers say it has improved their local area, thousands of homes have been built within one kilometre of stations, and new job opportunities have arisen within 500 metres of key stations.

The line opening was greeted with fanfare from local communities.

‘The first few months of Crossrail going live was like the kids were in a candy store – London had a new toy. It generated a genuine sense of uplift,’ says Smith.

Unlocking wider economic, environmental and social benefits Looking beyond these benefits, next-generation transport will also leverage digital and smart technologies. Digital technologies like artificial intelligence and smart sensors can be used across transport networks to enhance predictive maintenance, analyse traffic patterns, and optimise the passenger experience by reducing travel times and minimising disruption. They will also play an important role in addressing increasing climate and environmental challenges.

By adapting international best practices, Australia can plan and prepare transport that truly has the power to transform. An environment of collaboration between government, industry and communities has the potential to realise investment for ambitious transport infrastructure that connects people, is sustainable, and thrives for future generations. ♦

End notes

1 https://www.sydney.edu.au/business/our-research/institute-of-transport-and-logistics-studies/transport-opinion-survey.html

2 https://minister.dcceew.gov.au/bowen/ media-releases/joint-media-release-settingaustralias-2035-climate-change-target

3 https://treasury.gov.au/policy-topics/housing/accord

Bus rapid transit

arup.com

Panel discussion 20 years of reform

Key points:

• Two decades ago, the infrastructure agenda was driven largely by the states and territories, resulting in a fragmented national pipeline and policy narrative. Infrastructure Partnerships Australia was established to bring the sector together and drive national policy.

• Asset recycling in the 2010s ushered in a golden period of reform in New South Wales, enabling the delivery of a substantial infrastructure pipeline across the State, and providing a framework for other jurisdictions to follow.

• Infrastructure Australia and the infrastructure bodies (iBodies) have played a critical role in building certainty in the sector to date, and are building their capacity to further support jurisdictions in better coordinating procurement and sequencing.

• Looking ahead, addressing the housing supply shortage, meeting the demands of population growth, and lifting lagging productivity will be central to the reform agenda over the next two decades.

Panellists:

► The Hon. Mark Birrell AM, Patron, Infrastructure Partnerships Australia

► Michelle Jablko, Chief Executive Officer, Transurban

► Tim Reardon, Chief Commissioner, Infrastructure Australia

Moderator:

► Adrian Dwyer, Chief Executive Officer, Infrastructure Partnerships Australia

Industry leaders discuss two decades of infrastructure reform (left to right: the Hon. Mark Birrell AM, Michelle Jablko, Tim Reardon and Adrian Dwyer)

Adrian Dwyer (AD): Thank you very much to our panel for joining us today. I wanted to start with you, Mark, casting your mind back 20 years to when Infrastructure Partnerships Australia was established. Could you give us a sense of what the state of play was at that time? Why did you and a few others feel it was important to create an organisation like ours?

Mark Birrell (MB): I think that 20 years ago, we had an infrastructure sector that was realising that it just needed a bit more. It needed more options so that it could deliver for either its clients or, if they were governments, for its citizens, its voters, its electors. I saw an infrastructure sector that was boisterous, active and interested, but was often within state boundaries and therefore was looking for the option of national leadership. The sector was also looking to solve funding or finance issues. For that reason, Partnerships has always been an infrastructure and investment conference.

The infrastructure sector wanted to improve productivity and quality of life, which is what infrastructure is all about. But it was limited and the sector therefore needed some more options, and was looking for federal leadership, which existed largely in sectors like transport and mining, but needed to be much broader. It was also looking for a longer-term focus, and to promote having conversations across state boundaries. Engineers, architects and the construction sector were already doing this at a national level; however, there wasn’t a focus on getting governments working together better. The Federal Government was largely silent, and that provided the context for people to recognise that we could do a bit better.

AD: Tim, what stands out to you about this time?

Tim Reardon (TR): I have a few reflections. One was just the prevailing economy at the time. It was right in the middle of a mining boom, and most of the noise out of infrastructure was that the energy and mining sectors, and export trade, were going really well. There was some public infrastructure happening at the time around the country, but a lot of the energy was with the mining boom and the ongoing development of it. There was a Coalition Government in power at the federal level that had seen surpluses for a long time. Some of that money did go into certain infrastructure projects. Twenty years ago, the focus was on freight networks, and so projects like the Alice Springs to Darwin Railway were completed around that time.

Infrastructure was fragmented and very much led by state and territory governments, while the Federal Government would become involved as a funder. But, as Mark put it, there was no coordination across state borders. There were population and economic challenges at that time, and states and territories were responding to those, but the only time that they would have a discussion with the

Federal Government was bilaterally to seek funding. There wasn’t any contest around a pipeline, or national narrative or advocacy across the country. And there certainly wasn’t the advocacy that Infrastructure Partnerships Australia – now two decades along – is doing and has done for a long time. One other point to demonstrate the example – even the word ‘national’ being used in our institutions 20 years ago was fledgling.

For instance, organisations like Infrastructure Australia (IA) did not exist at that time. It took three more years for IA to commence under the Hon. Anthony Albanese in 2008. The National Transport Commission (NTC), established in 2003, which is the policymaker and regulatory maker for all transport across the country, did not exist. Most recently, the NTC announced a rail interoperability program, which will increase productivity through simple signalling alignment across the nation. The National Heavy Vehicle Regulator, which regulates access for all trucks across large parts of the country, didn’t exist. The National Rail Safety did not exist; it only commenced in 2013. There were no state-based or territory-based infrastructure bodies. So, there’s been a lot of change in 20 years, and the use of the word ‘national’ has enabled buy-in, collaboration and trust across states, territories, and the Commonwealth. These institutions are not federal entities dictating terms, but are national entities, and their advocacy in those couple of decades, including from Infrastructure Partnerships Australia, has been good for the country.

AD: I’m going to ask a risky question of Mark as the father of Infrastructure Partnerships Australia. Has it met the expectations that you had for it in its infancy?

MB: Yes, it has exceeded. I’m very proud of what the organisation has done. It’s bigger than what we could have hoped for 20 years ago. Infrastructure was in such an early stage at the time we were seeking to set this up, I asked if we could get infrastructure as a domain name. And, of course, they were all available. Everyone regarded themselves as being in the sector, but no-one acted as a sector. What we needed was for everyone to meet as one – public sector and private sector, not separate but together – and it had to be policy-driven. All of us knew that we were interested in the outcome of our projects or of our needs, including productivity and quality of life – so, how do we discuss how we shape it? I’m very proud, and we’ve come a long way. Twenty years ago, Melbourne and Sydney didn’t even have a divided four-lane uninterrupted highway. Anthony Albanese, to his great credit, was the Transport Minister and then the Infrastructure Minister who delivered that. He should be given credit in this evolution because, as Infrastructure Minister, he appointed Sir Rod Eddington AO as Chair of IA. You need leaders, and this sector has been lucky to have them.

AD: It’s interesting you say that the domain names were available. We’ve had this debate before, but why did you choose three words for the name?

MB: Infrastructure Partnerships Australia?

AD: It’s one word too long, isn’t it?

MB: It was a compromise. The starting point of the idea was to set up a Public Private Partnership (PPP) forum that was going to be called The PPP Forum. So, I regard it as a victory that we have a longer name because Infrastructure Partnerships Australia is better than that one. We could have just been Infrastructure, full stop, or if we had been totally fashionable, The Infrastructure Institute. It has worked really well, and the fact that we’re all here discussing common interest topics, and wanting to know what’s coming up and how we can shape it, is marvelously aligned with the public interest.

AD: Michelle, which reforms have had a lasting impact on the sector over the last two decades? And secondly, what have been the missed opportunities?

Michelle Jablko (MJ): I want to home in on Sydney as a good example of just how phenomenal the infrastructure build has been. Over the last decade, Sydney’s population

has grown by one million people. Private enterprise has invested $36 billion on top of many billions of dollars of government investment. I remember being in my 20s, in the late 1990s, working in Parramatta. Because I had to fly in and out of Sydney, I had a choice between staying in a hotel in Parramatta for the night, or travelling an hour each way every day, and staying in Sydney. Today, you do this trip with a million more people in less than 30 minutes. It’s phenomenal what the infrastructure has done.

NorthConnex has been another great example. Before it was built, there were 5,000 trucks a day on Pennant Hills Road, making it impossible to take your kids to school without worrying about safety. So, the need was there. But given how expensive tunnels are, how do you get it done? What it took was a partnership between the Commonwealth Government, the State Government and the private sector, who agreed to a budget, and fit the scope and design to meet that budget. And today, however many years on, 9,000 trucks are off local streets each day because of the project.

I don’t know if reforms have been missed, because there’s always a time for reform. Some reforms come slower than others, and it’s good to have things like road

Transurban Chief Executive Officer Michelle Jablko

user charging on the agenda today. One of the things that’s been missed is probably the narrative. There is a lot of excitement about the narrative when a new project opens as opposed to while it’s being built because of all the destruction. And once a project is completed, everyone often forgets what life was like before that. Going back to the $36 billion of investment in Sydney – that equates to more than 1,300 schools and 50 hospitals that could have been built at the same time. As the needs for private capital grows, it will also have a role to play in helping that narrative along.

AD: Tim, what are the key reforms for you over that time?

TR: Building on what Michelle said, I will point out asset recycling in New South Wales as an example. In the decade after the Sydney Olympics, there was some infrastructure delivered; however, the growing population and economic growth need in the city and the rest of New South Wales meant that a fair bit on the drawing board still hadn’t been built.

When the Coalition Government came into power with Barry O’Farrell, followed by Mike Baird and Gladys Berejiklian, they were determined to drive an infrastructure pipeline across transport, health, education, sport, arts, and entertainment, with a fair share of infrastructure for urban areas in addition to a larger proportion for regional centres. Restart New South Wales was started as a program to sell some assets and recycle that into new infrastructure. We also had the long-term leases of the Sydney, Newcastle and Port Kembla ports; WestConnex, which was a major asset recycling project; and the privatisation of poles and wires in the middle of that.

In the period between 2011 and 2015, three things came together that enabled things to be moved at a very fast speed. The first was the development of long-term plans across 10-, 20- and 40-year periods for the State, which was very unusual, particularly in transport given the politics around it. The second was the growing capability in the public sector, and certainly the private sector, and the build-up of trust that came from a more certain investment pipeline. And the third was the political championing, particularly on behalf of Baird, who went to the 2015 Election as Premier to deliver poles and wires, and that money would directly go into new infrastructure.

And we built new infrastructure – five motorways, four metro lines (either in operation or in build), three light rail lines, bus transit, and many regional highways – delivering a transformation of the transport network over 15 years in New South Wales, particularly in Sydney, which needed that investment. So, asset recycling was pursued as a reform, and involved working with the Federal Government, which also provided some incentive money, and working with IA, which was a great partner in putting our projects on

the Infrastructure Priority List. The confluence of all those things, and the advocacy of organisations like Infrastructure Partnerships Australia, meant that we moved a mountain in 15 years, and into a golden period for reform.

AD: Mark, you were on the founding Board of IA that was created by then Infrastructure Minister Anthony Albanese as part of the Rudd Government. I want to ask you about the institutional architecture created during that time and to what extent that has led to better outcomes.

MB: It had been a difficult task in officially starting a national conversation on infrastructure in Canberra. Infrastructure was discussed at a Cabinet level, but didn’t have a department outside of the Department of Transport, which held less influence than Treasury and Prime Minister and Cabinet. So, as the starting point of the restructuring, you needed an IA to get Canberra talking infrastructure. I think that has worked well; but it’s still a daily battle. The other point I’d make is that, because of IA, there is now a pipeline. There’s a ‘thing’ called upcoming projects that have been widely discussed, and that’s what Sir Rod wanted to get started right from the beginning – an agreed document that everyone could buy into. It’s good, and I think it helps states coordinate. One of the ongoing challenges is coordinating state tendering processes so that, for instance, they don’t all try to build hospitals in the same year. It hasn’t quite reached that point of maturity in Australia, but we do have largely what we didn’t have before: an agreed list of likely largescale upcoming projects, and a conversation in Canberra about that.

AD: Tim, where are we up to on the journey with IA and the iBodies? What’s the unfinished business?

TR: IA has been an establishment since 2008. I acknowledge the leadership that has gone before me. It’s an honour to play the role I’m playing now in a newly constituted IA. The review basically broadened our remit to cover energy, transport, water and telecommunications, as well as anything else that we might be asked to look at. We look at a project life cycle from inception all the way through to post-completion reviews and everything that entails. As Mark pointed out, the Infrastructure Priority List is one of the single biggest products that IA produces, and everyone has an interest in it for obvious reasons.

We’ve been asked to make it far more targeted, because for states and territories, it’s a lot to consume. We are going through that process at the moment, and the collaboration with the states and territories, particularly with the iBodies, has been exceptional, and that’s been quite a revelation for me. I knew it was good in terms of relationships, but it really is strong, and we only want to continue with that collaboration. A few things are slightly different. For the first time, IA is now just advising on budget rounds in a far

more direct way with the Federal Government and with our Federal Minister as our key customer, and that’s a fairly agile and dynamic job.

To help out with that, the governance of the organisation has changed considerably from a large board to three Commissioners – myself and two colleagues: Dr Gillian Miles and Clare Gardiner-Barnes. This means we can be quite nimble in terms of how we go about our work around the country. We’ve got a long way to go, as well, because, as Mark pointed out, we would optimally have pipelines to enable agreement between jurisdictions about sequencing. We are not there yet beyond us putting out things like the Infrastructure Market Capacity report. Therefore, jurisdictions are considering how they do sequence themselves, but the next level for us is around truly national coordination, including in areas of procurement and sequencing, amongst others. That’s what we’ll work on for the next couple of years.

AD: Michelle, I want to talk about reform readiness. So, after 20 years, it looks like there’s now consensus around road user charging starting with electric vehicles. What’s your take on that journey of having reforms ready to go when the moment hits, and perhaps where we’re up to on roader user charging?

MJ: Perhaps there’s no better example of the work of an organisation like Infrastructure Partnerships Australia in bringing industry together to be ready for the reform. I know you and your team, Adrian, have done so much work over many years. It has been an area we have advocated for as a company for a long time because we could see what was coming: the electrification of vehicles, excise tax falling away, money being more expensive, and many calls on the need for infrastructure as populations grow. Having sustainable and fairer road funding had to be part of the future, and it’s fantastic to see it is now on the national agenda. It’s also on the agenda in many other countries, including New Zealand, which has recently taken a very modern approach. It’s essentially removing excise tax before the electrification and introducing a digital system. Now, New Zealand has been further ahead on this for some time.

I think what’s important when we think about reform is how we ensure it works for the users. We’ve done quite a lot of trials over the years, both here and in a number of states in North America. These trials showed that even where participants were sceptical at first, once they saw how much they were spending on excise and how much they were spending on a road user charge side by side, they actually thought the road user charge was fairer. We also ran a trial in North America, which also helped to address participant concerns about privacy and data.

I think it’s exciting that it’s on the national agenda, and it’s really important.

AD: Michelle, I want to talk about the mega transport boom and how we’re now moving to a phase where energy and digitalisation are going dominate the pipeline. What do you think are some of the learnings we can take from that journey on transport that can be applied to the new realm of build out?

