2021 Future Building

futurebuilding The Australian Infrastructure Review

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Contents

futurebuilding The Australian Infrastructure Review

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Contents 2 Chairman’s Foreword | Sir Rod Eddington AO, Chairman, Infrastructure Partnerships Australia

3 Partnerships – 2021 sponsors 5 Premier’s keynote address | Then New South Wales Premier, The Hon. Gladys Berejiklian MP

14 Panel discussion | Respected leaders 28 Keynote interview | Shemara Wikramanayake, Managing Director and Chief Executive Officer, Macquarie Group

Managing Editor: Brendan Pearce Future Building is published by: Executive Media Pty Ltd ABN 30 007 224 204 PO Box 256 North Melbourne VIC 3051

Tel: +613 9274 4200 E: media@executivemedia.com.au W: www.executivemedia.com.au Advertising: Peter Anderson peter.anderson@executivemedia.com.au Tel: +613 9274 4200 Business Development Manager: David Haratsis Tel: +613 9274 4214 E: david.haratsis@executivemedia.com.au Cover image: Shutterstock All other stock images courtesy of Shutterstock and iStock.com

39 Panel discussion | Delivering major rail projects 54 Keynote interview | The Hon. Paul Fletcher MP, Federal Minister for Communications, Urban Infrastructure, Cities and the Arts

64 Panel discussion | ESG as an investment thematic

74 Keynote address | John Pickhaver, Macquarie Capital, Australia and New Zealand

82 Keynote address | Roch Cheroux, Chief Executive Officer, Sydney Water

DISCLAIMER: The editor, publisher, printer and their staff and agents are not responsible for the accuracy or correctness of the text of contributions contained in this publication, or for the consequences of any use made of the products and information referred to in this publication. The editor, publisher, printer and their staff and agents expressly disclaim all liability of whatsoever nature for any consequences arising from any errors or omissions contained within this publication, whether caused to a purchaser of this publication or otherwise. The views expressed in the articles and other material published herein do not necessarily reflect the views of the editor and publisher or their staff or agents. The responsibility for the accuracy of information is that of the individual contributors, and neither the publisher nor editors can accept responsibility for the accuracy of information that is supplied by others. It is impossible for the publisher and editors to ensure that the advertisements and other material herein comply with the Competition and Consumer Act 2010 (Cth). Readers should make their own inquiries in making any decisions, and, where necessary, seek professional advice. © 2021 Executive Media Pty Ltd. All rights reserved. Reproduction in whole or part without written permission is strictly prohibited.

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Foreword

Chairman’s Foreword I’m pleased to present the 2021 edition of Future Building, Infrastructure Partnerships Australia’s annual journal of insights from Partnerships, Australia’s most prestigious gathering of infrastructure leaders.

This year’s Partnerships theme was ‘The Response’.

Business, industry and government leaders came together from across the country to share their perspectives on how we can tackle contemporary infrastructure challenges and capitalise on the opportunities presented as we emerge from a deeply disruptive period. Partnerships also provided a unique opportunity to examine how we can build on the positive momentum generated by major reform achievements to secure our national recovery.

Over the course of the conference, discussions canvassed the evolving political landscape and the opportunities presented by the increasingly dominant trend of digitalisation in infrastructure. We also explored the initiatives being taken to cement a positive post-pandemic legacy, and the steps industry is taking to prioritise and accelerate decarbonisation of infrastructure projects, assets and services.

Then New South Wales Premier, The Hon. Gladys Berejiklian opened the conference with an overview of the state government’s vaccination program, its reopening plans and the critical role public infrastructure investment will play in underpinning recovery efforts. Our respected leaders’ panel, comprising Dr Kerry Schott AO, Mark Birrell AM, Jim Miller and Mike Mrdak AO, provided insights on the current state of infrastructure reform in Australia and the progress still to be made.

Co-head of Macquarie Capital, Australia and New Zealand John Pickhaver outlined how stretched government balance

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sheets have opened up an opportunity for record levels of unallocated private capital to be deployed into new infrastructure investments. Our investor panel also explored the challenges and opportunities for environmental, social and governance investing in Australia, and the critical need for a coherent national decarbonisation framework leading up to COP26.

Federal Minister for Communications, Urban Infrastructure, Cities, and the Arts The Hon. Paul Fletcher MP joined the conference to share his views on Federal–State relations and the evolving telecommunications landscape; while Managing Director and CEO of Macquarie Group Shemara Wikramanayake closed the conference with an in-depth discussion on the fundamentals that make Australia an attractive investment destination and the steps we need to take to maintain our competitive edge.

Partnerships 2021 was again a timely platform for the expression of new and thought-provoking ideas. The insights contained within this journal should galvanise our collective ambition to emerge from the shadow of COVID-19 stronger than ever.

Sir Rod Eddington AO Chairman Infrastructure Partnerships Australia

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INSIDE INFRASTRUCTURE PODCAST

Premier’s keynote address – The Hon. Gladys Berejiklian MP

Premier’s keynote address Then New South Wales Premier, The Hon. Gladys Berejiklian MP Interviewer: ► Adrian Dwyer, Chief Executive Officer, Infrastructure Partnerships Australia

Key points: •

•

•

New South Wales is leading the country on vaccination rates, which will help enable a faster return to normality and deliver a boost to the state’s economy.

Continuous and honest engagement between government and industry during the construction shutdown – to work together, implement safe work practices and get worksites back up and running – has the potential to be a lasting legacy of the pandemic and improve productivity moving forward.

The New South Wales Government remains committed to delivering a record pipeline of projects and is confident infrastructure will be a key driver of economic prosperity in its recovery from the pandemic.

Then New South Wales Premier, The Hon. Gladys Berejiklian MP (GB): I would like to start by acknowledging the traditional custodians of the land on which we stand, and pay our respects to elders past and present. I also acknowledge Infrastructure Partnerships Australia, and all of your members, who have stood by us during what has been an incredibly challenging time.

Until this most recent Delta outbreak in New South Wales, we prided ourselves on not having a single day lost in terms of infrastructure and construction. As you all know, for a period of two weeks we had to temporarily halt all construction in Greater Sydney, which was a very difficult decision. In hindsight, when we look at the period and the number of cases we had at the time, you can’t put your finger on exactly what worked and what didn’t, but certainly for a long period of time we’ve been able to prevent exponential growth until we had our vaccination rates where they needed to be.

In response to that pause, we’ve also allowed weekend work – and 24/7 work – on some sites through our regulations. While there’s a cap on the number of workers on any site at the moment, we are looking to address that in the very near future. Now, more than ever, the New South Wales Government is committed to delivering on its $108-billion infrastructure pipeline over the next four years. And even pre-COVID and pre-Delta, we’ve seen that

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Premier’s keynote address – The Hon. Gladys Berejiklian MP

investment in public infrastructure provides business confidence and encourages private investment, and that’s exactly what we need to see as part of our COVID recovery.

a moment on the importance of the National Plan and opening up, and New South Wales’s role in leading the nation towards a reopening.

We’re approaching that magic 70 per cent double-dose rate, when we can go back to doing the things we enjoyed previously.

And we are looking forward to leading the way in terms of living with COVID and resuming international travel, and hopefully, in due course, encouraging all the states to eliminate internal borders throughout Australia, which is so critical.

GB: The National Plan is significant. Every state premier and chief minister signed up to it. The National Plan essentially says that once each state hits the 70 per cent and then the 80 per cent double-dosed targets, we will see internal borders come down and we will see our nation function again as one.

Now, critically, New South Wales will hit those vaccination targets before the other states, so we don’t envisage others opening their borders to us until they’ve reached those targets.

But given what our state’s been through, we intend to make sure – within the national framework – that we provide those freedoms to our businesses and our citizens, even if other states don’t reach those targets. Once all the other states reach those targets, it’s incumbent on them to follow the National Plan.

The New South Wales Government sees infrastructure and public investment in infrastructure as part and parcel of our recovery. Following the previous lockdown, there had been various forecasts made as to what the recovery might look like and the worst fears did not eventuate. So, I’m confident that the pent-up demand, the ability for us to resume those productivity levels, and also for us to renew our working relationship with all of our partners in a COVID recovery phase, will see us resume the momentum we had previously. I’m absolutely confident that infrastructure will be a key driver of our prosperity and of our recovery moving forward.

It’s always a pleasure addressing all of you because infrastructure delivery in our nation, and in New South Wales in particular, is a partnership. It’s a collaboration between the private sector and government. Those interfaces have become stronger and stronger over the years, and in no small part because of the great efficacy of Infrastructure Partnerships Australia. Because when the private sector and government have good people working together, we’re unstoppable in what we can achieve. Some of the things we’ve achieved in New South Wales in the public transport space, in the way we’ve delivered schools and hospitals, and in social infrastructure, have been firsts for our state and, we believe, firsts in Australia in terms of scale. So, we’re looking to the future with hope and optimism.

We’re looking forward to October (2021) being the month when everything resumes and when we have a new approach – a new vigour in living with COVID, but also ensuring that our citizens have the greatest level of freedom, that our economy continues to be able to grow, and that, of course, the benefits of the infrastructure we’re building will mean a greater quality of life for our citizens. While we can sometimes get bogged down in the detail of a project we’re delivering, we forget that the whole basis of delivering good infrastructure is for our great quality of life to improve, and to enhance opportunities for our citizens. That’s what motivates us every day. So, thank you for being partners on this journey.

Thanks very much, Adrian. I’m happy to take questions.

Adrian Dwyer (AD): Thank you very much, Premier.

I’m a big fan of hope and optimism, so long may we see it continue. I wonder, just as a kick-off, if you might just opine for

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New South Wales and Victoria, the two largest states, accounting for at least 60 per cent of our nation’s population and probably a bit more of the economy, will be in very similar situations. I think it will be heartening to see greater cooperation between the two largest states on how we navigate that phase.

New South Wales is very happy to be the first state that welcomes the thousands of Aussies coming back home, as well as international students and skilled labour. We know that a lot of our projects rely on good expertise, which we do have here, as well; but for infrastructure, staff moving between nations is important. So, we’re happy to be the first state that opens up internationally. We’re also keen to make sure, within our nation, that we don’t have those economic hindrances, or the social disconnection where families can’t see each other.

AD: That issue of domestic and international borders is clearly important for the economy and for the infrastructure sector. Do you think we’ll see international borders coming down before we see all domestic borders opened?

GB: There’s a chance that Sydney Airport could start welcoming thousands of Australians soon. In fact, New South Wales citizens may move freely to some overseas destinations before they can travel interstate – depending on what some state premiers choose to do. That could be a real possibility. I hope that’s not the case. I hope everybody follows the National Plan.

I think South Australia has shown a keenness to join New South Wales and Victoria, and to stick to the National Plan. I think there is a prospect that some of us might have an opportunity to go overseas before we head to Perth. I hope that’s not the case, because I think it’s really important for us to move forward together and that’s certainly what we’ll be working towards. I’m always someone who believes in working

Premier’s keynote address – The Hon. Gladys Berejiklian MP

together and working in consensus; but we’re not going to hold back our citizens if some state premiers choose not to follow the plan.

AD: We’ve had a question from Scott Power, CEO of BMD Group, who says, ‘Thank you, Premier, for your leadership throughout the pandemic. Consultation between government and industry has never been stronger than we’ve seen during this crisis. What’s your view on the steps that can be taken to embed this level of engagement as we move towards delivering a huge infrastructure pipeline?’

GB: When we had to make that difficult decision about putting a halt on construction, we were absolutely floored by the understanding the industry showed us. Small, medium, large – your sector appreciated the difficulty of the situation and said, ‘How can we work on this together?’ And then reopening happened quicker than we expected because we worked so well with the industry. So, we’re really up for what we can make business-as-usual practice, because we should never let a crisis go to waste.

Within the New South Wales Government, we’ve been able to improve our technology, our back-office operations, and the way we do things, because when you’re in a crisis, you need to manage things differently and you’ve got limited resources.

So, we’ve been able to become more efficient and we’re keen to hear any suggestions Infrastructure Partnerships Australia or its members have on how we can embed those consultation processes moving forward.

It has not only been me, but also key ministers who’ve been given the responsibility to have regular consultation with the sector to make sure we take on board your concerns. The most recent concern, which we’ll be considering soon, is the number of workers on a worksite. We have to resolve that favourably in the very near future.

We’re looking forward to productivity even exceeding what we had before because with the high rates of vaccination and the good COVID safety plans, it really does allow us to ensure business continuity, less disruption, greater productivity and certainty, and no more lockdowns. Once you have 80 per cent of your population fully vaccinated, that gives you a great prospect for business continuity and that’s what we’re looking forward to.

But if you have any legitimate suggestions on how we can make that consultation process more permanent – any standing groups or any permanent forums – we would be more than happy to consider those. That closeness of collaboration has been great for us and I’m sure useful for your sector in being able to have input on policies as we announced them.

AD: We’ve been involved in a lot of those, Premier, so thank you to your ministers and government for that. I’m sure our members will keep feeding through to us the small things that can make the return to normality better. I wouldn’t expect

you to make any announcements this morning on it, but there are a lot of questions coming through around the workforce caps increasing in line with vaccination rates. And I think from what you’ve said, you would expect them to increase as vaccination increases?

GB: That could even occur before then, Adrian. We’re looking at what we can do in the very near future. I feel very optimistic about what we can manage there, because if you have good vaccination rates within your workforce, and good COVID safety plans, there are opportunities for us to look at increasing workforce caps before we get to those vaccination targets.

AD: One of the narratives we’ve heard a lot over the past 12 months has been people making a ‘sea change’ or ‘tree change’ during COVID, and moving to regional areas. What do you think that does for the government’s view on things like faster rail and connectivity to the regions? Does that accelerate an already in-train set of decisions?

GB: I think they’re mutual. Our fast rail strategy is about growing our regions, reducing travel times, and increasing safety and productivity. But I think the jury’s out as to whether there’ll be a correction or whether these are lasting trends. I think the key thing is flexibility and adaptability. COVID has taught all of us that there are different ways of doing things, but we also have to appreciate people’s individual preferences in terms of where they work and how they move, and whether working from home and flexible workplaces are going to be much more prevalent. I think there’s an opportunity for us to look at all of that. Sitting in peak-hour traffic is now beyond the pale because if you can have staggered work times at either end of the day, that improves productivity and reduces congestion, and certainly fast rail improves connections between the regions.

I think what has been a clear identifier or a clear distinguisher is those communities that have good access to the internet have been able to have employees placed anywhere in the state and productivity has remained reasonably good. So, it has caused government to rethink its strategies – but I think what it has done is validate our strategies. We’ve always had a growth plan for the regions. We’ve always had a fast rail strategy that is more ambitious than perhaps some of our other state counterparts.

We believe those strategies are completely in sync with what the post-COVID world might look like. We have to accept that the COVID world might be with us for three or four years – we just don’t know. But in any case, there’s no doubt that it has validated those plans we had in place.

I think it’s important for us to be open about what things will look like after lockdown and after we hit the 80 per cent vaccination target, especially in our larger cities. I’m keen to see the Sydney CBD bustle again, but I also accept that people might have different arrangements regarding workplace hours and workplace flexibility. These are all issues that affect our

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Premier’s keynote address – The Hon. Gladys Berejiklian MP

paths moving forward, no matter who we are and what our circumstances are. COVID has seen a huge realignment of skills and the way people work.

Interestingly, we’ve seen some companies actually grow, even when their employees are working from home, whereas others have really suffered because of productivity challenges.

These learnings augur well for the kind of skills we need moving forward. In New South Wales, we’ve also asked Professor Peter Shergold AC, a leading education expert, and David Gonski AC to provide us with a footprint for tertiary non-university education, and how qualifications can be both university- and industry-led. So, we’re looking at the tertiary sector in a whole different way.

Often when people have a university degree, they still need to have some kind of technical expertise. How can we allow those micro-credentials to be recognised along the pathway to people re-skilling to be able to move more fluidly between careers and between jobs? I think this is a really important area and governments have to work more closely with industry.

Places like Germany have wonderful models, where economy, as well as our social wellbeing, and they are issues the government is looking closely at.

and telling government where the skills shortages are – government can then step up and support industry. We’re

AD: Melissa Chain from the Australian Rail Track

looking at all those models and we’re really excited by what

Corporation, and a couple of others, have asked questions

that means. I think COVID has just accelerated our thinking

broadly about taking a longer-term view on skills and expertise.

in providing those opportunities for much more flexible

Clearly, borders being closed – domestic and international –

workplaces, and enabling people to upskill or learn different

has had an impact on that, but are there things government and industry can do to enhance and develop the homegrown skilled workforce to deliver the 20- to 30-year pipeline ahead of us?

GB: Definitely. We have to be open to re-introducing skilled labour to Australia, which we haven’t been able to do during the pandemic. For example, one initiative in New South Wales is establishing a body called Careers NSW, through which any individual – irrespective of their age or background or

skills, and move between professions.

AD: Premier, that’s the end of the time we have for questions. Thank you so much for joining us today.

Premier: Thanks, Adrian. Thank you again to all your members

for

their

support,

their

understanding,

their

cooperation and their input. We look forward to working with you as we recover together through this challenging time.

circumstances – can speak to somebody about a career

AD: Thank you. I think it’s a testament to your leadership

change or re-skilling. Careers NSW involves industry leaders

that in the midst of a pandemic, you’ve taken the time to engage

who have volunteered to support that initiative. I think we have

with senior business and public sector leaders this morning. So,

to accept that re-skilling and re-tooling will be part of our career

thank you, Premier.

Then Premier of New South Wales, The Hon. Gladys Berejiklian MP Gladys Berejiklian was first elected to the New South Wales Parliament as Member for Willoughby on 22 March 2003. She served as Leader of the Parliamentary Liberal Party and the 45th Premier of New South Wales from 23 January 2017 until 1 October 2021.

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industry is much more involved in re-skilling and re-training,

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Following the election of the O’Farrell Government in March 2011, Berejiklian was appointed Minister for Transport and served in that role for four years.

In April 2015, Berejiklian was appointed Treasurer and Minister for Industrial Relations as part of the Baird Government. She is a Master of Commerce graduate from University of New South Wales and prior to entering Parliament worked as a general manager for one of Australia’s largest financial institutions. Gladys has also completed studies in Government and Public Administration via a Bachelor of Arts from the University of Sydney.

Are you unlocking the full social, economic, and environmental value of your projects?

RPS can help.

Find out more: rpsgroup.com/social-value-creation

rpsgroup.com

companyfocus

Innovation in social value advisory RPS forms practice to assist clients in capturing social value from infrastructure.

A new approach to social value creation in infrastructure will help companies by identifying the true value of projects.

It will also help communities by better understanding their needs.

That is the view of Vanessa Pilla, National Lead of the new Social Advisory and Research Practice at RPS. She believes Australia’s infrastructure sector should collaborate on a social value agenda that becomes embedded within project analysis and delivery.

‘Social value creation is the future of infrastructure,’ says Pilla. ‘If our industry wants to deliver more projects, we will need different thinking on how social value in infrastructure is defined, measured and communicated.’

This begins with building industry consensus on a definition of social value and the assumptions behind its measurement, says Pilla.

‘RPS believes social value in infrastructure is ultimately about individuals’ wellbeing and quality of life. An agreed definition would

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standardise measurement of social value creation and feed into project cost-benefit analysis.’

Pilla sees two main benefits from social value creation. The first is project design. ‘At its core, social value creation requires a deeper understanding of how people value infrastructure. That means wider engagement with communities up-front, and more opportunity for them to co-design projects. The long-term result will be infrastructure that better serves communities.’

The second benefit is economic.

‘Defining and measuring social value could have a profound effect on project economics,’ says Pilla. ‘A lot of social value creation from new infrastructure projects is not being sufficiently recognised because our industry doesn’t measure it properly.’

Project economics

Pilla’s colleague Lee Jollow, National Lead – Economics at RPS, uses transport infrastructure as an example

of social value capture. ‘Typically, economists look at commuting time saved from a new road and what that means for employment. Then we use average weekly earnings to put a value on that job creation. But that only tells part of the story.’

Jollow adds: ‘What if the new road is in a community with high long-term unemployment? And the road enables someone to move to a full-time job?

Also, what if the new road helps people to live a little further out, and reduces their debt and housing stress?

We need to capture this value in project economics.’

Social value creation recognises the interplay between infrastructure elements, says Jollow. ‘Imagine if that road makes it easier for young people to go to university, or makes it easier for older residents to access hospitals.

We need to ask more questions about how a project will support the value and sustainability of other infrastructure in a community.’

companyfocus

Jollow says the economics of social value capture are significant. ‘RPS has worked on projects where identified social value has been worth up to half a billion dollars over 30 years. On major projects, social value can change the dial on investment decisions.’

Jollow says social value creation is particularly important in regions.

‘We know infrastructure is an enabler in the regions and can help address community problems by better connecting people to services, work and each other. We also know that only around 30 per cent of projects on Infrastructure Australia’s priority list are in the regions. Capturing social value is the missing piece of the puzzle in regional infrastructure.’

Long-term approach

Pilla emphasises that social value is not a new concept, and that Australia’s infrastructure sector has done considerable work in this area. ‘It’s not about starting from scratch. Rather, it’s about building on current thinking on social value creation and taking it to a new level. Most of all, it’s about stakeholders working together on this issue to help communities.’

Pilla says the United Kingdom shows the potential of new approaches to social value creation. After the 2008–09 global financial crisis, the United Kingdom cut spending on social services, public health, social infrastructure and housing.

That increased poverty and inequality in some areas.

With funding constrained, the UK government introduced the Social Value Act 2012 to ensure that social, economic and environmental benefits were included in decision-making for public-sector contracts. In July 2021, the legislation required all major procurements to explicitly evaluate social value rather than just consider it.

‘The UK Act is not perfect, but it shows how other countries are moving towards social value creation – and where Australia needs to head,’ says Pilla. ‘There are good signs with Infrastructure Australia starting to lead this conversation.’

Launched in July 2021, Infrastructure Australia’s refreshed Assessment Framework requires proponents to demonstrate the merits of each proposal across three overarching assessment criteria: Strategic Fit, Social Impact and Deliverability. On Social Impact, companies need to show the value of their infrastructure proposal to society and the community across quality of life, productivity, environment, sustainability and resilience.

‘For the first time, the Assessment Framework is saying that even if you can’t monetise social value in costbenefit analysis, it will be counted in the decision on a project,’ explains Jollow.

‘Until now, our industry has tended to treat social value as binary: if it can be monetised, it’s included; if it can’t, it’s excluded. That’s led to a lot of social value not being captured.’

Supporting clients

RPS recently launched its Social Advisory and Research Practice to help clients position for this change – and to harness the firm’s Australian and global strengths. RPS is one of the world’s leading infrastructure advisers with around 5000 consultants

working across 125 countries and six continents.

Operating in Australia since 2003, RPS has advised on many of the country’s largest projects: Brisbane’s Cross River Rail; Sydney’s Metro, Parramatta Light Rail, Great Western Highway Upgrade Program and Western Sydney Airport; and Melbourne’s Metro Tunnel Project, Level Crossing Removal Program and Airport Rail Link.

‘RPS has done extensive work in social value capture through our economics team,’ says Pilla. ‘The new Practice builds on that and provides a structure to bring together RPS economists, social researchers, community-engagement practitioners and other infrastructure experts.’

Pilla says the Practice aligns with RPS’s purpose and values, and its goal to provide the best advice. ‘We see an opportunity for RPS to help clients better define, capture and communicate social value in their projects – and for that analysis to help urban and regional communities get the infrastructure they need.’ ♦ To learn more about RPS, visit www.rpsgroup.com.

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ANZ prepares for the emerging ‘hydrogen economy’ A forward-looking approach is helping institutional customers transition to the fuel of the future.

ANZ’s John Hirjee believes that commercialisation of green hydrogen technology in Australia will occur before 2030 – well ahead of current market expectations.

Hirjee is spearheading ANZ’s push to become Australia’s leading bank for financing hydrogen projects, through his role as an Executive Director of ANZ’s Resources, Energy and Infrastructure (REI) business.

‘ANZ believes green hydrogen commercialisation is years rather than decades away,’ says Hirjee.

‘Companies will more aggressively cut their carbon emissions by embracing hydrogen and other renewable energies. The underlying driver of this trend is the growing focus worldwide

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on corporate environmental, social and governance performance.’

Hirjee draws parallels between hydrogen and solar panels. ‘There was rapid market adoption of solar panels as their cost fell 90 per cent over a decade. Today, green hydrogen is not commercially feasible to produce at scale. But that will change this decade as industry drives innovation in hydrogen technology, invests in hydrogen infrastructure, and collaborates to find solutions.’

ANZ’s customers in REI and other sectors are preparing for the coming hydrogen economy, says Hirjee. ‘Our customers recognise that hydrogen is a potential game changer in renewable energy due to its unique properties.’

Hydrogen’s benefits are well known.

Each kilogram of hydrogen contains about 2.4 times as much energy as natural gas. Environmentally, hydrogen is unique among liquid and gaseous fuels because it emits no carbon dioxide (CO2) when burned; however, hydrogen is virtually non-existent in its free form on Earth.

Much energy is needed to liberate hydrogen from water, biomass, minerals, fossil fuels and other materials in which it exists. This energy needs to come from renewable energy sources to classify the fuel as ‘green hydrogen’ used to decarbonise energy systems and industrial processes.

Momentum to commercialise hydrogen is building. In 2020, the

companyfocus

Federal Government made clean hydrogen one of its five priorities for low-emissions technologies.1 In 2018, CSIRO launched its National Hydrogen Roadmap, noting there is ‘vast potential’ for a new industry in hydrogen.

Globally, demand for hydrogen is expected to increase substantially over coming decades as Japan and other Asian countries put imported hydrogen at the heart of their economies.

‘Everywhere you look, interest in hydrogen technology is growing,’ says Hirjee. ‘In our discussions with customers, ANZ’s message is that industry needs to move quickly to take advantage of investment in hydrogen technology and infrastructure.

Hydrogen is potentially highly disruptive as a renewable energy source, so companies must be ready for this change.’

Hirjee believes Australia’s emerging hydrogen industry will rival liquefied natural gas as an export industry within two decades. ‘There’s huge potential for Australian hydrogen to be exported to energy-intensive countries like Japan and South Korea.

Australia has natural advantages in hydrogen through our wind and solar resources, and land mass. With the right financing ecosystem, Australia can become a leading global player in hydrogen production.’

ANZ at forefront of hydrogen finance

ANZ has substantially increased its focus on hydrogen finance in the past few years. Since joining ANZ in 2019, Hirjee has led the bank’s research on the hydrogen economy, facilitated customer discussions, and championed hydrogen’s potential within ANZ. Hirjee is a chemical engineer by training and a former Senior Energy Adviser to Angus Taylor, the Federal Minister for Industry, Energy and Emissions Reduction. In July 2020, Hirjee was appointed to the Australian Renewable Energy Agency’s Board.

‘ANZ has embarked on an internal program to increase its understanding of hydrogen and educate our frontline

bankers on its potential, across industry,’ says Hirjee. ‘This is a marathon rather than a sprint: ANZ is making a long-term investment to help companies make the transition to hydrogen. The feedback from customers on the bank’s hydrogen work is encouraging.’

ANZ is already in discussions with several customers on hydrogen projects in Australia and overseas. ANZ provided minor support to its Japanese and Australian partners on the successful implementation of the Hydrogen Energy Supply Chain (HESC) Pilot Project – Victoria’s world-first hydrogen project.

HESC aims to produce and safely transport clean liquid hydrogen from Australia’s Latrobe Valley in Victoria to Kobe in Japan.

Hirjee’s ANZ colleague, Jonathan Evans, says the bank is positioning itself to finance hydrogen projects. ‘ANZ is a leading bank to the resources, energy and infrastructure industries and a long-term supporter of energy and infrastructure development in Australia.

We have deep expertise across corporate and project finance, [and] advisory and sustainable finance, such as green, social, and sustainable bonds and loans.’

