NSW ELECTION 2011: Getting the Fundamentals Right
March 2011 Infrastructure Partnerships Australia is a national forum, comprising public NSW ELECTION SUBMISSION 2011 and private sector CEO Members, advocating the public policy interests of Australia’s infrastructure industry .
FOR MORE INFORMATION PLEASE CONTACT:
BRENDAN LYON CHIEF EXECUTIVE OFFICER INFRASTRUCTURE PARTNERSHIPS AUSTRALIA Level 8, 8-10 Loftus Street, Sydney NSW 2000 PO Box R1804, Royal Exchange NSW 1225 P | 02 9240 2051 E | [email protected]
NSW ELECTION SUBMISSION 2011
CONTENTS
CONTENTS 3
EXECUTIVE SUMMARY 4
RECOMMENDATIONS 5
1. INTRODUCTION 8
2. STRATEGIC PLANNING, PROCUREMENT AND FUNDING 9
2.1 – Infrastructure NSW 9
2.2 - Infrastructure Planning 10 2.2.1 – Need for a Long Term Infrastructure Plan 10 2.2.2 – Major Infrastructure Planning Approvals 11
2.3 –Funding and Procurement 12
3. TRANSPORT 14
3. TRANSPORT 15
3.1 – Public Transport 15 3.1.1 – Urban Rail 15 3.1.2 – Metro 18 3.1.3 – High Speed Rail and Regional Rail 20 3.1.4 – Light Rail 21
3.2 – Roads 21 3.2.1 – Key Road Projects 21
3.3 – Freight and Ports 24
3.4 – Additional Transport Considerations 25 3.4.1 – Building for Future Capacity 26 3.4.2 – Preserving Corridors for Future Infrastructure 26
4. ENERGY 28
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EXECUTIVE SUMMARY
The 2011 election provides a generational opportunity for New South Wales to reform its practices and policies and to begin the long task of rebuilding the capacity and condition of the State’s infrastructure networks.
New South Wales is the nation’s largest economy. It is the country’s key financial hub and the global gateway. Yet New South Wales has been falling behind because it has not sustained a suitable level of investment in productivity enhancing projects – or in the social infrastructure networks that will sustain quality of life in the face of population growth.
One key challenge has been the lack of an integrated, long-term, strategic infrastructure plan. Too often, projects have been announced and subsequently cancelled at the whim of governments. That’s why this document’s central theme is the need for new structures of government that will drive collaboration across government toward the best project and policy outcomes.
The Coalition’s commitment to form a new coordinating infrastructure agency, responsible to the Premier and Parliament, is an important step forward. It will allow a process where Departments bid for their projects to be included on a real, state-wide infrastructure plan matched to the capacity of the budget.
New South Wales needs to deliver a real infrastructure plan that spans the decades ahead; that delivers long-term certainty about where population growth and economic development will occur – and sequence the delivery of the transport, health, education and utilities networks that will need to be delivered to accommodate that growth.
A new plan that stands up to scrutiny is critical. But funding the level of investment is a key challenge.
The infrastructure backlog is so significant that real thought needs to be given to how practices can be changed to free up the capacity of the State to bring projects forward. That will mean asset privatisations; and it will also mean reforms to the work practices of government – freeing up operating expenses to be invested in new capital projects. And, it will require much greater consideration to how private investment can be encouraged to deliver the backlog of public infrastructure projects in this State.
The recommendations in this paper detail the key policies and projects that need to be advanced to allow New South Wales to meet its infrastructure challenges and equip the State for growth.
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RECOMMENDATIONS
The next Government of New South Wales should:
Planning, Procurement and Funding
1. Establish Infrastructure NSW to oversee an audit of the State’s infrastructure and work with line agencies to identify a state-wide, long-term infrastructure programme; and provide oversight in the delivery of major projects.
2. Task Infrastructure NSW to develop a long term infrastructure plan, identifying existing and emerging infrastructure shortfalls and detailing project priorities over a 20-year timeframe.
3. Develop a new major infrastructure approval pathway to replace Part 3A, ensuring a streamlined, transparent approval process for major public infrastructure projects, while maintaining public confidence.
4. Undertake a full public audit of the State’s financial position prior to the first budget after the election. The audit should identify opportunities for asset sales, contracting out arrangements and other reforms to improve the states ability to fund better services and better infrastructure.