MJ: One of the things I think that has been great in transport is the superannuation industry and its role in building out all of the infrastructure we have. What this means is at the end of the day, the members – that is the mums and dads – own the infrastructure, and I think that’s fantastic. When we talk to our superannuation partners, energy is a big area of focus for them. The world is different, though. The industry is more concentrated, bigger and is increasingly looking offshore. So, I think it’s important that Australia continues to be an attractive place to invest. In the early days of road transport, many investors went bust because they didn’t get the certainty and predictability right, and so making sure that certainty is there is critical.

On the flip side, I think it is even harder for the energy industry. There are many similarities between transport and energy in that they both involve the delivery of long-term assets that outlive the people who put them together – the people that cut the ribbon. The difference is that in road projects, you engage directly with the communities that will use them, whereas in energy, the source and the grid are often quite separate from the user. But I think the providers can learn from what we’ve gone through in ensuring that you don’t set and forget – you keep the narrative going, and you invest in communities. All along our corridors, we invest in things like driver education and community grants, and I think all those things continue to be important.

AD: Tim, are you seeing sufficient transfer from the skills and capability we built up during the transport boom over to the next frontier?

TR: I think we’re in early phases; however, I will make one comment on transport. With the population growth that we’re going to have, and with our urban areas continuing to consolidate alongside what we might need to do for the middle ring over the next 20 years, we’re going to need a lot more transport. Projects on the Infrastructure Priority List – including the Cross River Rail in Brisbane, the Sydney Metro and the Melbourne Metro – are all augmentations to the train networks to uplift frequency across our three biggest cities. That’s no small thing to do at the same time, and as I’ve said in many forums, it’s phenomenal.

This is all being delivered at the same time as METRONET expands its train network in Perth. Sometimes, we should sit back and reflect on how much we’re delivering.

We have three of those four cities that are airport-linked by rail, and there’s plenty of focus on Sunshine Station as part of the Melbourne Airport Rail Link. So, I don’t think we’ll be slowing down anytime soon in terms of the long-term needs of transport. That’s not exactly the narrative we’ve had. We know we need a big shift to energy, but there’ll be more transport required with the population numbers coming to us.

On the energy transition, there are lessons to be learnt in terms of skills and capability, but more broadly, Infrastructure Australia is looking at the energy transition; the enabling infrastructure around the country for renewable energy zones and what it means to get from port out to these renewable energy zones. There is ad hoc discussion going on at the moment. But we want to make that more programmatic around each of those zones, working with our colleagues in other departments at the federal level to identify where the gaps might be. Building social licence in small communities, which have never seen this level of investment, and the need for fine-grained communications on what those communities can expect, is a key lesson learnt post mining boom. When a lot of the mining workforce was brought into the cities, they were told, ‘You’re probably

going to have to behave a little differently in the city than you do in a mine site’. In a similar way, we’ll have to behave differently when we go to renewable energy zones to build in very small communities. In addition, streamlining procurement and every approval we can think of are the lessons learnt. Some of this isn’t new, but I think if we take a programmatic approach, we’ll get to where we need to go because, boy, do we need to get to places fast in terms of our net zero ambitions!

AD: For our final question, I want to get the panel to cast their minds forward another 20 years to Infrastructure Partnerships Australia’s fortieth birthday in 2045. We convene the same panel and I ask you to look back on which reforms from the preceding two decades you’re most proud of. Mark, we’ll start with you.

MB: We must tackle housing if we’re going to be proud of ourselves in 20 years’ time. Currently, we’re in a dilemma as a nation in the provision of housing – that’s a supply issue, but it is also a cost of construction issue. I think the answer is probably three-, four-, five-storey buildings rather than 30-, 40- or 50-storey buildings. And I think we must take the community with us. All that is a challenge, but I would regard it as the highest focus. If you’re looking at improving

Infrastructure Partnerships

Australia Chief Executive Officer Adrian Dwyer moderates the panel

mental health issues in a community, it’s ensuring you have social housing. If you have a roof over your head, you’re halfway there; if you don’t, then you’re in a great dilemma. If you want young people to buy into their communities, you must let them live in their community.

Another thing I’d say is that in 20 years, we’ll be talking about the success of the Brisbane Olympics. Sports infrastructure is important and doing it right is important. For two weeks, all eyes will be on us, so I’d get that right and regard it as a national priority. Sports infrastructure can add to the health of a community, and can also help people feel like they’re in it – so, I’d raise those two.

MJ: What I’d say, to Tim’s point, is that the need for infrastructure is clear. Population growth means people need to move around, they need somewhere to live, they need to be able to get their goods delivered, and they need to be able to warm themselves. So, the need is there, but the world is different. Now, the good news is that we’re also on the cusp of, I think, the biggest technological change in our sector since we went from throwing coins in a bucket to free-flowing roads and electronic tolling.

So, what do we have to do? We have to invest to get more value out of every bit of infrastructure we have, and invest so that users see value. From our perspective, the users may

not actually be driving; they may be sitting in the back seat of a self-driving car, but they still need to know the value they’re getting, and they want to know in a really personal way. We must also continue to invest in the electrification of the network. So, I think there’s lots of opportunities to get that value, but that’s probably where I’m most focused.

TR: My overarch is on productivity. I think the only way we’ll continue to have the ability to deliver the infrastructure needed across all those sectors – energy, water, transport and telecommunications – will be delivering more with less. We will need to deploy artificial intelligence and digital technologies at scale, as well as the delivery of modern methods of construction. We must also look at the culture and diversity of our construction industry, and how we go about procurement and regulatory arrangements. All of these are things I’m hoping to look back on a lot earlier than 20 years, and see that we have achieved sustainable productivity growth without holding back the economy because we still need to build all of those train lines, all that energy transition, and everything else to maintain the quality of life we want for our country.

AD: And mine will be that that we’ll look back on how much foresight there was on getting in early on road user charging!

Enhance

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DEPARTURE

9:10 AM

Continuing a 90-year legacy

The names on Fulton Hogan trucks, hard hats and high-vis vests represent more than just a brand; they honour the company’s founders, Jules Fulton and Bob Hogan. Since partnering in 1933 to launch a quarrying and asphalt business, their legacy continues through their families and Fulton Hogan staff. Today, Fulton Hogan remains an independent, privately owned, non-listed public company with corporate offices in Australia and New Zealand, employing more than 2,500 people as owners, and with a total workforce of over 10,000.

Being family-owned underpins everything Fulton Hogan does. The company is committed to supporting communities, protecting the environment, and valuing everyone – customers, suppliers and employees alike. No matter how much times and technology change, the core values stay the same:

► Earn and show respect with every action.

► Energy and effort deliver the highest standards.

► Professionalism and positivity define the company, regardless of challenges.

► Leadership is demonstrated by delivering projects safely and developing people.

Fulton Hogan has been a part of Australia’s development since 1980, steadily expanding through acquisitions. Originally focused on road surfacing, maintenance and repair, Fulton Hogan Australia has grown into a fully integrated resources and infrastructure company with more than 4,000 employees nationwide.

Its unique position stems from its self-reliant network of quarries, asphalt and bitumen plants, enabling Fulton Hogan to self-perform or partner across every stage of horizontal construction. The company delivers multiple-lane highways, interchanges, bridges, ports and terminals, as well as essential utilities like water

and telecommunications, along with the crucial infrastructure services necessary for ongoing operation and maintenance.

The company operates under three business units: Construction, Utilities and Infrastructure Services, offering clients the cohesive service of ‘one Fulton Hogan’, led by a dedicated Australian executive team. The company’s independence gives it the flexibility to act as principal contractor, joint venture partner, subcontractor or alliance member. For more than 90 years, Fulton Hogan has built long-term relationships and responded effectively, both for routine projects and emergencies arising from fires, floods and landslides.

The company’s expertise spans runways, roads, telecommunications

and water, consistently delivering sustainable, high-quality project solutions tailored to client needs across diverse sectors. Fulton Hogan is an industry leader in infrastructure construction, road and civil maintenance, asphalt production and surfacing. In the utilities sector, the company provides essential services in water, telecommunications and energy.

Through innovation, a safety-first culture and a strong commitment to sustainability, every project is delivered to the highest standard of quality and efficiency, whether in urban centres or remote regions. Fulton Hogan stands as a trusted partner in building and maintaining the infrastructure and essential services upon which Australian communities depend every day. ♦

Supporting Australia and New Zealand’s ambitious rail future

In a groundbreaking move, Alstom, a global leader in rail transport solutions, is poised to install the only battery‑electric trains in the Southern Hemisphere in Wellington, New Zealand.

A new initiative that aims to replace the existing diesel fleet with battery‑electric alternatives is a pivotal moment for Kiwi transport.

‘This will mark the beginning of the transition to replace diesel fleets

across Australia and New Zealand,’ says Alstom Australia and New Zealand Managing Director Pascal Dupond.

A local company with a French heritage, Alstom has been a cornerstone of the Australasian rail

Alstom Adessia Stream B battery train

industry for more than a century. The business, part of the broader French‑headquartered Alstom Group, employs around 2,500 people across Australia and New Zealand, and is the market leader ahead of a range of international and domestic competitors. With 88 per cent of its sales executed locally, the company operates three Rolling Stock manufacturing sites in Australia – two in Victoria and one in Perth – and multiple maintenance depots across all key states.

‘We are the only technology provider capable of managing a major rail project end to end, from design to manufacturing up to maintenance, in Australia,’ says Dupond.

Alstom’s Wellington project is a crucial step towards New Zealand achieving net zero emissions, while also representing a significant upgrade to the city’s transport infrastructure.

‘We are excited about this opportunity, and we believe it will demonstrate the value of battery technology in contributing to a sustainable future,’ he adds.

Back in Australia, the company is actively involved in a huge range of projects across its rolling stock, signalling and maintenance portfolios, including significant developments in Victoria and Western Australia, and potential growth in Queensland.

In Victoria, new trains and trams are set to be delivered by 2026, while in Western Australia, Alstom is working on a landmark manufacturing project – to build the first electric C-Series train – that has brought manufacturing back to the State after a 30 year hiatus, responding to the Western Australian Government’s request. ‘We are progressively putting new trains into service, with eight out of 41 already operational,’ Dupond explains.

Moreover, Alstom is undertaking a 10 year project to re signal the entire Perth network, in partnership with DT Infrastructure, after being awarded the $1.6 billion contract by the Public Transport Authority of Western Australia to deliver High Capacity Signalling. The project, using Alstom’s state of the art Urbalis Communications-based Train Control (CBTC) technology,

aims to increase network capacity by 40 per cent, enhance energy efficiency and improve cybersecurity, while minimising disruption to commuters.

‘We need to bring resilience into and modernise those networks. Digital technology is what we can bring to achieve that,’ Dupond says.

Alstom is the only provider to have installed CBTC systems across both urban and mining networks in Australia and New Zealand. Its portfolio includes three major urban deployments with Melbourne Metro Tunnel, Sydney Metro, the ongoing High Capacity Signalling project in Perth, and the world’s largest CBTC mining project with BHP in Western Australia.

Alstom is also advancing innovation and skills development through partnerships with universities and industry through a vehicle called the Mobility Supply Chain Centre of Excellence (MSCCE), which has been developed in collaboration with the Department of Transport and Planning in Victoria. The MSCCE is designed to foster long term innovation and export opportunities for local Australian

Alstom awarded a €538 million contract in Wellington for 18 Adessia Stream B battery trains and 35 years of maintenance

businesses through the development, funding, testing and commercialisation of various projects. The MSCCE aligns with the Victorian Government’s broader strategy to meet the growing demands of the rail and rolling stock industry.

At the same time, Alstom is committed to increasing diversity within its workforce. Women currently represent 21 per cent of its workforce in Australia and New Zealand, with a target to increase this figure to between 25 per cent and 28 per cent.

‘We need new people in the industry. If we want to bring innovation

and be more efficient, we must attract young talent,’ says Dupond.

Turning to industry matters, a recent announcement from the Federal Government regarding the adoption of the international standard European Train Control System (ETCS) is a significant step forward for the rail industry in Australia. Today, every state has its own requirements, standards and competency systems. This is not value for money for the country or the states. The move towards a common standard is expected to bring economies of scale, and improve efficiency and resiliency across the rail network.

Alstom is one of the worldwide leaders in ETCS technology, with local capabilities in Australia to support the future implementation across the country to enable digitalisation of rail networks, improving resiliency and operational performance.

Alstom’s commitment to local manufacturing, sustainability and workforce development underscores its role as the industry leader. As the company moves forward with its ambitious projects, it’s not only shaping the future of rail transport, but is also contributing to a greener, more efficient and inclusive industry. ♦

Keynote interview Shemara Wikramanayake, Managing Director and Chief Executive Officer, Macquarie Group

Macquarie

Key points:

• Global growth has been resilient, and will continue to remain so, despite increasing global volatility and developing de-globalisation; Australia remains well-positioned to attract global capital from investors looking to diversify.

• Renewable energy and increasing global digitalisation continue to present compelling investment opportunities, while defence and critical minerals are areas of potential new opportunity.

• Skills shortages and regulatory bottlenecks remain key barriers to capitalising on investment opportunities and must be met with acceleration of micro-skilling, vocational training and migration reform, and modernising planning and approvals.

SW: I know. So, I don’t know if we’re jinxed or not, but it seems to be a colourful time in the world each time we come together to speak. The latest, as you say, is what’s going on in the United States with new administration.

Overall, we’re finding that global growth has been quite resilient and, interestingly, will remain so, even though it’s slowing down. Despite the volatility and the precarious times, we’re cautiously optimistic about where global growth will end up. But the big thing happening with the United States is there’s a very inward focus now. This is not only causing changes in the United States in the short term, but is also having impacts globally. What we are finding now – as you’re probably also seeing – is an element of de-globalisation starting to develop. Other regions are having to think about their supply chains, trading partners and allies, as well as their approaches to national security, defence, and energy security. This is happening against a backdrop of de-globalisation, which creates change and challenge, but also opportunity, as all these systems must reconfigure. That is having an impact on capital flows, as well.

Moderator:

► Adrian Dwyer, Chief Executive Officer, Infrastructure Partnerships Australia

Adrian Dwyer (AD): Thank you, Shemara, for joining us. This time last year, we were a few weeks away from the US election, which turned out to be a fairly consequential election. I know you’ve spent a bit of time there since. Can you give us a sense of where things are at in the United States? What are the knock-on effects for the globe, particularly for Australia?

Shemara Wikramanayake (SW): Before I do that, I wanted to note that Macquarie has been supporting Infrastructure Partnerships Australia for 20 years, and during this time, this event has become the leading conference in bringing business, policy, and government together. We have had this conversation each year for a while now, and I know you have previously spoken with some of my other colleagues. I was just going to give some context to our conversations and say that it’s been a pretty colourful and volatile period over the years we’ve been speaking. During this time, we’ve talked about the COVID-19 pandemic, and how that was going to impact the world. Emerging from the pandemic, we saw huge fiscal stimulus, followed by surging inflation. More recently, we saw interest rates rocket in response to that inflation. So, each time we speak, there seems to be some topic du jour.

AD: Our first conversation was on video due to social distancing.