Evans, also an Executive Director in ANZ’s REI business, says there are synergies between hydrogen, renewable energy and infrastructure

finance. ‘Green hydrogen needs a lot of renewable energy to be produced.

Investment in infrastructure is critical to transport the fuel through pipelines, and at ports and other transport assets.

ANZ’s knowledge of these sectors and record in infrastructure finance positions us well with companies wanting to know what is required to finance hydrogen projects.’

Evans says that the ‘hydrogen economy’ is strongly aligned with ANZ’s purpose to ‘shape a world where people and communities thrive.’ ANZ has committed to facilitating $50 billion in sustainability solutions by October 2025.

‘Environmental sustainability is a key part of ANZ’s DNA, driving our focus on the financing of hydrogen projects,’ says Evans. ‘Hydrogen’s role in reducing harmful emissions and decarbonising economies by 2050 is clearly evident. We are seeing some customers well-advanced on hydrogen planning, and we expect that to translate to a number of hydrogen projects and ANZ-led financing deals later in the next few years.’ ♦ To learn more about ANZ’s work in hydrogen, visit www.anz.com/institutional/industries/ resources-energy-infrastructure/ 1

Commonwealth Government (2020), “Technology Investment Roadmap: First Low Emissions Technology Statement 2020.”

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Panel discussion – Respected leaders

Panel discussion Respected leaders Panellists: ► Mark Birrell AM, Founding Chair and now Patron of Infrastructure Partnerships Australia, Board Member of Transurban, and previous Chair of Infrastructure Australia ► Jim Miller, Vice Chair at J.P. Morgan, Chair of Infrastructure Victoria, and former Deputy Chair of Infrastructure Partnerships Australia ► Mike Mrdak AO, Chair of NEC Australia and former Federal Secretary of the Department of Communications and the Arts ► Dr Kerry Schott AO, Then Chair of the Energy Security Board, Board Member of NBN Co, former Managing Director of Sydney Water, former Chair of Transgrid, and Patron of Infrastructure Partnerships Australia

Moderator: ► Adrian Dwyer, Chief Executive Officer, Infrastructure Partnerships Australia

Key points: • • •

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The dismantling of COAG and the establishment of the National Cabinet has made coordination and long-term structural reform more difficult.

Market principles across all infrastructure sub-sectors should be reasserted, and independent infrastructure bodies should seek to call out backsliding on reform.

Governments can build on the positive momentum generated through COVID – including the digitalisation of government service delivery and progress on road user charging – to institute further changes to the efficient operation and regulation of markets.

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Panel discussion – Respected leaders

Adrian Dwyer (AD): I might kick off with a question that I’ll put to Kerry first. Australia’s initial response to COVID-19 was exemplary by international standards, but we’ve seen, since then, Australia perhaps slip behind other parts of the world, with continuing lockdowns and certainly an initial phase of the vaccine rollout that was quite slow. What are your views on how we can regain that lost ground?

Kerry Schott (KS): I think New South Wales is showing the way forward. This is something we’re all learning as we’re going. So, I think we just have to be kind about the mistakes that are going to be made along the way. One of the things in the energy sector that’s been happening is that customers who are having difficulty with their bills have been assisted by the retailers, but the retailers themselves are in some commercial strife.

The other thing that’s been happening recently, which will be common to most people on this call, is that some of the construction on the transmission build has ceased because the Queensland Interconnector and also the Victorian Interconnector happen to be going through a couple of local hotspots. So, when that happens, everything stops. The other thing that’s really been very frustrating is that key workers, from Siemens in this instance, haven’t been able to get into the country because of a lack of flights, and so on. But these are things that everyone must be battling with. We’ve basically all got to get vaccinated and get on with it.

AD: Jim, how important is the adherence to the National Plan as we move towards reopening?

Jim Miller (JM): I think Kerry summarised it well. I think everyone’s in agreement that you need a plan, and it’s tremendous that they’ve got a plan, but you must also be kind, because things will change. This coronavirus has obviously shown that you can be right, and you can be wrong, all in the space of a very short period of time – but you must have a plan.

That’s the important thing. The other element I’d call out is that the plan is, as has been talked about, one page. So, there’s a lot of detail to work through.

There has been a lot of work done over a long period of time, decades even – by Infrastructure Partnerships Australia, the iBodies, the Productivity Commission, and a whole range of players – that is directly relevant and applicable in this world going forward, and that can be used to supplement the broader plan.

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I think we’ve seen the Federation at its best in the actions of state governments putting stimulus funding into productive infrastructure projects

anticipated or expected, and we’re going to have to really work through it.

It’s having a negative impact on commerce and on jobs – particularly if you work in a logistics sector, the construction sector, or many of the industries that need reliable supply chains. We want our borders to be open, and we want to be able to do business across state lines, not to mention overseas.

So, my hope is that we reflect on this problem in the Federation in the cool light of day, probably 2022, and this sector can help. We can have a positive discussion – as Australians, not as individual members of any single state – about how the borders are going to operate in the future, so that we can have certainty. Let’s try, in a cool environment, to deal with that next year. On a more positive note, I think we’ve seen the Federation at its best in the actions of state governments putting stimulus funding into productive infrastructure projects.

New South Wales, Queensland, Victoria and South Australia have all put money into very logical projects and got the money moving, particularly mid-size projects, or even outstanding maintenance projects, which are too often forgotten. The Federal Government has also increased its infrastructure expenditure in response to COVID-19. This is a great example of the Federation working. But I can see our sector being called upon over the next 12 months and asked, ‘Well, how could you work this a lot better?’

AD: Mike, your take on fixing the Federation?

AD: Mark, it’s just the five of us and 1000 of my closest friends. Is the Federation broken, and how do we fix it if it is?

Mike Mrdak (MM): Look, I think the Federation is at a fundamental point in history. I think as we look back on the COVID crisis, the National Cabinet will prove to be one of the great mistakes. It was a good mechanism in those early days, but I think we’re now seeing that it’s not operating to take longterm reform issues forward.

Mark Birrell (MB): Morning, Adrian. I think the Federation’s really under great stress. We’ve seen perhaps the best and the worst of it over the last few years. The stress is because of the prolonged and often unexpected border closures.

That’s become a symbol of something that no-one really had

I think the dismantling of the Council of Australian Governments (COAG) mechanisms will prove to come at a great cost to the country. So, I agree with Mark. I think we’ve got to step back as a nation next year and rebuild a lot of the machinery. Most of us, over the last three decades, have

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seen national markets reform, national regulatory reform, and national investment thinking taking place, largely because of the Federation and how it’s worked.

I agree with Mark – we’ve seen some real positives, where you essentially have states being able to tailor different solutions and come up with some terrific innovations. But if we don’t coordinate that better through a COAG-type mechanism, then I do worry that we’re not going to be able to achieve the next stage of reform. What worries me is that the National Cabinet has become such a politicised process that essentially, at the moment, nothing is being dealt with at National Cabinet that is a not a headline political issue. How do you get long-term structural reform dealt with at something like National Cabinet?

It can only happen if you actually build strong bureaucratic and governance structures that sit behind it, which enable industry and senior officials to work together and develop plans – and they take a long time. National Cabinet’s not built to do that. So, I think we’re going to have to rethink all of that as we go into 2022, and start to rebuild a lot of the mechanisms and a lot of the trust between jurisdictions to get sustainable reform.

AD: I might just come back to Mark on that point about long-termism, because it’s often missing. Mark, how do you generate the environment where we can get our policymakers, public service and businesses to think in that long-term way that’s needed for infrastructure?

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here have been a lot T of really good initiatives that have come out of COVID-19, but it’s not a magic pudding

MB: That’s the critical issue, because we are living in the sector that always plans out 10, 20, 30, or 100 years. That’s our life. It’s the life of virtually everyone who is listening to this discussion this morning. So, we’re the long-term people. We’ve got to reward the political leaders who talk long term. We’ve got to actually engage with the journalists who think long term and want to talk about policy reform and agendas, rather than the environment of the six o’clock news or the social media tweet, which is all about the immediate. Because part of the frustration that this group has got, and we’ve all had on policy, is that it’s a lot harder to do this policy reform now, because it’s immediately defeated by a negative tweet, or it’s immediately vetoed by one state leader who, frankly, doesn’t care.

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That was not the normal debate. It wasn’t the debate in the 1980s and 1990s. You used to have an agenda that was respected, and journalists said, ‘Yeah, you can now implement that.’ The ball was in your court to implement, to consult, to put out a green paper, white paper, and go. So, I want to talk up the leaders. I want to reward the ones who say, ‘Yep, I’m prepared to do something. Are you with me?’ There are some there. We’ve seen some good signs, particularly among the Treasurers, federally and many at a state level, who’ve said, ‘You know, there’s actually quite a bit to be done.’

But the issues that unite us on policy are the ones where we have to say, ‘Okay, post-COVID, it’s fair enough to have been distracted by the COVID crisis.’ This was a black-swan event – a potential future event that we learned about in our economics courses at university that actually occurred. But now we have to get back to an agenda where we’re talking about the underlying problems. If you don’t talk about the underlying problems, then all of your initiatives are just short term.

AD: One of those underlying problems, Mark, will of course be the fiscal impact of increased stimulus that’s gone into the economy, both infrastructure and otherwise. I might come to Jim on this. Those floodgates can’t remain open forever. How do we responsibly withdraw that stimulus and build back confidence for the private sector to take over that investment task?

JM: That’s a really good question. I think the first point you’ve got to make is that the governments – state and federal – they’ve all done the right things by doing what they’re doing.

That’s really important to acknowledge and call out. There have been a lot of really good initiatives that have come out of COVID-19, but it’s not a magic pudding. To put this into a Victorian context, prior to the last election, they were targeting, say, debt at six per cent of gross state product. They went to an election saying, ‘Let’s take it to 12 per cent.’ That was kind of okay, but during COVID that doubled, and is possibly getting closer to 30 per cent. It’s not finished yet, and we’re obviously seeing the Federal Government headlines – they’re talking about a trillion dollars of debt, moving from say 25 per cent to the best part of 50 per cent.

Debt is still low by international standards, but obviously, the simple maxim is that we’re borrowing against future income.

And that’s kind of okay, but we’ve got to get that future income to come through, and we know that, as a country, there are a number of demographic challenges: we’re an aging population and the like. So, there does need to be the next part of the discussion here. The fiscal stimulus has been great, but it can’t go on forever. So, there’s a lot of work that needs to be done in thinking about how we can make reform happen. Otherwise, it will become more of a problem as we move through, and that will create its own negative spiral. Business is ready, willing and

Panel discussion – Respected leaders

waiting to invest. We just need to create the environment to facilitate that investment.

AD: Mike, I might come to you on that issue. You spent a good part of your career at the coalface of the negotiations between the Federal Government and the states in getting that money out. Is it going to be possible to wean the economy off this huge fiscal stimulus?

MM: It’s going to be very difficult. We’ve locked in very high community expectations of the role of government in a whole range of new areas, and that’s very difficult. There are two issues. One is, as Jim mentioned, the level of fiscal debt that’s got to be dealt with, and I don’t think it’s going to be as easy as just waiting for it to eventually diminish, because high levels of debt, as we know, restrict your choices and options at the time when you want to make good investments. Secondly, we’ve created a strong expectation in the community that government will continue to underpin a whole range of expanded activities, which is really going to be difficult for governments in the future to sustain.

The OECD, in its recent paper on Australia, comes back to tax reform, because every global crisis in human history accentuates existing trends; and what this one has done is shown the fragility of our tax system. We are heavily reliant on income taxes to prop up government and the state. What we need to do is create a much more sustainable tax system. I suspect a lot of people around government are going back and having a look at the Henry Tax Review again, and starting to look at some of the structural issues; over the next couple of years, governments are going to have to have a really hard look at where they’ve locked in some operational spending at higher levels.

It’s hard to see governments being able to wind back some of the increased spending on health – particularly public health.

The question is: how do you find the resources to invest in infrastructure, research and development, and the sort of areas that are actually going to be quite critical to growing us out of the fiscal position that the COVID-19 crisis has placed us into?

This is going to require a couple of years of very hard work by governments around the country, and I think we’re going to have to come back with quite a detailed discussion with the community about tax reform.

AD: Kerry, I’d like to talk a little bit more about that reform piece. While we’ve seen some flashes of progress in recent years, particularly led by state treasurers, as Mike mentioned earlier, there have perhaps been some areas of backsliding.

We’ve seen increasing direct and regulatory intervention in areas like energy, without an end date or exit strategy. In telecommunications, we have a publicly owned network with only a conceptual pathway to exit. How do we refocus policymakers on interventions that help, rather than harm, consumers over the long term?

KS: In energy, most of the interventions have been driven by a government nervousness about reliability, and a lack of belief that the private sector would fill that gap. I’ve got no doubt that they would have, but they’re not going to do it in the time frame that the governments want to see it done in. We are going through a whole change in the market design in energy, and it is very difficult to get new investment in energy of certain kinds, because we’ve had lots of assistance for renewables and they’re very cost-competitive anyway. But to accommodate more renewables in the system, we need to make sure that they’re accompanied by firm and flexible generation.

But what’s happening with the government intervention that’s particularly bothersome is that it’s not coordinated – and the point Mike was making about National Cabinet is absolutely correct. It’s had the unfortunate effect of cutting industry consultation and involvement right down from what it used to be, and it really makes operating across a national market and with national outcomes much more difficult.

AD: Mike, we’ve now got a situation where intervention begets more intervention, and there’s a danger that we could end up on a bit of a slippery slope towards a worse outcome for consumers. How can we effectively call out that backsliding?

Is there a renewed role for independent infrastructure bodies, or the Productivity Commission, or others, to start being the bodies that call out that backsliding from within government rather than those of us talking from the outside?

MM: I think it’s both. I think the various bodies, including the treasuries and the policy departments, will have a key role in this, as well as bodies like Infrastructure Partnerships Australia and other industry groups, because the reality is that it needs to be highlighted – the rollout of services needs to be markettested. You can’t simply presume that we can continue with that model, which has high levels of government intervention in regulatory settings and service delivery, at the price that the community thought they were prepared to pay in the past.

So, I think there’s a challenge here to firstly make sure that we are putting all of these processes under a contestable lens, and we’re having a look at the price and the service delivery quality that actually occurs under various models. I think that will be part of the fiscal reckoning that’ll happen after this process, to make sure we’ve got the most effective and efficient service delivery, and I think that’s going to be quite critical. I think we’ve seen, over the past 18 months, some suboptimal interventions and investments driven by pressures on governments – quite understandable given the crisis we’ve been through, but we can’t sustain that. And I think, as Kerry says, we’ve got to go back and make sure that our assessment processes and our investment decisions are soundly based.

It is important to note that there are some real success stories in government at present. If you look at Service NSW

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– setting aside some of the criticism they’ve received more recently around delivery of payments to small businesses – the digitalisation of service delivery in New South Wales and, increasingly, in Victoria, is a real success story coming out of COVID. That’s driving efficiencies but, more importantly, it’s driving a much better service quality. Those are the sorts of models I think we’re going to probably need to see – and we need to ask hard questions in the future about who’s providing the service.

of looking longer term, apart from hope – which is, as we know,

AD: Thanks, Mike. You’re a consummate public servant when you use the term ‘suboptimal intervention’. I don’t know, Mike or Jim, if you wanted to wade in on this idea of calling out that backsliding and making sure that we don’t have these increasing interventions that beget further interventions.

and the like. So, we do need to think about how we prosecute

JM: I guess I’d make two comments. One is: all of these reforms are hard, but as we were talking about before in terms

to electric vehicle road user charging. Kerry’s been an absolute

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not a strategy – then your only other real alternative, particularly given the debt levels that we’ve got, is austerity. And as we know, if reform is hard, austerity is extremely difficult. It leads you to the point of saying, ‘Well, okay, there is actually a definite need, but perhaps an important need for the reform.’ I guess the thing I’d call out is how we do it – how governments, as you say, are backsliding because of all the things that Mike talked about: short-termism, the 24-hour news cycle, social media, that argument for reform.

Obviously it needs a leader, and we’ve seen that while it is tough, things can prevail. And Infrastructure Partnerships Australia has been great on this with its initiatives that have led mountain in terms of the energy sector. Things haven’t exactly

Panel discussion – Respected leaders

played out as perhaps she’d prescribed, because the states have taken the running, but it’s really having that leader – someone standing up and calling it out.

I guess that the second element that we really need to move to is – and this is consistent with this theme, Adrian, and this is a quote that you gave, but I’ll repeat it here – ‘We need to move from this pride of authorship to pride of repetition.’ So, when someone calls something out or makes a big play, it’s really incumbent on the industry, if we’re really serious about stopping backsliding and getting reform going, to repeat that, and call it out repeatedly, in different forums, again and again.

You’ve seen it with the work that Infrastructure Partnerships Australia started on transport pricing.

Organisations like Infrastructure Victoria and others have taken that up. And referencing that work is so important because more people saying the same thing is going to create the opportunity for change.

And probably the third thing that I’d call out is that we do need to engage with the community more. We talk among ourselves and we get heated agreement very quickly, which is tremendous, but we do need to involve the community more.

It doesn’t mean that we need to go and run a coast-to-coast campaign, but obviously the big thing that the politicians are always reacting to is community perception. And, of course, change is hard, but going out and at least communicating the issue, and understanding the challenges, has proven to be a very helpful process. And you come out with a better solution.

AD: Jim, I might come back to that in a moment. I think we’d struggle to run a coast-to-coast campaign at the moment.

Perhaps it’ll just be an east coast one for the time being. Mark, has Jim just described the antidote to the lack of long-termism you were talking about earlier?

MB: I think so, in that we have to take people with us on the journey. And we have to find people who want to talk about positive outcomes. When anyone who’s on this hook-up is planning a project, they’re usually saying, ‘What does the user want? What does the customer want? What does the consumer want out of this?’ Right? That’s exactly the way we should approach selling policy reform. What do people want as an outcome? They’re not usually interested in what steps it has to take through parliament or regulation. They’re interested in the outcome. If we talk as an infrastructure sector about outcomes, then we will get people captivated by it.

If you’re going to have a transport market – which is something that you’ve been progressing very well – then you talk about the outcome that it brings, because it will bring greater public and private investment in the transport sector.

And it will mean that very high-value, productive projects, get rewarded. And people go, ‘Oh, that actually occurred. We saw the outcome.’ So, look at it through a consumer’s eyes

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I f we talk as an infrastructure sector about outcomes, then we will get people captivated by it

or a user’s eyes, and talk up the governments that talk about users and consumers, because if we’re going to deal with the underlying problems, that’s the way of carrying people with us.

AD: Thanks, Mark. And Jim, I did just want to come back on some of the community consultation. I know it was a feature of Infrastructure Victoria’s 30-year strategy that you released not long ago. Could you talk to that? And also the challenges of that long-term strategy in a fairly radically uncertain present, with a focus on short-term trends.

JM: On the community side, it can take many forms.

And in truth we’ve done things like citizen juries, community consultation and surveys. The form it takes is less relevant – it’s more that you do it. And picking up on what Mark was saying about really trying to deeply understand what the concerns are, to have a genuine conversation, is probably the thing that we’ve found has been most useful in that discussion.

In terms of long-term planning in uncertainty, you’re right.

But long-term planning is so important, because it comes back to this basic point that if you’ve got a plan, when things change – not if they change, but when they change – you pivot. If you don’t have a plan, you lurch. Clearly, the latter approach is not going to lead to sustainable outcomes, or certainly long-term beneficial outcomes. So, long-term planning has never been more important. But we recognise that things will change, keep building the evidence base, keep looking for the triggers.

A lot of the work that we do, particularly when we’ve got to look out 30 years, is acknowledging that things are going to change, but we put in triggers to say, ‘Well, actually this is what we’ve assumed, that population growth will be this level,’ as a simple example. If that doesn’t happen, either sooner or later, then you need to adjust your plan. And calling that out in advance, again, is a helpful part of the process, to make sure that the plan is dynamic.

AD: Thanks, Jim. I might just come to Kerry. One of those long-term challenges that we have to tackle as an industry and a community is decarbonisation. There’s a big capital task required to meet that, particularly in the energy sector. And we know that money can only come from users and taxpayers. Do we need to have a renewed conversation about who is going to pay for the energy transition, and how, in the most efficient way?

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KS: I think that within the industry, there needs to be a conversation about the allocation of some of the costs between the different parts of the industry. At the moment, the way the cost of transmission building is allocated doesn’t actually work very well, because it doesn’t take into account the benefits of a big transmission line to the whole sector. It really just looks at the two states that the transmission line is crossing, so it doesn’t quite work. And it also means for something like Marinus Link, that Victoria is expected to pick up most of the cost of Marinus, and their consumers would. And that’s just not really fair given that the benefits are much broader than that. And that needs to be looked at, and it is being looked at the moment.

But I think people forget that this investment is being done, because the benefits far exceed the costs. We’re not doing it for any other reason. And in Australia, we’re not even doing it with decarbonisation as a national objective; frankly, we’re doing it because renewables are the cheapest form of power, and that’s what’s driving it all. Getting them into the market has already brought wholesale deals down and will continue to do so. In the National Electricity Market, we’re running at times on 55 per cent renewables. And there are times when South Australia is running on 75 per cent, and the whole market will get to levels like that probably within four or five years. So that’s going to bring wholesale prices down phenomenally. While governments might have huge debts, there are sectors of the economy that have huge savings and are sitting there ready to invest, if they’ve got something that looks investible.

Apart from developing hydrogen, which is definitely something we need to be fostering, there are other things in industry attached to the benefits that renewables bring that we should really be looking at, like more flexible aluminium and steel production. If we can get those production processes more flexible, we’d have an enormous advantage in Australia, as Ross Garnaut has pointed out. And, similarly, we ought to be looking at green cement and things of that nature as potential new industries. Some of that private-sector money may need a bit of a nudge to get into developing that stuff, but there’s huge potential there.

AD: Mark, I might just come to you to drill down on this briefly. It feels to me, at least, that we’ve stepped back from market principles in the last few years. There’s more and more government intervention. Am I being overly negative? Or is that the case?

MB: I think it’s important for policy people to be pure. So, you’re allowed to be disappointed by the fact that there’s been a distraction. Look, in the 1960s, the way you got a phone booth into your street was you lobbied your local MP, and he wrote to the Postmaster General’s Department, and then you might get the phone booth installed in your street. That’s what happens when you just have a government system. And

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now we have a market-based system where firms want to provide telecommunications services to you because you’re a consumer and you want it. A structure has been created around that, which means that the consumer really does direct service provision.

In the transport sector, we’ve still got the thing, ‘Oh, I want a new road. I’ll write to the local MP. He’ll take it up with the Department of Infrastructure federally, and they’ll get back to me in due course.’ You actually want something that says that the consumer has a role and talks it up. So, in a nutshell, market reform in transport is all about trying to bring into transport what we’ve done in virtually every other sector – energy, telecommunications, health – allowing the user, the consumer, to be more dominant. Those ideas were written up by the Productivity Commission 15 years ago. They were written up by Infrastructure Australia. They were written up by Infrastructure Partnerships Australia. So, there’s a list of reforms there, and I think we just need to get back to it – we’ve got to talk it up.

AD: Thanks, Mark. I’ll open this question to the whole panel as a final question. We’ve seen a crisis, and we’ve sought to not waste the crisis. There has been momentum generated and a fervour for reform generated in other areas. How do we maintain that momentum over the coming 12, 18, 24 months, to make sure that we don’t miss this opportunity? Jim? JM: That’s a really good question. And in truth, everyone’s listening, right? You can see, hearing the [then] New South Wales Premier, her door is open. And I certainly don’t get the sense from any of the other discussions that anyone’s door is closed to this. And so, I think really the challenge for the industry is just being coordinated in what we do and present it in a way that’s digestible. That would be my overarching comment. Now is the time.

AD: Kerry, fanning the flames of reform – how do we do it?

KS: I think it’s happening, Adrian. I just encourage it to keep going. I think Mike mentioned early on about the terrific work that Service NSW has done, and that digitalisation that’s been going on delivers much better service, and it’s less costly than it used to be. And that’s now happening with household rooftop solar and all the energy saving that can go with that, and smart appliances. I think we’re well on the way – we just need to get out of the way and let it rip.

AD: Mike, get out of the way and let it rip. That’s the answer?

MM: Well, I think the first thing is we’ve got to be honest and say, ‘We can’t return to the world that was there in January 2020. The world’s got to move on.’ And we’ve actually got to talk about the positives. The reality is if we hadn’t done some of the transport investment reforms of the last 20 years, then a lot of people wouldn’t have been able to get a lot of groceries and things during the course of the last 15 months. National markets, investment by the private sector in big distribution, the

Panel discussion – Respected leaders

way our logistics systems operate, the way our infrastructure operates, are all success stories coming out of this. And the big success story out of COVID is the digitalisation of the economy.

It’s not only enabled Australians to keep working and to stay in touch through some really difficult times, but most importantly, it’s also made, and will continue to make, huge efficiencies.

Now, there’s a lot of rationalisation and change coming with that, but we’ve got to build on the positives. And we’re very fortunate to have an energy sector, a telco sector, which continues to invest; and we’ve got to make the case for why they’ve got to be able to continue to invest, because if we hadn’t made those reforms in the last 20 years in telecommunications, energy and transport, this would’ve been an even more bleak process. And if you look at where we’ve

invested well in the past – public health – we’ve got to make sure we keep investing in those areas, public and private, to be ready for the next crisis. So, I think we’ve just got to talk up the positives and be open about the fact that we can’t return to the world that was there pre-COVID. We’ve got to build a new world – hopefully a world based on all of the good things we’ve learnt.

AD: Thanks, Mike. I think it’s always sensible to leave the last word to the Founding Chair of Infrastructure Partnerships Australia. Mark?

MB: Well, first of all, I just really want to say congratulations for getting this conference together in a COVID environment. I think it’s stunning, and from what I can sense, there are about 1000 people on this hook-up, and that’s extraordinary.

Renewable energy generation in Western Australia

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I agree with Mike. I think we’ve had some things through COVID that we’ve learnt from. I’ve seen it in the health area with telehealth and GP services online. That’s an extraordinary revolution in what’s been made available.

And it was an example of public policy being driven by need, and need causing a policy conversation. We’ve also seen, as I said before, a lot of stimulus spending, but the interesting thing was that the stimulus spending went into lists of projects that had been published over about a 10-year period.

been publishing. So, we had a consensus list of logical

The money was spent on projects that iBodies, in particular Infrastructure Australia and the Federal Department, had

And thank you to the whole panel for the insights and candour

Mark Birrell AM – Founding Chair and now Patron of Infrastructure Partnerships Australia, Board Member of Transurban, and previous Chair of Infrastructure Australia

infrastructure. He has both a Bachelor and a Master of Economics from Macquarie University. He is also a Fellow of the Institute of Actuaries Australia.

Mark Birrell was the founding Chairman of Infrastructure Partnerships Australia and is a full-time non-executive director. With an extensive background on public and private boards, he is currently Chairman of PostSuper, non-executive director of Transurban and past President of the Victorian Chamber of Commerce and Industry. His previous roles have included Chairman of the Port of Melbourne Corporation, Chairman of Infrastructure Australia, Chairman of Regis Healthcare and national leader of the infrastructure group at MinterEllison Lawyers. Through the 1990s, he served as a Cabinet Minister and Government Upper House Leader in Victoria, initiating numerous successful capital works projects.

Birrell was made a Member of the Order of Australia in the 2021 Queen’s Birthday Honours List ‘for significant service to the infrastructure sector, and to business.’

Adrian Dwyer – Chief Executive Officer, Infrastructure Partnerships Australia Adrian Dwyer is the Chief Executive Officer of Infrastructure Partnerships Australia – the nation’s infrastructure think tank, providing independent policy research focused on excellence in social and economic infrastructure.

Dwyers’s career spans business, policy and public service roles across the private sector and the New South Wales and Australian Governments, with expertise across transport, utilities and social infrastructure markets, and wider public administration.