5. Spell out a pipeline of PPP projects, radically enhancing the pipeline of opportunities for private investment in public infrastructure. Infrastructure NSW should also be tasked with delivering new options to facilitate a PPP to deliver the M5 East motorway, within the first year of government.
Transport
6. Develop an integrated, long-term and committed transport plan to finally spell out the future of transport in NSW.
7. Commence the North West Rail Link in the next term of government; and as with major rail projects proposed for Melbourne and Brisbane, it should be assessed for delivery under a Public Private Partnership.
8. Investigate the options to progress CBD station upgrades by harnessing the private sector through a PPP.
9. Continue the delivery of the South West Rail Link to be commissioned in 2016.
10. Prioritise and sequence the Western Express and City Relief Line as part of a uniting transport plan for Sydney.
11. Continue and accelerate the completion of the Rail Clearways programme to untangle the CityRail network and increase network reliability.
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12. Work collaboratively with Reliance Rail and RailCorp to expedite the resolution of remaining issues to allow the successful introduction of the Waratah Trains to the CityRail network.
13. Engage the public in an informed and considered debate about the future role of Metro rail in Sydney, clearly articulating the importance and benefits of such a system, to deliver a long-term plan for an eventual metro system; allowing a future metro rail network to be considered in the context of a long- term infrastructure plan for New South Wales.
14. Engage with the Commonwealth in the high speed rail feasibility study process to ensure the best route selection is achieved and the corridor is future proofed.
15. Replace the existing XPT and Xplorer trains with a new fleet of regional trains, potentially through a PPP, to boost customer satisfaction and efficiency.
16. Consider the role that an expanded light rail network could play – particularly between Sydney’s south east and Moore Park precinct in advance of future metro connections. Such consideration should be undertaken by Infrastructure NSW and Transport NSW in the context of formulating the long-term infrastructure plan.
17. Finalise planning of the M5 East, then put the project to market in the next term of government, as a Public Private Partnership.
18. Finalise negotiations with Interlink to allow for the expansion of the M5 South Western Motorway in the next term of Government.
19. Prioritise and sequence the delivery of the F3-M2 link as part of the long-term infrastructure plan.
20. Prioritise and sequence the delivery of the M4 East as part of the long-term infrastructure plan.
21. Seek further Commonwealth support and provide additional State funding to complete the duplication of the Pacific Highway by 2016.
22. Investigate a future Bells Line of Road corridor and ensure it is protected for future development as part of the long-term infrastructure plan.
23. Undertake further feasibility work on the F6/M6 corridor and prioritise it as part of the long-term infrastructure plan.
24. Develop a uniting freight strategy to inform the state-wide infrastructure plan, mapping out future demand for sea, road, rail and air freight and future infrastructure upgrades and intermodal terminals that will be required to meet this growth.
Energy
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25. Undertake a considered privatisation of the remaining generation assets and invest realised capital in major infrastructure projects.
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1. INTRODUCTION
The 2011 NSW State Election provides an opportunity to refresh the State’s approach to its many infrastructure challenges.
The principal call of this paper is the need for a long-term, sustained and rigorous infrastructure plan that provides certainty about the projects that will be delivered over time.
Already, there is clear evidence of significant infrastructure shortfalls. Overcrowding of public transport in peak periods sometimes exceeds 130 per cent; congestion costs Sydney’s economy more than $5 billion each year; and last year, the State suffered more than 10,000 power outages. Significant issues also exist in terms of the quality and capacity of key public services, including social housing, public health and education facilities.
The size of the infrastructure backlog is enormous. The State Government’s transport blueprint, which was never formally released, contained transport projects estimated to be worth more than $150 billion. It is estimated that around $17 billion needs to be invested in energy distribution networks; and tens of billons more into new and renewed energy generation.
On top of these existing challenges, New South Wales is facing significant and sustained population growth. The State’s population will surge from around 7.2 million people presently, to more than 9.1 million by 2036. This will place a significant call for investment in new and renewed social infrastructure and public services, particularly in health, education and justice facilities.
In recent times, the State’s infrastructure strategy has been subjected to a regrettable shifting in priorities. This has resulted in a lack of progress in terms of new projects, and has damaged the reputation of New South Wales as a place to do business.
That’s why it is critical that New South Wales introduces the right structures and policies, to allow for the selection of the right projects, to be delivered in the right places – and at the right time.