One feature we are seeing is capital flowing away from the United States. The United States accounts for around 25 per cent of global GDP, but roughly 72 per cent of global market capitalisation. While investors are beginning to diversify slightly away from the United States, a shift from 72 per cent to, say, 70 per cent, isn’t going to make a huge difference to the United States. But for markets like Australia – sitting at roughly 1.5 per cent of global capitalisation – even an additional half a per cent of inflows can have a meaningful impact. We’re already seeing that reflected in the rising valuations of our biggest stocks. For example, our largest bank is now trading at four times book value because global capital is looking for alternative safe places to go – and that will continue. Australia is seen as one of those very safe other places – politically stable, economically resilient, and has a history of centrist government. Despite our relatively short Federal terms, the current Government holds a strong majority at the moment, and is well-positioned to serve two terms. In addition to this, we have a highly independent central bank. Interest rates are high, giving policymakers capacity to move on the monetary side. We also benefit from strong population growth and proximity to Asia – the fastest-growing region in the world. There are many reasons why investors are looking at investing in Australia as a repercussion or ramification of what’s playing out in the United States. Having said that, we can’t afford to be complacent. While conditions have been favourable for Australia, there are a number of areas where we need to be on the front foot over the medium term.

AD: Two of the themes that have featured in our conversations over recent years are the energy transition and digitalisation. Given the recent change in the energy transition journey in the United States, what are the implications for Australia?

SW: I’ll start by noting the broader backdrop that energy demand is surging – electrification across virtually every sector and digitalisation is driving energy demand. Despite everything going on in the United States, investment in clean energy is also picking up significantly. Globally, investment has risen from around six per cent growth last year to roughly 10 per cent, half year on half year. We are getting far more investment into clean energy, but as you say, it’s shifting now from the United States to Europe. Where the United States, with the Inflation Reduction Act (IRA), had been a major driver of investment in new technology, that money is now pivoting away from the United States towards Europe. Here in Australia, however, we are still attracting substantial investment in energy transition. Last year, we saw a record $12.7 billion in investment. The Federal Government has now released new targets for 2035 – a very ambitious 62 per cent to 70 per cent, up from the previous 2030 targets. These targets set a goal for where it wants the country to move, and reforms have been put in place to drive that. This includes expanding the Capacity Investment Scheme and allocating additional funding for the Clean Energy Finance Corporation. For Australia, this framework is important for driving investment in clean energy here. What is also important is the development of new technologies globally while ensuring that energy security is preserved throughout the transition. Australia’s energy system is still heavily coal-based, and as we move away from that, we’ll need not just new generation sources, but solutions for firming. It’s an interesting time, and we’re still seeing significant opportunities to invest here. In our asset management business, Macquarie Asset Management, we have Aula, which invests in utility-scale wind, solar and

battery projects. Aula currently has a four-gigawatt pipeline across Queensland, South Australia and Western Australia. We also operate a battery storage business, Eku, which has three projects in operation or development, and another six that we have in construction along the east coast – in Queensland, New South Wales, the Australian Capital Territory and Victoria. We’re also investing heavily in the grid where a huge amount of investment is needed to support the energy transition. This includes investments in Endeavour Energy and ElectraNet. Our colleagues in Macquarie Capital are also very active on the advisory side. Over the past two and a half years, they’ve worked on approximately $10 billion in transactions. There has been a lot happening in the market over this time: KKR recently acquired Zenith Energy, which provides renewable solutions to the mining sector, and we acted for J-POWER in its acquisition of Genex Power, Australia’s only pure listed renewable player.

In climate change, yes, the United States is pulling back somewhat with IRA and related policy shifts, but the rest of the world is moving ahead because we are going to need these solutions. Europe is taking a stronger lead, and Australia is also on the journey as a key player. Our newly set targets are among the most ambitious globally, with only the United Kingdom having higher targets. While Australia represents just 1.5 per cent of the world’s emissions, our emissions per capita are very high, so I think it’s admirable we’re setting standards and attracting substantial investment.

In digital, as well, there are significant ongoing investment opportunities. The move towards machine learning – which most people would agree will be even more transformative than the move to cloud a decade ago – is accelerating the

Macquarie Group’s Shemara Wikramanayake provides insight into the current macro-economic environment

electrification of everything. Everyone is familiar with data centres, but across the whole digitalisation area – and much like the energy transition – there’s plenty of infrastructure investment opportunity for those of us involved in the sector.

We’ll probably cover data centres later, where we’ve also done a great deal. My Macquarie Capital colleagues tell me that over the past 10 years, there have been 7,000 transactions in digital infrastructure worth $3.3 trillion. The data centre sale we completed for $24 billion felt significant, but in the context of the broader market, it’s only a drop in the ocean – and that’s only expected to increase. Beyond data centres, we’re also seeing developments in scalable fibre-optic networks. Our Vocus portfolio in Macquarie Asset Management acquired the TPG fibre-optic network, with Macquarie Capital advising alongside the enterprise business.

Another growing area is co-located renewable energy, which hyperscalers are increasingly keen on. At the moment, hyperscalers account for 2.5 per cent of energy demand, which is forecast rise to six per cent by 2030 and 12 per cent by 2050. Digitalisation creates substantial opportunity to invest in energy.

Chip aggregators, which provide compute capacity to artificial intelligence (AI) developers, is another area of infrastructure investment. Macquarie Capital completed a $650 million raising for CoreWeave, and has advised on about $58 billion worth of transactions in digital infrastructure over the past decade across 28 transactions.

Overall, the point is that in both energy transition and data digitalisation, we are only at the start of the journey. These are long-term structural changes, and there is a lot more to do – regardless of how the United States positions itself in the short-term. In the medium-term, climate change presents a major challenge that we’ll need to address across all sectors – not just energy, but also transport and agriculture, and more – through new solutions and infrastructure. Similarly, developments in machine learning and AI are set to drive significant demand for supporting infrastructure.

AD: While those themes have been accelerating, we’ve been discussing them for a few years. Where do you see the emerging opportunities arising from new geopolitical dynamics?

SW: The themes we’ve been discussing are largely structural, playing out regardless of what’s happening today. What we’re seeing today is a much greater element of de-globalisation. Defence is an example of where more investment is needed. For decades, the United States has shouldered a large part of global defence investment, but now the message is, ‘You need to pick it up yourself.’ President Trump, for instance, has been urging countries to invest five per cent of GDP investment in defence. This shift is causing nations to wake up to the need to be more self-reliant.

At the same time, with governments carrying huge debt, there’s a growing role for private capital in the defence sector, particularly in non-munitions areas like land and buildings – assets that are not strategically critical, but still essential.

The United States has also been investing in dual-use technologies, such as satellite systems, often outsourcing to companies like Starlink, which they can then draw on as an off-taker. Defence, therefore, is a clearly growing area of opportunity.

Critical minerals is another key area, and Australia is very well-placed to supply them. China has dominated in this space, and what the current geopolitics is showing is that it’s not wise for the world to have all its eggs in one basket, with any one country. Events such as civil unrest or climatic disruptions could create challenges.

The United States is pivoting away from China for geopolitical reasons, which is creating opportunities in critical minerals for countries to step up and respond and, as I said, Australia is well-positioned to do that. This will require substantial infrastructure for the extraction, processing and transport of critical minerals.

My third and final area is related to energy security – and, once again, the United States is waking everyone up to the fact that if we go too fast, it’s not a linear transition. As we roll out new clean energy solutions, we also need firming solutions to maintain reliability. This means we still need investment in areas like liquefied natural gas. To accelerate decarbonisation efforts, big energy companies are heavily focusing on new carbon capture, utilisation and storage technologies. We’re working with a lot of them to invest in those areas. Those are probably the three areas I would highlight in terms of where geopolitics is driving new opportunities – beyond renewable energy, the climate response, and digitalisation.

AD: All of this is occurring against a backdrop where the demand for infrastructure continues to outstrip supply. Population growth, as we have heard, will continue to drive that into the future. Skill shortages, rising material costs, and a fairly sclerotic approach to regulatory reform in some areas – how are we going to overcome all that?

SW: I saw your Infrastructure Investment Monitor this year, which noted that Australia is the most compelling destination for investment for the first time since 2021. This is fantastic. That said, you also made a point about some of the big challenges Australia is facing, including access to skilled labour and regulation. I mentioned earlier that we can’t be complacent at the moment. We are attracting good business and investment; however, there are impediments. These are a source of real frustration when we speak to our clients, and we made sure to raise them at the Roundtable in Canberra earlier this year.

On the labour point, I was part of the Universities Accord that Minister Clare oversaw in the first term of the Labor Government, which looked at how we can access more skilled labour in a nimbler way. We are increasingly focusing on micro-skilling and vocational training, and must partner with education institutions to get people skilled in the sectors we want quickly. For example, at Macquarie, we have a Winter Development Program that helps to train STEM students in the financial services sector. Similarly, the Victorian Government has a Digital Jobs Program to rapidly train people in digital capability. But I think we do need to partner with education institutions on these training schemes, while looking closely at talent immigration, visas and systems, and investing in areas like construction productivity.

Regulation was another major point of discussion at the Roundtable in Canberra. It’s great to see states such as Victoria and New South Wales using AI to streamline planning, and prioritise critical infrastructure. There was a discussion earlier about speeding up the delivery of housing and data centres using AI. Regulation is a big topic, and if we are going to stay at the forefront, we will need to think about the impediments in both of those areas.

AD: I’m glad you mentioned the Economic Forum Roundtable, because I think you’re the only person in the room that was there.

SW: Right. There were a few people there!

AD: Presumably, you took some ideas?

SW: I think it’s great that they took the initiative to bring together people with many different perspectives. I certainly found it valuable sitting in the room where there was active engagement across representatives from unions, small and medium-sized enterprises, and regulators. The Government has since identified around 10 priorities to focus on, and the ones agreed on are the big priorities.

As I mentioned, regulation ranked very high in those discussions. Minister Watt, as you know, is progressing reforms to the Environment Protection and Biodiversity Conservation Act, as many of our clients note that planning and approval times are slowing things down here compared to what they see in other countries. The Government is also trying to remove duplication across the approvals system – which has grown significantly – and create a Front Door Scheme so that things can get streamlined through a lot quicker. In areas like housing, the National Construction Code is being reviewed to identify duplication at all levels. This is partly in response to the concerns people have about the increasing cost of housing. About half of the adults in Australia earn less than $68,000. Globally, that’s a very high per capita income, but when our housing costs are so high, it really isn’t enough for people to be able to afford homes. But the fact is that this is a huge supply-side issue in this country. We have abundant land, but land costs have been high, and that is because of zoning and infrastructure constraints, and now skyrocketing construction costs. So, there is a

Infrastructure Partnerships Australia’s Adrian Dwyer hosts a sit-down with Macquarie Group’s Shemara Wikramanayake

lot of work in trying to undo that because it is impacting skilled labour coming in. People are increasingly attributing higher house prices to immigration, when, in reality, it’s a supply-side issue.

Another key area of focus was the development of a national AI plan, which Minister Ayres is currently working on. In addition to that, we looked at regulation more broadly, as many of our clients flagged the Foreign Investment Review Board and lack of coordination between regulators for approval, and simply not getting fast answers. The Government is currently considering ‘go’ and ‘no go’ zones in renewable energy.

It was a good roundtable to be involved in, and the Government has identified some short-term actions, and is planning more for the medium term. It’s a good opportunity for us to all engage with the Government at the Federal level and help clear some of the bottlenecks. But it’s a positive sign that we’re waking up to the fact that business investment has been good, but very challenged at the moment, particularly relative to the way things are moving in other countries we operate in. The United States, for example, has been freeing up investment, and the United Kingdom is now giving regulators dual mandates to support growth and development. Regulators such as the Hong Kong Monetary Authority and the Monetary Authority of Singapore have long operated under that mandate.

AD: Now, I know this is, of course, the most important conversation we’ll have over the next few days, but you are flying to the United States shortly to host the Prime Minister in New York. What are you hoping to see out of that trip? How do you think we can foster stronger relationships with US businesses?

SW: Yes, the Prime Minister will be in the United States for the UN General Assembly and Climate Week, and we are hosting him – along with Energy Minister Chris Bowen – in our New York offices to engage with a whole lot of US businesses. We’ve been operating in the United States for three decades, and have invested tens of billions of dollars across both our balance sheet and our asset manager. But we often jokingly call the United States the ‘emerging market for infrastructure investment’ because there is very little private capital deployed in infrastructure. Much of the investment happens at the state level, and particularly in local council, yet the country requires a huge amount of capital invested in infrastructure. So, we’re trying to create opportunity for private capital to deliver the solutions needed in the United States.

In February, Ambassador Rudd held a summit – which we co-sponsored – bringing together representatives from Australia’s $4 trillion pension fund sector; senior United States officials, including Scott Bessent and Howard Lutnick; as well as businesspeople. The focus was on how we can deploy

Australian savings to deliver good return for risk opportunities, while addressing some of the shortcomings of infrastructure investment in the United States.

It was a start to what we hope will now continue with the Prime Minister continuing to meet, not just with government, but with businesses and local councils, on how the great precedent we have created in Australia can be delivered in the United States.

AD: This is my final question, and I’m conscious I’m asking it in Melbourne. When we spoke last year, you just opened your new office in Sydney atop a Metro station, delivered using private capital to fund both the station and the developments above it. I understand it’s all going well and am interested in your reflections on how that’s worked out as a role for private capital in delivering public infrastructure.

SW: It’s a great example of the public and private sectors working together. This project has been 10 years in the making, and we’ve now been in the new building for a year. For the first time in 25 years, we brought all our global staff together in Martin Place, which had been our home for a couple of decades.

Essentially, what happened was the New South Wales Government approached my predecessor, Nicholas Moore, about a plan for a metro system to create more efficient transport links for those commuting into the city; it’s been a brilliant initiative.

And Moore said, ‘Let’s give them an unsolicited offer,’ and asked John Pickhaver, ‘JP, can you get this done?’ And so, he was the great entrepreneur with the idea. But a big team at Macquarie – from Macquarie Capital to our business services team – worked for a very long time with the Government to deliver this project through the COVID pandemic.

This meant we had to build this thing virtually, and yet we delivered it on time, and on budget. But we’ve done more than create an incredible building for us – we have revitalised Martin Place into a civic centre with dining and retail, and a transportation hub, with respect for the heritage, history and culture of the land. It’s a classic example of how we can work together with government to deliver on a whole range of areas. It was a hugely positive experience – as Premier Minns acknowledged when he came to open the building with Treasurer Chalmers – working with many leaders in the New South Wales Government. It’s been a positive experience, and our New York office is a similarly beautiful venue that will be hosting the Prime Minister.

AD: Maybe something in Melbourne in the future?

SW: Our office here at 80 Collins is also incredible – a fantastic combination of office and development more broadly.

AD: Our countdown clock is just approaching.

SW: Yeah, 20 seconds.

AD: On time – like anything good in infrastructure.

Flying into the future

Decarbonisation of aviation, a particularly hard-to-abate sector, will hinge on the successful global rollout of sustainable aviation fuel. But how close are we to a widespread use of this drop-in fuel?