Dwyer served as Infrastructure Partnerships Australia’s head of policy from 2011 until 2015, where he led major studies on road-pricing reform, contracting and financing models, among others. In 2015, Dwyer left Infrastructure Partnerships Australia to serve as the Executive Director of Policy and Research at Infrastructure Australia – the Commonwealth Government’s statutory infrastructure body. At Infrastructure Australia, Dwyer led the development of the Australian Infrastructure Plan – a 15-year reform map for Australia’s infrastructure markets – alongside other major reports and studies, and enjoys strong, trusting relationships across the business, political and public sectors.

paid off rather than us scratching around for stimulus projects.

We had them in that list. And part of that was because we published and we encouraged people to publish, to talk about it like this. The more written information available on good infrastructure projects that’s published, the better the decisions and outcomes out of it.

AD: Thanks very much, Mark. A great note to finish on. this morning.

Mike Mrdak AO – Chair of NEC Australia, and former Federal Secretary of the Department of Communications and the Arts Mike Mrdak holds a number of non-executive and advisory roles. He is currently Chair of NEC Australia, the longstanding global Japanese technology company that is a leading-edge provider of IT services, digital communications and digital smart technology in transport and safety. Mrdak had a 32-year career with the Australian public service between 1988 and 2020. Mrdak held the position of Secretary, Commonwealth Department of Communications and the Arts, between September 2017 and February 2020. Between June 2009 and September 2017, Mrdak was Secretary of the Department of Infrastructure and Regional Development. His work with the infrastructure and regional development portfolio included management of infrastructure planning and investment; policy initiatives to increase productivity; security, safety and regulation in road, rail, aviation and maritime transport; regional development; local government; and services to Australia’s territories. Between March 2008 and June 2009, he was Deputy Secretary (Governance), Department of the Prime Minister and Cabinet. During this time, he was appointed Commonwealth Coordinator-General with responsibility for ensuring the effective implementation of key Commonwealth economic stimulus infrastructure investments. Mrdak was appointed an Officer (AO) of the Order of Australia in the Queen’s Birthday 2016 Honours List for his distinguished service to public administration through executive roles in the infrastructure, transport and logistics sector, and through the development of policy reform initiatives.

Dr Kerry Schott AO – Then Chair of the Energy Security Board, Board Member of NBN Co, former Managing Director of Sydney Water, former Chair of Transgrid, and Patron of Infrastructure Partnerships Australia Dr Kerry Schott is the former Chair of the Energy Security Board, and is a Director of NBN. She is also a member of the Direct Assets Committee for Aware Super.

Jim Miller is Chair of the Infrastructure Victoria Board, Vice Chair at J.P. Morgan, and Director at Household Capital.

Dr Schott was Managing Director and CEO of Sydney Water from 2006 to 2011.

Before that, Dr Schott spent 15 years as an investment banker, including as Managing Director of Deutsche Bank and Executive Vice President of Bankers Trust Australia. During this time, she specialised in privatisation, restructuring and infrastructure provision. Prior to becoming an investment banker, Dr Schott was a public servant and an academic, and since retiring from Sydney Water she has been an adviser to governments and a chair and director of several public sector–owned companies.

Miller was an Executive Director at Macquarie Capital from 1994 to 2015.

With experience across a range of sectors, he led more than $120 billion in transactions and worked with both government and private-sector clients.

Miller has extensive experience in infrastructure, having worked in the areas of regulated assets, transport, energy, utilities and resources, and social

Dr Schott holds a doctorate from Oxford University; a Master of Arts from the University of British Columbia, Vancouver, Canada; and a Bachelor of Arts (first class Honours) from the University of New England. She was recently awarded an Order of Australia and Honorary Doctorates from the University of Sydney, the University of Western Sydney and the University of New England.

Jim Miller – Vice Chair at J.P. Morgan, Chair of Infrastructure Victoria, and former Deputy Chair of Infrastructure Partnerships Australia

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projects. That’s what we need to do more of. So, the reforms

futurebuilding

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InQuik Bridging Systems at forefront of bridge design Award-winning Australian innovation helping councils and communities.

Logan Mullaney, Managing Director of InQuik Bridging Systems, was proud of his company’s work during New South Wales’s devasting 2019–20 bushfire season.

Using its breakthrough design for semi-modular bridge components, InQuik replaced more than 20 New South Wales bridges that were burnt or damaged.

‘It was humbling to build those bridges,’ says Mullaney. ‘There was incredible devastation to families, vegetation and wildlife, and so many people were doing it tough.

Rebuilding bridges was part of helping communities get back on their feet.’

As part of that work, InQuik rebuilt two bridges for Shoalhaven City Council, south of Sydney. Having prepared the site, four assemblers with a crowbar, a crane driver and technical supervision had the components for the School Creek Bridge in Shoalhaven assembled in four hours, ready for the concrete pour.

‘All businesses and workers involved in the reconstruction, earthworks and cranage were local and/or from regional New South Wales,’ says Mullaney. ‘It’s important that infrastructure projects create work for the local community.’

The School Creek Bridge in Shoalhaven was one of more than 100 that InQuik has built. Since its 2017 launch, the family-owned business has emerged as one of Australia’s fastestgrowing infrastructure design and manufacturing companies – and an exemplar in innovation.

InQuik has had strong industry recognition. The Sydney-based company received the 2020 Australian Engineering Excellence Award (Canberra division) from Engineers

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Australia, and the 2019 T.C. Graham Prize from the US-based Association for Iron & Steel Technology.

About 40 councils have used InQuik to replace bridges, often timber and remotely located. InQuik has also built larger bridges in capital cities.

‘Our technology is ideal for replacing country bridges,’ says Mullaney. ‘We can bring the materials on the back of a tilt-tray truck or with a heavy-lift helicopter. One council used a local carpenter to install a small bridge using InQuik components. It was built in about two weeks at about half the cost of a typical bridge.’

InQuik’s innovation is timely.

Only 10–15 per cent of Australia’s 60,000 government-owned bridges meet current design standards, says Mullaney. ‘Timber, concrete or composite bridges were often designed decades ago when trucks carried lighter loads. Many will need to be replaced in coming years.’

In February 2021, the New South Wales Government announced that more than 400 timber bridges across the state will be rebuilt through its $500 million Fixing Country Bridges program. InQuik has replaced dozens of bridges in northern New South Wales, which has most of the state’s timber bridges.

Climate change is another factor.

‘As the incidence of bushfires and floods increases, more bridges will be destroyed or damaged,’ says Mullaney.

‘Governments will need to invest in modern bridges that are highly resilient to natural disasters.’

Family values

Mullaney’s father, Bruce Mullaney, and his uncle, Jim Howell, invented InQuik’s technology. A carpenter by trade, Bruce got the idea while working with Mullaney (also a carpenter) in China, building modularised container housing.

companyfocus

Their vision was a bridging system that could fit in shipping containers and be sent to countries during natural disasters or wars.

Bruce believed he could develop a system for making concrete slabs, where reinforcing steel could be clipped to the formwork, holding the reinforcement at the right height and distance.

After sourcing expert engineering advice, Bruce and Jim found that their design could be applied to bridges. The result: all reinforcing and formwork could be manufactured and assembled off site, transported to site, rapidly assembled and concreted in place.

‘It’s a revolutionary design,’ says Mullaney. ‘The technology was developed to be exported, but when we showed it to Australian governments as part of our innovation grants, the feedback was to commercialise the technology here and rebuild our bridges.’

Mullaney adds: ‘Australia has one of the world’s most stringent bridge codes.

We realised validating the technology in this market and helping councils on a range of bridges would provide foundations for InQuik to expand globally.’

Mullaney and brother Ben launched InQuik to commercialise the technology.

After completing two doctorates in chemistry (in Sydney and Oxford), Ben joined the family business to help Bruce take his ideas to market.

Another brother, Hayden, joined while completing his MBA, and youngest brother Ryan has a background in logistics and supply chain.

The family was devastated when the second of the four brothers, Hayden, died at a gymnasium in 2018.

Hayden, then 29, was the Director of InQuik and worked in a sister company to InQuik that was finding ways to revolutionise concreting.

‘Hayden’s death reinforced what InQuik is all about,’ says Mullaney.

‘We want InQuik to always be based on family values, with lots of people sharing in the company’s success. That includes employees, local contractors and communities.’

Big plans

InQuik has nearly 40 employees and expects to double that within 12 months.

The business will soon open a second manufacturing facility at Tomago, in Port Stephens (it currently has four factories making products in New South Wales and Queensland).

The new Tomago facility will house the InQuik International Innovation Centre, used to collaborate with

InQuik’s international partners and train staff.

InQuik has big plans in Queensland.

In April 2021, the state road authority, the Department of Transport and Main Roads, approved the company’s bridging system. InQuik has previously supplied components for bridges to Scenic Rim, Southern Downs, Tablelands, Mackay and Logan councils.

InQuik is in discussions to introduce its system in New Zealand, the Pacific Islands, parts of South-East Asia, Bangladesh, India and South Africa.

The United States is a priority. The Biden Administration’s US$1 trillion infrastructure package will replace at least 10,000 of the nation’s smaller bridges.

‘Tens of thousands of bridges worldwide need replacing this decade and beyond,’ says Mullaney. ‘Many are in remote areas and will be costly to replace using traditional bridge construction technologies. InQuik technology can solve this problem.’

Mullaney is proud of the company’s progress, and is excited about its future.

‘It’s just the start for InQuik. Market acceptance of our product shows a strong need for our technology, and that communities here and overseas can benefit from it.’

On a personal note, Mullaney says: ‘There’s something very satisfying about building a bridge that will serve a community for 100 years or more – and in seeing what it means to people when a bridge lost during a bushfire or flood is rebuilt.’ ♦ To learn more about InQuik, visit www.inquik.com.au.

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companyfocus

Edutainment, gamification and user doesn’t pay

By Hayley Jarick, CEO, Supply Chain Sustainability School

Experts predict that around 85 per cent of the jobs that today’s learners will be doing in 2030 haven’t been invented yet1, and Australians with one career and a job for life are rare or retired.

Nowadays, the norm is closer to five careers and three jobs per decade.2 Industries are also evolving rapidly, resulting in some information and essential training during course construction becoming outdated during the years a course runs. In addition, there is a plethora of messages competing for learners’ attention, forcing educators to become creators of edutainment (e.g., Renovate or Rebuild on Channel 9Life) and gamification (e.g., Ubisoft’s Assassin’s Creed educational tours of Greece and Egypt). The Supply Chain Sustainability School (the School) is changing how we upskill en masse, envisioning collaborative, accessible education for a sustainable future.

The School enables socially, environmentally and economically sustainable supply chains for all Australian and New Zealand organisations through open access to educational resources. It de-risks investment in personal education by providing free access for learners, linking education to active, in-demand requirements of employers, and connecting students with industry experts. It offers micro and nano courses that enable professionals to develop a specific skill when they need it, and maintains a catalogue of resources that can be referenced in the future.

This type of learning benefits industries by eliminating the noise, time lag and risk of knowledge becoming outdated between the period of learning and use. It adopts a new approach to learning that effectively offers on-demand content to learners

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of varied pre-course qualifications and inherent knowledge.

Fellow organisations collaborate to gain consistency and efficiency among industry players. The School partners to collate and create cross-functional training opportunities with professional services suppliers, product and material suppliers, procurers, government, and industry bodies. The topics chosen for content development are based on gaps and the needs of Fellow organisations; this makes it efficient and increases employer satisfaction as it directly addresses needs. It also enables skill transfer both vertically and horizontally for participants.

The School varies the delivery of training based on how learners want to learn. One of the recommended learning pathways enables individuals and organisations to assess what they know up front, learn the skill gaps, reassess, and progress to the next level. It has the benefits of not requiring students to spend time learning what they already know from previous formal and informal training, and prevents students who may have previously learnt but have no current knowledge from

Hayley Jarick

progressing beyond their ability. It caters to everyone, from beginners to leaders, and includes many format preferences, including e-learning modules, videos, webinars, workshops, documents and infographics. ♦ But don’t take my word for it; instead, try it today at www.supplychainschool.org.au.

1

https://www.delltechnologies.com/content/dam/ delltechnologies/assets/perspectives/2030/pdf/ SR1940_IFTFforDellTechnologies_HumanMachine_070517_readerhigh-res.pdf

2

https://mccrindle.com.au/insights/blog/jobmobility-australia/

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Keynote interview – Shemara Wikramanayake

Keynote interview Shemara Wikramanayake, Managing Director and Chief Executive Officer, Macquarie Group Key points: •

• •

There is an optimistic outlook for Australia’s recovery, with the economy expected to benefit from the phasing out of lockdowns and border closures alongside government spending on infrastructure stimulus.

Australia remains a compelling infrastructure investment market given the predictable policy environment, long-term population growth, open trade networks, and overall resilience of the economy.

ESG is a top priority for governments and investors, with climate change now considered to be a mainstream risk–return issue for institutional investors.

year gone by and the year ahead in advance of the Partnerships

Interviewee: ► Shemara Wikramanayake, Managing Director and Chief Executive Officer, Macquarie Group

Interviewer: ► Adrian Dwyer, Chief Executive Officer, Infrastructure Partnerships Australia

conference. And this year is no different. I am delighted once again to have the privilege to sit down with Shemara. So, thank you for joining me, Shemara.

Shemara Wikramanayake (SW): Thanks very much. It is great to be here again this year.

AD: Now, last year I asked you what we could do as a country to not waste the crisis. Over the past 12 months, has

Adrian Dwyer (AD): Over the past couple of years, I have been delighted to have the opportunity to sit down with Shemara Wikramanayake, the CEO of Macquarie Group, to discuss the

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government activity – things like stimulus – given you confidence that we are taking advantage of the current circumstances?

And is there more we can do?

Keynote interview – Shemara Wikramanayake

SW: Well, when we met last time, Adrian, one of the greatest unknowns was how the global economy would fare as nations emerged from the worst of the COVID-19 pandemic and began opening back up, and what the short- and mediumterm effect on global economies and economic sentiment would be. Now, we know that the world has seen one of the fastest economic rebounds in history, and the prospects for the global economy are probably brighter than any of us could have imagined at the worst point of the pandemic when we were speaking last year.

Although the recoveries are likely to remain geographically uneven, and we are still learning to live with COVID and its different variants as they come through, we do expect global economic growth over the second half of 2021 to remain strong and above the long-run average. And one of the reasons we have seen economic performance rebound so strongly has been, as you mentioned, government spending on infrastructure as a source of stimulus to maintain productive capacity of economies during the pandemic. This has preserved jobs with a cascading positive effect through the economy and has helped recovery happen in the quickest time possible.

Now, there are strong signs that this will continue through various ‘Build Back Better’ initiatives that seek to address longterm challenges through accelerated investment. And of note, we are seeing encouraging progress in the United States with this $1-trillion infrastructure bill possibly coming, which aims to significantly upgrade infrastructure there, including through incentivisation of private capital investment into new public works projects. Here in Australia, the Federal Government has recognised for a long time that infrastructure is one of the sectors that is best placed to lead the national recovery from the current pandemic and underpin future periods of long-term economic growth. That recognition has seen a commitment of $110 billion of investment over the next 10 years through its rolling infrastructure plan.

AD: One of those themes over the past 12 months, certainly when we sat down last year, was that Australia was in an enviable position globally, having the early phase of the pandemic well suppressed. Late-phase lockdowns and a protracted vaccine rollout program has now seen Australia perhaps slip behind other parts of the world. I guess my question is, have we been a victim of our own success? And what is your house view on what Australia’s recovery looks like from now?

SW: The general message from us remains one of optimism for Australia. For much of the pandemic, Australia, along with New Zealand, has been in an enviable position. We have benefited from being islands with dispersed populations, and from the early application of strict containment measures.

What that allowed us to do for a period was to carry on with

a fair degree of normalcy and continue growing our economy while other countries had to press pause. Now, of course, we know that newer variants would eventually put a strain on that strategy and subject large parts of both of our countries to latephase lockdowns and the risk of economic contraction – albeit from a relatively robust starting point coming into it. As a result, what we have seen of late is a concerted shift from COVID-zero – stamping out the occurrence of all cases at almost all costs – to a new COVID normal. This is recognition that we need to manage the virus in a way that balances the management of the health impacts with the need to move as quickly as possible back to opening the economy so we don’t lose the economic advantage that we gained during that earlier phase.

There is no doubt that what we are going through in New South Wales, as well as in Victoria and the Australian Captial Territory – especially the impact on both lives and livelihoods, which is especially tragic – is difficult for a lot of people; but what it has served to do is accelerate the vaccination program, with the rollout here in Australia now among the fastest in the world, and continually improving timelines towards meeting vaccination thresholds. Towards the end of the year, we expect that this will allow us to open up to a COVID-normal world sooner, and with a greater certainty than perhaps would have happened had the strategy of zero cases been successful for longer. We believe in overall terms that this will actually prove to be economically beneficial, and see the economy rebound in a quicker and a more sustained fashion.

AD: I want to talk about Australia’s place in the global infrastructure picture. When we released the 2021 Australian Infrastructure Investment Report about a month ago, 84 per cent of respondents were highly likely to invest in Australia over the coming two or three years. Australia is still viewed very favourably from a global infrastructure investor’s perspective, but the global picture is changing. A lot of respondents mentioned the potential passage of the $1-trillion United States infrastructure stimulus bill, alongside plentiful ESG opportunities in Europe. How do you see that global infrastructure jigsaw coming together? And what are the competitive challenges and opportunities for Australia within that new paradigm?

SW: First of all, well done on another great report. Those findings do not come as a great surprise, because Australia has a long track record of being a compelling infrastructure investment market, where investors have seen attractive riskadjusted returns. And for the reason we have talked about, those characteristics have been confirmed over the past 18 months and investment appetite remains strong – indeed, stronger. We have a very predictable policy environment, a growing and resilient economy, long-term population growth, as I mentioned, and some of the most open trade networks in the world. That has stood us in good stead as a worldclass environment for attracting infrastructure investment in

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Keynote interview – Shemara Wikramanayake

the global marketplace for capital, and indeed for talent. Now alongside that is $185 billion of public infrastructure projects already underway across Australia.

And within that, there is a growing role for the private sector in helping to finance, construct and manage historically publicly provided social infrastructure assets in health, education and social housing, all to boost economic activity. One such area that we are involved in is a development of new specialist disability accommodation – a project that is a prime example of how the public and private sectors can partner to deliver fit-for-purpose infrastructure that is significantly better than what it replaces.

And then, of course, there are city building projects continuing all around us, including the Martin Place Metro development that we are involved in here in Sydney. Investment in economic infrastructure has been strong for some years now, especially in New South Wales and Victoria, but there remains a healthy pipeline of major projects, especially given the expansion of activity in other states like Queensland in the run-up to the 2032 Olympics, and at a Commonwealth level. And now that we have what seems to be a clear path out of COVID-19 here in Australia, which may have been a question mark for a short period, I think that is going to be a great help to our globally competitive position.

AD: One of the long-term trends we have seen really play out over the last couple of years is superannuation: not just the sheer scale of superannuation in total, but also individual funds with things like consolidation happening in the sector. How are you seeing the role of super play out and influence the broader investment market?

Port of Botany Bay

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SW: There is a natural fit in terms of the long-term nature of superannuation investments and the time horizon envisaged for infrastructure investment. Superannuation is seeking the type of long-run, stable, and strong returns for savers and pension holders that infrastructure assets have been proven to provide, while super funds have a reliable and growing capital base, which can help fund the infrastructure that underpins our continued economic growth and social development. They make attractive partners because they bring with them a longterm management perspective, a strong domestic focus, and an increasingly expert view on the sector. They also add to a diversity of partnership opportunities for long-term infrastructure investors like Macquarie; this diversity is not restricted to superannuation. We are also seeing increased appetite from longstanding investors in our funds, such as sovereign wealth funds, to engage with us as direct investors at the project level.

So, the trend is a global and broad-based one.

AD: Later this year, we have the COP26. We saw that the recently released Intergovernmental Panel on Climate Change report said that to arrest global temperatures going up over the next decades by more than 1.5 to 2 degrees, there needs to be deep reductions in carbon emissions. I am interested to know what role you think investors will play in that. When we spoke last year about ESG, we discussed what that meant, but what has changed over the past 12 months? How has that accelerated?

SW: Well, you’re right that ESG considerations have been high on business agendas for several years now, but the granularity of focus in boardroom strategic discussions and

Keynote interview – Shemara Wikramanayake

“

igitalisation has been D an important global trend in infrastructure for some time, and the pandemic has only served to accelerate that

among investors, legislators and regulators has undoubtedly increased a quantum step in the past year. The number of ASX companies with a stated target of reaching net-zero emissions has increased – more than trebled in the past year. Meanwhile, the responsible investment market here in Australia has nearly doubled in size over the past five years to $1.2 trillion, which represents over one-third, about 37 per cent, of the $3.2 trillion market here of investment in total. The added impetus, I think, has been driven by a couple of key factors. First, the geopolitical focus; in the face of continuing extreme impacts from changing weather patterns, there has been accelerating urgency by governments to begin implementing measures aimed at achieving net-zero emissions. The other thing is risk management; climate has now become a mainstream risk-andreturn issue for institutional investors, not just a niche issue.

There is widespread acceptance of the science and the need for action. That, in turn, demands a shift in investment approach that considers potential investments under a range of climate scenarios and gradually diverts capital to assets that contribute to the solution, rather than the problem.

AD: One of the things that has intensified over the past 12 months is the debate between holding something and making it better or divesting an asset with a particular carbon profile. I know from our discussion last year that you tend to fall on the side of hold and make better. But I am interested to know what that means in practice across your portfolio, and what you do as an organisation at a granular level to make things better.

SW: As long-term investors in infrastructure assets that underpin economies and communities, we do take our responsibility to address climate risks very seriously. We recognise that we have a duty to ensure that services and supply chains remain available in the face of climate risks, that emissions from activities are managed, and that value is preserved on behalf of our investors. As part of Macquarie Asset Management’s commitment to invest and manage its portfolio in line with global net-zero emissions by 2040 – which was a global industry first – we are working with our clients to establish a baseline for measuring greenhouse gas emissions,

and to plan initiatives to achieve sustained emissions reduction over time. We have already started developing Paris-aligned/ net-zero business plans across infrastructure and real assets in our portfolio companies where Macquarie Asset Management exercises control or significant influence, and that is a process that we expect to be completed within the next two years.

You are correct that we see ourselves playing a more meaningful role where we hold assets to make them better, using our Macquarie-wide expertise to shift their emissions profiles over the period of ownership originally intended, rather than divesting them and passing that same challenge to another owner. In practical terms, it is twofold. One area is adaptation, which is about ensuring that assets in our portfolio are as resilient as possible to the impacts of existing climate change, and that their ability to serve the community is maintained.

That might mean bearing power cables to avoid flood and fire risk, adapting ports and bridges for the likelihood of rising sea levels, or deploying precision farming techniques to improve yields and maintain security of food supply. The second area is detailed work to reduce the emissions profile of each asset to mitigate against future climate change. That might mean replacing conventional power supply with renewables, or managing down reliance on revenues from heavy-emitting activities. One local example here is the Port of Newcastle, where works are underway to diversify activities and reduce reliance on revenues from coal. A significant investment is being made to ensure that the port can handle a broader range of commodities. And, importantly, as is the case with many of these plans, that due consideration is given to ensuring that we manage the economic and climate impacts, re-skilling workers and ensuring that the community sees an economic advantage from participating in the plan.

AD: One of the other themes we have discussed in the past is the COVID impact on accelerating trends that were already present in the infrastructure sector, and one of those was digitalisation. Have you seen the demand for those types of investments accelerate over the last 12 months? And do you think there will be sufficient opportunities going forward to meet that demand?

SW: Digitalisation has been an important global trend in infrastructure for some time, and the pandemic has only served to accelerate that. Macquarie has been a direct investor to some of these businesses, notably in the edu-tech space, but our funds are also long-term investors in the underlying internet infrastructure. In 2020, Macquarie’s telecommunications and dataset portfolio companies experienced unprecedented demand – particularly in Europe, with the likes of KCOM in the United Kingdom and TDC in Denmark experiencing a surge in usage. We have seen demand for digital assets intensify over the past 12 months, particularly for those packaged up as part of auction processes and formally for sale. I think there is

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Keynote interview – Shemara Wikramanayake

towers to institutional pension fund capital, delivering a strong return for its own shareholders as well as good investments for the pension funds.

AD: For my final question, I would like to cast forward a bit. We know the national recovery relies on moving beyond COVID lockdowns and to a more COVID-normal setting. My small question for you, Shemara, is where will we be when we talk in 12 months’ time, and what will we be talking about?

SW: Well, given the last 12 months, it feels a bit bold to make a call for 12 months in the future, compared to other periods of our lives. But it does feel like every day brings further clarity on a way forward, and moves us closer towards living in a more normalised way, where COVID is managed as part of a normal life in line with other infectious diseases. So, despite the recent softening of economic growth that we have seen as a result of these current lockdowns and border closures, and that we will likely see in the September quarter, the economy’s fundamentals are sound, and we expect growth to bounce back once the required vaccination targets are met, and both state and national restrictions begin to ease. The phasing out of lockdowns and border closures as part of the national plan, or limiting them to the most targeted means possible, should provide the clarity needed by business and investors to keep capital flowing and keep corporate investment projects on track. The fiscal stimulus that has been a central part of the government’s economic response to the pandemic – especially Sydney’s peak hour during lockdown

increased recognition that these assets have the characteristics that are essential to infrastructure, like criticality and stability. The additional investment needed to support this digital transition means that many traditional telecommunications companies have sensibly considered alternative sources of capital. In turn, this has encouraged several infrastructure investors into the sector who have built considerable expertise in managing digital infrastructure and can mobilise the stable, long-term capital that is needed to invest in network expansions and upgrades. One example of that – again, in Australia – was the success of Telstra in selling 49 per cent ownership of its mobile

Shemara Wikramanayake – Managing Director and Chief Executive Officer, Macquarie Group Shemara Wikramanayake has been Macquarie Group’s Managing Director and CEO since late 2018. Wikramanayake joined Macquarie in 1987 in Macquarie Capital in Sydney. In her time at Macquarie, Wikramanayake has worked in six countries and across several business lines, establishing and leading Macquarie’s corporate advisory offices in New Zealand, Hong Kong and Malaysia, and the infrastructure funds management business in the United States and Canada. Wikramanayake has also served as Chair of the Macquarie Group Foundation.

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investment in the infrastructure space – will start coming to fruition and continue supporting the economy, we think over the next few years. And I think the way we work will also settle once we have clarity with a hybrid model adopted, and that will lead to further investment in digitalisation and the necessary infrastructure, as we discussed.

AD: Thank you, Shemara, it was a privilege as always to sit down and talk. When we spoke in 2019, we did it in person, in 2020 we did it socially distanced, and in 2021 we have done it virtually. Let us hope that in 2022 we can be back together in person, and perhaps in front of a live audience. Thank you again for sitting down with me.

As Head of Macquarie Asset Management for 10 years before her appointment as CEO, Wikramanayake led a team of 1600 in 24 markets. Macquarie Asset Management grew to become a world-leading manager of infrastructure and real assets, and a top 50 global public securities manager.

In 2018, Wikramanayake was appointed a Commissioner of the Global Commission on Adaptation, a World Bank–led initiative to accelerate climate adaptation action and create concrete solutions that enhance resilience. In 2019, Wikramanayake was appointed by the UN’s Special Envoy for Climate Action, Michael Bloomberg, to the Climate Finance Leadership Initiative, which seeks a sixfold increase in climate mitigation investment from the private sector.

companyfocus

companyfocus

Foundations for infrastructure innovation in Western Australia Infrastructure WA delivers strategy to guide major investments for state’s bold future.

Western Australia’s inaugural draft State Infrastructure Strategy – Foundations for a Stronger Tomorrow – is aptly named. The goal is to embed approaches that maximise the economic, environmental and social return from Western Australian infrastructure projects and programs over the next two decades.