Maintaining the freedom and connectivity that comes with frequent, reliable and affordable air travel while decarbonising is a significant global challenge. Over 20 per cent of global carbon emissions come from the transport sector, and while some of these emissions can be readily addressed, the two per cent stemming from aviation are considered particularly hard to abate. This is because the energy density requirements of commercial flight are difficult to meet using electrification or hydrogen.

IFM Investors believes that to decarbonise aviation, a fuel that is lighter than batteries and denser than hydrogen is needed. Sustainable Aviation Fuel (SAF), part of a wider Low-Carbon Liquid Fuels (LCLF) industry, meets these criteria and is the only currently available medium-term pathway to decarbonise aviation. Based on one modelling scenario, replacing 80–90 per cent of aviation fuel with SAF would reduce global aviation emissions by 62 per cent by 2050.1 IFM Investors fully supports the introduction of SAF, and welcomed

the Federal Government’s recent announcement to commit to a $1.1 billion, 10-year Cleaner Fuels Program. Its commitment complements earlier support for the sector through the Future Made in Australia Innovation Fund, administered by ARENA, which earmarked $250 million in grants to support the development of low-carbon fuels.

Alongside industry partners Ampol and GrainCorp, with whom IFM signed a memorandum of understanding (MoU) last year to explore a domestic integrated renewable fuels supply chain, IFM Investors is also encouraging government to consider demand-side mechanisms needed to create an LCLF industry.

IFM Investors does so by recognising that global demand for LCLF continues to rise and that an opportunity exists for Australia to capitalise on its comparative advantages in agriculture, land availability and refining expertise to become a global leader in LCLF.

Under the MoU, Ampol and IFM Investors are progressing the

feasibility assessment for a renewable fuels facility, with capacity to produce more than 750 million litres annually, at Ampol’s Lytton Refinery in Brisbane, close to Brisbane Airport, in which funds managed by IFM own a stake. At the same time, GrainCorp is exploring the feasibility of building a new canola processing facility to supply Australian canola oil to the future plant.

To put the targeted production volume of 750 million litres of fuel into perspective, the Government’s Cleaner Fuels Program envisages a pipeline of around two billion litres of LCLF. IFM Investors’ first project (which is hoped to be followed by other projects) will be meeting close to half of the stated goal.

Alongside reductions in the aviation sector’s carbon emissions, by creating the potential to deliver more sustainable air travel, this and other projects will deliver new jobs across the country, and the potential for long-term returns for the retirement savings of working people. ♦

1 IATA Energy and New Fuels Infrastructure Net Zero Roadmap, page 5

Investing in what matters

Capella Capital reveals new structure as it gears up for growth in global markets

Australia’s leading public infrastructure developer, financial adviser and asset manager, Capella Capital, is set for further growth following the realignment of its operational model and a substantial investment from one of Japan’s largest trading companies, Sojitz Corporation.

Since 2009, Capella has secured more than $34 billion of infrastructure development projects across transport, social and energy infrastructure sectors.

Following this success and the investment by Sojitz, Capella’s Origination team will now target new regions and broader asset classes while continuing to support Australia’s growing infrastructure needs.

Leadership updates

Capella’s long-term Origination directors have taken on new roles in the company’s leadership structure.

Sarah Neaves, Terence Carroll and Ben Mark have been appointed to Executive Director roles in the Origination team. Chris Oliver and Jamie McKellar have been promoted to new roles in the Capella leadership team.

Oliver takes on the role of Head of Origination, leading the growth of the Public Private Partnership infrastructure

development business in Australia and New Zealand. McKellar has been appointed to the role of Chief Investment Officer, and is responsible for overseeing Capella’s investment strategy, portfolio management, and capital allocation.

Karl Smith has recently joined Capella as Head of Energy to strengthen its strategic focus on energy infrastructure – in particular, renewable generation and energy storage.

Capella has also appointed Yasuaki Kadota as Chief Strategy Officer and, early next year, Siddharth Bengani will be taking on the role of Head of Global Markets. Both of these roles assist in leveraging Capella’s integrated capabilities across project development, capital raising and investment through to asset management into new regions, including the Middle East.

Capella’s Asset Management team continues to be led by Head of Asset Management Chris Jones, delivering asset management services across $21 billion worth of infrastructure projects, spanning diverse sectors, such as transport, health, and social infrastructure.

Managing $850 million of equity investments, the team combines deep

technical expertise in delivery and operations, with a sharp focus on value drivers to optimise returns for investors and generate value for Capella’s government partners.

Capella Managing Director Malcolm Macintyre says that Capella’s updated structure is grounded in strategic insight, operational excellence, and a commitment to building enduring partnerships with government and private sector partners.

‘Our revised strategy is founded on the same principles that have defined our success to date – deep sector expertise, collaborative delivery models, and a commitment to long-term value creation. As we enter new markets, we bring a proven ability to lead and successfully deliver complex infrastructure projects in the local communities that we are proud to be able to operate in,’ he says.

Macintyre adds that the focus on energy and specific international markets is supported by a growing network of strategic partners, positioning Capella to deliver infrastructure solutions that are both locally responsive and globally relevant.

Partner with Capella and imagine more

Panel discussion

Delivering more with private investment in public infrastructure

Key points:

• Private investment has delivered significant benefits in public infrastructure projects, extending well beyond economic gains. It has brought agility, innovation, enhanced service quality outcomes, and access to global expertise.

• Despite a strong track record of success, the role and value of private investment in public infrastructure are not always widely recognised by taxpayers. This highlights the need for better communication of the public benefits and long-term value private investment brings.

• As a case study, Melbourne Airport illustrates how private ownership can enable efficiency by ensuring operators take a long-term view, underpinned by 20-year master plans and multi-year investments.

Panellists:

► Lorie Argus, Chief Executive Officer, Melbourne Airport

► Paul Crowe, Chief Executive Officer, Plenary Group

► Dan Marshall, Principal, The Infrastructure Advisory

► Nancy Tchou, Managing Director, Mizuho | Greenhill & Co.

Moderator:

► Andrew Griffiths, Partner, Herbert Smith Freehills Kramer

Panel discussion on the role of private investment in delivering public infrastructure (left to right: Lorie Argus, Paul Crowe, Dan Marshall, Nancy Tchou and Andrew Griffiths)

Andrew Griffiths (AG): Private investment has played an important role in the Australian infrastructure story; but the discourse has tended to focus on the things that have gone wrong, rather than the value of the investments delivered to communities and taxpayers. I’d like to start by asking the panel: What are some of the unseen things that private investment has done for Australian infrastructure?

Dan Marshall (DM): Just to preface slightly, I’ll be bringing a slightly New Zealand perspective to the discussion. There are a couple of things I’ve observed over the last 15-odd years in New Zealand, the first of which is we’ve seen better preparation and due diligence on projects from the government side. The rigour of going through a process with private capital has really strengthened that practice.

I think, equally, project governance. And not just project governance once a project is underway or in construction, but actually how agencies are shaping up their own internal governance as projects come through that feasibility phase, I think, has certainly improved. And then to reference Bill English, who was the Minister of Finance when I was leading the Public Private Partnership (PPP) program at the Treasury; he was always very keen on private service provision and ideally with private capital as a benchmarking mechanism for public service, and public sector performance.

Nancy Tchou (NT): I think what we’ve seen around embracing the private sector is that it does bring a level of up-front proceeds to the government. And we’ve seen multiple examples in Australia where those up-front proceeds are redeployed into much-needed infrastructure. If you look, for instance, at the long-term lease of Port Botany, some of those proceeds were deployed into the construction of WestConnex. In the long-term lease of Port of Melbourne, that was deployed in removing the dangerous level crossings for the community’s benefit.

But it’s not just about the up-front proceeds of money. By embracing the private sector, the government is able to leverage the private sector’s expertise around agility, flexibility, and capital investment, as well as its global expertise around innovation in terms of technology, and it allows the government to refocus its attention on its core skill sets, which is effectively being a policymaker and a regulator. And we’ve seen that appropriate risk transfer in some of the recent transactions that have been undertaken in Australia.

Paul Crowe (PC): From a PPP or delivery point of view, obviously all these projects are about partnerships, and the partnership is ultimately with government, but we’re the service provider that is responsible for providing a service to the clients. And I think the unseen thing about PPPs is the improvement in the service across assets.

For Sydney Metro, for example, the private sector came up with a solution to do four-minute headways instead of five-minute headways, which improves the travel time and

the flow of people in Sydney. It is similar on the Gold Coast Light Rail, where we’re moving people up and down the Gold Coast. And the service quality gets measured. I think the customers give private sector operators in both those situations a 10 per cent to 15 per cent higher scorecard on operating those two assets.

And it’s similar for other assets. You can go into health, looking at the fantastic hospitals that we have in Victoria, whether it’s the Victorian Comprehensive Cancer Centre, The Royal Children’s Hospital and Footscray Hospital, which is soon to open. These are amazing places that provide people with better outcomes when they’re at their most vulnerable. And those sorts of things shouldn’t be lost [when considering] why we should partner with the private sector.

One of the most recent examples I heard about was PPP schools; they’re very simple, they’re not very complex, but PPP schools – because they’re well-maintained – have lower truancy, so you’re getting better attendance at PPP schools than at government schools. So, these sorts of outcomes can be measured and should be talked about a lot more by the industry about the real benefits to the client, which is the people out there that are looking for the service.

Lorie Argus (LA): If I think about airports, there is a lot of pain happening at airports currently with investment, but a lot of good news in that investment. But if we look at just even the top 10 airports in Australia, we’re going to invest $26 billion in the next 10 years. $26 billion. It’s an unprecedented number. $10 billion of that, I think, is mine and $3 billion of that is the runway. So, the most important thing, I think, is customer service innovation, absolutely, better efficiency, operational efficiency and prioritisation – but also the taxpayers.

Many people I speak to in Melbourne still think that they’re paying for the third runway. I can assure you they’re not.

Melbourne Airport Chief Executive Officer Lorie Argus

That’s a private investment, but it does free up the taxpayer dollars for essential services like police, hospitals and schools. I think that then it also puts the appropriate risk on the right party.

From an airport’s perspective, that’s significant development, but we also take all the passenger risk. So, we are best placed to be motivated to grow efficiently. But also, to that point about innovation: I think you are far more agile when you look at private investment and the focus of the right risk allocation for that private investment. And again, freeing up the best benefit for the taxpayer dollar.

AG: That’s an awesome level of benefit, but there seems to be this perception gap where private investment’s not really getting the credit for the great outcomes it’s delivering. Just coming back to you, Paul, are there any ways to get more public awareness of some of the benefits that are being delivered?

PC: There is a role as an industry to make sure that the benefits of private sector investment are more broadly known – such as those ones that were just talked about. Unfortunately, we’re not really great at sharing those statistics. Government departments will know some of these statistics, whether they’re construction delivery statistics around money saved or against public sector comparatives, or they’re statistics on service quality or other outcomes. They’re out there, but they’re not shared as an industry.

It is something we need to change so that we do have this sort of discourse publicly about why we do PPPs, and why we involve the private sector. They’re not for every asset, but there

are great outcomes there for quite a few assets where we have improved the quality of life by having a PPP versus a non-PPP.

AG: And certainly the truancy point is very interesting and something that you wouldn’t know about without it being put in public discourse somewhere like here. Lorie, you touched on some of the great benefits that private investment in Melbourne Airport has been delivering. It’s been in private management now for 28 years. With that experience in mind, what are some of the benefits and efficiencies that have been delivered to passengers through that investment?

LA: Yes, it’s been private now for 28 years. And if I think about our life cycle of investment, airports are obligated to grow – of course we’re lease-bound to do that, but we also have to do 20-year forecasts and 20-year master plans. That is very challenging to do if you were thinking about that in the political life cycle sense. Many of our projects are multi-year, and the third runway is one great example of a project that is going to see a number of political life cycles. We’re already talking about noise amelioration plans that won’t really be affecting the communities for up to 10 years from now.

And that, I think, is one of the key benefits of the private investment: the long-term planning, and the ability to have consistency around investment, to make sure that we’re building ahead of the curve. We bet on ourselves in regard to making sure we get that investment ahead of the capacity required, but ultimately our investment, whether it’s the ports’ investment or those critical assets in our great cities, means

Plenary Group Chief Executive Officer

Paul Crowe

that it’s better for business, it’s better for trade, it’s better for tourism and it’s better certainty for the long-term partnership.

That partnership does come with all of that innovation and customer experience, but ultimately we are still a federally regulated asset, as well. So, we do share that partnership in respect to the checks and balances within the light-handed regime, making sure we’re operationally efficient, and making sure we’re meeting the security obligations and all of those things. You only have to look at some of the American airports, for example, that are still in those government hands. The reality is you’re never going to have government entities be able to prioritise all the things. And there’s some shocking airport examples around the world. There are some great ones, too, but having that tension about long-term investment, making sure that we’re doing that as efficiently and operationally-optimally as possible, but also in a partnership sense, I think it’s a win-win for everyone in that respect.

AG: Nancy, just turning to you, it sounds like airports have got it locked down, but what other asset classes have you seen that are getting real gains from that private investment? And are there any that you don’t think are really maximising their potential?

NT: I think a lot of it depends on the transaction settings and how the PPP started. So, I’d probably dissect that into two components. Firstly, the risk transfer needs to be appropriate.

The risk transfer needs to be to the party that can actually manage it the most. So, we have seen instances in the past – namely with the Victorian tram and bus networks, and the Tasmanian freight networks – where the risk transfer just went too far and at the end of the day, the government needs to take that on board.

Secondly, there are some assets that economically may not make sense in private ownership because of the way that the asset and the industry evolves. So, being able to provide sufficient incentives to the private sector to enable them to invest in that asset is important. The example that we saw in Tasmania is that there were just unfortunately not enough incentives for the private sector to invest in upgrading and maintaining the networks and, as a result of that, the State needed to take that back.

In terms of transactions and PPPs that have gone right, I mean, Lorie talked about airports, and ports is another example, such as the ports lease transaction on the east coast. Effectively, that was the right risk transfer and it unlocked capital where the private investor was able to be agile and flexible in its capital investments in order to increase and optimise efficiencies for the ports, and not have the political and budgetary influences around them.

And then, recently, the wave of registry transactions has been another huge success in not only bringing up-front proceeds to the government, but also providing that service

Mizuho | Greenhill & Co. Managing Director Nancy Tchou

delivery and modernisation element, which the government has been waiting for for a long time.

AG: Dan, New Zealand has been signalling some more private investment opportunities in the last couple of years. What do you think has gone right so far with that rollout? And what do you think is still meant to be done on that?

DM: A little bit of context: I know a lot of you operated in New Zealand under the previous Labour Government (2017–2023), when we saw a real step back from the use of private capital in New Zealand. With the Nationally-led Coalition coming in during 2023, we saw a real desire to see private capital back on the table.

Looking at a few things that we’ve seen happen, the National Infrastructure Summit earlier this year had a gestation period from when the Government first came in, but they got that out. The Government has also established the National Infrastructure Funding and Financing entity, with a focus on attracting and managing private capital. The New Zealand Infrastructure Commission has released a draft infrastructure plan and an infrastructure priorities process. So, I think those are positive.