‘The Strategy represents a new era for infrastructure planning in Western Australia,’ says Phil Helberg, CEO of Infrastructure WA (IWA). ‘For the first time, Western Australia will have a system-wide, long-term strategy to prioritise, plan and deliver major projects and programs.’

Helberg says the Strategy has a different approach. ‘Infrastructure strategies are sometimes just about doing more projects. That’s important during COVID-19 to support economies, but IWA’s focus

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The goal is to embed approaches that maximise the economic, environmental and social return from Western Australian infrastructure projects and programs is also on infrastructure innovation through better demand management, technology and sustainability.’

Three-quarters of the Strategy recommendations are about non-building ideas, including recommendations on infrastructure policy, regulation and procurement.

‘Success is not just about how many projects are built,’ says Helberg.

‘It’s also about ensuring the right

levers are used to get the most efficient infrastructure outcomes for the community.’

Released in July 2021 by IWA, the Strategy is the culmination of more than 18 months of research, analysis and consultation. IWA has undertaken extensive stakeholder consultation across the state and received numerous responses to the draft Strategy.

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IWA is considering this feedback (the public consultation phase ended in September) and will then finalise and present the Strategy to Western Australian Premier Mark McGowan.

Once accepted, the final State Infrastructure Strategy will be tabled in the Western Australian Parliament.

The Western Australian Government will outline its response to the recommendations within six months of the report’s tabling. The Strategy is expected to be implemented from mid to late 2022. It will then be followed with an annual 10-year rolling State Infrastructure Program, commencing from 2023.

‘Industry has called for a longterm strategy for Western Australian infrastructure,’ says Helberg. ‘IWA has delivered a Strategy that will lay the foundations in addressing the state’s infrastructure needs and priorities for generations of Western Australians.’

The Strategy will be updated at least every five years, and an annual report on progress in implementing the Strategy will be published.

Infrastructure needs

IWA imagined what Western Australia could look like in 2042. By then, the state’s population will have grown to an estimated 4.3 million

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(from 2.7 million now). The state will have successfully reduced net carbon emissions by transitioning to green energy and zero- or low-emission vehicles. There will also be record patronage of public transport in Perth.

Access to social and affordable housing will be high, unemployment will be low, and digital jobs will flourish.

Western Australia’s economy will remain strong in resources and energy, but will become more diversified as sectors such as information technology, health care and education grow.

‘To achieve this vision of the future, Western Australia needs to ensure every dollar invested in infrastructure achieves the best possible return,’ says Helberg. ‘That begins with developing a long-term pipeline of well-chosen major projects and programs that goes beyond electoral and economic cycles – one that is collaborative, visible, clearly communicated and forward looking.’

IWA has an important role in the state’s future. Established under the Infrastructure Western Australia Act 2019, IWA commenced in July 2019 with a board of both independent and senior public sector members. The agency provides expert advice and assistance to Premier McGowan and the government on infrastructure matters in the state.

As part of its role, IWA will assess and report on major infrastructure proposals developed by the state’s government agencies. ‘Our focus is to drive collaboration and coordination between agencies on major projects and programs, rather than replicate or duplicate their work,’ says Helberg. ‘No government can afford a siloed approach to infrastructure planning or delivery.’

Demand management

A key Strategy theme is about managing infrastructure demand through prevention, early intervention and pricing. ‘Greater focus on demand-

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management initiatives can divert, delay or avoid the need to build and maintain costly infrastructure,’ says Helberg. ‘We can’t just keep building more infrastructure to solve problems.

Through system-wide thinking, we must find ways to drive change and maximise returns from existing infrastructure.’

Helberg says health care is an example. ‘Instead of just building more hospitals, a better strategy might be to also implement prevention strategies.

Infrastructure that encourages people to lead healthier lifestyles could reduce pressure on hospital infrastructure.

This type of change is complex and takes time, but is integral to modern infrastructure planning.’

Road infrastructure is another case in point. ‘Building more roads inevitably leads to more cars on roads, and pollution. New or upgraded roads will always be needed, but we need to develop infrastructure and systems that encourage people to use other modes of transport. For example, more investment in public transport solutions or cycling paths.’

Helberg says IWA is focused on the interconnectedness of infrastructure assets. ‘Like most jurisdictions, Western Australia is struggling to keep up with demand for social housing, but increasing the state’s investment in social housing could also create

Through system-wide thinking, we must find ways to drive change and maximise returns from existing infrastructure better outcomes for health and justice infrastructure. We need to consider how infrastructure assets can drive shared benefits.’

Technology is another Strategy theme. Helberg believes the application of digital technology is an opportunity for infrastructure in Western Australia.

‘The public sector can do more in how it captures, analyses, uses and shares data between government agencies.

Data is the key to optimising current infrastructure and reducing the risk of building unnecessary projects.’

The Strategy calls for a ‘digitalfirst’ infrastructure approach. ‘When considering a new project, we must keep asking: is there a digital solution to the problem faced?’ says Helberg.

‘Telehealth is an example. By delivering more healthcare services online, can Western Australia reduce the need to build costly new healthcare infrastructure? How can we deliver smarter solutions?’

Responding to climate change is another priority. ‘Climate change was one of the top issues raised during stakeholder consultation,’ says Helberg.

‘IWA is focused on how infrastructure planning and delivery can help Western Australia adapt to climate change, and how the state can get to netzero carbon emissions by 2050 at a government agency level through better infrastructure planning and operation.’

Helberg is pleased by the response to the Strategy and is excited about its possibilities. ‘Significant work and government response are still required before the Strategy is implemented from next year, but IWA has a clear view on the foundations required to plan and deliver infrastructure, as efficiently and effectively as possible, for Western Australian communities over the next two decades.’ ♦ To learn more about Infrastructure WA, visit www.infrastructure.wa.gov.au.

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Victorian Government’s focus on excellence in infrastructure procurement The Infrastructure Delivery Group supports government, industry and the community.

The Infrastructure Delivery Group (IDG), in the Victorian Department of Treasury and Finance, is helping the state stay at the forefront of infrastructure procurement and delivery.

Established more than 20 years ago, IDG is Victoria’s specialist infrastructure procurement team. IDG assists government departments and agencies, and their project partners, on a range of procurement-related issues, and provides whole-ofgovernment advice.

‘IDG’s role is to find extra value for taxpayers from major infrastructure projects in Victoria, and to improve service-delivery outcomes for the community,’ says An Nguyen, Executive Director in Treasury.

Nguyen says IDG is the Victorian Government’s ‘shopfront’ for industry to get advice and support on infrastructure procurement. IDG has oversight of major infrastructure projects across government in Victoria.

‘IDG’s long-term strategic focus on procurement complements the infrastructure work of government departments and agencies, which typically interact with industry on a project-by-project basis and have more of a short- to medium-term focus,’ says Nguyen.

‘Industry participants who seek a broader perspective on infrastructure procurement in Victoria, across departments and agencies, will find it through IDG. We are the place for industry to ask questions and provide feedback to government about its infrastructure procurement policies and practices.’

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IDG’s role within Treasury

IDG is one of two main infrastructure groups within Treasury. An infrastructure-investment team works at the front end of projects during the decision stage. It assesses business cases and investment decisions, and advises on capital allocation.

IDG examines the best way to procure a project, advising the Treasurer and the relevant government department or agency.

IDG typically focuses on large and mega infrastructure projects, as well as complex projects of any size. IDG also oversees implementation of the government’s public construction framework and assesses market-led proposals.

The Office of Projects Victoria works closely with Treasury and advises on technical standards for major projects.

Infrastructure Victoria is the independent advisory body tasked with developing a 30-year infrastructure strategy for Victoria.

An Nguyen

In August 2021, Infrastructure Victoria presented Victoria’s Infrastructure Strategy 2021–2051, an update of the first 30-year strategy released in 2016. The report says that in the last five years, the Victorian Government has committed to the state’s largest infrastructure program, driving record investment in new transport, health, education, social housing and tourism infrastructure.

‘The size of Victoria’s current infrastructure pipeline reinforces the importance of having world-class procurement practices,’ says Nguyen.

Image © Department of Jobs, Precincts and Regions; Lynton Crabb

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Image © City of Melbourne

IDG provides advice and support to implement whole-ofgovernment infrastructure and construction policies in Victoria.

This includes advice on: ► procurement and packaging ► funding and financing ► commercial principles and risk analysis ► tender processes and documentation ► benchmarking and value-for-money assessments ► compliance with policy frameworks ► standard form contracts ► operational-phase advice for Public Private Partnerships (PPPs) ► market-led proposals.

‘There is rising infrastructure demand across Victoria and, at the same time, Victoria, like governments worldwide, has fiscal constraints. As such, IDG is always looking for ways to get the best return on every dollar of public money invested in infrastructure.’

IDG’s dual roles

IDG has two interrelated roles. The first is within government. IDG establishes, refines and maintains Treasury’s infrastructure procurement framework and policies.

‘As part of Treasury, IDG is at the centre of how the government shapes and applies infrastructure procurement policy,’ says Nguyen. ‘We advise government departments and agencies on the state’s procurement framework, to help them maximise project outcomes.’

IDG is currently developing and implementing significant reform to improve Victoria’s infrastructure policy framework, and drive improvements and efficiency in the delivery of its fastexpanding infrastructure pipeline.

‘Over the past 10–15 years, IDG has continually evolved the state’s procurement policy framework to adapt to changes in market conditions, and Victoria’s fiscal position and infrastructure priorities,’ says Nguyen.

‘IDG’s mandate is to ensure Victoria’s infrastructure procurement policy is always fit for purpose, for the time.’

Driving collaboration

IDG’s second role is industry facing. The team has commercial, financial, legal and procurement experts, with deep public and private sector experience.

Natasha Payze, a Director in IDG, says the group has a collaborative approach. ‘IDG can advise government departments and industry on a range of issues, such as framework requirements and standard contract forms (see breakout box). We have expertise in selecting and implementing a full suite of infrastructure procurement models, and developing innovative funding and financing models.’

Payze says IDG also provides broader advice. ‘Over the past two decades, IDG has developed extensive knowledge of what works in infrastructure procurement across government in Victoria. We want private-sector firms to adopt best practices in procurement and to understand what is required.’

‘Collaboration works both ways,’ says Payze. ‘IDG is always happy to hear from the private sector about how the Victorian Government can improve the procurement process. We are willing to explore new or innovative ways to do things better with procurement – or adapt to changing market conditions – so that we best leverage the skills and capability of the private sector.’

Nguyen says IDG’s work has long-term benefits for the Victorian community, government and industry. ‘A consistent, standardised procurement framework creates greater certainty for all stakeholders.

That helps Victoria maintain its position as an attractive market for local and international infrastructure investors, and compete with other jurisdictions.’

Nguyen adds: ‘Ultimately, IDG wants to make procurement less costly and more efficient. At a time of record infrastructure development in Victoria, government must keep streamlining procurement processes, and strive to eliminate any duplication or waste. This requires a coordinated procurement approach within government, and strong industry collaboration.’ ♦ To learn more about infrastructure investment in Victoria, visit www.dtf.vic.gov.au/ infrastructure-investment.

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companyfocus

Energy from waste Phronis is inspiring the delivery of world-changing waste infrastructure.

Energy from waste facilities form part of a broader integrated environmental strategy. Phronis plays a key role in supporting major international partners and technology providers to successfully deliver state-of-the-art solutions in Australia.

Phronis’s globally recognised capability in energy from waste solutions brings key technical resources to Australia from around the world. The team has been intimately involved in the rollout of technical solutions for waste disposal in Australia and abroad.

Phronis provides technical, market, regulatory and procurement support to developers, investors and constructors of waste infrastructure at all stages of projects, from the initial business

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case through to owners’ engineer services. Phronis offers deep, technical understanding of energy from waste and biomass energy generation technologies, including thermal treatment technologies, mechanical and biological treatment, anaerobic digestion, and bioenergy.

Phronis has supported delivery of the first large-scale energy from waste projects in Australia. The company’s recent local experience offers a unique understanding of the challenges that future projects may face.

Phronis understands the regulatory and compliance requirements, and the technical demands of delivering a complex processing plant.

Phronis partners with a range of leading Australian businesses to

support planning and environmental assessment and approvals, environmental management and compliance, fire engineering, building conformance, dangerous goods, plant registration, and safety in design. ♦

Panel discussion – Delivering major rail projects

Panel discussion Delivering major rail projects Panellists: ► ► ► ►

Frankie Carroll, Chief Executive Officer, Suburban Rail Loop Authority Graeme Newton, Chief Executive Officer, Cross River Rail Delivery Authority Rebecca Pickering, Interim Chief Executive, Inland Rail, Australian Rail Track Corporation Peter Regan PSM, Chief Executive Officer, Sydney Metro

Moderator: ► Adrian Dwyer, Chief Executive Officer, Infrastructure Partnerships Australia

Key points: •

•

•

With a strong pipeline of major rail works committed well into the long term, both the market’s capacity to deliver these projects on time, and its ability to deliver them on budget, have become pertinent issues.

Major project delivery agencies have responded to these issues by looking to create interactive, collaborative procurement processes that would enable better risk sharing and deeper market engagement through simpler works packages.

For complex, multi-decade programs to deliver on their full potential, further implementations across several areas are critical, including to enable effective value capture, to develop enduring local skills capacity, to establish social licence, and to futureproof precinct developments in dense urban areas.

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Panel discussion – Delivering major rail projects

Adrian Dwyer (AD): The pipeline for passenger and freight rail has never been stronger in Australia. There is a oncein-a-generation scale of projects happening right now. Of course, there are questions around whether we have the skills, frameworks, and capacity to design, assess and deliver projects of this scale. Peter and Frankie, you are both in the market for two of the biggest programs of transport investment in the nation’s history, and the reality is the pipeline will only expand over the coming years. Peter, to you first, what are you hearing from the market in terms of capacity to deliver the coming pipeline, and where do you foresee the biggest potential constraints?

Peter Regan (PR): Thanks, Adrian. The feedback from the market has been that it is quite stretched across major projects in the rail and non-rail sectors. In terms of rail, the challenges are around ensuring an appropriate stagger of the individual packages that we are bringing to market. They’re also around balancing out the resources of contractors – around bid teams, the capacity for the government to evaluate bids, and then the capacity for the market to provide the designs before you get into construction.

What we are seeing is that if we provide sufficient future transparency of the pipeline, the actual construction works appear to be manageable. There are some challenges there; certainly resources are a big challenge on the construction side – especially flexibility of resources. So, the ability to get resources and capability to the right project in the right jurisdiction is probably as challenging as it has ever been. And that is not just limited to getting international resources into Australia; local restriction of movements, both between jurisdictions and within jurisdictions is proving to be a very big challenge while we’re in delivery.

AD: Frankie – you are in an earlier stage with Suburban Rail Loop, but do you think the market has the capacity and capability to deliver the multi-decade program of works that you are looking at?

Frankie Carroll (FC): I agree with Peter. The market is stretched at the moment, but our conversations with the market are looking good. We are coming in for construction in 2024–25, so we are a little bit away from the peak. We will have projects finish in the meantime, like the Cross River Rail in Brisbane, so we will happily take some of the resources from there. We are hoping to go back out to the market before the end of the year and continue the market engagement that we have begun. It is really important to understand what the market wants, and the appetite in the market for this project. And, like Peter said, this is a longterm project, so we can put some meat on the bone in relation to future commitments from governments. And from what we are hearing through market engagement, the idea of a longer-term pipeline is really important to them. I think that is why this project will attract market players in the current environment.

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AD: Frankie, I guess inflation is an issue du jour at the moment in a broader economic sense, but we do hear a lot about inflation of costs on projects. Do you think that is inevitable as we tackle this bigger pipeline, or can we unlock additional capacity to make sure we get value for taxpayers?

FC: I think resources and steel prices are a problem at the moment. What we are seeing is rapid inflation in those two things. I think there will be a bit of softening when we start opening up for international players – hopefully when lockdowns finish, and we start to see freedom of movement across states and internationally. But the idea is to try and keep control of the costs, making sure that the design is right for the project, and making sure we have done all the preparation, so we do not get unexpected surprises during the project’s delivery. But it is important to keep an eye on it, and we are doing just that.

AD: Rebecca, what has your experience been on the Inland Rail project? Have you noticed a tightening in the market over the years that you have been in delivery?

Rebecca Pickering (RP): Absolutely; I agree with the other panellists. All of our contractors are telling us they have plenty of work and can pick and choose. And the market does feel tight – we are seeing that in so many facets. Thinking about this panel session, I actually tried to find some data that articulates it a bit better. BIS Oxford Economics has pulled together some stats about the rail industry that are really telling – compared to 2019, we are already seeing that annual expenditure on rail projects is up by 50 per cent. Looking at the number of sanctioned projects that are in the pipeline, we are heading towards being up by 200 per cent on 2019 levels by about 2023.

So, when you see that, it is a huge mountain that the industry has to climb in terms of catering for that increase.

What it translates to is quite a substantial skills gap just in the rail industry alone – not even thinking about road construction – a skills gap in the order of about 150,000 workers to really cater for these projects. So, there are plenty of challenges that our contractors are talking to us about. In terms of the regional question, I think it gives an extra dynamic to that challenge.

It creates opportunity as well, though; we’re seeing a trend towards decentralisation of people and industry, and a desire for that to come about, but that’s a fairly slow-moving trend. So, our contractors are flagging the difficulties of resources, and attracting people to work on those construction projects out in regional areas. Housing and other things are also a constraint, so there are plenty of challenges. Certainly everything points towards a much tighter market at the moment.

AD: Thanks, Rebecca. Graeme, you are obviously nearing the completion end of your project – not quite there yet but getting there. What kind of skills legacy do you envisage leaving that can help contribute to your colleagues on this panel that are more at the front end of their projects?

Panel discussion – Delivering major rail projects

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I t is a huge mountain that the industry has to climb…what it translates to is quite a substantial skills gap just in the rail industry alone – not even thinking about road construction

Graeme Newton (GN): We are now four years into the project – two years into the construction build – with four more to go. When we first started, we were encountering a lot of skill shortages, with a lot of work happening interstate. It was interesting hearing what the other panellists were saying, as well. As projects become more real, people start to make choices on moving for work. I was in the tunnel this morning talking to one of the senior workers there. The tunnel-boring machine element will be finished by the end of this year, and he has already been tapped for a road tunnel job in Melbourne. He was saying, ‘You have got to go where the work is.’

There is some ability to migrate. What we found is that a lot of Queenslanders were doing the old fly-in and fly-out, and were very happy to come home. I think COVID has exacerbated that, and they are very happy to be at home in Queensland and continuing to work. But what we are seeing is this evolution at both a professional and a worker level. For instance, there is a Certificate III in rail that is being set up by Queensland TAFE, which will create a legacy of rail-capable workers, who will then go on to rail projects – whether it is working on Rebecca’s or Frankie’s jobs. Then there is training. We have done about nine-and-a-half million work hours, and of those about a million training hours were for 270 apprentices. Each project has the opportunity to set up long-term training centres; we have one for Cross River Rail. Our project, by reasonable terms, allows for a six- to eight-year cycle, but even longer projects will allow this. So, there’s a real opportunity for those central agencies like Transport and Main Roads or central transport agencies to come up with long-term training plans. I know our department up here is looking at that.

Following on from the forecasts that Rebecca was talking about, the numbers I have seen suggest that 260,000 to 385,000 workers – both professional and tradespersons – will be required across both the roads and the rail sectors into the future. It was not that long ago when people were pessimistic about the sector. So, if we are talking about shortages, that

is probably a better problem to have rather than not enough investment in the first place. You can get in and resolve that, and we are seeing the transition of workers out of some sectors.

So, it is a massive opportunity for transfer of skills, which I am quite optimistic about.

AD: A lot of good things are being done there. Graeme, there must be areas where there were acute skills shortages that you experienced across the project that maybe are a signal to colleagues around the room?

GN: It was probably more pockets – especially things like signalling. Australia does not have a lot of skills in signalling – particularly around digital signalling, European Train Control Systems (ETCS) and similar types of work experience. We seem to be bringing a lot of those skills across from Europe. That is one area that I think we will all benefit from – getting capable skilled workers into Australia, and then training up locals and hopefully getting a few of those international people to stay here and become residents, because the South East Queensland network will have a full rollout of ETCS over the next couple of decades. But all of these tunnels that have been built across the country will require knowledge and skills, and all of those require maintenance. So, that is one area in particular that comes to mind.

Australians have always been very good at tunnelling and the civil works, but it’s that next level of technology. The technology that goes into trains now will be starting to rival aerospace, and I think rail-related technology is going to be something that young university graduates will start to look at as an attractive sector to get into, where in the past they might have looked at aeronautical engineering.

AD: Peter, beyond market capacity issues, managing the delivery interfaces across multiple packages with the complexity of projects we are talking about has presumably been challenging – particularly where the packages have been disrupted by construction shutdowns and border restrictions with COVID-19. What has been the Sydney Metro experience on that interface and integration issue?

PR: This was certainly a challenge before COVID, and it has become a bigger challenge. The difficulty is unlike some other linear infrastructure, you have got such an interaction between a series of horizontal contracts for rail systems, track and power, and then stations, which are vertical-style contracts, with different contractors controlling each of those sites. But they need to be shared by multiple contractors in terms of access and fitting out different components. It was already very challenging because of the need to get so many dates to line up between those different contracts – something that can be achieved quite well on paper, but when one of those gets out of sync, it can have a very quick flow-on effect on a lot of other contracts. If the out-of-sync elements limit access, then that becomes very difficult to manage.

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Brisbane prepares to host the 2032 Olympic Games

We were very fortunate in the last year – Sydney Metro was not heavily impacted on its own sites by COVID; the impacts were more offshore and in supply. This time around, there were delays when we had the construction pause and restrictions on workers. But now we are also facing the additional challenge of if there is a positive case on a site, then you have got a degree of people who need to isolate – and that can take out a critical activity at just the wrong time on that site, which has a flow-on effect for access on others. The ability to double-shift, and things like that, is hampered by the number of different contractors going through the same sites that need to be kept separate.

It is a challenge that we and our delivery partners are learning very quickly how to manage, and how to try and limit the risk on site to limit that impact. But how we look at acceleration and catching up time across 14 or 15 major contracts that need to interface with each other is certainly new territory at scale, and it has the potential to make us really think about how we should be contracting for those kinds of interfaces in the long term.

So, trying to format one project view is certainly a challenge, and it is not a new challenge, but COVID has put an additional lens of complexity on it.

AD: And, of course, the packaging is an element of that.

Frankie, Suburban Rail Loop is yet to finalise the packaging for major works. Can you tell us a little bit about how that process is going?

FC: We have been going to the market and having conversations with constructors, designers and interested

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parties for the last 18 months. We are redefining some of the packages based on feedback. It is very clear the risk appetite in the marketplace is very low. So, we are kicking off initial early works next year to try and minimise that risk further. We have done a lot of geotech across the board in relation to this project.

We have drilled 550 bore holes over nine kilometres, and done about 11,000 lab tests. That is equivalent to a bore hole about every 50 metres, and we are continuing that. We are hoping to go back out to the market later this year, hopefully by the end of the year, to have final market engagements and show them how we have designed the rest of the packaging to see if that hits the mark. So, we will be interested to hear what the market has to say by the end of the year, but I think we have got to a point in the marketplace where we will have interested parties to bid for the project.

AD: I want to turn briefly to the nexus between rail projects and the urban or industrial environments they serve. Graeme, there is a lot of talk about the Priority Development Areas on your project, and subsequently the impact of the Olympics that will happen in Brisbane and South East Queensland in 2032. How useful has that precinct-based approach been, and what impacts do you think it will have on the Olympic Games and beyond?

GN: Thanks, Adrian. For those who do not know, we have the capacity under Queensland state planning legislation to set up what is called a Priority Development Area; essentially, that means planning controls come under the state government.

Panel discussion – Delivering major rail projects

What is attractive about that is it de-risks the project from a planning approval point of view. Of course, you are still going to go through a planning scheme, but a lot of the requirements are clearer and more up-front. I think at the front end the clear message from the property sector is, ‘The more you can derisk, the more likely we are to invest’.

We have developed a pricing strategy that looks at about 48,000 square metres of available, developable space, and we are working with Treasury and Queensland Investment Corporation on that. We have project development agreements for the Albert Street land, and I concur with what Peter is saying in relation to that risk and interface between your infrastructure project and your above-ground, vertical work. We have worked pretty hard to try and decouple that, and to be honest we learnt a lot from the Melbourne Metro project particularly in that regard.

Queensland property prices are not on parity with Sydney CBD prices, so there is an ability to get some degree of decoupling there. But there is potential across the four major precincts in our area to have significant development.

If you think about the Olympics coming online, you have got a Woolloongabba Stadium Redevelopment right next to a very large, five- or six-hectare site. If you start incorporating the two sites together, that holds real potential for planning the pre-Olympics, and then also planning the post-Olympics.

And then, you have Roma Street where we have demolished the transit centre – we have a large developable site, and the government is looking through the Olympics lens again to commit to building a new indoor arena there. So, you are creating a new development, changing the shape of the city and then putting a railway station right in the middle of the CBD with our new Albert Street station. It will change the way people move around, and immediately that changes the appetite and attractiveness for suburbs. So, we are seeing suburbs like Woolloongabba already taking off well. It is starting to have a stimulus in the real estate pages.

AD: Thanks, Graeme. A feature of Peter’s business, and Rebecca’s and Frankie’s, is the program nature of what you are doing, and that the long-term nature necessitates changes over time. Rebecca, I wonder if you could talk to us about the updates to the procurement approaches, and how you have gone about implementing those in the Inland Rail context.

RP: Thanks, Adrian. Inland Rail is 1700 kilometres long from Melbourne to Brisbane, so we have got very different styles of construction across that length: from brownfield upgrades to bridge lifting, through to full greenfield areas, hundreds of kilometres of track, major flood plains to cross, and a big chunk of tunnelling through the Toowoomba range. We have a very diverse program, and to echo something Frankie said, we were listening to the market about the appetite for risk and

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I nland Rail is 1700 kilometres long from Melbourne to Brisbane, so we have got very different styles of construction across that length

how we should package that work up so that we could really create as competitive an environment as we could for people to participate in.

We did change our delivery strategy last year in response to that feedback from the market, and the main things were: we took out some of the more rail-track-specific complex construction aspects, and cut down package sizes to invite more tier-two civil contractors to be able to participate. That is probably one of the key changes. Also, we have tried to make packages less complex in general, and keep them uniform in the type of work across the package, which seems to have gone well for us. We have had a huge amount of interest expressed through the RFP process that we kicked off last year, and we have just awarded a major civil works program to BHQ joint venture for our Northern Works Program, covering construction from Toowoomba west, towards the Queensland/ New South Wales border. And we have seen some tier-two Queensland-based construction companies able to compete against the others in the market to win that work. I think that that bodes well for our ability to mobilise into those regional areas of Queensland, with companies that have worked in those geographical locations before on similar civil works programs. They have the connections into the community and the drive to spend money locally. Also, they are already geared up with a lot of job readiness programs, and partnering with a skills academy to really look at the future workforce needs in those areas.

At the moment, the change in delivery strategy is really progressing well, and we will be able to make some announcements about some of the successful proponents on a few other works programs over the coming months, which is quite exciting.

AD: And you said the ‘1700-kilometre rail project’ – I understand the Deputy Prime Minister has aspirations to add another 30 per cent, as he was discussing at the press club a few days ago. Peter, for your project, a somewhat novel approach around Sydney Metro’s Western Sydney Airport

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Panel discussion – Delivering major rail projects

line, you went to market with what was intended to be a Public Private Partnership (PPP) – but you have said you are open to alternative commercial frameworks. Maybe you could tell us a little bit about what is driving that shift, and whether you think that more iterative style of procurement methodology might become a permanent feature of the market.

PR: Thanks, Adrian. We were very conscious that the traditional availability PPP structure is fairly rigid, and designed deliberately to be so, whereas the contractual structures and the risk allocation are set up in a way that allocates each risk fully to one party in the structure. Things are allocated in a very binary fashion. And we were hearing a lot from the market that there was concern about whether or not they would be able to prioritise bidding for a project in that context, when there were so many other opportunities with more collaborative arrangements that didn’t have such rigid risk allocation associated with them.

So, we were very keen to still pursue the benefits of the whole-of-life costs that you get through a PPP, and particularly the involvement of the operator in the design and construction. But there was a genuine concern that actually there would not be a depth of competitive field to deliver that if we didn’t also look at how you can bring some of those other developments in risk-sharing that we are seeing in other contract arrangements, not in PPPs. If we could actually test, or if we were able to bring some of that sharing into a

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PPP process, would that change the level of market appetite, and different players, or different appetite from the existing players; and also, could you potentially get a better alignment of interest on the way through?

So, we have been trying to explore whether there are things that are best placed being fixed, as they have traditionally been passed down a supply chain; whereas other risks that actually need more active management or cannot be as well specified could be allocated to a number of parties, and shared, including with the state. Importantly, I think in a PPP context, we are looking at what role that private finance plays in taking those risks and moving away from being a complete postbox-style allocation, where everything is going down or up or to the side – but actually having shared exposure to solving certain risks. So, it is a combination of thinking from different forms of contracting. What we have found is that rather than predetermining all of that ourselves, we can actually run a more interactive expression of interest process – it takes a bit longer and is more than a prequalification, but it is a genuine interaction with the market to understand where on the spectrum of different risk allocations they would be comfortable themselves, and where they feel they could deliver better value. So, we were much less prescriptive as to what the structure would be, and we instead set out what our objectives were.

Panel discussion – Delivering major rail projects

“

ver the course of the last O few years, we’ve made sure our engagement staff and our project staff are based locally, so they are actually part of the community

An interesting example is that rather than saying it was our objective to obtain cost certainty, what we were trying to obtain was cost confidence, and be more up-front about the fact we were prepared to take exposure to certain things that perhaps historically we would not have. But the incentives and the alignment of interests needed to be there to drive the right outcomes. It certainly attracted a very positive response from market, and I think it works well to consider that in a PPP context. Certainly, that level of engagement up-front on all of our contracts is probably worth doing. Governments have talked about different forms of engagement and consultation, and I think it is really important that we do it.

AD: Thanks, I might turn to the issue of consultation and social licence. Rebecca, I wanted to come to you and talk about the challenges of gaining and maintaining social licence over such a substantial geographic area on your project.

I know there have been some challenges around particular local issues, but can you just talk to us about what you have been using to gain and maintain that social licence?

RP: Thanks, Adrian. It is very localised and specific, as you mentioned. Over the 1700 kilometres, we actually deal with 36 different local government authorities. Across our greenfield areas, we have about 300 impacted farms, and many others on our brownfield sections that will see increased volumes of traffic on the train lines they already border onto. So, there are plenty of stakeholders, plenty of whom are incredibly supportive of the project and want to see all the great stuff that it can bring to regional areas in terms of stimulus for their local economies.

But first and foremost, we have been focused at this point on the impacts, which are very real and quite substantial for many of the parties whose properties we will be directly impacting.

So, the intent has always been to listen and be respectful, and try and moderate our designs where we can to mitigate the impacts. But we have to be open and honest about the fact that a project like ours does create quite substantial impacts for many.

It has taken years for us to build relationships with the landowners that we are impacting, to work with them where we can on the design, and to work with the councils to make sure that we are getting those road and rail interfaces, and other parts, right. So, it’s really been about investing time. Over the course of the last few years, we’ve made sure our engagement staff and our project staff are based locally, so they are actually part of the community. They understand the local issues, and they are not just flying in and out of Brisbane or Melbourne, but they are really demonstrating we do want to be, and we are, part of the community; we listen, and we can make changes and adapt.

We listen to the requests of the community to understand how we can help them leverage the opportunities – that has come through loud and clear from the councils. They are strong advocates for their communities. So, where we can, we work with them to help them access opportunities or develop their own business plans of how they can get their own communities ready for what Inland Rail brings. We have seen huge work done by those local councils to secure funding from state governments and the Commonwealth for special activation precincts, to encourage intermodal terminals to come to their towns, and that is really where the jobs from Inland Rail come from. We build a train line and we create a lot of jobs during construction, which are always welcomed, but it is the longerterm jobs – the industry that we are going to stimulate in those regional areas – that is where a lot of councils are rightly focused. So, we have been supporting them, ensuring that they understand how they can get funding to draft their business cases to attract private-sector and other investment in their regions. That has been really important to build and maintain that social licence.

But you are right, where issues arise you have to generally employ a targeted response to listen to what the issue is. In some areas, it might be flooding, in others visual amenity, and in others it might be noise related. It is a whole raft of things, so we just have to listen to the issue and then seek to provide information, adaptation and mitigation mechanisms where we can. But it is a challenge for infrastructure projects globally.

We are often not anyone’s cup of tea when we land on the doorstep, but as well as the impacts that we bring, there are undoubtedly huge opportunities. And it is trying to walk that balance between acknowledging and addressing the impacts while making sure you are clear about the benefits you bring.

That is really where you have got to work in that sweet spot to really drive social licence.

AD: Thanks. Peter, often one of the victims of social licence is value capture, and I would probably put myself in somewhat of the value capture sceptic column in a general sense. But on Sydney Metro, you have actually managed to do it in a very practical, commercial way. Perhaps you could just talk us

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Panel discussion – Delivering major rail projects

through some of those challenges of getting the contributions to support the development, and how you intend to use those approaches in the future.

PR: Yes, they are complex arrangements, and putting in place an integrated station and over-station developments is quite challenging. You are mixing a lot of different objectives together. Where we have had more success is where we are looking to share the value that is created directly on the land that the Metro station or the Metro project has been using for construction. Particularly, we’re looking at where we can do that with adjoining land or by creating something that is a better overall outcome in terms of the place making, construction and design by building something that’s much more integrated. So, rather than building a station with the intent to subsequently sell some development rights, we try and bring that process forward, so that once the station – particularly an underground station – has been excavated, the whole building structure in a single go is built by the same builder. It provides the opportunity for a much better public domain that is all done in an integrated way. What we are then finding is it is also commercially easier to put in place an arrangement where part of the value is shared, or the contribution to some of the gains that development might

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make can be reinvested into building better public domains.

And that is very, very different to the challenges of creating a structure that takes value off sites that you do not have an ownership interest in.

It is certainly something we target around the stations and the more densely developed areas in the city. In the CBD areas it is easier to do, but still quite challenging. And I think we need to be collectively realistic that that kind of contribution to funding is material and is worthwhile, but it doesn’t pay for the full underlying infrastructure cost by any means. It allows for a better outcome at precincts and a better alignment, so we are more likely to find that we are opening stations into an adjacent precinct environment that is already activated, rather than going on for another four or five years of the area being a construction site. There are a lot of different elements to what makes it tick, but certainly for Metro City and Southwest that has been a feature. In Metro West, and where appropriate on the Western Sydney Airport line, we will be looking to do similar things.

AD: Thanks. I am going to come to audience questions.

But very quickly, Frankie, the business investment case for Suburban Rail Loop alludes to value capture. Are you attracted to some of the models that have been deployed in Sydney?

Panel discussion – Delivering major rail projects

Courtesy of the Suburban Rail Loop Authority

FC: Yeah, we are attracted to some of those models, but I

work in a joint venture arrangement. That usually is the softest

think we are going to try and take it a little bit further. So, just to

way for most foreign add-on companies to come in. We have

give the audience context, we are talking about the first stage

seen that on a couple of fronts. In our case, our signalling

of 26 kilometres of twin tunnels, and six new underground

provider is Hitach, but they did a merger with Ansaldo.

stations, costing somewhere in the region of $30 billion to

Now it is Hitachi Rail who are the deliverers, but effectively

$34.5 billion. It is in the middle suburbs of Melbourne, which

it is Ansaldo and Hitachi. We are seeing a combination of

is expected to grow by up to nine million people by 2056. We

technology between what was Hitachi technology, with the

have to put people somewhere. So, the precincts around

Ansaldo delivery capability. It depends on the nature of the

the station boxes – we are running off about 1.6 kilometres,

business and the size and scale. There is a real appetite

or a 20-minute walking distance – and the Business and

for those sharp skills from overseas to be absorbed into the

Investment Case proposes some value-capture mechanisms

market and have that learning adopted. At the end of the day,

to consider in this area. A Development levy to be operational

while it is great to have Italian or Japanese expertise, why

by 2025, allowing Transfer Duty surcharge to be operational

can’t we be building some Australian expertise, as well?

by 2035, and a commercial Car Parking Levy to be operational by 2035 are aligned with the date of the opening of Suburban Rail Loop East.

AD: Yes, particularly given the length of the pipeline into the future, with programs like Inland Rail, Suburban Rail Loop and Sydney Metro. Finally, Rebecca, with Inland Rail, one

AD: Graeme, Benoît Vo-Dinh, Head of the Project

of the constraints for your deliverers will be getting people to

Management Office at Keolis Downer, remarked on there

regional areas. Do you think fly-in fly-out (FIFO) is going to be

being a stretched market, and how bringing new players into

a feature of that? Is regional rail delivery the new mining as far

the market can be part of the solution to that. But there are

as workers are concerned?

risks involved with bringing new players into an existing market.

What can be done to encourage foreign rail companies, into the Australian market, while also addressing the attendant risks?

RP: I think it is inevitable that FIFO will be a component of our resourcing strategy. Inland Rail has already finished completion of one section – the 100-kilometre section from

GN: That is a good question because the rail sector, even

Parkes to Narromine. We had great local employment: I think

just between states, is quite different. They can get a good

700 people employed locally there, which was terrific. But we

relationship within Australia and get to know others if they

still had to supplement that with FIFO, and drive-in drive-out

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Panel discussion – Delivering major rail projects

workers. And we are under construction further north, around the Moree area – not far from the Queensland and New South Wales border – where it is the same. We are focused on trying to train and source people locally, or encourage them to relocate to that area. Approximately half of that workforce comprises locals, versus – again, it is early stages – relying on FIFOs as well. And that has had issues around COVID that adds to the complication. Sourcing staff locally has got a lot of upsides in terms of de-risking that.

When we get to other parts of the project that are less remote – up towards Toowoomba through the Lockyer Valley and then towards Brisbane, and the same goes down in Victoria as we come in through some of those sections – we do have

AD: Thanks, Rebecca. The key message I am taking from this panel is that if you have a teenage kid, encourage them to go into rail. And if they want to see the depth of pipeline, then they can look at infrastructurepipeline.org and they can see all the projects that are coming up over their future career in rail. Thank you very much to the panel for the candour and insights today. It is clear the major rail investment programs you are all leading will have a transformative impact on the urban environments and supply chains of this country. So, thank you once again for your contributions.

Frankie Carroll – Chief Executive Officer, Suburban Rail Loop Authority

Graeme Newton – Chief Executive Officer, Cross River Rail Delivery Authority

Frankie Carroll joined Suburban Rail Loop Authority in January 2021 after holding multiple leadership roles in the Queensland public service and private sector.

Graeme Newton has 30 years’ experience as a senior executive in the infrastructure sector, leading large and complex, high-profile, multibilliondollar projects within the private and public sectors. Newton was appointed by the Queensland Premier in 2011 as the first Chief Executive Officer of the Queensland Reconstruction Authority. Over the years, Newton has worked in a range of infrastructure leadership roles, including as Director-General for the Department of Infrastructure and Planning, where he was a key decisionmaker for Queensland, leading major infrastructure, investments, planning and project delivery. In addition, he was appointed as Coordinator-General under the State Development and Public Works Organisation Act 1971 (Queensland) and has also worked for Deloitte Australia as Lead Partner for the Queensland Government.

He brings 30 years of experience in major infrastructure and finance roles across public and private sectors. Hailing from Ireland, Carroll spent 20 years living in his home country before travelling the world. His career has seen him gain international experience working in major financial service centres globally. Carroll was inspired by the opportunity in Suburban Rail Loop to make fundamental improvements to the way people move around Melbourne, and to improve access to jobs and opportunities. Prior to joining the Queensland Government, he had a successful career across the Australian and international financial services sectors.

Carroll moved to Brisbane in 2008 to take up the role of Chief Executive Officer of Queensland Water Infrastructure, where he delivered major water storage facilities across South East Queensland. With experience as Chair and Director of Brisbane’s Cross River Rail Delivery Authority, he has a deep understanding of city-shaping infrastructure and mega-project delivery. Carroll has also worked in a range of senior Queensland public service roles, including as Under Treasurer; Director-General of the Department of Infrastructure, Local Government and Planning; Director of Trade and Investment; Director of Building Queensland; Chair of Economic Development Queensland; and CEO of the Queensland Reconstruction Authority.

Adrian Dwyer – Chief Executive Officer, Infrastructure Partnerships Australia Adrian Dwyer is the Chief Executive Officer of Infrastructure Partnerships Australia – the nation’s infrastructure think tank, providing independent policy research focused on excellence in social and economic infrastructure.

Dwyers’s career spans business, policy and public service roles across the private sector, and the New South Wales and Australian governments – with expertise across transport, utilities and social infrastructure markets, and wider public administration.

Dwyer served as Infrastructure Partnerships Australia’s head of policy from 2011 until 2015, where he led major studies on road pricing reform, contracting and financing models, among others. In 2015, Dwyer left Infrastructure Partnerships Australia to serve as the Executive Director of Policy and Research at Infrastructure Australia – the Commonwealth Government’s statutory infrastructure body. At Infrastructure Australia, Dwyer led the development of the Australian Infrastructure Plan – a 15-year reform map for Australia’s infrastructure markets, alongside other major reports and studies – and enjoys strong, trusting relationships across the business, political and public sectors.

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a bigger pool of local people to tap into. We will see a much lower proportion of FIFO happen in these parts, but it will be a component of every section, I believe.

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In his current role as Chief Executive Officer of the Cross River Rail Delivery Authority, Newton is leading the delivery of the $5.4-billion Cross River Rail project.

Cross River Rail will transform South East Queensland’s public transport network, and be the catalyst for up to $20 billion of economic development in and around the station precincts. This role involves extensive engagement with the rail and infrastructure sector, strategic policy advice, and high-level commercial negotiations.

Rebecca Pickering – Interim Chief Executive, Inland Rail, Australian Rail Track Corporation Rebecca is Interim Chief Executive, Inland Rail, at the Australian Rail Track Corporation (ARTC) and has responsibility for overseeing the ongoing delivery of the 1700-kilometre Inland Rail program. A chemical engineer by background, Pickering joined ARTC in 2018, and most recently served as Director Planning, Communications and Stakeholder Relations.

Pickering’s extensive experience was honed within the energy industry in both the United Kingdom and Australia, including leadership roles spanning policy and regulation, strategy and portfolio management, stakeholder relations, gas field operations, safety leadership, and reputation management.

Peter Regan – Chief Executive Officer, Sydney Metro Peter Regan joined Sydney Metro in 2021, following more than 20 years in transport, and infrastructure project development and delivery in Australia and the United Kingdom. Regan has been in the senior leadership team at Transport for NSW (TfNSW) since 2015, most recently as the Acting Secretary for Transport. He has also led TfNSW’s infrastructure and place, finance and investment divisions.

Regan has worked with the New South Wales Government since 2011, including as the Chief Executive Officer for the Sydney Motorway Corporation, the Chief Financial Officer of the WestConnex Delivery Authority, and the Head of Infrastructure Finance at NSW Treasury. Regan was previously the Director of Corporate Finance at Transport for London, after commencing his career in corporate and project finance roles at Deutsche Bank and PwC.

Sustainable business practices

Our sustainability-linked loans encourage businesses to achieve positive social and environmental outcomes.

commbank.com.au/sustainablefinance

companyfocus

Commonwealth Bank at forefront of urban transformation Bank’s Future Cities and Networks ecosystem leading sustainable change.

A re-imagining of Australian cities will require ecosystem thinking that reflects the growing interconnectedness of organisation assets and stakeholder needs.

That is the view of Michael Thorpe, Managing Director of the new Future Cities and Networks ecosystem team at the Commonwealth Bank of Australia (CBA).

‘The future of cities is about stakeholders collaborating to solve problems, create shared opportunities, and drive social and economic change,’ says Thorpe. ‘At the heart of this change is capital linked to an organisation’s environmental, social and governance (ESG) goals.’

This thinking underpinned the launch of CBA’s Future Cities and Networks ecosystem in October 2020, which merged the banking teams supporting real estate and infrastructure in CBA’s institutional bank together with the health, media and technology sectors.

As one of five ecosystems, Future Cities and Networks encompasses a team of 85 people across the globe. Other

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Charles Davis

ecosystems include Future Resources, Efficient Supply Chains, Intelligent Finance, and Connected Services and Smart Networks.

Thorpe says Australian cities are poised for significant change. ‘As urban populations grow, people will want to live, work and play near large hubs within cities. Younger people, in particular, won’t accept urban sprawl or long commute times to work.

‘At the same time, technology will connect cities like never before.

For example, there will be seamless integration of electric vehicles and public transport through smartphone apps. Also, there’s already greater use of big data to make cities more efficient, livable and sustainable.’

Thorpe expects organisations to work with a more diverse range of stakeholders – and co-lead social and environmental change in cities.

‘There will be greater focus on social infrastructure projects that provide affordable housing or build-to-rent projects – and new emphasis on

Michael Thorpe

projects, such as vertical gardens, that enhance urban sustainability.’

Interconnected stakeholders

The confluence of these trends will blur lines between commercial real estate, economic and social infrastructure, technology and sustainable finance. It will also give a stronger voice to customers, employees, nongovernment organisations and other project stakeholders.

‘Future Cities and Networks enables CBA to think more holistically about future urban needs,’ says Thorpe. ‘Rather than the traditional banking approach of focusing on an organisation and investors in commercial real estate and infrastructure, we’re approaching issues through a more interconnected lens, across industries and stakeholders.’

Thorpe says the design of Future Cities and Networks is a significant point of difference in Australian banking.

‘We’re able to have much broader

companyfocus

conversations with clients earlier in the financing process, helping shape ideas and assess potential outcomes across a spectrum of objectives.

‘For example, CBA arranged a sustainability-linked loan (SLL) that was tied to Gold Coast Airport achieving environmental outcomes.

The Airport’s employees believed more could be done to reduce the Airport’s carbon emissions, and the Airport management team responded with a commitment to do so through a SLL.’

Sustainable finance and ESG

Thorpe’s colleague, Charles Davis, says organisations recognise that linking capital to ESG outcomes can drive better financial and social returns. Davis is Managing Director of Sustainable Finance and ESG at CBA. This new division works closely with the ecosystem teams and the broader bank to support the development and execution of sustainable finance products.

Davis says CBA’s work with NSW Land Registry Services (NSW LRS) typifies the change underway. In August 2021, CBA served as an arranger, lender and sustainability coordinator on the $300 million SLL for NSW LRS. The loan was the first in Australia to set the development of a Reconciliation Action Plan as a target.

The facility has embedded targets for driving improved environmental and social outcomes that align with NSW LRS’ sustainability ambitions.

The targets address issues such as diversity at senior management levels, emissions reductions and advancing Indigenous engagement.

‘There’s growing demand across the spectrum for SLL and bonds, and green or social loans and bonds,’ says Davis. ‘The discussion among investors is about when this form of debt becomes a core part of a portfolio rather than a smaller part of a dedicated ESG fund. Lenders increasingly want to reward companies that achieve ESG goals.’

Davis says growth in SLLs is about more than lowering the cost of capital.

Notable firsts

CBA’s record in Sustainability for the Australian market: ► First SLL tied to better social outcomes (Wesfarmers) ► First Public Private Partnership Green Loan (Canberra Metro) ► First SLL for healthcare sector (Ramsay Healthcare) ► First Sustainability-Linked AUD bond (Wesfarmers) ► First Green Loan for an operational New South Wales Public Private Partnership Green Loan (Sydney Light Rail) ► First Sustainability (Green + Social) Loan in Australia (Celsus – the commerical operator of The Royal Adelaide Hospital) ► First SLL for the agriculture sector (Stockyard Group)

‘Organisations see the benefit in having a range of forward-looking metrics that drive sustainable change, and linking those targets to their loan facility. The loan can become a catalyst for an organisation to move faster towards a low-carbon future, improve employee wellbeing, or ensure it continues to source goods responsibly, for example.’

The formation last year of the CBA Sustainable Finance and ESG team, which has grown to a team of 15, centralises the bank’s resources in this area. ‘We’re using that expertise to bring a strong overlay in sustainable finance to client projects,’ says Davis.

CBA is a leading provider of sustainable finance in Australia. The bank has achieved several market firsts and has been involved in some of the country’s largest sustainable-finance transactions (see breakout box).

‘CBA has worked on groundbreaking deals in sustainable finance,’ says Davis. ‘But it’s just the start as more organisations use capital to achieve multiple goals for multiple

►

First SLL with a Reconciliation Action Plan as a target (NSW LRS).

CBA has also brought to market several of the largest sustainablefinance transactions of their kind in Australia. These include the: ► $2.8 billion SLL for ISPT Core Fund ► $3 billion Green Bond for Queensland Treasury Corporation ► $500 million non-financial corporate Green Bond for Lendlease Group ► $2.2 billion use of proceeds ESG-labelled Loan for Celsus – largest use of proceeds Healthcare ESGlabelled Loan in Asia Pacific and largest use of proceeds project finance ESG-labelled Loan in Australia.

Source: CBA

stakeholders, and respond to the growing interconnectedness of assets across sectors.’ ♦ To learn more about Future Cities and Networks, and Sustainable Finance and ESG at CBA, visit www.commbank.com.au/institutional.

Disclaimer Important information: This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. You should consider seeking independent financial advice before making any decision based on this information. The information in this article and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of its publication but no representation or warranty, either expressed or implied, is made or provided as to the accuracy, reliability or completeness of any statement made in this article. Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945

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companyfocus

Veolia’s circular economy mission for Albury– Wodonga Bringing new jobs for locals and boosting the economy.

Leading environmental solutions company Veolia has announced that its recycling and recovery operations in Wodonga are best in class, which it credits to the region’s strong efforts in sustainable waste behaviour.

Focusing on preventing climate change, Steven Thomson, Field Sales Manager for Veolia, says the organisation has strengthened its mission to ‘drive a circular economy’, and highlights the business’s new purpose in ecological transformation – which is to rebalance the ways humans interact with the planet.

Veolia’s recycling activities are seeing the successful diversion of hundreds of tonnes of waste from landfill every week.

Cardboard recycling is carried out on site, with the organisation baling over 150 tonnes of recycled cardboard weekly, which goes on to be turned into new cardboard for use.

Veolia also collects soft plastics, like shrink wrap, which is then recycled into more than 100 new products, such as plastic fence posts. Hard plastics get recycled into things like bar chairs to support concreting.

With plans to continue recycling and building circular solutions that keep materials in use for longer, Veolia will soon commence activities to turn organic waste, collected from businesses across Albury–Wodonga, into compost or fertiliser.

In February this year, Veolia was awarded the Albury City Council commercial contract, which includes collecting organic waste, allowing it to expand into the commercial businesses

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sector, including pubs, clubs, cafes and restaurants.

‘Extracting value from waste materials by recycling them into new products for others to use is really important if we want to protect the planet and preserve our resources,’ Thomson says.

The Albury–Wodonga region was uniquely placed to pave the way in recycling, as it is home to some of the country’s leading agricultural businesses, which are setting ambitious environmental targets for their operations.

‘As more companies adopt a “zero to landfill” approach, Veolia is helping

customers to meet these targets. It’s a matter of working together to get the right outcome for the region, and this will mean generating the green jobs of the future.’

Veolia’s north-east region is growing, and Thomson expects this to translate into new employment opportunities as time goes on.

‘Our expanding operations will most definitely bring employment to the area and allow us to strengthen our partnership with local businesses,’ he says.

Veolia intends to build on its activities in the north-east region, with a key focus on people and the planet. ♦

Scan me to learn more

Keynote interview – The Hon. Paul Fletcher MP

Keynote interview The Hon. Paul Fletcher MP, Federal Minister for Communications, Urban Infrastructure, Cities and the Arts Key points: • •

•

Media narratives about state and federal relations do not always reflect healthy cooperation at an infrastructure planning and investment level.

The pandemic has reinforced the value of high-speed, high-capacity telecommunications, with the National Broadband Network (NBN) having been highly effective in supporting Australia’s digital needs through COVID-19.

The deployment of 5G technology over the coming years will complement the NBN’s fixed-line infrastructure and support Australia’s knowledge economy.

Interviewee: ► The Hon. Paul Fletcher, Federal Minister for Communications, Urban Infrastructure, Cities and the Arts

Interviewer: ► Adrian Dwyer, Chief Executive Officer, Infrastructure Partnerships Australia

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Keynote interview – The Hon. Paul Fletcher MP

Adrian Dwyer (AD): At the outset of the pandemic, there was a great deal of optimism that Australia was entering a new era of cooperative federalism. Can we still be optimistic about that or is the best of Team Australia behind us?

The Hon. Paul Fletcher MP (PF): First of all, great to be with you. Yes, I think we absolutely can continue to be optimistic about our federal system. We know in the infrastructure space, there’s routine and continuing cooperation between the Commonwealth, and state and territory governments. We have a $110-billion infrastructure pipeline, and a very large number of projects around the country are being jointly funded by the commonwealth and state governments. We ask state and territory governments to work with us on their forward planning in giving us essentially a pipeline of projects they’re interested in securing funding for. So, certainly in the infrastructure space, as indeed so many areas of government, there’s good day-to-day cooperation between the Commonwealth Government, and state and territory governments.

It is the nature of politics that where there are tensions or conflict, that tends to get more attention from the media than constructive joint efforts to work towards an outcome. But I remain pretty optimistic about our Federation, and when this is all reviewed – how we coped with the pandemic – I think it’ll be seen that our Federation did pretty well compared to most other federations.

AD: Well, I did just want to dive a bit deeper into that, because there is a political and media narrative around the National Cabinet that does overlook the day-to-day operational piece you spoke about. And the rubber really hits the road in infrastructure. So, while we are getting that noise at perhaps a National Cabinet, national political level, you’re confident that we are still getting the job done from an infrastructure perspective?

PF: I think we’ve got well-established processes to coordinate between the Commonwealth, and state and territory governments. Of course, there’ll be issues of disagreement or different views about priorities, but in the day-to-day working arrangements between the Federal Department of Infrastructure, Transport, Regional Development and Communications, and the relevant state departments around the country; if I look at the engagement that I have, and my colleague Barnaby Joyce as Deputy Prime Minister has with state and territory infrastructure ministers, we are in regular dialogue with them.

I’d also make the point that even in terms of the pandemic, there have been some observations made that are not very well informed. Rather than criticising the National Cabinet, I think the more insightful observation is that this was a very flexible and rapid response to a unique

challenge. As a consequence, the Prime Minister, premiers and chief ministers have been coming together at key points weekly, and then coordinating and aligning the work of their respective officials. I think it’s been cooperative federalism in play.

Now, have there been disagreements and tensions? Of course there have – that’s natural. We need to properly respect states and territories have a set of responsibilities that sit with them, and understandably premiers and chief ministers, knowing the buck stops with them on those issues, will ultimately make their own calls. If you look at cooperation on a whole range of issues, I think we can collectively, as Australians, take a degree of pride in the way that our nation has responded and the way our Federation has responded.

AD: I wanted to talk about one of the other emerging heroes of the pandemic, the NBN. It has gone from national punching bag to national hero over the past 18 months or so. Has COVID and the major increases we’ve seen in broadband demand really demonstrated the value of having that fixed-line, highspeed backbone system?

PF: Absolutely, there has been a remarkable change in public sentiment over the past 18 months. Essentially, we’ve conducted a giant, unplanned experiment in working and studying from home, and in a matter of a week or two, several million people moved to operating in that mode. Of course, you really need good broadband to do that. The previous generation of broadband DSL was considerably slower down than NBN, but much, much, much slower up. And you need good speeds in both directions to video conference. I think what happened is Australians found themselves at home, they discovered that the NBN is pretty good, and that we all have devices with microphones and cameras – smartphones, tablets and laptops – and access to software packages such as BlueJeans, Teams, WebEx and Zoom. We’ve all become very familiar with them, and we’ve all been surprised by how good they are. The NBN has absolutely been key.