We’ve obviously got two PPPs in market now. We have seen a revised and revamped market-led proposal process with an aim of being both more permissive and also more aligned with what we see here in Australia. And we’ve also just recently had a toll concession market engagement process. So, I think there are some positive things there.

I think the challenge that we have in New Zealand is we have the three-year electoral cycle, and we are now two years into a three-year cycle. I think, if I was to be slightly critical of this Government, it has taken them longer than they envisaged to get their head around where private capital can and cannot play a role. So, I think that’s something that we are struggling with.

One of the things for me is New Zealand doesn’t have an issue with spending enough money on infrastructure. For the decade 2010 to 2019, we outspent the OECD on a per capita basis on infrastructure. I didn’t believe it when I heard it, and I think a lot of people wouldn’t. Where we have an issue is around the efficiency and productivity of that spend. And whereas we go from number one in the OECD on dollars per capita spent, we dropped to thirty-seventh in the OECD in terms of bang for buck for that spend. And that is where I see a real opportunity for private capital to support what various governments want to do.

The lack of consensus between the left and right in New Zealand is a massive issue for us. And I don’t need to tell investors in the room how much of a chilling effect that has had on appetite to play in New Zealand. My personal view is that infrastructure is an easy place for there to be political discord and I think we need to do a lot more to take that out of it. I think

the work that the Commission’s leading goes some way towards that.

The last thing I will say is we had an announcement yesterday of a circa one per cent reduction in GDP. I look at the numbers and the graphs on that screen in the demographer presentation with a little bit of envy because we are not facing some of those same environments. But that will have a much more significant impact on the official cash rate in New Zealand. We were forecasting a 50 basis point reduction through the rest of this year. Most commentators are now saying that’s at least 75, so that’s going to create a bit more impetus around the ability to invest and I think that’s where Government needs to be thinking.

AG: One of the things New Zealand has been grappling with to get these projects rolling is risk allocation. Nancy, traditionally, the focus in private finance projects has been on risk transfer from the government to the private sector. And sometimes, as you said earlier, that has slightly overshot the point of efficient risk transfer. The real challenge now is what does smarter risk sharing look like? What do you think it looks like today relative to where we’ve come from over the last couple of years?

NT: As you mentioned, previously we were under a structure where governments effectively transferred a lot of the risk to the private sector. That included, at times, political risk, operational risk, and regulatory risk, and then the governments had to step in and take that back. At that time, the successful transaction was how much risk you could transfer to the private sector. Where we are now, it’s that smarter risk-sharing mechanism where it’s more bespoke assessing who can control and manage the risk more successfully.

Take, for example, operational risk or capital investment risk – that probably most logically belongs with the private sector, whereas risks around policy and risks around regulatory change is best managed by the public sector. So, when assessing the success and non-success of a PPP, it probably is working out what the value for money is in that transaction. And that is more a risk-return allocation – again, the best value for that, rather than how much risk you can push over to the private sector.

Where do I see us going into the future? Probably more bespoke, smarter risk sharing. In other words, there is no ‘one size fits all’. Plus, understanding the asset at hand, the industry, and the market environment that you’re in and actually defining the various risk items, and methodically going through who can actually control that the most.

The other interesting aspect is the current environment that we are in right now. There are additional risks that we’re exposed to – geological risk is one. That’s probably one that is quite possibly unlikely to be managed by the private sector. So, from a value-for-money perspective, it’s best that that remains in the public sector. But then you have risks around innovation, technology and sustainability – those are all around operational

risk items, which, from a transaction perspective, I think, best belongs with the private sector.

AG: Paul, I know you operate globally. Are there any global examples of best practice and risk allocation?

PC: There are myriad examples out there and I think the thing about PPPs is that it’s not just one kind of risk allocation. There are many different risk allocations across markets. And when the private sector and the public sector can work together with freedom, you can come up with a nuanced risk allocation that suits the project. Quite often, the processes don’t have the freedom because of procurement rules, whether they’re like the ‘Euro’ procurement rules or other things that impose a certain way of doing the procurement, which really limits the amount of flexibility on risk allocation, particularly around key risks for PPPs in delivery around construction risk.

With in-ground risk, there are better ways to share that risk and make sure it’s tied to better outcomes on technical solutions that suit the actual in-ground conditions, rather than over-designing things for a risk allocation purpose. And that is one of the dangers in Australia: Have we over-designed our infrastructure because of the risk allocation we’ve imposed on the private sector?

The other thing about political risk you can see in the long-term leases. The UK market, in thinking about the return of Private Finance Initiative, is looking to what they call there the ‘mutual investment model’ and retaining a 20 per cent

ownership of government. And it has gone down really well in terms of mitigating the political opposition to partnering with the private sector. But also in practice, in resolving issues as they arrive, it has created a better partnership and an ability within the Special Purpose Vehicle to really understand the risk better. The issue or crisis is that tough things happen when delivering infrastructure and how do we pivot more quickly to mitigate that risk in a live environment. The United Kingdom is looking towards that sort of model, not only for political risk, but also just to create better engagement to handle risks as they emerge.

AG: I have this question for Lorie. By some metrics, Melbourne is going to be the largest city in Australia shortly. What does the growth journey for Melbourne Airport look like in that context?

LA: I know many of you in the room have opinions on how Melbourne is doing or not doing around the traveller experience and growth. I think the Melbourne Airport Rail link is a perfect example of what hasn’t worked in the political cycles and getting a key part of infrastructure in a world-class airport to a world-class city globally. We’re one of the very few airports in the entire universe that doesn’t have a train link.

So, I’ll move through that quickly and move to the more positive things around the fact that we are duty-bound to grow. And Melbourne does have an exciting story to tell. I think we currently have a climate where it is a challenge from a visitor

Herbert Smith Freehills Kramer Partner Andrew Griffiths moderates the panel

economy perspective around the things that we have to address in crime and the things that we have to address more locally that don’t do long-term damage to our reputation. But we are a great city. We’ve got sporting events, we’ve got all the things, we’ve got all the components and we’re duty-bound to meet that obligation: 76 million passengers by 2042. Our Premier was up in China yesterday talking about the $154 million for every passenger service into this economy.

And we do have long-term investment plans. We are doing $4.5 billion in international terminals, $3 billion in runways and half a billion in roads. But the rules of the game need to stay consistent (and I think we’ve heard that from all the panellists today) to have really good policy setting so that our private investors can have certainty around delivery, and can take the right risk allocation around growth and plans. But in order to do that, we can’t have the rules of the game change all the time.

And I think that that is a key piece around policy to make sure light-handed regimes stay as they are. That when regulation has been proven to work, it stays consistent so that the long-term investors have half a chance of meeting the great growth plans ahead. And Melbourne has a great story to tell in that respect.

AG: Dan, we all know that asset recycling has traditionally led to infrastructure build. Given fiscal constraints at the moment, do you see more of a role for asset recycling?

DM: Yes, in a word. Look, I think for me, government balance sheets have got a bit lazy post–global financial crisis, pre-COVID, or even through COVID. I think it’s been a lot easier for them to either tax or borrow than to have a good hard look at how the assets they own are performing. So, I think there is a real opportunity there. To contrast the mixed ownership model, we have the sale of 49 per cent of the government stake in the gentailers in New Zealand compared with, say, New South Wales poles and wires. Considering the ring-fencing of funding and the clarity around what it was going to be spent on, I think in New Zealand there’s still a perception that we sold the family jewels and we bought a few state dinners, and that’s the extent of it. So, I think building that social licence and being really clear around where the money is going to go is important.

And then the other thing we see is the need for regulation from a consumer and user perspective, as well. It’s just so critical in building that leverage.

AG: Nancy, any policy settings you think would need to change to facilitate another round of asset recycling?

NT: If you look back to 2014, what effectively kickstarted a lot of the Australian Government transactions was that 2014 Asset Recycling program where the Federal Government incentivised the states to asset recycle because they provided 15 per cent of net proceeds in terms of additional funding. So, that comes down to the incentives. In that scenario, the Federal Government was effectively a funding partner and also a policy

influencer for the states. So, when you look at the New Zealand example and you’ve got the councils that own the assets, and the Central Government looking to do things, perhaps there’s a scenario where there are some sort of incentives that can be provided by the Central Government to the councils.

Second is urgency. That program created a sense of urgency because it was a very defined program, being 2014 to 2019, with limited funding. All the states needed to compete for that funding and they needed to get their programs and use of proceeds done by 2019. So, that then prompted the state governments to do things.

And then, lastly, how you present the social licence, as mentioned, is not all about the up-front proceeds, but it’s the additional service quality, efficiencies, all those things we discussed that the private sector provides, not just money on the table.

AG: If we all were to reconvene in 10 years, what does success for Australian and New Zealand private investment in infrastructure look like?

LA: Sure. I mean, we’re going to be pretty big in 10 years’ time as a city, as a State, as a country. I think that I’d like to hope that the conversation has moved on from PPPs, has moved on from individual contracts, individual projects, and it’s more systematic within the acceptance of private investment and solutions within that envelope – partnerships, win-wins and the right risk allocations. But I just hope that strategically we’ve moved on from individual projects, time, scale and cost, into how we look at sectors, how we look at the best outcome for the taxpayer, how we look at the best outcomes for our governments and the private sector together, and more strategically than just on a project-by-project basis.

PC: I hope that there’s some success stories so that the public actually understands how the private sector is involved and if we look forward in 10 years, maybe a stadium in Tasmania that the private sector can get involved in, and some great facilities up in Brisbane that the public understands the private sector helped deliver a great outcome on.

AG: What about you, Dan?

DM: I think a couple of things. One, I’m really keen to see that efficiency has been contributed to through private capital. Secondly, I think to your point, Paul, it’s about telling the story. I give a shout-out to Nick Leggett and the Infrastructure New Zealand team. A presentation in New Zealand on Transmission Gully, just explained the benefits of that, and I’d like to see a lot more of that happening.

NT: I would love to see governments embrace private sector participation and have a transparent pipeline of opportunities so that the infrastructure investors can come in with certainty, and that we become the most attractive infrastructure country in the world.

AG: Thanks very much, panel.

Growth at Port of Melbourne driving new infrastructure opportunities

Trade and Victoria’s surging population are driving growth at Australia’s largest trade gateway, the Port of Melbourne. So far, almost $1 billion has been invested in its infrastructure since the port was leased in 2016, with more to come. A further $700 million is earmarked for investment by 2028–29, as the port plans for more construction and jobs to support further economic and population growth.

A key initiative on the port’s drawing board is the proposed fourth international container terminal. Planning is underway, with the

project scheduled for completion in 2036. It is expected that the new terminal will produce a $5 billion boost to the Victorian economy. The new terminal will also support larger 14,000 twenty‑foot equivalent unit (TEU) vessels, and manage risks of port congestion and shipping delays. It is also expected to produce thousands of new jobs in the construction, logistics and supply chain sectors.

‘This project would be a major new private investment and a milestone for Melbourne. It offers a long pipeline of infrastructure work and jobs in

Victoria,’ says Saul Cannon, Chief Executive Officer, Port of Melbourne.

The fourth container terminal is among 10 key projects outlined in the Port of Melbourne’s 2055 Port Development Strategy, due for publication at the end of this year. These projects support the growth and development of the port over the next 30 years, ensuring that goods continue to move and jobs are supported, generating economic activity.

One of these is the strategic expansion into the former Melbourne Market site, providing approximately

29 hectares of additional, near-port land to support freight and logistics activities, and supply chain efficiency. Based on current planning, it’s expected that more than $200 million will be invested to develop the site.

Catering for growth

The dual effect of increasing trade and a steadily rising population is propelling the need for infrastructure expansion and improvements at the Port of Melbourne. In FY25, it handled approximately $154 billion worth of trade – the highest trade value ever recorded at the port.

Each year, the port handles more than 3.4 million TEU, cementing its position as the largest container port in Australia. On current figures, it handles almost 21 per cent more volume than any other container port in Australia.

Announcing the release of the FY25 trade data in August, Cannon says the port had benefited from infrastructure investments and stakeholder cooperation.

‘By handling close to 40 per cent of nationwide container trade, we are proud to meet the growing needs of Victoria. The sustained growth

in container volumes reflects our investment in efficient infrastructure and ongoing collaboration with government, port users, industry and the broader community,’ says Cannon. Container trade through the Port of Melbourne is expected to more than double within the next 30 years. A 2.5 per cent per annum rise is forecasted to around 7.1 million TEU by 2055.

Key drivers behind the increase are the economic and population growth of Victoria. Melbourne is Australia’s fastest-growing city and is set to be the nation’s largest city by the early 2030s.

The Federal Government’s Centre for Population expects Melbourne’s population to eclipse Sydney’s population by around 2031–32.

‘Demand for trade is growing, with containers that move through the port representing real economic activity. This includes goods imported to support infrastructure projects and raw materials feeding into construction. We are excited about our program of works and the port’s future, and look forward to contributing to Australia’s continued economic prosperity,’ Cannon says. ♦

Pivotal position

Located in a central position on the outskirts of the CBD, the Port of Melbourne occupies 534 hectares of land and 52 kilometres of shipping channels around Port Phillip Bay and the Yarra River. Its close proximity to nearby freeways and freight railways provides easy access to markets across metropolitan Melbourne, regional Victoria and interstate.

Imports and exports are an important part of the Port of Melbourne’s function, but it also plays a pivotal role in the Victorian and Australian economies. The port’s catchment area extends to Tasmania, New South Wales, and South Australia, while international destinations include Asia, Europe, the Middle East, North and South America, New Zealand, and the Pacific Islands.

Significantly, the port contributes more than $11 billion in revenue to the Australian economy. Of this, benefits in the order of $10.5 billion flow to Victoria and $233 million to Tasmania, with the remainder going to New South Wales, the Australian Capital Territory and South Australia. In Victoria alone, the economic contribution is $5.3 billion in gross state product and $2.5 billion in Victorian household income.

The Port of Melbourne is essential to a range of different industries – most notably in the construction, agriculture and property sectors. Currently, it supports around 30,300 full-time-equivalent direct and indirect jobs.

The future of the port promises to deliver more jobs and more investment to Australia’s economy. ♦

Global forces, local strategies

QIC’s guiding principles and strategic partnerships unlock compelling opportunities for investment in Australia’s energy transition.

Global forces

For infrastructure investment manager QIC, several global forces are driving the need for disciplined local strategies and strategic partnerships to meet Australia’s net zero ambition.

QIC’s Head of Infrastructure, Ross Israel, says the global energy transition continues to accelerate with urgency. Rapid technological cost reductions, particularly in solar and battery storage, have made clean energy more scalable and commercially viable, while electricity demand growth is outpacing both overall energy demand and GDP growth.

‘However, this transformation is unfolding amid heightened geopolitical and economic pressures, and volatility in climate policy,’ says Israel. ‘Supply chain instability and regional conflicts have underscored the need for resilience, and a focus on domestic manufacturing and energy security.’

Meanwhile, capital costs and risk premiums have increased; but despite this, Israel says there is investment demand from institutional investors and sovereign wealth funds. In addition, environmental, social and governance mandates continue, and there is a growing market for green and transition bonds.

‘Looking ahead, the shift from niche, early-stage technologies to large-scale deployment is accelerating, but so are the risks,’ he says. ‘Higher capital costs, greater due diligence, permitting delays, and supply chain vulnerabilities are now front and centre, while federal and state policy differences can add complexity.’