When we came to government in 2013, there were barely 50,000 premises connected to the fixed-line network.

Our priority was to get the network rolled out as quickly as possible. And when we got to early 2020, 98 per cent of premises were able to connect; that was really important in our national response to the pandemic. We saw big rises in traffic levels. During the day, traffic levels on the NBN were up 70 per cent compared to before the pandemic, but the network held up very well. We saw big jumps in demand. At key times, there were 40,000 new connections a week. That’s three to four times the speed and rate of connection we normally get. So, it has been a very significant demonstration of the NBN’s capabilities.

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Keynote interview – The Hon. Paul Fletcher MP

AD: I’m surprised you didn’t mention the sheer volume of traffic that’s gone to InfraFlix, our on-demand streaming platform dedicated entirely to infrastructure; I’m sure it made a substantial contribution! With the doubling of traffic happening every year, clearly the NBN’s not finished. There’s a big investment task required. How are we going to meet that demand?

PF: Well, we are in the course of upgrading it. We said in 2013 that the first priority was to get the network rolled out using the multi-technology mix – Fibre to the Premises, Fibre to the Node, and Hybrid-Fibre Coaxial – and we have done that.

Last year, we announced a $4.5-billion upgrade, which by 2023 will see eight million premises on the fixed-line footprint able to order a speed of up to one gigabit per second. That’s the next stage in the evolution of NBN and I got a briefing from the company yesterday on the roll out, which is going well.

We are continuing to upgrade and evolve the network to meet demand, and are now seeing 13 per cent of connections at 100 megabits per second or higher, and we’re seeing more applications come along that take advantage of the very high speeds. What we’ve been able to do is prove out the business model; NBN is now EBITDA (earnings before interest, tax, depreciation and amortisation) positive after the last round of annual results. While over the last few years NBN has had to pay a payment per user who transfers from the Optus or Telstra networks onto NBN, we are largely through that.

So, the business model has been proved up, and that’s reflected in the fact that we’ve successfully raised private sector capital in the private debt markets in Australia and the United States. The NBN has also now managed to repay around $6 billion of the debt financing it received from the Commonwealth. We had $29.5 billion of equity financing and then $19.5 billion of debt; we are now down to, I think, $13 billion or $14 billion in debt because of the repayments that NBN has been able to do by replacing the Commonwealth debt with private sector debt. I might say they’re getting materially lower rates from the private sector debt, as well, as they keep reminding me every time they see me.

AD: Well, I’m sure from the discussion we have had today about the availability of capital there’d be plenty of people ready and willing to step up on the equity side of the equation should that transaction come in the future.

PF: And just on that, our position is the same as the previous Labor Government. In due course, NBN will transition into private ownership, but that’s still some years away. Our focus right now is on leveraging the economic and social benefits of this network, and continuing to upgrade the speeds.

AD: The other piece of the telecommunications puzzle that has changed since the beginning of the rollout of the NBN is 5G, and how that complements and competes with the fixedline network. Could you talk us through how you’re seeing

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ustralia is already A a global leader in remotely operated mines, and 5G will be able to take that to a new level

that 5G puzzle come together and what it will do to the NBN business model?

PF: Well, certainly 5G is enormously important. Telstra, Optus and TPG Vodafone are very extensively rolling out 5G networks. Telstra has recently committed to strong new targets for 5G penetration around the country over the next few years.

People do often say to me, ‘Well, doesn’t that mean the NBN is under serious competitive threat?’ I’d say a couple of things.

Firstly, competition is a good thing; we welcome competition.

The previous Labor Government was quite tempted to put in various sorts of rules to give the NBN a rails run, but we don’t think that’s the right approach. The second point is 5G and NBN have different and, in many ways, complementary strengths.

When it comes to delivering large amounts of capacity to each home for use by homes for educational and other purposes, but also for viewing Netflix and Disney Plus, and all the other streaming services, NBN, a fixed-line network, is always going to have an advantage in terms of the capacity it can deliver and the price. At the end of last year, or 12 months ago, the total average monthly download across the NBN fixed-line network was 330 gigabytes. Already, in 12 months, that’s up to 400 gigabytes. We are seeing huge growth in the quantum of data people are consuming every month.

Now, the thing about a mobile or a wireless network is that while 5G is much, much faster than 4G, there are constraints on the total amount of capacity that can be delivered. Particularly as penetration or take-up around a base station rises, you start to get towards those constraints. That’s my lawyers’ understanding of it; the engineers will tell you there are always things you can do. You can provide more spectrum, or sectorise base station breakdown and narrow sectors. That’s all true, but the cost structure for wireless for mobile is different to the cost structure for fixed. Therefore, there will be major segments of the market where NBN will always have a cost advantage.

But if you think about some of the things that 5G can do that a fixed-line network can’t match, you can look at robotics, connected and automated vehicles, or smart manufacturing.

We’ve got a $20-million grant program to fund projects to trial and develop different kinds of 5G applications. Those projects

Keynote interview – The Hon. Paul Fletcher MP

have included funding for a trial of using high-resolution video cameras to count the number of sheep going through a particular position on a farm. Then you need to carry that data over a network, and that’ll be over a 5G network using software, which counts much more reliably than having people doing it manually.

We have also seen 5G used to support the movement of freight-carrying devices at an intermodal terminal. There’s a range of these applications in which 5G will be incredibly valuable, and certainly in the whole area of connected and automated vehicles, 5G has huge potential. Another one of the projects we are funding is at defence contractor Rheinmetall.

They’re taking some of their defence vehicles and developing them as remote firefighting vehicles. So, rather than sending rural fire service volunteers into incredibly dangerous fire situations, in years to come we’ll be able to use 5G connectively to send a remotely controlled firefighting vehicle, and no human life is at risk. My point is that the fixed-line broadband that NBN offers and mobile broadband in the latest 5G version have different and complementary strengths, and they’ll serve overlapping but ultimately different markets.

AD: I’m interested in the high-definition camera that counts sheep – presumably it doesn’t fall asleep in the same way that a human would if allocated the same job.

PF: That’s exactly it – a really powerful example of the way technology, including communications technology, supports industry verticals. Agriculture has an ambition to be a $100-billion industry, and the Australian Government is backing that. Agtech is really important, and so connectivity and 5G networks will have a really important part to play there. Australia is already a global leader in remotely operated mines, and 5G will be able to take that to a new level.

There is also 5G and connectivity for tourism. A year or two ago, I visited a lavender farm near Launceston. They made the point that their visitors want to get the picture of the sweeping hills covered with lavender to post on Instagram, and that is absolutely key to building their brand. Of course, they need decent connectivity, and until a year or two before I came to see them, they had a connectivity problem. You can multiply that story by thousands of tourism businesses around the country, and there’s just sector after sector where improved

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Keynote interview – The Hon. Paul Fletcher MP

digital connectivity, both fixed broadband and mobile, is key to capturing productivity gains and capturing new markets.

portfolio, but the economics of the two sectors are quite similar.

AD: One of the things that would need to underpin that, of course, is the incentive structures for network operators to invest in and build out mobile capacity. We’ve seen in other jurisdictions around the world that sometimes we’ve got those equations wrong and delayed the rollouts. Do we have the right incentives to get 5G investment, and subsequent Gs after that?

what we’re really seeing is a convergence, or overlap, between

PF: If you look at the behaviours of Telstra, Optus and TPG Vodafone, I think you’d say that they do see substantial incentives to invest because they’re putting a lot of private capital into this. That being said, I think you’ve touched on what’s quite an important issue, which is that our entire digital economy ultimately rides on the physical network built and operated by companies like Telstra, Optus, TPG, Vocus, and many others.

These are very capital-intensive businesses, and yet their returns have been under pressure, whereas businesses that use those networks are making very good returns. Global digital platforms, like Netflix, Facebook and Google, have done very well through the pandemic in Australia and elsewhere, but they deliver services – they’re getting to customers using a network that has been paid for with $49 billion of taxpayers’ capital.

that helps them plan their journey.

I think these are issues that will bear careful consideration, because if we don’t have the underlying physical networks, which cost a lot of money to build and a lot of money to maintain, then all of the rest of the digital economy can’t operate.

that are designed to get the traffic flowing more freely, drawing

AD: Thank you, Minister. I want to move to something a bit closer to home for you, which is the combination of portfolios you have. I know it’s something you’re quite passionate about – both the infrastructure, urban infrastructure piece and communications. I know it was a very deliberate decision to combine those two portfolios. Can you talk us through the rationale for the merger, and perhaps some of the practical applications that we’re seeing from having a united portfolio on those two fronts?

PF: Look, it’s a very logical combination of areas. In the 80s, there was a portfolio known as ‘Transport and Communications’. As communication became more and more important, it got separated off to become its own cabinet-level

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Both are heavily fixed-cost and low-variable-cost industries, but physical transport infrastructure and connectivity. The whole area of connected and automated vehicles is one example, or the notion of smart motorways. The technology we are using for smart motorways is in many ways still quite primitive – big electronic signs on motorways to alert drivers to information I had the chance recently to visit the Main Roads WA Network Operations Centre in Perth, and they’ve put a lot of sensors and other devices on their network. We talked particularly about the Kwinana and Mitchell freeways and the investments they’ve made, which the Commonwealth has now invested in. These include things like cameras to monitor traffic, but also to track traffic levels using sensors. If 60 or 70 per cent of vehicles have a smartphone in them, what you’re getting is highly statistically valid data.

What really struck me was that they have established a job called Route Manager. This person sits in the Network Operation Centre and makes decisions about particular routes on all the data and information coming in. Now, as we think about how we get more capacity on a given road network, we are going to have a choice of investment decisions. Do we do the traditional thing, which is spend hundreds of millions of dollars on more concrete and steel to build additional lanes, or do we spend at least some of that money on better IT and networking so we are gathering better information, and able to manage the system better and get more capacity through the given physical assets? Certainly the fact that I’ve got these sets of responsibilities brought together, as I think about what 5G means, it’s very, very important for the transport networks.

And it is really a good opportunity to look at these questions from both the transport policy side and the communication policy side.

AD: Thank you for joining us today, Minister.

The Hon. Paul Fletcher MP – Federal Minister for Communications, Urban Infrastructure, Cities and the Arts

Safety and the Arts in May 2019; and was appointed to his present role in December 2020.

Paul Fletcher MP is the Minister for Communications, Urban Infrastructure, Cities and the Arts in the Morrison Government. He entered Parliament in December 2009 as the Member for Bradfield, and was was appointed Parliamentary Secretary to the Minister for Communications in September 2013; Minister for Major Projects, Territories, and Local Government in September 2015; Minister for Urban Infrastructure in July 2016; Minister for Urban Infrastructure and Cities in December 2017; Minister for Families and Social Services in August 2018; Minister for Communications, Cyber

Before entering Parliament, Fletcher was Director, Corporate and Regulatory Affairs, at Optus for eight years; established a consulting firm serving the communications sector; and in 2009 his book about broadband, Wired Brown Land was published by UNSW Press. Earlier in his career, Fletcher was Chief of Staff to the Minister for Communications in the Howard Government, Senator Richard Alston. He has dual first-class honours degrees in law and economics from The University of Sydney and an MBA from Columbia University in New York, where he was a Fulbright Scholar.

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Yarranlea Solar Farm Queensland

Delivering technical excellence and innovation to contribute to Australia’s future SMEC is a global engineering, management and development consultancy delivering advanced transport and energy infrastructure solutions for our clients and partners.

Leveraging our 70-year history of delivering nation-building infrastructure, we provide technical expertise and advanced engineering services to resolve complex challenges within roads, highways, rail, metro, airports, hydropower and renewable energy markets.

We are committed to delivering sustainable solutions that help to connect, move and power people and communities by investing in technology and innovation to be at the forefront of engineering. Infrastructure is evolving, through combining digital technology, our extensive expertise and detailed understanding of local conditions, we deliver innovative and sustainable solutions that meet the varying needs of specific environments and users.

Discover more about how SMEC is contributing to a sustainable future. smec.com/infocus

Through our specialist expertise, we’re challenging boundaries to deliver advanced infrastructure solutions.

We’re redefining exceptional

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People are the investment

By Dr Richard Kelly, Chief Technical Principal & General Manager Technical Excellence, SMEC

How the infrastructure boom is shaping Australia’s future workforce.

Opportunity often takes a form that is forced upon us by circumstances outside of our control and influence. It is derived from necessity produced in the wake of economic uncertainty and global challenges, like the COVID-19 pandemic. In mid 2019, none of us were preparing for the level of change that was coming; but, as with every challenge, the end and the new beginning are inevitable.

For Australia, part of this new beginning is taking the form of unprecedented investment in infrastructure to aid the economic recovery post pandemic. It is not sectoror market-specific, but broadly provides investment in multiple areas and markets simultaneously. This provides both opportunity and challenges for the engineering industry to not only meet the market’s need for a highly skilled

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and specialised workforce, but also to technically enable the industry to work innovatively to deliver infrastructure that is financially viable but also, critically, sustainability-focused.

Put simply, the industry needs to deliver on these promises to a high standard, with a constrained workforce.

How we respond in the next few years will change the face of engineering, construction, the future health of our communities, and our economic future.

Fostering growth to meet the future

Engineers Australia’s report, ‘Australian Engineering Employment Vacancies Jan–June 2021’, highlights the challenge we are facing. In the first half of 2021, there was a 44 per cent increase in engineering vacancies across Australia, levels not seen since 2018.1 With the

saturated and expanding infrastructure investment across all levels of government, and private investors driving exponential growth in a very short period – merging with the closed borders limiting international talent acquisition – investment in people, innovation and technology will be crucial to the success of these projects.

With every challenge there is an opportunity, and in Australia we are fortunate to have some of the world’s leaders in engineering, planning and construction. We have a highly skilled and educated workforce that can transform the sector and implement innovation utilising the latest technological advances, which lead to productivity returns – an excellent base for the future growth of the sector.

By investing in programs like ‘Cultivate’2 to foster the next generation

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of female leaders, we are providing the opportunity for women within our industry to have increased access to leadership positions, which will bring a diversity of thinking to every solution we create. Six emerging female leaders are connected with a sponsor from the senior leadership team. The sponsors and sponsees work together over an eight-month period, supported by technology-based solutions, to access new opportunities, share knowledge and further contribute to promoting diversity and, ultimately, diversity of thinking.

Women like Ciara Otter, a talented water infrastructure specialist who is delivering innovation for our water networks, will be instrumental in Australia being able to meet the infrastructure demands placed on our cities in the future – particularly as climate change impacts reduce our access to safe and secure water supplies.

Otter shared her thoughts: ‘Being supported by SMEC to grow as a leader and as an individual is helping me to better assist my clients to achieve their goals. By bringing diversity of perspectives and ideas, I am looking forward to how this will be reflected in the solutions we develop to build climate resilience.’

Similar to ‘Cultivate’, SMEC has also been delivering the ‘Fusion’ program to sponsor and grow future technical leaders. In this program, Kara Stariha is developing drone-based methods for measuring and interpreting dam rock slopes. Stariha’s use of technology increases productivity and helps overcome the current shortage of dam engineers.

Driving sustainability through, innovation and technology

Knowledge sharing, harnessing innovation and use of technology are not only vital tools in creating project delivery efficiencies, but also help to drive sustainability.

In a world where face-to-face conferences have been cancelled, we recognise that, on a micro level, we can still demonstrate industry leadership, supporting our colleagues to grow and

learn new ways to implement innovation on their projects. Fostering a workplace culture that capitalises on the skills and interests of our people, SMEC ran its inaugural Internal Technical Conference, which focused specifically on promoting knowledge sharing innovations and technology application on projects across disciplines and geographies.

Promoting cross-sector collaboration, and cultivating ideas and methodologies, can lead to outstanding innovation.

It is also through our focus on innovation and optimising technologies that we can create and help deliver sustainable outcomes for our clients.

As our knowledge and understanding of climate change implications increase, so does our commitment to integrating solutions within our deliverables.

Investment in developing the skills of our existing staff and the fostering of specialists in the delivery of Infrastructure Sustainability Council rating systems on our projects continue to grow.

The knowledge and skills are here, and are being implemented now, but there is always room for improvement and growth.

By prioritising integration of sustainability features, we have an opportunity to utilise the significant investment in infrastructure to create projects that change the landscape now, but also deliver long-term outcomes. By incorporating mitigation measures to address key climate change risks – including increases in extreme rainfall events, extreme heat, severe storm events, flooding, solar

radiation and changes in soil moisture – we can help deliver infrastructure that is resilient and serves the community better. We have already implemented this methodology on the design of Crows Nest Station, as part of the Sydney Metro City & Southwest project.3

A global view of the future

SMEC takes inspiration from its legacy on the original Snowy Mountains Hydro-electric Scheme. As a nationbuilding project, the first Snowy Scheme developed Australian capability and expertise that was then exported around the world. Our people helped developing nations not only build infrastructure but also build local engineering skills, investing in the countries’ long-term economic development.

By investing in our current workforce, we are building further on our skills and capabilities to directly influence the future of Australia, which, post boom, will provide an export market for specialised technical expertise. It will continue to drive Australia’s reputation for excellence, and help deliver high-quality and sustainable projects across the world. ♦ 1 https://www.engineersaustralia.org.au/sites default/files/2021-07/australian-engineeringemployment-vacancies-jan-june-2021.pdf 2 https://cultivatesponsorship.com/ 3 https://www.smec.com/infocus/portfolio/crowsnest-station-design/

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IFM: on our way to net zero by 2050 IFM Investors has set a 2030 interim emissions reduction target of more than one million tonnes of carbon dioxide equivalent (CO2e) for its infrastructure asset class as part of its commitment to target net zero by 2050.

This reflects an emissions reduction target of 40 per cent of IFM’s existing infrastructure portfolio from 2019 levels.

We will continue to invest in essential infrastructure assets that working people rely on every day, in sectors such as transport, utilities and energy, with our focus on transitioning these assets to help ensure they can continue to operate in a net zero world.

Understanding that to meet our net zero by 2050 commitments, action is needed over the next decade, IFM will take the following steps for the infrastructure asset class: ► Interim targets: Scope 1 and 2 emissions reductions target of at least 1.16 million tonnes of CO2e by 2030 (from a 2019 baseline). This reflects a 40 per cent reduction in emissions. ► Investment processes: We have enhanced our investment decision-making processes to help ensure that new acquisitions are net zero by 2050, and that new acquisitions have considered climate change transition and physical risks under reference scenarios, including 1.5-degree reference scenarios.

Melbourne Airport – solar installation

►

►

►

Asset management processes: We have enhanced our asset management processes so that climate change transition and physical risks are assessed on a periodic basis. We also continue to implement emission reduction initiatives.

Investment restrictions: We will phase out thermal coal by 2030 and will not make new investments in assets that derive material revenue1 from thermal coal.

Pursuing climate solutions: IFM, along with our portfolio companies, will continue to seek to increase the amount we can invest in the significant investment opportunities that are arising from the energy transition.

To continue delivering on our purpose, which is to protect and grow the longterm retirement savings of working people, it’s vital that we have a plan to mitigate the risks of climate change A 62 futurebuilding futurebuilding

David Neal, Chief Executive, IFM Investors

►

Increased reporting: We will enhance our annual carbon footprint reporting by including disclosure on progress against IFM’s 2030 emissions reduction target.

We are making infrastructure investments today that our investors expect to hold for the long term. If these investments are to generate strong, long-term sustainable returns, we need to ensure that they continue to play an important role in society in a net zero economy.

We look forward to continuing to work closely with our investee companies as we embrace the energy transition together. ♦ 1

Revenue greater than 20 per cent of total.

We are global infrastructure specialists IFM Investors was established more than 25 years ago by a group of Australian superannuation funds to protect and grow the long-term retirement savings of their members.

To achieve this we think in terms of decades, not years.

Committed to delivering strong returns over the long term, we focus on sustainable investments that generate social and economic benefits for the wider community, including essential infrastructure assets, such as toll roads, ports and airports.

As at 30 June 2021 we invested on behalf of 555 like-minded institutions worldwide. The A$172 billion entrusted to us by these investors incorporates the retirement savings of more than 30 million working people.

To find out more visit ifminvestors.com

ART_IFM381

DEBT INVESTMENTS | INFRASTRUCTURE | LISTED EQUITIES | PRIVATE EQUITY Past performance is no indicator of future performance. This information has been prepared without taking into account the investment objectives, financial situation or needs of any particular person or entity. This material does not constitute an offer, invitation, solicitation or recommendation in relation to the subscription, purchase or sale of securities in any jurisdiction and neither this material, nor anything in it, will form the basis of any contract or commitment. IFM Investors Pty Ltd recommends that before making any investment decision, each prospective investor should consider whether any investments are appropriate in light of their particular circumstances and refer to the appropriate information memorandum for further information. IFM Investors Pty Ltd ABN 67 107 247 727, AFS Licence No. 284404, CRD No. 162754, SEC File No. 801-78649.

IFM-20SEPTEMBER2020-1842721

Panel discussion – ESG as an investment thematic

Panel discussion ESG as an investment thematic Panellists: ► Damian Graham, Chief Investment Officer, Aware Super ► Michael Hanna, Head of Infrastructure – Australia, IFM Investors ► Matina Papathanasiou, Founding Partner, QIC Global Infrastructure

Moderator: ► Janice Lee, Partner, Integrated Infrastructure, PwC

Key points: •

•

•

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While there are clear risks involved with ESG investments, there is recognition of the enormous growth potential over a long horizon, especially given the scale of investment that is required to decarbonise the global economy.

Investors are broadening their definitions of what social infrastructure entails, with growing opportunities for private investment in areas such as health and social infrastructure, and social and affordable housing.

ESG credentials and targets provide a mandate and social licence to operate, and are increasingly critical to the long-term earnings profile of an asset; however, targets need to be accompanied by a practical plan and framework for measuring progress.

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Panel discussion – ESG as an investment thematic

Janice Lee (JL): The 2021 Australian Infrastructure Investor Report revealed that 93 per cent of respondents felt that environmental, social and governance (ESG) investments had become a really pressing issue in the last two years, and everyone felt it was going to become more important over the next three years. Panel, I’m keen to hear your perspectives.

Why has ESG become such an essential focus for infrastructure investors? Damian, I will go to you first.

Damian Graham (DG): From our perspective, ESG is a very material financial risk, so we need to manage that risk well. It’s interesting to me that it’s becoming more of a factor. For a long time, we’ve thought that managing ESG risk well is important to making sure that we can create longterm sustainable returns for our members. So, ESG risk can impact revenues, and certainly the positioning of the business. It’s a mandate to operate; it’s a social licence to operate. All those factors are so important to the long-term earnings profile of an asset or a business – that’s why we care about it. It’s great to see the market becoming more focused on it, because we think that will lead to better returns for members in the long term.

JL: Matina, what’s your view?

Matina Papathanasiou (MP): I think it has become a very important issue. We all recognise that climate change is an enormous issue. The latest Intergovernmental Panel on Climate Change (IPCC) report highlights the importance of why ESG is a key objective. The report was prepared under a rigorous process: 234 scientists from 66 countries, using over 14,000 scientific papers and approved by 195 governments.

The conclusions of that report, which we need to take very seriously, are that it’s unequivocal that humans have warmed the planet, causing widespread and rapid changes to oceans, ice and land surfaces. Secondly, a critical conclusion is that it’s only possible to [restrict warming] to between 1.5 and two degrees Celsius to avoid global warming if we have massive and immediate cuts in greenhouse gas emissions. We really do need to think that through. We only have 10 to 15 years left of emitting at current levels until we exhaust our carbon budget. This is the decade that we actually need critical action, which includes energy transition. I think everyone realises the importance of climate change, and why these considerations need to be built into plans.

Yallourne Power Station, Victoria

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Panel discussion – ESG as an investment thematic

The second area, which I’m also passionate about, is the increasing requirement around social equity, particularly through gender. I think the infrastructure industry needs to play a key role in creating equality, and we need to attract more women into the sector. It’s basically an expectation that we have a more equal society.

JL: Thank you. Michael, what do you think is driving the change?

Michael Hanna (MH): I echo Damian’s and Matina’s observations, but I think for a lot of businesses, and as John Pickhaver mentioned before, over half of the ASX100 companies now have zero emissions targets – I think it’s 40 per cent in the US listed market. I think each of us on the panel today has net-zero targets. At the same time as we announced our net-zero commitment last year, we were one of the founding partners for a group called the Net Zero Asset Managers initiative. Just to indicate the momentum around this thematic, when we began last year there were 30 members and $9 trillion under management. In the space of 10 months, that’s grown to 128 members – a fourfold increase – and the money under management has gone from $9 trillion to $43 trillion. It just shows you the significant momentum around that particular thematic. And what’s driving that? It’s the realisation that climate change is no longer just something scientists talk about – it is real, and it’s hitting our investments’ bottom line directly.

For example, we have to place a significant amount of insurance just in the Sydney area for bushfire risk. We’ve really struggled to get that placed this year, and we are looking at a premium increase of 100 per cent or more, not just for that type of risk, but also for more general business risks. There’s absolutely a realisation that it’s real, it’s happening, and it’s hitting the bottom line. While we all believe that we’re altruistic and we’re committed to a bigger goal around sustainability, for very selfish reasons, managers have taken action because it’s a huge risk financially, which has to be addressed.

JL: It feels like such a significant inflection point in the way funds are viewing the race to net zero. I wonder if any of you want to elaborate on what that transition really looks like – navigating that across a portfolio of assets, particularly where there may be existing assets within that portfolio that have ESG issues?

DG: We put in place a transition plan about five years ago now. We refreshed that last year to set some targets, and to set some activities that we felt were going to help us to transition to a lower-carbon future. The decarbonisation plan, for us, is to reduce our carbon footprint by about half by the end of the decade, and to get to net zero by 2050, if not before. The challenge I’ve had is that I feel like it’s a long way away, but clearly we need to be doing things right now. We’ve thought about what we can do in the shorter term. We put in place a

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limate change is no C longer just something scientists talk about – it is real, and it’s hitting our investments’ bottom line directly

goal to reduce our listed equity portfolio by at least 30 per cent in three years. Pleasingly, in the first 12 months, we’ve reduced that by nearly 45 per cent. But the harder part, and I think it’s very relevant to what we talk about today, is that the real assets, the infrastructure, the property, the other agricultural assets, are much more additive with regard to reducing the carbon footprint for a portfolio. That’s, we think, where the harder work will be required.

So, we’ve started this year just to benchmark our physical portfolio, which I know others might have done in the past. It’s something that we’ve just started in the last few months, to really be able to get that sense of what our physical portfolio looks like, and then start setting some strong targets to reduce that in the next few years. We also think engagement with listed businesses and other companies is critical to understanding their planning. Finally, there’s the need to advocate for change – that’s also a critical part of our plan. It’s multifaceted, but it’s quite hard when you’ve got the 10,000-odd assets that we hold.

MH: As Damian mentioned there, it is difficult – just measuring is challenging enough. We’ve got 50-odd assets around the world, and we’ve actually been measuring our emissions footprint since 2017. With the significant proliferation of net-zero commitments by managers and companies over the last 12 months, it’s an easy commitment to make, but it’s much, much harder to actually set a plan in place. Just last week, we announced a 40 per cent reduction in emissions target across all of our global infrastructure assets by 2030. So, just on Damian’s point there, 2050 is a long way off. Setting an interim target is really important, and, equally, so is setting a target from a bottom-up basis. We are absolutely confident that we can hit 40 per cent. It would be great to do more. But based on technology as we understand it today, and working with each of the assets, we’re confident that we can deliver that on average across the entire portfolio over the next nine years. We have a dedicated team now working on that. For each of the asset teams across our offices globally, I’d say 20 per cent of their time and effort will be going into this over the next decade to deliver it. It’s a huge amount of work, and it’s challenging. But unless you measure and put plans in place, you’ll never achieve it.

Panel discussion – ESG as an investment thematic

MP: We’ve been through the same process – and we’ve got 21 assets, and that’s been challenging enough. So I can’t imagine Damian’s task with his large portfolio. It’s not just setting the target, it’s developing a real plan and a pathway, and that’s what we’ve been working with our assets on. As I outlined earlier with the IPCC report, we don’t really have until 2050 – we have to try and do it as soon as we can in a way that doesn’t obviously detract from value. We do need to find a pathway as soon as we can to implement those plans, and that’s what we’re doing. I guess the other thing we’re doing in our portfolio is making investments in companies that are positive towards the energy transition. In the last 12 months, we’ve made three such investments – one of those being power through the acquisition of Tilt Renewables, in which Damian’s group (Aware Super) is one of the investors.

That is now Australia’s largest renewables platform, which we are very much looking forward to continuing to grow.

JL: Matina, my next question is on the ‘S’ component of ESG. The 2021 Australian Infrastructure Investment Report also identified social infrastructure as the most attractive asset class, and governments are prioritising investments in this area off the back of the pandemic. Is that something QIC is exploring, and do you see a growing role for private investment in social infrastructure assets?

MP: Once again, because we’re talking about ESG, it’s really important that infrastructure is provided equitably across urban, rural and regional areas, and it’s got to improve quality of life. With COVID, you can see just how important that is. The definition of social infrastructure has broadened and changed more recently. Traditionally, it’s been very much Availability Public Private Partnerships (PPPs), but it has expanded into areas such as health care, and social and affordable housing.

They do have slightly different investment characteristics than traditional PPP models.

At QIC, we have focused on the health sector; we acquired Nexus Hospitals, a day- and short-stay hospital provider, in 2019. We’re hearing a lot about health care, with focus on the sector due to the current health crisis we are going through. It’s an area that’s always been supported by the mega trends, aging populations, and, unfortunately, increasing chronic illness. It’s part of the decentralisation theme and getting health services closer to individuals’ locations. So, that’s really what we’ve been focused on, the healthcare sector, and it’s evolving in different ways. For example, Nexus Hospitals has recently announced a Memorandum of Understanding with the South Australian Government where it’s building a greenfield, short-stay hospital facility for public-patient elective surgery, and it’s a 10-year take-

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Panel discussion – ESG as an investment thematic

Public housing towers, Waterloo, New South Wales. Image courtesy of I J Bar

or-pay contract. So, I think with social infrastructure, we need to think about it more creatively and work with government to provide more of it, and improve living standards.

The other area that I think we’re all starting to realise the importance of is social and affordable housing. That also has some interesting investment models that are evolving. It’s got long-term demand drivers, as we’ve heard earlier today. It’s essential for communities and has some PPP-like structures, and government funding support is available in areas such as land tax relief. They’re the two areas that we are looking at presently.

JL: Damian, Aware Super is doing a lot in that space around affordable housing as part of its sustainable investment framework. Tell us a bit about this initiative and how the ESG frameworks are shaping Aware Super’s approach to other social infrastructure investments.

DG: I might give a bit of a potted history, because it may be useful. We’ve looked at the issue of social and affordable housing over the last six or seven years, probably longer, and we formed the view that we didn’t think that social housing was an area that we could invest in. We just didn’t feel like it could create the type of returns that would be justified for our members, and that’s always a financial requirement. Obviously, we’re investing for our members’ best financial interests, so it always comes back down to the risk–return.

We did form the view that the ‘key worker’ affordable housing sector was one where we felt like we could create an appropriate risk–return. We’ve invested just a touch under three-quarters of a billion into that sector in the last two years or so, and that’s been really positive. It’s generated a strong short-term return for us. The thesis has also played out as we’re expecting it to so far.

Obviously, there’s a long way to go, but the model we are trying to use is typically a focus on key worker, affordable housing. It can be a blend of both at-market and also affordable, tending to be built-to-rent. In general terms, we’ll look to bring some of that stock to market over the longer term. That can drive and support some of the returns that are required. Our key focus is to try to ensure that we’re benefiting the housing stock. We think that’s a key issue around housing affordability. And so, we’re starting to plan our part there across mainly the eastern seaboard, but we’ve also undertaken some developments in Western Australia. So, it’s really a great opportunity for us. We think it’s a fantastic, virtuous circle where we can create that positive impact on the housing stock. But again, it’s always about the risk–return of that, and that’s the underlier of all of our ESG focus. It’s about trying to create the right, lower-risk outcome, or manage the ESG risk in the future earnings.

JL: One of the factors that has come up a lot, certainly in the 2021 Australian Infrastructure Investment Report, but also more widely in public discussion, is the interplay between policy

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Panel discussion – ESG as an investment thematic

“

I think with social infrastructure, we need to think about it more creatively and work with government to provide more of it, and improve living standards

and regulatory stability, and investment confidence around ESG. I wonder if the panel could elaborate on where they’re seeing that play out. It looks as though investors are getting on with the job. We can see that, at a state and territory level, there is certainly a consensus on the timing for net zero. What’s missing from that picture, and what else is needed for policy certainty to unlock that class of ESG investments?

MH: From an energy perspective, you’re right. Businesses have been getting on with it for some time. I was just looking back on our records, and we were making significant solar investments back in 2010. Again, I’d like to point to our altruistic DNA, but it was purely financial. It made perfect sense. This was in Alice Springs, so the technology was not fantastic back then. But, given the solar budget that you’ve got there in central Australia, it made absolute sense, and the economics worked so we could hit the bottom line straight away and get payback within one or two years by investing in solar. There’s no government policy required to do that, or helpful conditions, it was just basic economics and a bottom-line imperative.

Northern Territory airports, including Darwin, Alice Springs and Tennant Creek, are 100 per cent renewable. We’ve been rolling out some of the Southern Hemisphere’s largest rooftop solar, along with partners QIC, alongside Brisbane Airport, Port of Brisbane, and other key assets. We’re working on an enhancement of that through a power purchase agreement (PPA) with QIC and other partners as we speak. For us, it just makes perfect business sense – it’s good business to do that.

In terms of standalone investments, we were one of the early movers in renewables back in the early 2000s, with a business called Pacific Hydro. It was the very Jekyll-and-Hyde style of renewable energy policy that we saw through last decade that was a key factor in us divesting out of that business, which was a bit contrarian given what our peers have been doing. I think, in hindsight, that’s still been the right decision. Adrian Dwyer made the point earlier: capital’s a coward that will go where it’s best treated, and we find other geographies around the world where investing in standalone renewable investments has been a better prospect for us.

We talked about climate change earlier; it’s seen as a risk, absolutely, but it’s also a huge opportunity for us. I think the estimate is at least A$40 trillion dollars is required to decarbonise the world and hit net zero by 2050. My biggest concern for Australia is that policy and regulatory frameworks can’t move quickly enough to accommodate the change that’s coming. It’s happening already, and I’ll give you a really good example. We’re invested in a utility called Ausgrid, which provides power to everyone at the conference here this morning in Sydney, and on the Central Coast and Hunter. But we’ve been trialling three really successful community battery projects. We’re using Ausgrid’s on-street infrastructure, and repurposing it to accommodate battery storage and to avoid individual households having to outlay five grand or more for their own wall battery installations.

We’ve been oversubscribed multiple times to get into those community batteries. So, they are hugely successful, [and] very popular. The politicians love them, but the regulator has been really difficult to work with. We’ve got green lights for the trials, but the regulatory framework doesn’t accommodate this type of more innovative play by a utility such as Ausgrid. For every community battery project we’ve got, we have another four or five ideas where we can utilise infrastructure, and it makes sense for a utility to play in this space. But we have a framework that’s very rigid, and it takes months – if not years – to change. My biggest concern is that the government, both state and federal, can’t move quickly enough to accommodate the more innovative approaches that are being taken, to take advantage of investment opportunities around climate change.

DG: I think that’s a point well made, Michael. We’ve invested in some community battery storage in the United States because we’ve found there to be a deeper opportunity set in that space.

And again, it goes to the point made earlier about trying to find good opportunities to leverage the decarbonisation, not just reducing risk, but certainly looking for new investments that can really leverage that theme. That’s important.

MP: I would agree. Just to highlight for regulatory reform, we talk a lot about the energy sector, but we’ve also got to electrify the transport sector. That’s a huge area that I think we’re just starting the journey on. About 17 per cent of Australia’s emissions come from transport, and what I find really interesting is that 10 per cent of all emissions come from new vehicles (light vehicles). We actually do need to have policies, and we don’t have enough policies in Australia that support electric vehicle uptake. At the moment, it’s only 0.12 per cent of our fleet. Our forecast for Australia for 2030 is that 50 per cent of new vehicles will be electric vehicles, but even then it’s only going to be 10 per cent of the total fleet. I think it’s a relatively lower-cost emission reduction option, and we need to work with governments to find those and start to implement them.

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Another area – and I support what Michael was saying – is that we’ve got a big renewable energy platform and we want to continue to grow it, as do many others who want to invest in the space. There’s really a lack of capacity, transmission, and distribution networks in terms of how the state of the grid is regulated. We have a physical and regulatory structure that is last century, and we need to build out a modern grid and modernise it, and allow for renewable energy in regional areas and establish those connections.

waste-to-energy or major transport projects, or corrections

The last point I wanted to make was also around labour transition. This is a big issue. People are concerned that as we move from fossil fuels to renewable energy, jobs will be lost. We need to get out there in the community and have people understand that many new jobs will be created as we start to move towards renewables and other industry.

There’s going to be enormous investment and job creation.

The Clean Energy Council has reported that as of 2020, Australia employs 25,000 people in clean energy jobs. So, we need to have governments work with us to get that out there into the community, because this energy transition will create jobs. It’s not just a loss of jobs. We’re certainly keen to employ people; we need more people to build and work in these businesses.

local regions. I do think that, clearly, it’s a requirement for

JL: Thank you. Damian, can I touch on social licence and managing that transition? Just on the challenges with getting community and planning support in areas like

What role do you think governments have to play in building the social licence for that infrastructure? Do you think they’re doing enough, and perhaps improving in this respect?

DG: As you note, Janice, it’s a really complex area.

These sometimes tend to be very challenging pieces of infrastructure, and they can have a material impact on the governments to push ahead, push through, and really create the ‘why’ around these projects. They need to support local communities and areas to adopt these pieces of infrastructure as much as they can. I think your question – are they doing enough or are they doing it well? – can become very politicised. These types of complex social infrastructure projects have the risk of becoming quite politicised, so it is difficult. Governments play a key role in that, as well as [in] ensuring that they deliver well. The delivery of projects on time and on budget can also assist with the view that these assets can come to market well, and can drive a really strong social benefit. That’s why they’re being done – because there is a social benefit being delivered.

JL: Thank you, Damian. Well, that’s all we have time for.

Thank you to our panel for the insights today.

Damian Graham – Chief Investment Officer, Aware Super

Janice Lee – Partner, Integrated Infrastructure, PwC

Damian Graham is responsible for Aware Super’s investment strategy and a team of investment specialists who manage the investment portfolios across all asset classes. Graham brings more than 25 years’ experience in managing equity portfolios and investment teams. Between 2012 and 2016, Graham was Chief Investment Officer at Aware Financial Services Australia Limited.

He previously headed up Private Portfolio Management for the Macquarie Group, where he was promoted to run that business following a successful tenure as Head of Investment within the same division. Graham has also held senior positions within Norwich Investment Management and J.P. Morgan Investment Management.

Janice Lee is currently a Partner in the Integrated Infrastructure team at PwC. Prior to her time at PwC, Lee was Head of Government Practice at L.E.K Consulting, and was also a Director at EY in the Economics, Policy and Regulation practice.

Michael Hanna – Head of Infrastructure – Australia, IFM Investors Michael Hanna is responsible for managing the IFM Australian Infrastructure Fund, and is also a member of the Infrastructure Investment SubCommittee. Prior to joining IFM Investors in 2006, Hanna held senior executive positions at the Victorian Department of Treasury and Finance (public-private infrastructure group) and at global consulting engineers Arup, both in the United Kingdom and in Australia. Hanna represents IFM Investors as a director on the board of Ausgrid, and previously represented IFM Investors as a director on the boards of NSW Ports (Port Botany and Port Kembla), Pacific Hydro (renewable energy business in Australia and South America), Eastern Distributor (M1 toll road in New South Wales), Interlink Roads (M5 toll road in New South Wales), Ecogen Energy (power generation business in Victoria) and Wyuna Water (public-private partnership in New South Wales).

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infrastructure – some of these are really complex projects.

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Lee has previously worked as a policy adviser across several high-profile government portfolios, including with the Office of the Australian Minister for Infrastructure and Regional Development, the Office of the Australian Treasurer, and the NSW Department of Premier and Cabinet.

Lee holds a Bachelor of Commerce/Arts from the University of New South Wales.

Matina Papathanasiou – Founding Partner, QIC Global Infrastructure As Co-founder of QIC Global Infrastructure, Matina Papathanasiou is a wellrespected industry figure with more than 30 years’ experience in investing and managing infrastructure assets globally, and in institutional funds management.

She has oversight of the investment and asset management decisions in QIC’s Global Infrastructure business, which manages over A$21 billion in assets. Her roles have provided her with 20 years’ experience as a company director, and in operational, major projects, mergers and acquisitions, strategy, risk, IT and HSE. She has been a director on a number of boards of infrastructure companies over the past 20 years, including a current board position at Port of Melbourne Hobart International Airport and PowAR. She has also been a director of a number of other infrastructure companies, including NorthWestern Roads Group, Brisbane Airport Corporation, EPIC Energy, Powering Australian Renewables Fund, M7 Tollroad, TransGrid, Epic Energy (DBNGP and East Coast Pipelines), Pacific Solar and India Infrastructure Holdings.

Fast track your next major project.

The Territory welcomes investment from those with the ambition and drive to make it happen. Our Territory welcome means you have access to decision makers and will feel connected and valued in ways you can’t imagine anywhere else.

The Territory’s Investment Commissioner, Major Projects Commissioner and Infrastructure Commissioner can help you realise your investment opportunity in the Territory, navigate approvals and create Territory jobs.

Photo left to right

Jason Schoolmeester, Major Projects Commissioner E: Jason.Schoolmeester@nt.gov.au T: 0457 245 091 Louise McCormick, Infrastructure Commissioner E: Louise.McCormick@nt.gov.au T: 0428 758 220 Andrew Cowan, Investment Commissioner E: Andrew.Cowan@nt.gov.au T: 0412 612 086

business.nt.gov.au

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New era for infrastructure planning in the Northern Territory Infrastructure NT Commission to support greater private-sector investment.

Louise McCormick, Acting Commissioner of Infrastructure NT, says the new Infrastructure NT Commission aims to assist with job creation and helping the Northern Territory become a $40-billion economy by 2030.

McCormick says it will give the Territory a stronger voice in national infrastructure planning.

‘Infrastructure NT will represent the Territory in national infrastructure discussions,’ she says. ‘We’ll work with Infrastructure Australia to develop nationally significant priority projects and ensure the Northern Territory has a seat at the table to bid for infrastructure projects.’

Infrastructure NT will develop a new Territory Infrastructure Strategy incorporating annual planning, and will oversee ‘shovel ready’ government projects that have had appropriate community engagement and regional liaison.

Another priority is reviewing and defining processes with the Northern Territory Government to assess

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and prioritise major public-funding infrastructure projects.

‘For the first time, the Northern Territory Government has an infrastructure body to coordinate and centralise infrastructure planning, and build on previous work,’ says McCormick. ‘This will accelerate development and delivery of Northern Territory infrastructure.

‘Infrastructure NT will effectively be the “shopfront” for the private sector to come [to] with ideas for new and existing infrastructure. We want to work more closely with the private sector and make it easier for organisations to collaborate with government.’

Infrastructure NT will also be a community voice, says McCormick.

‘We’ll help raise awareness and build support for infrastructure projects that can create sustainable social and economic value for communities across the Territory for years to come.’

Infrastructure NT has had a strong industry response. Infrastructure Australia CEO Romilly Madew in April described the establishment of

Louise McCormick

Infrastructure NT and an Infrastructure Commissioner as an ‘exciting milestone for the Northern Territory.’

Infrastructure to accelerate growth

McCormick says the formation of Infrastructure NT is timely. ‘There’s so much opportunity in the Northern Territory. We’re potentially at the start of a new wave of major projects.’

Established in April 2021, Infrastructure NT is one part of the catalyst to ‘step change’ the Territory economy and offset the economic impacts of COVID-19, through creating more jobs, attracting private investment, supporting current and emerging industries, building on the Territory’s competitive strengths, and unlocking regional potential.

To achieve a $40-billion economy by 2023, the Northern Territory will need a sustained average annual growth rate of 3.9 per cent – the government’s previous estimate for annual growth after COVID-19 was 1.5 per cent.

A more than doubling of the Northern Territory’s long-term growth

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rate requires a significant increase in private-sector investment to ‘supercharge’ the economy.

For this to happen, the Northern Territory needs an investor-centric approach, an investment-delivery system to coordinate government activity, investment and major projects commissions, and an NT Infrastructure Commission.

The NT Government in April appointed McCormick as Acting Infrastructure Commissioner. In July, the government appointed Jason Schoolmeester as Major Projects Commissioner and Andrew Cowan as the Investment Commissioner.

Together, the three commissioners will advise on major projects that provide the highest return on public investment in the Northern Territory.

A key goal, says McCormick, is improving the long-term sustainability of infrastructure investment in the Northern Territory. ‘We want to smooth the infrastructure cycle and move away from previous volatility in economic activity after major project delivery.’

Strong project pipeline

McCormick says there are three major Northen Territory infrastructure projects at varying stages.

The first is the Beetaloo Sub-basin Project, about 500 kilometres south-east of Darwin. The Commonwealth and Northern Territory governments last year engaged Deloitte to identify the steps needed to develop the sub-basin’s vast gas resources.

Deloitte’s November 2020 report says the development of the Beetaloo Sub-basin provides an important source of gas supply for a Northern Territory manufacturing hub and east coast gas market, which is facing a shortfall from 2024. ‘Initial results are promising… with a number of stages to progress through prior to commercial or investment decisions being taken,’ wrote Deloitte.

The second is the Middle Arm Sustainable Development Precinct in Darwin, earmarked for advanced manufacturing. The 1500-hectare precinct has lots that

could accommodate low-emissions manufacturing and a related ecosystem.

‘Middle Arm is an example of how private investment in infrastructure can develop industries of the future in the Northern Territory,’ says McCormick.

‘An environmentally sustainable manufacturing precinct could create many jobs during the construction and manufacturing phases.’

Infrastructure Australia Chief of Infrastructure Assessment David Tucker says it was an opportunity to upscale the value of mining and manufacturing, and diversify the gas industry, which should be expedited.

‘The Middle Arm Sustainable Development Precinct is an area that can continue to grow over time and be developed in a staged way as businesses come online,’ he says.

‘The scale is in the billions of dollars, and the value depends on the timing, the release of investment, and how quickly this occurs. Infrastructure Australia listed this as a near-term opportunity, which is saying we should get on with it straight away.’

The Adelaide River Off-Stream Water Storage (AROWS) project is assessing the potential of an offstream dam on the river. The Federal Government and National Water Infrastructure Development Fund funded a business case that will assess AROWS’s potential to provide secure, reliable and cost-effective

water to meet future residential and industrial needs.

‘This infrastructure could potentially augment Darwin’s water supply as its population grows, and provide opportunities in agriculture, manufacturing and other industries,’ says McCormick. ‘There are substantial agribusiness opportunities in the Northern Territory in areas such as cotton.’

McCormick says the three projects are potentially worth more than $4.6 billion of investment. ‘There’s a long way to go, but these and other projects can support faster economic growth in the Northern Territory and expand our industry base.’

McCormick is passionate about infrastructure’s potential in the Northern Territory. She is a former Executive Director of Transport Infrastructure Planning in the Department of Transport, Northern Territory; and General Manager, Transport and Civil Services, in the Department of Infrastructure, Planning and Logistics, Northern Territory.

She believes Infrastructure NT can make lasting differences in the community. ‘The Northern Territory is strategically located, and has vast mineral resources and a growing population. We’ll need more infrastructure and private-sector investment – and a stronger voice in national infrastructure planning – to capitalise on that opportunity for all Territorians.’ ♦

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Keynote address – John Pickhaver

Keynote address John Pickhaver, Macquarie Capital, Australia and New Zealand Economic outlook and the opportunities for Infrastructure

Key points: • •

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Despite the impact of the pandemic on global economies, the recovery is already underway.

Stretched government balance sheets have provided an opportunity for record levels of unallocated private capital to support the economic recovery from COVID-19.

Investment activity will be driven by the digital transformation of infrastructure assets, corporate and government efforts to decarbonise and a focus on sovereign resilience.

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I would like to take you on a journey through what the data is telling us about our economy and its recovery from the pandemic. Firstly, we will take a global perspective then deep dive into the Australian market and finally we will look at the opportunities that will drive investment activity in the infrastructure sector.

From a global standpoint, in terms of real gross domestic product (GDP) there was a sharp drop-off courtesy of COVID-19 in 2020 before a recovery during 2021. Compared to the preCOVID trend, there has been a very sharp recovery (Figure 1), in fact, it is the strongest in history – much stronger than the recovery from the global financial crisis (GFC).

Looking forward, our forecasts show very strong GDP growth before returning to more normalised levels as we travel

Keynote address – John Pickhaver

forward through to the first half of next year. We are observing some of the leading indicators of economic growth, including the global Purchasing Managers’ Index (PMI) having had a big spike in 2021 which is now starting to tail off. The PMI is a leading forward indicator that is showing us that growth is slowing and returning to normal levels.

The biggest risk to our recovery remains COVID-19.

Thankfully, the vaccine program has exceeded expectations in terms of both the development of vaccines, and then the rollout of doses particularly in Australia. The vaccine rollout is a massive logistical challenge that is unfolding across the world. Interestingly, it’s happening unevenly both by country and by income distribution. One of the key risks to the global economy recovering to normal levels is the uneven distribution of vaccines.

Pleasingly, as vaccines roll out, it seems that they are working well. We can see that the rate of fatalities and hospitalisations has significantly reduced during the Delta wave, compared to the big wave last year. In the middle of last year in the United Kingdom, the seven-day average of COVID-19 cases, and the number of fatalities and hospitalisations, followed very similar

trends. What we’re seeing now, through August and September in the United Kingdom is that while there is a surge in cases, the hospitalisation and fatality rate remains quite low, indicating that the vaccines are doing their job.

Turning to the major economies around the world – the United States recovery is well advanced. Business investment is strong despite a surge of Delta cases. Another leading indicator of the recovery of economic activity in the United States is the shipments of capital goods, which began to rise coming into 2021 and is up again in this quarter.

US real GDP did tail off in the last quarter of 2020, but there has been a significantly faster recovery from the initial shock than what was observed in the GFC. In our forecast, we predict US real GDP to return to the pre-COVID trend in 12 quarters, or three years, after the initial impact of COVID. Turning to Europe, there was a bigger initial impact on the economy in terms of a reduction in GDP, followed by a sharp recovery before a bit of a hiccup a couple of months ago, which is now beginning to trend up again. As everyone will recall, it took Europe longer to recover from the GFC than other economies – in particular Australia and the United Kingdom.

Figure 1

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Figure 2

One interesting thing we’re seeing in Europe is that the rates of vaccination in many of the European countries have gained pace, are well-advanced and have overtaken the United States. Whilst the United States was out of the blocks early its vaccination uptake is now tailing off at the low to mid-50 per cent vaccination rate. This is a risk factor as we look at those economies going forward, particularly the United States.

the actual number of hours worked in those jobs is significantly

Turning to China – a major trading partner of ours and a big influence on our economy. China had a recent Delta outbreak in July and August, resulting in a big drop in the Purchasing Managers’ Index as Chinese authorities restricted economic activity. Consequently, government responses to increases in case numbers remain a threat to Chinese growth and, by extension, Australian exports.

and restrictions were eased, we saw that our economy

Lastly, looking at Australia, we had a lower level of COVID-19 impact in the Australian economy in the first wave last year, and we saw a classic V-shaped recovery. Employment dropped off, as did GDP, but it recovered very quickly to pre-pandemic trends; however, we are seeing that recovery significantly impacted in the current Delta wave.

at that level of vaccination and we open the economy, even

In terms of unemployment, Australia has performed relatively well with a 4.5 per cent unemployment rate announced for the month of August; however, in our view, the low rate is masking the realities underlying our economy as the participation rate is down quite significantly. The actual number of jobs in the economy and

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reduced. So, whilst the headline figure for unemployment is positive, the other measures of actual productivity and wageearning capacity in our economy are quite low.

We’re expecting GDP to fall heavily in the third quarter as a result of the current lockdowns, but we expect it to rebound in the fourth quarter upon reopening. Last year, when lockdowns bounced back quite quickly, and we expect that to happen again, hopefully in a more sustainable way.

We’re optimistic here, in terms of the efficacy of the vaccine, that we will have a successful program similar to that in the Northern Hemisphere, with governments discussing 70 and 80 per cent as targets, similar to the UK experience. If we are if case numbers rise on the back of that, the fatality and the hospitalisation rates should remain low as we have witnessed in the United Kingdom, Canada and the current wave in New South Wales. We are positive and optimistic that those vaccine targets should allow economies to reopen. Of course, that vaccine target rate is the topic of our daily and hourly news coming through our feeds. New South Wales should hit their targets first, with Victoria and other states not too far behind.

We can already see that the vaccine is working in terms of lower levels of fatalities and hospitalisation rates in Australia.

Keynote address – John Pickhaver

Figure 3

When we do recover, what do we expect to drive our economy? Where should we see growth returning? Traditionally, we’ve talked about population growth as a big driver for infrastructure investment and Australia’s high level of population growth relative to the averages provided by the Organisation for Economic Co-operation and Development (OECD). Australia typically runs well above the OECD average, in the range of 1.5–2 per cent. Recently, population growth has fallen off a cliff with Australia’s borders being shut. We’ve had our natural population growth, but no immigration supercharging total population growth, which traditionally underpins the economic and social infrastructure requirements of our cities.

Our expectation is that that population growth will return.

We think it will bounce back as the natural drivers of population growth, the demand for labour, skilled migration and education as an export return – not immediately, but overtime. As a result, we expect population growth will return and continue to be a driver of economic activity and therefore infrastructure demand. We’re starting to see governments look to step up their investment in infrastructure. Across the states and the Commonwealth, there is a large step up in the aggregate numbers and forecast budgets for investment in infrastructure, with a significant amount of it directed toward rail.

What are the implications of that higher spend? Looking at government balance sheets, we are observing the combination

of infrastructure and other spending to support economic growth.

The stimulus that governments injected into the economy over the past 18 months, such as JobKeeper in Australia, has resulted in record levels of government debt globally.

In terms of government debt, historically, significant world events, such as World War I and World War II, have caused big increases in government debt. Post the GFC, however, government debt increased significantly and never really came down. The ‘Great Lockdown’, as we’ve called the pandemic, has seen government debt step up again (Figure 2). In particular, debt in emerging markets has increased meaning that government balance sheets across the board will be stretched. Governments have borrowed a lot already and are continuing to do so, which will impact their capacity to spend.

Interestingly, it’s not actually costing governments all that much to service that debt at present. With historically low interest rates, the cost of the interest expense is actually quite low, and so the danger is that governments get used to low-interest bills, alongside higher levels of debt.

All of that sounds a little bit negative, which is not normally my style. So, I’d like to step back out of the daily noise of COVID-19 and have a look at longer-term trend lines. We’ve gone all the way, back to 1871 (Figure 3) to look at US economic growth in terms of real GDP. Over the long term, it’s observable that the world will continue to grow and bounce back to its long-

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Keynote address – John Pickhaver

Figure 4

term trend of growth. We also expect that to happen coming out of COVID-19. While in some short-term periods you can see pockets of poor growth, when you step back and think about it over the very long term, we’re optimistic that things will recover.