It’s clear that deep sector expertise to understand the complexities associated with the transition and the ability to adapt quickly will determine who thrives in this rapidly evolving energy landscape.

Local strategies

QIC believes that as governments and industry accelerate the energy transition, we need to embed core principles into long-term strategies to ensure reliability, affordability and social acceptance. In particular, QIC believes the principles needed for a risk-adjusted energy transition in Australia are:

► Technical feasibility: rely on known technologies that are deliverable in achievable timeframes for the medium-term (base case transition), while aligning with long-term emissions targets

► Realistic growth projections: utilise realistic demand and load growth projections for the short to medium term to guide investment decisions and preferred location for renewable resources

► Grid reliability: ensure system reliability remains

a top priority, with a focus on maintaining generation capacity, grid stability and security of supply alongside decarbonisation goals

► Maximise existing network infrastructure: utilise existing network and generation infrastructure to reduce costs, and speed up deployment

► Flexible policy and regulatory approach: change up-front policy and regulatory settings to support investment certainty while balancing social licence obligations

► Supply insurance: manage supply risk with strategic fuel reserve arrangements, which will build resilience for unexpected events

► Equitable cost: energy supply needs to be reliable and affordable without placing an unfair burden on future generations.

‘By embedding these principles into forward investment, Australia’s energy transition can be technically sound, socially responsible and economically sustainable, which underpins a resilience for investors,’ says Israel.

Strategic partnering to unlock opportunities

QIC is already broadly invested across the energy value chain with A$8 billion in energy transition assets under management across Australasia and A$13 billion globally – a sizeable portion of their A$41 billion total infrastructure portfolio of 21 assets – and has always seen significant value in strategic partnerships.

‘In today’s market, strategic partnerships take on an increased level of significance,’ says Israel.

In 2016, QIC partnered with AGL on key generation asset Tilt Renewables – one of Australia’s leading renewable energy platforms – to drive large-scale renewables.

This portfolio has now grown to be Australia’s largest portfolio of operating wind assets backed by diverse and high-quality counterparties, more than 1.9 gigawatts of capacity across 12 assets, and fully integrated development capability.

At the other end of the spectrum, through a joint venture partnership with Vector Limited, is QIC’s consumer energy asset, Bluecurrent – one of Australasia’s largest metering platforms with more than 2.6 million owned or managed smart meters across Australia and New Zealand.

Smart meters play a critical role in the decarbonisation, decentralisation and digitalisation of the electricity sector. Israel says there is strong regulatory support to accelerate Australia’s smart meter rollout, which currently sits at approximately 50 per cent penetration versus New Zealand’s more mature market at around 92 per cent.

QIC, which has been investing in the energy transition in Australia for more than a decade, has also been cementing its role as an energy transition market leader with deep sector knowledge and relationships, having most recently been appointed by the Queensland Government to accelerate the delivery of new energy projects as part of its Queensland Energy Roadmap.

It was announced that QIC will lead a new investor gateway designed to attract and coordinate private capital investment in Queensland’s energy sector, in partnership with government-owned energy corporations.

Israel says this approach reflects a pragmatic, partnership-driven model to accelerate energy investment,

and deliver for both clients and for Queensland.

‘Institutional investors are actively seeking quality, scalable entry points into Australia’s energy transition, and Queensland’s Energy Roadmap presents an attractive range of investment opportunities across its energy value chain.’

As part of the roadmap, QIC will also oversee an accelerated pathway to deliver the CopperString electricity transmission line, and will expand its oversight of the revised business case for the Borumba Pumped Hydro Project to three other hydro projects.

Compelling opportunities

QIC sees that substantial growth is needed in renewables investment to meet renewable energy targets and electrification demand. Fortunately, QIC continues to see compelling and differentiated opportunities to deploy capital at scale.

‘There are significant energy transition investment opportunities across the value chain – from off-grid remote energy to storage, connection assets and more,’ says Israel.

QIC also sees substantial opportunities in the transport sub sectors, where structural tailwinds and the need for scalable solutions are strongest, with appealing opportunities in decarbonisation of transport supply chains, as well as transport mobility.

It is evident that QIC’s ongoing ambition to build energy platforms, leverage partnerships and deliver performance will distinctly guide its forward local strategy while respecting global forces in the sector. ♦

TRILITY is building water security in Australia and New Zealand

As urban populations continue to grow, so does the need for the water that sustains daily life, infrastructure, industry and public services; however, there is not an unlimited supply. During the decade-long Millenium Drought, there was serious debate about which southern Australian city would run out of water first.

TRILITY has been working to improve water security in urban and regional communities across Australia since the 1990s and in New Zealand since 2009, operating and maintaining over 40 water, wastewater and desalination plants, a variety of reuse schemes, and a biosolids facility. As a group of integrated services and business units, TRILITY also manufactures and constructs modular water and wastewater treatment systems, custom-built infrastructure and components for

environmental and utility projects. In addition, TRILITY also has highly specialised staff who service disinfection equipment, including chlorine units, throughout Australia and New Zealand.

‘Our teams handle everything from plant commissioning, water quality compliance and preventive maintenance, to fault finding and daily operations,’ says TRILITY Managing Director Francois Gouws. ‘They cover every state and territory of Australia, as well as the North and South Islands of New Zealand, and we also provide these services externally to our clients.’

Additionally, TRILITY has a team of relief operators, and thanks to the scale of the company’s footprint, it can deploy relief operators around both countries as and when they’re needed.

‘Our teams can step in to operate water and wastewater treatment

facilities when regular staff are unavailable, or when there’s a disruption such as a flood or a bushfire,’ says Gouws. ‘Our people are called out at all hours and, as many of our operations are in regional areas, they often have to travel long distances. Keeping these highly skilled and passionate people safe is a big focus for us.’

The need to adapt and change Gouws is pleased that the whole sector is rising to the challenges of climate change, population growth, ageing infrastructure and rising customer requirements.

‘We all recognise that what worked 100 years ago will not work into the future,’ he says.

Artificial intelligence (AI) and data interpretation have boosted TRILITY’s ability to expand and diversify.

‘This new capacity for managing and interpreting data has come at the right time to help us achieve smarter, more resilient and sustainable water management,’ says Gouws. ‘Some of our treatment plants are a good example. We’ve been able to optimise their operation to the point where they’re delivering more than they were designed to deliver.’

AI has also had a significant impact on predictive modelling.

‘We’ve become incredibly good at forecasting events and attending to threats before they become a problem,’ says Gouws. ‘Our team of experts analyse water quality, weather and historical data to predict where we need to focus. When I joined the company in 2009, events such as floods or bushfires occurred every few years, triggering a response in crisis management. Today, there’s almost always an event of some kind across our portfolio, and it’s now business as usual.’

Competition for funds

Impressive as they are, the gains made possible by technology can only stretch so far.

‘As an industry, we have ageing assets and, while above-ground assets such as treatment and desalination plants tend to attract most of the attention, there are also thousands of kilometres of buried pipelines delivering water and collecting sewage,’ says Gouws. ‘The Millennium Drought triggered a major surge in funding across Australia for a while, but we still need a huge investment to help us cope with ongoing climate variability and population growth.’

Australia is also in the process of transitioning to much-needed renewable energy, which also requires substantial investment.

‘As a sector, we expect to find ourselves competing for priority when it comes to things like overlapping infrastructure funding and skilled resources, and that is an area of focus,’ says Gouws.

He stresses that innovation shouldn’t be limited to technology.

‘I believe that, as a nation, we need to look at reducing costs associated with the processes involved in tendering, bringing projects to market and delivering our future infrastructure,’ he says.

One positive outcome of the drought was a change in how consumers think about their water supply.

‘Educating stakeholders in water literacy is hard work, but the really nice thing about our industry is that we’re all keen to collaborate,’ says Gouws. ‘In this case, we all came together through the various associations and agreed that we needed to do things differently. I think we’re benefiting from that today. For example, when I arrived in Australia in 2008, desalination plants were being brought in as emergency measures, but they were controversial. The industry was struggling to deliver – it was front page news every day. Since then, the industry has done magnificent work in engaging stakeholders. So, while we’re currently in a similar phase of expansion by building new treatment plants, alternative treatment plants and desalination plants, all have full stakeholder support.’

Training for the future

Since becoming a Registered Training Organisation (RTO: 46056) in August 2023, TRILITY has been offering

nationally recognised qualifications in water treatment, wastewater management, network operations and compliance protocols.

‘Steering ourselves through the federal system of regulations and registrations took longer than expected, but we’re very proud of our achievement,’ says Gouws. ‘It takes incredible skill to operate water, wastewater and desalination plants that deliver 24/7 service, and our people do it with passion. Now, they have the opportunity to train the next generation of operators, and we see them gain great fulfilment from sharing their knowledge.’

TRILITY-certified trainers are also helping to build sector-wide capability, especially in regional and remote areas. For example, a team recently travelled to Cape York to train Aboriginal and Torres Strait Islander operators so they can support their communities.

‘Water is, and will continue to be, a great industry to work in for many reasons, but I think the most rewarding part is knowing that we really make a difference for the long term,’ says Gouws. ‘It’s been a privilege to serve communities across Australia and New Zealand for 35 years, and we very much look forward to continuing that into the future.’ ♦

Panel discussion Energy: from ideas to electrons

Key points:

• Australia’s energy transition is accelerating, with investment flowing into renewables, transmission and storage, while electrification of major industries remains slow.

• Streamlined approvals, decisive government coordination and authentic engagement with communities are critical to keeping projects moving.

• Supply chain resilience and skills development will determine how quickly industry can deliver at scale.

• The transition is not just about replacing coal – it’s about unlocking future economic growth in areas like data centres, artificial intelligence and advanced manufacturing.

Panellists:

► Colette Munro, Zone President, Pacific, Schneider Electric

► Bede Noonan, Chief Executive Officer, ACCIONA

► Alistair Parker, Chief Executive Officer, VicGrid, Department of Energy, Environment and Climate Action, Victoria

► Brett Redman, Chief Executive Officer, Transgrid

Moderator:

► David Simpson, Chief Executive, Infrastructure, The APP Group

Panel discusses the progress of the energy transition and future opportunities (left to right: Alistair Parker, Bede Noonan, Brett Redman, Colette Munro and David Simpson)

David Simpson (DS): The Federal Government has set a target to reduce emissions to 62 per cent to 70 per cent below 2005 levels by 2035. This offers a helpful overlay to the answers that are going to be provided today. To begin, can we speak about the part that you play, or your organisations play, in your respective areas in the delivery of the energy transition?

Colette Munro (CM): Schneider Electric is the technology and systems and services provider for our customers. In that respect, we have all the energy technology that brings that electron from wherever it’s being generated all the way to where it’s being used. We do this across many sectors, including in homes, data centres, hospitals, and in airports and tunnels. So, we really get to see what is happening in the energy transition across all those different parts of Australia – from the large investment in data centres to the rollout of battery incentives across households. We definitely see this momentum building around the energy transition in all different parts of our economy.

DS: Bede, can you let us know about ACCIONA, and what role you play in the energy transition?

Bede Noonan (BN): We are broad and reasonably vertically integrated as primarily a construction contractor. In that respect, we’re heavily involved in building out part of the HumeLink with Transgrid, the Clean Energy Link North in Western Australia with Western Power and the Western Australian Government, as well as the Central-West Orana (CWO) Renewable Energy Zone (REZ) as the design and construction contractor with COBRA. We are also delivering the operations and maintenance, and a significant part of the equity – about one-third of the total equity. Our construction business operates across all other aspects of tunnels, transport and other infrastructure, but we also work very closely with our sister company, ACCIONA Energía, in building renewable energy projects, such as the MacIntyre Wind Farm – a one-gigawatt wind farm in southern Queensland. We’re also looking at how we ensure our energy businesses –that’s building and developing projects – and our construction business can work more closely together to achieve improved outcomes across the board.

DS: And Brett, Transgrid?

Brett Redman (BR): Transgrid is the transmission owner and operator of the transmission network in New South Wales and the Australian Capital Territory. We also have a connections business through our Lumea brand name, so we play quite an active role in connecting renewables, wind farms and solar farms at a grid-scale level. We also do a few projects down here in Victoria. Today, we have about 13,500 kilometres of transmission line under ownership and management.

I think that’s an important number to keep in mind as a backdrop when we start discussing what happens next, because over the next 10 years we’re looking at about 2,000 kilometres of transmission to be built – the front wave of all the change that needs to happen. So, we have about

13,500 kilometres now. We need to build about 2,000 kilometres or so in New South Wales to meet some of the 2035 targets, and more than half of that is already underway – some of it with HumeLink, which Bede and ACCIONA are building, and some of it with Project EnergyConnect, which we will finish next year. It will be the first big transmission project built in this country for decades. So, momentum is building, and it’s in the context of ‘We can deliver.’

DS: Have you had a chance to do the calculations about what additional transmission you need to get to the 62 to 70 per cent range?

BR: A couple of months ago, we published our Annual Planning Report. If you have a look at it, we’re planning to be at 90 per cent renewable energy by 2035. That lines up really well with the approximate 65 per cent scenario that was talked about in the Federal Government’s recent 2035 emissions target announcement. To put that into perspective, that means that the transmission projects need to be built. These are all largely on the books and in various stages, including Project EnergyConnect, HumeLink, Victoria to New South Wales Interconnector West (VNI West), Hunter Transmission Project and the CWO REZ. Over half of the 2,000 kilometres of line that needs to be built is Project EnergyConnect and HumeLink. Project EnergyConnect is nearly finished, and HumeLink is under construction as we speak.

Transgrid Chief Executive Officer Brett Redman

There’s a material amount of wind and solar that needs to be built, as well. We need to build or connect about 35 gigawatts of renewable energy into New South Wales to make it work. About 15 of the 35 gigawatts will come from rooftop solar; however, this might be a lot more, as distribution really looks at what more they can put in. And so, we probably need to ramp up 50 per cent – maybe double the connection speed that we’ve been doing compared to recent years. But if we increase the ramp-up rate by about 50 to 100 per cent, which is I think achievable, then we can reach that 90 per cent renewable energy target that we were publishing a month or two ago, and line up well with the analysis that we see for the emissions targets.

DS: And finally, Alistair, VicGrid?

Alistair Parker (AP): We were established by the Victorian Government about four years ago, initially to advise on improving the policy for developing the transmission network in Victoria to ensure the transmission network was ready in time for the energy transition. That role will end on 1 November 2025, after which we will become the transmission planner for Victoria and oversee all the large projects that are going on in Victoria – the connection to Tasmania via the Marinus Link, the VNI West that Brett talked about, and also developing transmission to connect up offshore wind. From that date, we’ll have about 250 staff.

We have been established to do transmission planning differently. Anybody who can read a newspaper will see that rural communities are concerned about the development of this infrastructure. And so, we’ve been set up to engage thoroughly and respectfully with these communities, and to make sure we’re managing those land use conflicts to speed up the transition in Victoria.

DS: And the unions in relation to those transmission lines, as well. Alistair, how is that impacting your ability to deliver?

AP: It certainly hasn’t impeded our ability at all. This is just a massive opportunity for everybody in the energy sector, and so we’ve seen a constructive approach from the unions, but we are one step removed from it in the role we do.

DS: Adrian Dwyer mentioned his excellent magazine, Partnerships 2025, and the article that appears in that magazine, which talks about the Energy Infrastructure Plausibility Matrix. So, within that context, where are you seeing the biggest challenges for the energy transition, and how plausible do you think it is that on our current trajectory we will meet our new legislative targets?

CM: I think that, as we just heard, we are well on our way. I think we’re at about 12 per cent of rooftop solar in our grid at the moment, and we can definitely double that. We see a lot of battery energy storage projects through our business, and many

Chief Executive Officer of VicGrid, Department of Energy, Environment and Climate Action, Victoria, Alistair Parker

of those projects are moving forward to give us that storage capability that we need in the grid. But what we see a lot is at the edge of the grid. So, I think what we must be careful about here is waiting for the transmission end to solve everything, because that will take some time. We’re on it, but I think there’s also this medium voltage piece – this at-the-edge piece –and then there’s also what we do in homes, and I think many people here will be on board with moving to electric vehicles and electrifying everything we can. And the big opportunity is probably in industry, where we haven’t been fast enough in electrifying. We’ve been holding back, waiting. I was talking to a hospital the other day that still had a gas boiler running, and I asked why they hadn’t upgraded to electric, given how hard a gas boiler is to maintain. I think we must give that confidence to help businesses get those business cases over the line and invest in that electrification in manufacturing, commercial and building, spaces, where up until this point we’ve been a bit slow.

DS: Bede, what do you think are the biggest challenges to get where we need to go, and do you think we can make it?

BN: I think if you’ve set yourself a target, you’ve got to go for it. My personal view is that I would prefer to see our economy where government created policy and left the private sector to work things out. I think we’re in a place now where that’s not occurring because we got rid of the carbon taxes and said, ‘That can’t work’. So, we rely on the government to make capital allocation decisions to a large extent, which is what it is, so we’ve got to run with it and go with that. Can it occur? To Colette’s point about electrification from a construction point of view, we bought our first electric piling rig about two years ago, and we know that there are electric trucks. It’s slow, hard and not occurring anywhere near that pace, and that’s going to be a big part of the transportation and machinery side of things.

But can the electricity grid get to that point quickly enough? Absolutely it can, but we all know of, and we’re discussing, the challenges of what’s in front of us that Transgrid and ourselves at CWO, and other developers and builders, will have both in the transmission lines and the generating assets. The biggest thing that I can say to any politician is to get a central key bureaucrat in every state government who is there just to drive people together and work out how they can get government departments working together, and understand a better way of achieving the same level of governance that we require as a society, rather than the step-by-step approach we generally have.

And, if you think about the challenges, our rural planning situation is effectively set up for the mining and resources industry, and we’re used to waiting seven, eight, 10 years to get a new mine up. That can’t occur. Now, I don’t think legislation significantly needs to change, but a mindset needs to change as to how bureaucracy, both government and the private sector, can be working at a faster pace together. This, all while still

providing the same governance requirements that our society demands to move that forward at a far greater pace.

DS: I agree. Brett, what do you think the biggest challenges have been?

BR: I think, for me, the biggest challenge continues to be all the different planning and approvals that you need. Often, the big headline approvals capture a lot of the attention – they’re called the main approvals – but there’s actually a plethora of small approvals that will also hold things up, as we’ve seen on HumeLink.

And so, the glass-half-empty view is that it does slow things down. So, HumeLink has spent the last six to nine months still trying to finish its last little bits of approvals even as some parts of the construction process got going. We can move much quicker without compromising the quality. Taking a glass-half-full lens, however, is seeing a rising maturity of experience across government departments, constructors, and even within ourselves, so that each time we come to do something, it’s easier than the last.

I’m with Bede in that previously I’ve been calling out a central focus, if you like – both on our side and also on the government side – to help shepherd things through, without compromising the quality of anything, I think that will make a difference. But I do see that starting to happen more. And so, I come back to EnergyConnect finishing next year. We’re almost at the end of the construction, which is a massive milestone in this transition. HumeLink is also getting properly underway, as is CWO, and there are several other big projects about to kick off. We’ve spent a long time getting the building momentum moving, but once we start to get moving, the hope is that we’ll surprise ourselves with how much momentum we can now build.

DS: Alistair, your biggest challenges?

AP: I think they’ve been well-covered. From a Victorian Government point of view, it has established the Coordinator-General of Investment to really try and speed things up. One of the things we published last month was the Victorian Transmission Plan, and it contains within it, for those who aren’t enthusiasts, six renewable energy zones and a shoreline renewable energy zone in Victoria. A subtle but really important thing is that it has now gone into the overall planning scheme to be recognised. So, we are hopeful that it won’t exclude people from going through the planning approvals, but there’ll be a real policy weight to make that easier for them to get through. And to some extent, we have tied ourselves up with Environmental Effects Statement (EES) processes and so on. I think the Victorian Government has set some really ambitious targets for them to go through as quickly as possible. It’s been quite striking for me coming into this space and learning about EESs – thinking that we’re somehow providing protections to the local community, only to discover that nobody

actually believes they’re of any use or represent any strict form of environmental protection. So, I think there are a lot of opportunities to speed those processes up more, and be more responsive to the community, but to get the outcomes that we need quicker.

DS: I had someone recently tell me at a barbecue that if you’re a developer of a solar farm, you have no risk as long as your supply chain is sorted out, which I found novel. Colette – supply chain constraints – what are you seeing?

CM: We have a big supply chain, so we bring in tens of thousands of different products into this market, and into the electrical space in all those different segments. We were talking about speed, and how the best projects can move from design to fully constructed and live in less than 12 months – a bit different to some of these big, slow-moving projects that we are used to. That whole process has to accelerate, with the entire supply chain needing to move faster to deliver. At the same time, we’re putting a lot more technology in, so they’re getting smarter and the way they integrate is getting smarter. There’s now a lot more technology that we wouldn’t have thought about in the past, that now has to get here, and we need the skills to get it installed and commissioned, and providing that optimisation that needs to happen with these new assets, as well.

We have a transformer plant still here in Australia, and we fight very hard to keep that manufacturing here. It’s actually in Victoria, in Benalla, and it’s really important that we keep that supply chain, that resilience, because all of these assets – whether they’re the large assets at the distribution level or at the edge or in the supply side – are now critical assets. And so, that supply chain – the spare parts, all of that – now has to rise to meet that challenge and the industry is doing that. Industry is pulling hard, bringing those resources in and rising to that challenge.

DS: We have a very stable political landscape at the moment. We have a relatively broad consensus across governments that we should be acting on climate change and delivering the energy transition. Going down to the next level of granularity, from each of your perspectives, what needs to happen to translate that appetite into actual action? Are there one or two specific things, practical reforms and innovation, that you think if applied would fast-track delivery?

BN: I mentioned one before. I do believe that we’re embarking on infrastructure that will be delivered by the private sector and largely funded by the private sector, but initiated and pushed forward by the government. So, I think that it’s the government that has to really be at the pointy end of helping us

Schneider Electric Zone President, Pacific, Colette Munro

break through, and that can be a single person who can actually coalesce and get different government departments to consider that issue of governance. Because that is the whole ‘holder of people back’: ‘We can’t do this, because that has to happen first’ type stuff. I think that when we see cooperation, we get major change in timeframes, of being able to get things done both from our point of view and the government’s point of view.

The other aspect, I think, is the social licence piece, which is causing some challenges because we haven’t done much of this work in Australia, both in terms of transmission and generating capacity. We rely a lot on people from overseas in different jurisdictions. We have a lot of stuff that’s unique here. Labour cost is very high, so that’s going to drive quite different methodologies in itself, because we are paying $150 instead of $20. We have business partners who are used to buying $20 labour in Brazil and going about building something differently to how we build it. That then translates to how you discuss that with the farmers whose land you’re going to be building on, including how long you’re going to be on their land, and what size crane and so forth you’re going to have. Those landowners are the people who want to understand the granularity of how long their gates are to be open for, or what size the track that you have to build is to get in there. The more you can alleviate their anxiety earlier, the better it will be for any of the projects. So, how projects can do that is a much better way forward from a social licence point.

DS: And Alistair, are there some practical, hands-on granular things that you think could speed up the process?

AP: I think Bede’s point is fabulous. We have a tendency to go out to these rural communities and say, ‘Oh, we’re going to build some big stuff in four or five years’ and they ask, ‘How is it going to affect my gear, how long is it going to be up, and what are you going to do to my access tracks?’ And a response of, ‘Oh, we’ll talk about that in four years’ time. Don’t worry, we’ll be back,’ loses social licence very quickly. I think to a man with a hammer, every problem looks like a nail. We’ve just published our Victorian Transmission Plan, which sets out a program of works that needs to happen. The whole idea of that plan was that it should be executable when we publish it. So, we will be working really hard to make sure we get out to market and moving along as quickly as we can. I think having that – it’s not quite a single person that you want, Bede – but an overarching plan of ‘this is where we’re going and this is what it looks like’ is going to be incredibly important.

DS: That’s all well and good, but the reality is that all these things come at a cost, and so one of the things we’re seeing is that there are costs that have been blown out over time, and many of these costs are currently being passed through to consumers unless governments step in. What’s the right balance between ensuring affordability and delivering the infrastructure required? Brett?

BR: So, a couple of comments on the cost. One, just to anchor a little bit, is that big numbers get banged about – about the cost of transition for the electricity sector, in particular – but what often gets lost in the discussion is about coal-fired generation closing and the need to build something to replace it. So, cost itself in some ways is mainly about the replacement of the current way that we generate electricity rather than a huge additional cost that’s just linked to removing carbon. There’ll be something in there about the ‘extra cost’, about the acceleration or reduction in carbon, but most of what we’re talking about spending is the least-cost pathway to replace very old coal-fired power stations.

Globally, there’s a rolling debate about who should bear the cost of transition. One of the big problems with infrastructure is that you spend many years spending money before you start earning a dollar or providing a benefit, and then you spend many years – and typically a low revenue part of the cycle – before it gradually ramps up with inflation, and starts to really pay for itself. And there’s a long-running debate around the world, particularly during that ramp up phase and building phase about whether the cost should be borne by the ratepayer – who will say, ‘You have just increased my bill, but I don’t see anything coming back for this’ – or whether governments step in and effectively bootstrap into the future by covering the difference through different schemes, either direct subsidies or things like the Rewiring the Nation Fund.

I’m an absolute pragmatist when it comes to moving through this change. Social licence and the need to bring the community along with you means that it’s not a purist solution.

The APP Group Chief Executive, Infrastructure, David Simpson moderates the panel

It’s not black and white, and it’s not about making the user ‘pay’ for everything. The pragmatic solution that will help bring the community along is for the government to grease the way, to peak shave the cost, if you like, to help us get through the next few years. A classic example of this is the Rewiring the Nation loans that were put in for HumeLink. They’ll last, from memory, for about 10 years and then get repaid. There’s a concession in those loans that helped us finance those projects in the early years without putting customer bills up more than the standard regulated rate of return. So, I think there’s some good pragmatic compromises there that are short-term in infrastructure terms in nature, but they’ll get us to the future rather than locking us up in a debate about whether we should do anything and then doing nothing, which will create even more cost and more delay.

DS: Colette, do you agree?

CM: I absolutely agree. I think we’re going to stop calling it ‘the cost’. In the old energy network, you had someone generating the energy and then supplying it to you, and you paid for it. And I think we’re still in this mindset that there’s a ‘cost’. But in the energy transition, it’s not actually a cost at all – it’s an investment

in the energy transition. So, it’s an investment decision, not a cost one.

I think it’s this old mindset that we are still living in, this old energy network, that someone else is going to generate energy and I’m just going to use it. No, we’re all pro-sumers now. We all produce energy and consume energy, and we get to play a bigger part, and that’s where the investments at all those different levels – the government level, but also within businesses, and within homes – have a role to play in this energy transition. And if you look at the emissions reduction target range that we’ve now been set – if the government expects it’ll be able to get us to the bottom half of that range, then it falls to business to help lift us to the higher level of that range.

DS: Time for a little bit of competition now. We normally have New South Wales people picking on Queenslanders, but we haven’t got the opportunity today. So, New South Wales and Victoria are both progressing renewable energy zones in their own way. I’m a New South Wales person, and I do make the observation that New South Wales is further progressed currently. Are there any lessons for Victoria that you can share from the New South Wales approach and success, Brett?

ACCIONA Chief Executive Officer

Bede Noonan

BR: Let me frame this by saying that I live in a glass house and I’m not here to throw rocks. I’ve been part of many social licence pushbacks and challenges, and it’s really, really hard, so, I’ll just talk about what we’ve done in our State and in our business. I guess we anchor what we do very much in a sense of authenticity. We are consistent with the people that we send out into the field. We weren’t originally – and received lots of feedback a few years ago that we were rotating project directors and people too frequently. If you’re talking to a farmer, the farmer will remember and keep score. So, consistency of engagement and then authenticity of engagement is important. I guess we make a point of going out and talking about what we can and can’t do. And the analogy I’d give is that we’ve all had those moments where we talk to individuals or groups and there’s that moment where you say, ‘We’ll go and look at it, and consider it,’ knowing full well that it’s never going to happen. A more effective approach is engaging with delicacy and diplomacy, and starting from an up-front position of this is what we can and what we can’t do, so let’s talk about what we can do and engage as best we can to move things around. In some instances, we have ended up doing things like moving routes and micrositing within properties, but then we’ll also be really clear about what we can’t do. The undergrounding debate from a couple of years ago is a great example. From the get-go, we stood in front of community groups, town councils and individuals and said, ‘We can’t do it, and here’s why we can’t do it.’ It would’ve been much easier to say, ‘The government will run an inquiry and wait to see what happens.’ Nevertheless, if you do that month after month, year after year, you build authenticity; and people might not like what you have to say, but they buy into a degree of trust that you’re being up-front with them, and that later builds the ability to come to agreement. And the proof points of this are, by agreement Transgrid now have easements signed off for EnergyConnect, which was a southern project where we have got to about 95 per cent. HumeLink, which I thought was going to be harder, is now at over 98 per cent of by agreement relating to our access and building across properties. So, it’s not easy. And I have great respect for the challenges that Alistair is facing down here, and I feel your pain. But I also see the opportunity.

DS: Alistair, what do you think?

AP: I’ve always preferred to be a fast follower in my career, and there’s been terrific opportunities. We look over the border and just watch what’s happening in New South Wales, and they’ve been generous in what they’ve shared with us over the journey. Our position has always been that New South Wales and Victoria, modestly, as you said, are the two states that count, so, if we can try and do the same basic things, that will work much better for the market. Our position has always been we will fast follow New South Wales

unless we get market feedback that we need to do something different. We’ve been really true to that. I would love to be a little bit closer, but I think we’re going pretty fast and, as Brett says, we’ve got some things to work through in some parts of the State, but when we start from the right place, we’ve shown we can go pretty quick.

DS: Rapid fire: Colette and Bede, you are both from international organisations. What can we learn from overseas?