We’re seeing a lot of positive opportunities within that recovery. One of those is that with government balance sheets stretched, the requirement for private capital and the opportunity for private investment in our sector is substantial. There is capacity and an appetite to invest in the private capital sphere.

We can see in three categories (Figure 4) – private equity, real estate and infrastructure funds – that have large amounts of unallocated capital that has been raised, and is ready to be deployed and invested, but has yet to be spent. We’re now starting to see a lot of that capacity beginning to be deployed.

The mergers and acquisitions (M&A) market has seen a record level of activity across the infrastructure sector this year. Some examples include the Future Fund, Commonwealth Superannuation Corporation and Sunsuper acquiring 49 per cent of the Telstra Towers (Amplitel Towers) business for almost $3 billion. We’ve also seen the IFM-led Sydney Aviation Alliance consortium, comprising IFM, Global Infrastructure Partners, QSuper and AustralianSuper, propose an acquisition of Sydney Airport for $32 billion (including debt). Finally, we’ve seen Aware Super and Macquarie Infrastructure acquire Vocus at an enterprise value of $4.6 billion.

Recently, we finished the 2021 Australian Securities Exchange (ASX) reporting season, and there’s a great degree of positive sentiment in the listed market. The ASX is continuing to trade at all-time highs with a lot of capital available and positive sentiment from investors. In the Australian market, we’re observing the price response of a lot of companies negatively impacted by COVID – travel, hospitality, leisure and so forth – has been much, much better in terms of a share price uplift, or lack of fall, after announcing downgrades to their forecast

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earnings. This is an indication that investors understand the challenges. They’re saying, ‘I’ve got it, you’ve had a tough time through this period, but we’re very optimistic in supporting you in the recovery, and we see that recovery coming.’ On the flip side, the stocks that have been beneficiaries of COVID-19 – online retail, for example – have actually had a less positive share price response post reporting their results.

Another marker of optimism in our listed market is when you look across companies that have started to be beneficiaries of the recovery; they’ve started increasing distributions again.

The audience will remember that as we initially came through COVID-19, a lot of companies weren’t able to provide dividend or distribution guidance, or even forecast earnings guidance for the years ahead. Companies are starting to be able to do that again, or at least provide a framework for how they’re thinking about their business in the years ahead. Dividends have increased: 49 per cent of companies who reported this year increased their dividend. About 15 per cent still have no dividend coming through, and about 10 per cent reduced their dividend.

Moving on from of reporting season and into AGM season, some of the other key takeaways we’re seeing with investors looking through the COVID-19 cycle and remaining quite optimistic is a strong M&A market. In fact, this year to September there’s been more M&A announced in the Australian market than we’ve seen on record, and we’re only three-quarters of the way through the year. We expect by year end to be north of $350 billion of announced M&A in the Australian market, which will be the highest year on record.

There’s been about $240 billion announced to the end of September, similar to the calendar year just before the GFC and the current high marker.

As we head towards AGM season, historically the focus of investors has been governance and remuneration, whereas the focus of investors this year has significantly heightened on

Keynote address – John Pickhaver

environment, social and governance (ESG) factors. Many of our listed company boards are spending a lot of time with investors on their ESG measures, and, interestingly, lots of investors are wanting a trading update as part of their AGMs, which isn’t the traditional place to provide that.

So what does all of this mean for investment activity in infrastructure, where are we seeing opportunities?

There are three main areas we’re seeing opportunities. Firstly, digitalisation: the digital transformation of our infrastructure assets, and our existing and historical infrastructure assets, and making use of digital technology to improve their maintenance and performance. This is in addition to new digital infrastructure: the infrastructure that supports the new areas of the economy.

The energy transition is the second area, specifically decarbonisation – not just renewable generation, which obviously is a component of the requirements to decarbonise, but decarbonisation more broadly. Finally, a new theme that we’ve been talking about is resilience, particularly in the areas of health, in national manufacturing, in cybersecurity and in defence. That’s an area where we’re currently seeing a lot of opportunity to support future requirements in those sectors.

Turning to the first of those, it is very clear that the world is digitising. The number of internet users was 3.9 billion in 2018, which is expected to increase to 5.9 billion by 2022. Of course, with that increased use and demand for digital and data services, there are supporting infrastructure requirements in terms of poles and wires, data cables, data storage, submarine cables, and fibre optics, that are really stepping up. The required funding gap, specifically in digital infrastructure, is nearly $700 billion as we move towards 2030.

The second theme is decarbonisation. In the context of this year’s COP26 Conference, there is a lot of opportunity to think about the pathways to decarbonisation to support our efforts in addressing climate change across Australia and globally.

We know the global greenhouse gas emissions present in the global economy, and if we continue with our current trajectories and policies, the International Energy Agency is showing a 2.7to 3.1-degree increase in temperature worldwide, which is well above where we want to be at 1.5 degrees. Getting to these lower trajectories requires a lot of capital to be spent, presenting an infrastructure and an energy investment opportunity. The gap of required funding will be up to US$5 trillion each year by the time we get to 2030, and not all of that is on the energy

sector. There are associated costs for general infrastructure across the industrial sector, production, buildings and transport.

Within Australia, corporates are taking advantage of the opportunity to decarbonise. On the ASX, 54 of the ASX 100 companies have set net zero targets in 2021. The challenge then becomes how do those companies achieve those targets, and what are the actions that they might be taking? Carbon offsetting is one pathway, but more fundamentally there needs to be the sponsoring of projects, the purchasing of energy through power purchase agreements from renewable generators, the transformation of industrial processes and construction processes, the source and the components of our materials in the infrastructure sector, and supporting the research and development of green, cleaner inputs into our processes. There is a lot of opportunity in that space from both an industrial and an infrastructure point of view across the Australian economy.

Turning to our last area of investment opportunity within infrastructure, resilience. On the health side, we’re familiar with the efforts to increase the number of ICU beds and available hospital beds in response to the current crisis. In Australia, we currently have 3.8 hospital beds per thousand people, which is below the OECD average of just over 4.5 hospital beds per thousand people, and so there continues to be a need for investment in our health infrastructure. While we’re going to be living with COVID-19 for the foreseeable future, having the sustainable health infrastructure to deal with that remains a critical opportunity.

In terms of housing, the waitlist for social housing has increased significantly, with a 50 per cent increase between 2017 and 2020. Looking at forecast population growth and the stock of housing, there is a real mismatch there in terms of the social housing stock needed to support the level of population growth.

On average in Australia, around three to four per cent of our total housing stock is social housing, whereas the OECD average is seven per cent, so here in Australia we have a lot of work to do to catch up. We have also seen a revolution in online education.

The demand for different ways of delivering education has grown significantly in our regional areas, where we’ve seen significant growth in regional school enrolments, however regional school infrastructure hasn’t kept pace with those enrolments.

In conclusion, what we’re seeing for our economy is a very positive and optimistic path forward, despite the challenges of COVID-19 and the challenging circumstances that we’ve faced within the last two years.

John Pickhaver – Co-head of Macquarie Capital, Australia and New Zealand

and acquisitions, and arranging debt and equity for a variety of transactions.

John Pickhaver is the Co-head of Macquarie Capital for Australia and New Zealand. Pickhaver has 19 years of experience in the finance and infrastructure sectors, both as a civil engineer and in infrastructure finance. While at Macquarie, Pickhaver has advised on corporate and project financings, mergers

capital structure reviews, and to governments in relation to projects, assets and

Pickhaver has also provided strategic financial advice to corporates in relation to financing. Previously, Pickhaver worked for a number of years as a civil engineer in Australia on infrastructure projects, before completing his Doctorate at Oxford University in civil engineering, and subsequently his Master of Applied Finance.

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RBC Capital Markets’ strong foundations in infrastructure advice Top-rated RBC Capital Markets draws on Australian expertise and global resources.

Antony Steinberg, Head of Power, Utilities and Infrastructure at RBC Capital Markets (RBC) in Australia, cannot recall a busier time for the local infrastructure sector.

‘I am not sure we have ever seen this level of deal flow,’ says Steinberg, a Managing Director at RBC. ‘The second half of 2021 will be even busier given the infrastructure and renewables deals currently underway in the market, including toll roads, regulated utilities, ports and towers.’

Steinberg expects the elevated deal flow to continue. ‘In a low-rate environment, pension funds are focused on deploying capital into infrastructure with high EBITDA margins and defensive low-risk stable cash flows, evidenced by the recent Sydney Airport bid and the WestConnex transaction. Also, the energy transition from fossil fuel assets to renewables – a focus for RBC globally – will continue to create deals.’

Steinberg joined RBC in 2019, attracted to the strength of its global infrastructure franchise and the opportunity to refocus and expand the local team. ‘Globally, RBC focuses on sectors where it can differentiate itself.

Infrastructure perfectly fits that criteria and, as a result, is a primary focus.’

RBC’s power, utilities and infrastructure team in Australia has over 20 Sydney-based specialists. They work closely with their global colleagues who this year have completed deals for a number of Australian asset managers, including advising on the sale of the Elizabeth River Crossings toll road and the acquisition of Enwave Energy’s Canadian district energy business.

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RBC advised New Energy Solar on the sale of its Australian solar farms to the Thailand-based Banpu Public Company, sourcing potential buyers globally through RBC’s international networks.

RBC’s ability to form multifaceted teams is an asset, says Steinberg.

‘On buy-side infrastructure mergers and acquisitions (M&A), we can bring in both M&A and infrastructuredebt advisory teams that work closely together.

‘Being part of a full-service global investment bank with access to RBC’s balance sheet and global capital markets capability is helpful when advising clients.’

Antony Steinberg

Philip McLaughlin

High performance

RBC’s infrastructure work has had strong industry recognition. RBC is a top-ranked global financial adviser for infrastructure by deal value.

RBC has advised on over $30 billion of successful privatisation bids. Steinberg, who led the sellside financial advisory team for the 2018 $9.3-billion, 51 per cent sale of WestConnex, has just advised the New South Wales Government on the $11.1 billion sale of its 49 per cent retained stake in WestConnex.

RBC is also a leading debt adviser, and major underwriter and lender in Australia, having structured and arranged over $35 billion of debt finance over the past three years for its infrastructure clients.

Philip McLaughlin, a Managing Director at RBC and Head of Capital Structuring Advisory in Australia, says,

‘We’ve been able to help infrastructure clients raise debt to fund M&A, and then help them refinance debt across bank and capital markets, including raising debt with sustainability-linked terms.

We work closely with clients across the infrastructure sector to help them optimise shareholder value through the creation of capital structures that are sustainable in the long term.’

Royal Bank of Canada is one of the world’s largest banks,1 with $1.6 trillion in assets and A2 and A credit ratings from Moody’s, and Standard & Poor’s.2 RBC Capital Markets is the global investment banking division of RBC. ♦ 1

Based on market capitalisation at 20 May, 2021.

2

Source: RBC 2020 Annual Report. Subject to Bail-in regime.

An Innovative, Trusted Partner The most significant corporations, institutional investors, asset managers, private equity firms, and governments around the globe recognize RBC Capital Markets as an innovative, trusted partner with an in-depth expertise in capital markets, banking, and finance.

Find out more at rbccm.com/australia RBC Capital Markets is the global brand name for the capital markets business of Royal Bank of Canada and its affiliates, including RBC Capital Markets, LLC (member FINRA, NYSE and SIPC); RBC Dominion Securities Inc. (member IIROC and CIPF) and RBC Europe Limited (authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority). ® Registered trademark of Royal Bank of Canada. Used under license. © Copyright 2021. All rights reserved. Distributed in Australia by Royal Bank of Canada (ARBN 076 940 880, AFSL 246521).

Keynote address – Roch Cheroux

Keynote address Roch Cheroux, Chief Executive Officer, Sydney Water Key points: •

•

•

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The key challenges facing the urban water sector today include aging infrastructure, population growth, increased urbanisation, pressure on waterway health, water security, and a changing climate.

An integrated approach to water cycle management can improve urban landscapes, protect the environment, and underpin more resilient and sustainable communities.

With 85 per cent of Sydney’s water supply coming from rainfall, we need to diversify Sydney’s water supply options, including using and re-using water more efficiently.

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I’m very pleased to share with you the work Sydney Water is doing to respond to the big challenges. You can all appreciate that water is an essential resource, but even more so as we are now in the recovery phase of the COVID-19 pandemic. The way we use water makes our city attractive to people, businesses and industries, and really supports the productivity of our economy and our aspirations to be one of the most livable cities in the world. So, I would like to focus on how we are looking to take a more holistic view of the water cycle, and how this has the real potential to improve our urban landscapes, protect the environment, and secure a more resilient and sustainable water future. I will also talk about how this can be applied to our work on urban typology and how we are delivering this in Western Sydney.

Before I start, I would like to acknowledge the traditional owners of the land we are on today and pay my respect to their

Keynote address – Roch Cheroux

The challenges and opportunities

Aging infrastructure

Increasing urbanisation

Water security

Population growth

Pressure on waterway health

A changing climate

Figure 1 20/10/21

elders past and present. I’m on Eora land today and I want to pay a very special respect for the good care of the land and water they have given over thousands of years.

Greater Sydney is undergoing great change. The New South Wales Government, through the Greater Sydney Commission, is driving the transformation of our city into a metropolis of three interconnected cities where residents have access to great services and great places. Underpinning this vision is the concept of a livable, productive and sustainable Greater Sydney, and water will be a really essential element in delivering these outcomes, and shaping the identity and amenity that each of us want to enjoy in these three unique cities. As we embark on this transformation, there are numerous challenges facing us as a business, as an industry and as a community. It’s in this context that, in our role at Sydney Water, we really are convinced that we must address these challenges in order to deliver the government’s vision for Greater Sydney, along with a secure, sustainable water future, and to continue to maintain the livability of our city for the many generations to come.

There are six challenges I want to highlight this morning (Figure 1). First is an aging infrastructure base. We’ve been operating in Sydney for more than 130 years. The population is growing, and the demographics are changing. Urbanisation is also increasing, and there has been high pressure on the waterways’ health for some time. Water security is a challenge and above all, you’ve got something that has a massive impact on our industry: climate change. In Western Sydney, with the creation of a whole new city, this challenge is manifested uniquely, and some of these challenges include a projected population of 1.1 million in 2036, and more than 1.5 million in 2056.

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There is minimal existing water infrastructure today in Western Sydney. The temperatures are also already hotter than the rest of Sydney, and there is increasing urban development.

This has typically resulted in poor environmental outcomes, and the loss of the landscape’s overall character and values.

Looking at the future development of Western Sydney, we estimate that the region will need between 20 per cent and 30 per cent more water infrastructure development to ensure the Western Parkland City vision. Once we see these as challenges, we can also see them as opportunities. It’s an opportunity to think differently, and to innovate to achieve a vision of a cooler, greener and more livable Western Parkland City.

At Sydney Water, we are making progress towards an integrated approach to managing the total water cycle, and that will help us keep water in the landscape, re-use the water, and ultimately maximise the value of this very precious resource.

One way we are doing this is through our ‘Urban Typologies and Storm Water Management’ report, released in September 2020.

The report provides a very practical, realistic and achievable guide to landscape-led development in Western Parkland City, where urbanisation is planned around the new Western Sydney International Airport via the Aerotropolis and the developments happening in the different local government areas. This report presents a range of urban typologies, or urban templates, which show how total water cycle management can be integrated with urban planning to address both the challenges of stormwater run-off and urban heat. The typologies we developed cover a range of commercial, industrial and residential development scenarios, and each typology is analysed against density, greening and stormwater outcomes, as well as cost, efficiency, social outcomes and impacts on streetscapes.

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Keynote address – Roch Cheroux

Water products and usage

Product priority

Recycled water has been integrated with stormwater and rainwater providing a climate independent source of water which contributes to tackling the issue of drinking water supply, security and resilience. The following graphs illustrate scenario comparison, with and without recycled water and represent water usage in the precincts.

To meet stormwater runoff targets, water products are prioritised in the following order: Top priority

1

Average water uses

This could be supplied from drinking water (top up of rainwater and stormwater) but could be met with recycled water.

25%

36% Drinking water for nonpotable uses

Stormwater

Base Case Scenario

11% Rainwater

18%

Approximately 50% less drinking water used for non-drinking water uses 13 ML/day of recycled water supplied to customers

Drinking water for non-potable uses

18%

Recycled W at er

Recycled water Scenario

25%

11% Rainwater

28%

28%

Drinking water

Drinking water

2

Stormwater

3

4

Recycled Water Scenario

Modelling shows recycled water for the initial precincts replaces 13 ML/day of drinking water on an annual average and up to 24 ML/day daily max. There is opportunity to increase recycled water supplied through scheme optimisation and reducing potable top-up.

Stormwater is used for on-lot irrigation, streetscapes, parklands and local urban cooling Rainwater is used for toilet flushing, on-lot irrigation, and streetscapes Recycled is used for internal non-drinking water use, outdoor/ irrigation, and streetscape Drinking water is used for internal uses (e.g. cooking, showering) and to top up rainwater and stormwater

Figure 2

Sydney relies on rainfall for about 85 per cent of its water supply, and with our changing climate, we really need to diversify our water supply options. We can use and re-use water more wisely and efficiently to create thriving, livable and sustainable cities, providing water supply security for the long term, and making it possible to use water to create greener spaces, healthier waterways and cooler cities. By investing in diverse water sources, such as purified recycled water, we can increase the resilience of our water supply and, at the same time, provide a sustainable, reliable and safe water supply for generations to come.

In the modelling that we have done for the initial precinct of the Western Parkland City (Figure 2), recycled water replaces about 13 million litres per day of drinking water on an annual average, and up to 24 million litres per day as a maximum. Until now, greenfield development in Western Sydney has typically resulted in land clearing, disrupted natural systems, and increased use of impermeable surfaces. Continuing with these business-asusual practices will drastically increase the flow of stormwater into the waterways of South Creek, which is absolutely essential to the realisation of the Western Parkland City vision. Long term, the impact of surplus run-off includes destabilisation of the creek lines and degradation of waterways’ health, which would also require increasing and ongoing investment to manage.

Additionally, conventional stormwater retention solutions need a lot of space, and it is this factor that drove us and our partners to think imaginatively about how landscapes and built form could be integrated to retain stormwater in situ.

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Our research shows that there are numerous measures that can be implemented and combined across the lots, street and open spaces to provide an effective solution to mitigate the impacts of stormwater run-off. Some examples include deep soil areas, permeable pavements, rain walls and roofs, as well as street trees connected to stormwater drainage for passive irrigation and bioretention in situ. Our modelling shows that the implementation of these measures has the potential to reduce surplus total stormwater run-off by up to 75 per cent to meet government objectives for waterway health outcomes.

What’s really fantastic is that our urban typologies have not only addressed the primary challenge of stormwater, but also the broader challenge of urban heat, which is a major issue in Western Sydney, and one that greatly impacts livability. Water and smart management of this resource will be absolutely critical in addressing the issue of urban heat.

Through our modelling, we have shown that the application of the urban typologies to land (in the Aerotropolis) has the potential to deliver significant benefits with regard to urban heat, including three-and-a-half times the tree cover. This includes an increase of open space between 18 per cent and 40 per cent depending on the area, and a potential reduction of peak temperature by 4.6 degrees on extreme heat days, as well as halving the number of ‘extreme’, ‘very strong’ and ‘strong’ heat stress days per summer – and that’s significant for the population living in this area.

Alongside these works, Sydney Water is also delivering the Upper South Creek Advanced Water Recycling Centre

Keynote address – Roch Cheroux

Upper South Creek Advanced Water Recycling Centre

Figure 3 20/10/21

(Figure 3), which will be the centrepiece of our effort towards a total water cycle approach in the Western Parkland City, as well as energy efficiency and adoption of circular economy concepts. This centre will be a sophisticated wastewater treatment and resource recovery plant that will support the new communities, and the economic activity in the Aerotropolis, as well as Western Sydney in general. When it reaches maximum capacity in 2036, this centre will treat up to 100 million litres of wastewater daily, and will produce high-quality recycled water suitable for a range of very different uses. It will also use industry-leading water and resource recycling technology to harness renewable energy – through co-digestion, taking advantage of the nexus between water and energy, water and food, and water and waste. It will be one of the greenest infrastructure investments in New South Wales.

So, where are we up to with this? The Environmental Impact Statement is due to go on exhibition in late 2021, and once approved, the first stage of construction will start in 2022 to build wastewater infrastructure that will service the new airport. The $1.3-billion facility will be the largest investment in water resilience in a decade, and we are

Roch Cheroux – Chief Executive Officer, Sydney Water Roch Cheroux commenced with Sydney Water as the Managing Director on 2 September 2019. In Cheroux’s past role as Chief Executive of SA Water, he led the transformation of South Australia’s largest water utility to embed technology, culture and systems changes to deliver improved experience for the corporation’s 1.6 million customers. Prior to joining SA Water, Cheroux was Chief Executive Officer of SUEZ for the South East Asia region and SUEZ-Degrémont Australia and New Zealand, Managing Director of United

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incredibly excited about the impact it will have on helping to create a more resilient and sustainable water network in the Western Parkland City. Adopting the principle of the urban typologies and stormwater management work focused on integrating water cycle management into the early stages of strategic land use planning has the potential to deliver fantastic outcomes for the environment, urban landscape, and overall community identity and wellbeing.

Instead of planning infrastructure that would just plug into the final city outcome, Sydney Water encourages a more collaborative approach to urban planning to include integration of recycled water from the new advanced water recycling centre, and the innovative approaches championed in the typologies report. These water-centric outcomes for the Aerotropolis have been accepted by the New South Wales Government, which is a reflection of how important this work is. By moving forward towards a more holistic approach to managing water, we can really maximise the value of this resource to create a more livable, green and sustainable city.

Utilities Asia and Pacific (TRILITY), and Chief Executive and Chairman of Tallinn Water in Estonia.

Cheroux is active across the industry and is currently Director of the Water Services Association of Australia, and member of the Commonwealth Government’s Australian Water Partnership Advisory Committee. A dual French and Australian citizen, Cheroux holds formal qualifications in engineering and business management, and seeks to champion innovation and workplace diversity in the organisations he leads.

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Agile Western Sydney University focused on growth An anchor institution in the Western Sydney region is unlocking opportunity through education.

Western Sydney University (WSU) is implementing a large-scale transformative program, Western Growth, to revitalise its campus network.

WSU has opened state-of-theart campuses in the Parramatta and Liverpool CBDs, and will open a fifth vertical campus in Bankstown’s CBD in 2023. By 2026, the groundbreaking ‘Multiversity’ – a project of the NUW Alliance, a partnership between UNSW Sydney, the University of Newcastle, the University of Wollongong and WSU – aims to expand to a new campus at the Aerotropolis, putting WSU and its partners in close proximity to industry.

‘Western Growth is about creating the best learning experience for students,’ says Peter Pickering, Vice President (Finance and Resources) at WSU, and the architect of the Western Growth strategy. ‘By repurposing its assets, WSU can reinvest in learning, teaching and research.

WSU is committed to developing technology-enabled learning resources for students, and campuses that are vibrant “living laboratories”.’

Pickering says Western Growth is a catalyst for CBD development. ‘WSU’s Parramatta Campus is an example

Liverpool Ngara Ngura

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Engineering Innovation Hub

of how campuses can energise and co-create cities, and of how campuses across a region drive connectivity, and community and industry engagement.’

He says the NUW Alliance can help more universities serve Western Sydney through a coordinated approach. ‘Universities want to expand into Western Sydney because it’s a growth area. But it’s important that they do so in a way that maximises teaching and research infrastructure.’

Western Growth is also about responding to changing student needs, says Pickering. ‘WSU continues to assess whether all its assets are fit-for-purpose in a world where more students are learning online.

Do universities still need as many 500-seat lecture halls when students are spending less time than ever on

campus? Students want to study near their work.’

In the past few years, WSU has sold some property assets, realising significant gains to fund new campuses.

The university has 11 campuses and 550 buildings on 1800 hectares across Western Sydney. ‘WSU has a lot of land it can do more with,’ says Pickering.

Western Growth is also about responding to WSU’s growth. The university’s student numbers have doubled to almost 50,000 since 2012, and WSU ranked in the world’s top two per cent of universities for research in the Times Higher Education World University Rankings. ♦ For more information on WSU’s Western Growth strategy, visit www.westernsydney.edu.au/western-growth.

companyfocus

NUW Alliance takes collaboration to new heights Leading universities work together to respond to the education needs of fast-growing Western Sydney.

The NUW Alliance is re-imagining the future of education, research and collaboration in New South Wales through a groundbreaking ‘Multiversity.’

Western Sydney University (WSU) last year joined UNSW Sydney, the University of Newcastle and the University of Wollongong in the NUW Alliance.

Launched in 2017, the Alliance is an Australian-first collaboration, and a potentially transformative model for higher education and vocational education and training.

‘The NUW Alliance is an important innovation in tertiary education,’ says NUW Alliance’s new CEO, Dr Andy Marks. ‘Never before have Australian universities and a TAFE worked together like this to develop the scale needed to drive interventions that benefit large communities.’

Dr Marks, Pro Vice-Chancellor, Strategy, Government and Alliances at WSU, says the Alliance’s model is pioneering. ‘Solving complex problems requires collaboration across disciplines and sectors. Universities are even more impactful for communities when they tackle issues together.’

Few Australian organisations have the size of the NUW Alliance.

Collectively, its partners have 194,000 students, 14,500 staff members, 37 locations, 15 innovation hubs and $850 million in research funding. The NUW Alliance is the country’s largest research grouping.

Dr Marks adds, ‘We especially want to help women from culturally diverse groups access higher education and build careers or businesses.

The Alliance’s partners are strongly committed to reducing socio-economic disadvantage, through social impact.’

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Industry focus

The NUW Alliance has three interrelated, industry-engaged projects: the Jobs Joint Taskforce, Multiversity and NUW Energy.

Launched in August 2020, the task force is accelerating an integrated research, education and training model.

The goal: rapid skills development and retraining programs.

The task force is focused on training in science, technology, engineering and mathematics (STEM). Its work is the foundation for the Multiversity.

Backed by the New South Wales and Australian governments, the Multiversity is focused on the Western Sydney Aerotropolis and Western Parkland City. As the site of Sydney’s second international airport, the Aerotropolis will create thousands of jobs and attract emerging businesses in advanced manufacturing, technology, defence and logistics. Western Parkland City is Australia’s largest city development since Canberra.

‘Western Sydney will need a step-change in training as major projects progress,’ says Dr Marks.

‘The Multiversity can help the region

develop more knowledge workers for hi-tech industries.’

The Aerotropolis Multiversity already has nine courses delivered by its partners. ‘The early response has exceeded expectation,’ says Dr Marks. ‘Getting over 100 enrolments in a few months, in a competitive market, is encouraging.’

The Alliance’s third project, NUW Energy, is Australia’s largest research cohort for energy issues.

It’s developing an integrated network technology to address future energy needs, advanced energy solutions for New South Wales and educational opportunities for the energy sector.

Dr Marks says the Multiversity and NUW Alliance research will provide industry collaboration opportunities.

He is passionate about small enterprises working with the Alliance.

‘There will be many opportunities for entrepreneurial ventures as the Aerotropolis develops. The NUW Alliance can become a hub that connects small and large enterprises with university and government stakeholders on research projects.’ ♦ To learn more, visit www.nuwalliance.edu.au.

DISCOVER THE

MULTIVERSITY. The future of education to meet the future economy.

Backed by both the NSW Government and the Australian Government, the Aerotropolis Multiversity will deliver a new approach to education and training, connecting the future of learning to the jobs of the future.

In an Australia-first collaboration, the University of Newcastle, UNSW Sydney, the University of Wollongong, Western Sydney University and TAFE NSW have joined forces to establish the Multiversity – a new education, training and research approach ready for the 22nd century, centred on the Western Sydney Aerotropolis and Western Parkland City, Australia’s largest and most ambitious city development since Canberra.

Visit our website to discover more | multiversity.edu.au

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