CM: I think Denmark is a good example in doing a really good job of having both wind and larger renewables, as well as microgrids, and things at the edge. Vehicle-to-grid technology has already rolled out there. So, I think Denmark’s a good place for us to look at for some good examples.

DS: Bede?

BN: I think one of the things in Spain – and we saw the blackout and I don’t profess to know a lot about it – is that it appears the general consensus there was that transmission and the infrastructure around it is super important, and to be invested in as much as possible ahead of the generation rollout, which is basically what the plan is now. But that should be doubled down on because you can have as much generating capacity as you like, but if transmission has a problem, then the whole thing fails.

DS: The final question is looking 20 to 25 years in the future: If we turn around and look back, how do you think the transition looks over that period of time, and what will we be seeing at that point in time? Alistair?

AP: I think that as a result of the REZs in Victoria, people will see the benefits of bountiful energy being available and real economic development opportunity being delivered over that time.

DS: Bede?

BN: Probably wrong, but I think potentially by then transmission lines will be redundant, and we will have power at source in a much more available way.

DS: Brett?

BR: Perhaps I’m setting up Greg [Boorer] a bit for what he’s about to talk about. The next few years will still be dominated by the replacement of coal. I’m now starting to really think about post 2035 – what the post-transition environment looks like and the economic opportunity of getting back to growth. And, of course, data centres – if you gave me another 20 minutes, I’d talk about them for 19. So, I’ll be interested in the next speaker, but I think that represents a big chunk of the future.

DS: And Colette, you had the first word. You get to have the last word.

CM: I have to say the same. I think good energy infrastructure is going to fuel a whole bunch of industries, and artificial intelligence and data centres are the obvious ones. I think those investments that we make now will have paid off by 2050.

Keynote interview Greg Boorer, Founder and Chief Executive Officer, CDC

Key points:

• Data centres are critical infrastructure that underpin national security, economic prosperity, and Australia’s potential role as an artificial intelligence hub.

• There is significant interest and growth in data centres, with many speculative applications in the queue for approvals, while constraints lie in electricity supply, GPUs, and execution capacity.

• Data centres can actively support the energy transition by providing grid stabilisation, opportunities for co-investing in generation and transmission, and curtailing load during peak periods.

• With urgent global demand for compute, Australia has the chance to capture investment, talent, and new industries, but only if governments provide vision, leadership, and faster action.

Moderator:

► Adrian Dwyer, Chief Executive Officer, Infrastructure Partnerships Australia

CDC Founder and Chief Executive Officer Greg Boorer

Adrian Dwyer (AD): Greg, we’ve been on a bit of a journey today – we’ve heard insights from a plethora of industry experts that have charted the highs and lows, stirred a little fear, and even injected a healthy dose of realism. Now we’ve come to you to provide the optimism and to paint a picture for the broader sector about what data centres are, and the role they’ll play in Australia. There’s been some debate about what data centres actually are. I’d like to know – what are they, and are they infrastructure?

Greg Boorer (GB): Thank you very much for having me. Hopefully we can demystify some of the debate around data centres over the course of this conversation. Data centres are not just critical infrastructure. They are the critical infrastructure that underpins the safe functioning of society, economic wellbeing and future economic prosperity. They are the beating heart at so many different levels because we all rely on digital infrastructure. When we were all stuck in our homes during COVID, there wasn’t much need for bridges and airports, as opposed to data centres, which enabled distributed working and work from home, and therefore the continuation of all ongoing economic activity. So, data centres are the intersection point where data, compute, companies, and everything meets.

AD: One of the main questions is: Are data centres property, or are they infrastructure? For the infrastructure investors in the room, why should they be seeking to deploy infrastructure-type funding to data centres rather than property-type funding?

GB: Data centres should be definitely thought about as infrastructure, especially given their long-term nature. For example, my weighted average lease expiry is nearly 14 years, or more than 30 years with options. I’ve had zero churn in my time as a data centre owner for 18 years. Nearly 100 per cent of my capacity is underwritten by AAA-rated counterparties, and there is nothing more defensible than that. Given how sticky the business is, data centres absolutely should be viewed as infrastructure assets that have higher returns.

AD: So, we heard Shemara [Wikramanayake] speak about digitalisation as a global thematic. What I’m interested in is: Does Australia stand out, particularly within the Asia Pacific? Why is it that Australia looks like a good destination for this type of investment?

GB: I think you’ve got to go back to the start. Where does all the technology come from? Who has primacy in the technological leadership? That would be the United States, who are our very close allies. Australia has abundant land and energy, and while we have a transmission challenge, we have the bright people that can sort that out. We also have geopolitical stability, and within the grand strategic competition of the world today – East versus West – we’re well-aligned with the United States, which is leading at the moment. In the future,

nations will have to compute to compete, both on a national security and economic prosperity level.

There are so many layers to this, but it’s clear that Australia could be an artificial intelligence (AI) regional hub for the Asia Pacific at a time when strategic global competition and demand is high. We also possess all the raw materials to be super successful in creating whole new industries in Australia. Both agentic AI and robotics are going to be necessary to maintain gross domestic product and standards of living. Those nations that don’t have the domestic capabilities will see their standards of living drop.

AD: Despite the huge growth and volume we hear about every day, there is a perception that data centres are a bit of a dark market. It’s hard to know what the actual demand profile is – what’s duplicative, what’s real, and what’s not. So, firstly, is that a fair characterisation?

GB: Absolutely, and I love working in the shadows because that’s where the magic is and where the money’s being made. I spend 120 days of the year in the United States, because that’s where you can really see what’s coming over the horizon – the innovation, technology, and strategic partnerships happening between the frontier labs of OpenAI and Anthropic. In some ways, I like the fact that it’s not completely transparent because it means that I’m putting the effort in, growing faster than everyone else.

It’s insane how ‘sexy’ data centres have become, and capital is just desperate to get into this market. Some of the assets that have been bought in recent times have been pitched as ‘AI-ready’ with huge growth potential – but there’s no chance that that will ever happen because there is so much speculation in this market. In Melbourne today, there are 22 large-scale data centre applications, and maybe five or six of them will actually be built. These applications are clogging up the queues and most of them are submitted by speculators without the track record, the capital, or the customers to execute.

AD: So, there’s an interesting dichotomy in your answer there. You say at the front end that the lack of transparency is an opportunity, but also that it’s generating a high degree of activity and speculation. Do you think there is a case for greater transparency around that more speculative component, and if you do, how do you think greater transparency can be achieved?

GB: I think I’m more of an ‘ask for forgiveness, not permission’ type of person. I think as soon as you start having regulations, where certain requirements have to be met, and data centres can only be built in certain locations, it may start to become misaligned with actual customer demand and customer requirements. I think there needs to be a first-principles approach with regards to who actually has the track record, the capital, and the ability to execute and prioritse what’s real over what’s not. At the same time, I think you can wrap criteria around all of those elements to accelerate planning

approvals and energy connection, among other things. This is all before we talk about the co-investment in transmission, grid augmentation and grid stability.

AD: I’m glad you mentioned that, because data centres are a little bit resource-intensive, particularly around energy and water. What is there in terms of innovation in the pipeline or existing uses in some of your data centres to reduce that intensity around resources?

GB: Part of being here today is trying to demystify this. Consumption of energy is an absolute lead indicator of economic prosperity. This becomes clear when you look at the countries that are investing in generation – for instance, China. While China is starting from a smaller base, its energy generation is vertical in terms of what it’s putting into its system. This is happening alongside the United States, which is also growing really fast. By comparison, energy generation in many countries is flat. So, what does that say? This tells us over the next couple of decades where the economic prosperity is going to be, because innovation is attracted to abundant energy. So, we shouldn’t actually feel bad about using energy. Instead, we need to think about

how to generate it and use it more effectively and efficiently across the entire economy. And we actually have a huge role to play.

I recently attended a meeting where I spoke to all the different water utilities in Melbourne, where there is currently a water shortfall. Of the 22 data centre applications I spoke of earlier, every single one will need water. CDC has an existing and future pipeline of about four gigawatts of data centres in Australia and New Zealand, which places us in the top five or so data centre operators in the world. Schneider Electric is the biggest provider of data centre infrastructure globally, and we’re its fourth biggest customer. The thing to remember when it comes to the consumption of water is that we are the only data centre operator in the top 10, probably in the top 100, that doesn’t use any water.

I established the business in 2007 – at the end of the Millennium Drought, and just before the 2007 Election, which Kevin Rudd won based on a platform of climate change. And it’s rained ever since! However, interestingly, we couldn’t use water. At a time when people couldn’t use external taps in their homes, how could we justify using water to cool computers?

CDC Founder and Chief Executive Officer Greg Boorer highlights Australia’s data centre opportunity

So, we turned to new technology – free air chillers, closed-loop water systems. We then scaled up and improved this technology, investing hundreds of millions of dollars in design and engineering to perfect it over 18 years.

Now we have this proprietary amazing solution where we don’t use any water. In turn, we’re getting prioritised by customers including planning authorities around Australia and New Zealand because we’re not using that water resource, which can therefore be used for the community. To my earlier point, I demonstrated that to the Melbourne utilities and people were blown away. This is because the top three data centre development applications awaiting approval in Melbourne are asking for, on average, 400 litres of clean drinking water per second.

AD: I think it’s worth reiterating that as recently as yesterday, I had a conversation with someone that it was just an implicit truth that data centres consume potable water, and we weren’t going to be able to roll out at the pace we wanted to without having a solution to that problem. And this is someone in the sector, with no knowledge that that existed.

GB: You could take a lazy, shotgun, multiple-decade-old approach to cooling, or you could go about it in a sniper-like, precise way, like we do. But that comes with investment, time and energy, and intellectual property. I welcome the opportunity to compete against all these companies.

AD: You’ve fixed water – that’s now solved. What about energy? What are some of the opportunities to be a contributor to the energy transition?

GB: I think what people don’t recognise is that, for the most part, data centres are massive loads on the grid. Think about the way the grid works – it fluctuates greatly with daily consumption, and it’s not stable. The higher percentage of stability and constant demand in the grid, the more efficient it is, the more stable it is, and the easier it is to manage. I spoke to the Chief Executive Officer of the Australian Energy Market Operator, Daniel Westerman, who said to me, ‘Greg, I want you to build bigger data centres faster because it’s good for the grid.’ He’s the only person in history who has ever told me to think bigger and go faster, and it’s amazing. Having that sort of demand on the grid is better for all of the other consumers because there’s less waste, and greater efficiency and stability.

Another point is the length of our contracts. I’m building 50-year assets at a minimum and signing contracts that will be 30 years minimum. In fact, I have recently re-signed our largest government customer, Services Australia, which has been with us for 15 years. This means I can work with the Transgrids of the world to co-invest in grid augmentation or, indeed, sign Power Purchase Agreements to underwrite new generation on the grid. We have the wherewithal to do it, and the length of contracts to underwrite it.

However, what is most exciting is something that’s starting to happen in America, but nobody even thinks about it here.

There are tens of billions of dollars of investment in our grid and generation that is used for around four per cent of the year because people want to turn the light on, and have the light come on. So, why don’t we participate actively and be integrated into the grid? At high demand periods, we can curtail the consumption of electricity from the grid and work in island mode, which offsets the demand for those extra investments used for a small portion of the year. And when you start thinking like that in light of how many gigawatts of data centres there are, if they’re good enough to actually participate and comfortable enough to go onto backup generation, like we are, then the opportunities are immense in terms of moderating the top cost of the energy transition right now. That’s an amazing community service. So, tell your friends we’re not evil. We do have a lot to offer in this space, and we just need to get governments and all variations thereof talking to us, rewarding good behaviour, and not penalising organisations like mine because of the sins of others.

AD: Can you just talk through some of the locational tension in this? The demand centres are in cities, and the energy generation outside of them. There’s also planning constraints. So, what are the tensions about where you place data centres?

GB: We work with governments and critical enterprises that, if interrupted, would impact the functioning of Australia – including banks, utilities and even cloud providers. Given this is all relatively latency-specific, the data centre must be close to populations and areas of consumption. Then AI comes along with large-scale training workloads and the training workloads for large language models, where latency is not as much of an issue. In this instance, the data centre could be anywhere. However, as AI progresses further into inferencing, proximity once again will be important. When I look at an investment decision, the first prize for me is something that has a 30- or 40-year reuse capability. This is because the electrons to that piece of land are so valuable that it might be government or enterprise today, cloud tomorrow, AI training after that, and then reused for inferencing for proximity and latency constraints around agentic AI. This could then morph into the biggest industry that has never been seen – robotics, which will be a $5-trillion industry in five years’ time and will require the proximity of compute to population centres.

So, with that said, there’s probably a bit of wiggle room. Certainly, you could build a data centre in the middle of nowhere today. But will that work forever? I’m instead taking the safer option for my conservative investors, which is to have certainty for 30 or 40 years that the electrons coming in can be reused for different applications, and that’s not trivial.

AD: Given all the speculation we spoke about earlier, I’d like you to just cut through that. What’s the real scale of the opportunity, here as it stands today?

GB: If the top seven companies in the world, plus all of the frontier labs, trust you and you have a record of performance of

delivering for them, then it’s impossible to overinvest. Capital is not a constraint. The constraint is electrons and GPUs. People are just desperate for GPUs right now.

AD: I was going to ask you what a high-range scenario looks like. But I think you’ve answered that.

GB: That’s just one customer. But there are all different types of capital and not every type of capital is prepared to be involved in what’s necessary. And you can’t necessarily wait for a contract to take away your risk and guarantee your returns because you’re too slow. That’s a three- or four-year thing. That’s too slow. In three or four years’ time, half of this will be done and dusted.

AD: If Australia seizes this opportunity, in the renewable and AI superpower type of world, what does the future look like, not just for the sector, but for the nation as a whole?

GB: We would attract so much talent to this country, and generate so much economic prosperity. We would be leaders on multiple levels, and have all the elements necessary for social cohesion and economic success in the future. We would have it, and control it to a large degree in our country, and, therefore, safeguard ourselves from a national security and economic security perspective from future shockwaves. This is urgent. And I know in infrastructure that people don’t like to think urgently, but we need to be urgent.

AD: Do you think we can realise that future? What’s your level of optimism?

GB: I’m a glass-half-full person. I’m in sales, so I think absolutely we can do it. I’m doing it now. Again, I’m not asking for permission – I’m asking for forgiveness. But we’re doing it in a sensible, social licence–friendly way, which is defensible, and it’s already happening. I would just love the political classes to get educated and show leadership and vision, and not talk about guardrails and problems. Instead, talk about the economic benefit, growth, national security and the imperatives for global competition. All this capital and those GPUs can go to any country in the world. Countries like South Korea, Malaysia and Indonesia are investing heavily in seeding – not with capital, but with GPUs – whole new industries in their countries. And they’re all constrained countries. Australia is unconstrained. It’s limitless what is possible for this country, and we don’t need money from the Government – all we need is leadership and vision. AI is not going to take our jobs; the person that uses AI better than you is going to take your job. So, we better have those tools, otherwise we’re going to have kids that won’t enjoy the same wonderful quality of life that we do.

AD: What a fantastic, optimistic note to finish on, and I say on behalf of the room, Greg, we forgive you.

Infrastructure Partnerships Australia

Chief Executive Offi cer Adrian Dwyer speaking with Greg Boorer