However, even before an expert body, such as Infrastructure NSW, is created, there are a range of obvious projects which should be prioritised for delivery. These include:
1. The contracting out of Sydney Ferries; and 2. The North West and South West rail links; and 3. The M5 East Motorway duplication.
The appointment of a new, expert procurement and prioritisation body, such as Infrastructure NSW, has much to offer taxpayers and the private sector in terms of certainty about the long- term priorities of New South Wales.
Done well, Infrastructure NSW offers the opportunity to align the public and private sectors toward the best project outcomes for New South Wales.
Equipping the body with appropriate skill would also allow it to work directly with government agencies in the procurement of major economic and social infrastructure projects, driving value for money and providing accountability around the infrastructure programme.
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2. STRATEGIC PLANNING, PROCUREMENT AND FUNDING
2.1 – Infrastructure NSW
The creation of Infrastructure NSW will be a critical part of bringing a new, joined up approach to the identification, funding and delivery of major projects in New South Wales.
This policy, progressed by the NSW Coalition, has been the subject of significant consultation with the business sector and is strongly supported by industry.
Infrastructure NSW would assist the NSW Government to identify existing shortfalls and prioritise and sequence the delivery of the most urgent projects first.
With an enormous and growing infrastructure backlog and ageing of the existing asset base, NSW can no longer afford or sustain indecision and inaction.
The establishment of an integrated infrastructure planning and delivery body is both logical and long overdue.
2.1.1 – Governance, Structure and Role of Infrastructure NSW
The Opposition has already committed that Infrastructure NSW would be established as a Statutory Authority. It would be governed by a Board with a majority of Members drawn from the private sector – including the Chairman.
Under this model, day to day management of Infrastructure NSW would be led by the Chief Executive, who would also act as the State’s Coordinator General.
Ideally, Infrastructure NSW would be a small executive agency, with expertise drawn from the public and private sectors. Infrastructure NSW would rotate skilled staff down into line agencies, ensuring accountability and deliver a mechanism to share project experience across government. This approach is similar in concept to the Victorian Government agency, Major Projects Victoria.
Ideally, Infrastructure NSW would act as a repository of major project expertise in the State and be equipped to provide expert oversight to Government agencies and in rare circumstances, directly manage the delivery of some major projects.
In order to ensure Infrastructure NSW remains focussed on its role in delivering major projects of significance for the State, criteria would need to be set in order to limit the number of projects within its scope at any one time.
Recommendation: Establish Infrastructure NSW to oversee an audit of the State’s infrastructure and work with line agencies to identify a state-wide, long- term infrastructure programme; and provide oversight in the delivery of major projects.
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2.2 - Infrastructure Planning
Long-term, integrated planning is the key to delivering the best infrastructure projects, at the best value to taxpayers. This kind of planning in New South Wales is well overdue.
New South Wales urgently requires a new, rigorous and joined-up approach to planning future infrastructure networks.
This new planning paradigm would fully link infrastructure development and land-use planning. Bold decisions are required around where Sydney will grow – the densities that will be required – and the infrastructure which will support this growth.
The sheer level of infrastructure investment that will be required means that New South Wales must have all procurement and financing options available to deliver the next generation of infrastructure projects. These options must include the extension of Public Private Partnerships to new projects; and give ongoing consideration to new models to fund major projects.
New South Wales needs to have a long-term plan to drive political and community consensus about the future shape and direction of the State’s economic and social infrastructure.
2.2.1 – Need for a Long Term Infrastructure Plan
As Australia’s most populous state, New South Wales is experiencing the full impact of the challenges facing the nation as a whole. A growing and ageing population is placing substantial pressure on the existing infrastructure - which is also ageing - at the same time as generating demand for major investments in new infrastructure projects.
These challenges are being directly experienced in the form of road congestion, overcrowded or substandard public transport networks, and congested ports, amongst others.
The foundation of an effective major infrastructure programme is a rigorous, coherent and long term strategic infrastructure plan, developed across government departments and in consultation with industry and the community.
A long-term plan would build community acceptance and political consensus about the projects needed to sustain New South Wales.
In 2006 a NSW State Infrastructure Strategy was developed which was intended to be “ a rolling 10-year plan for infrastructure projects to support service delivery”. The SIS was updated in 2008, but subsequently abandoned after the failure to reform the NSW electricity sector in 2008.
Since the abandonment of the State Infrastructure Strategy, New South Wales has seen a chaotic process of short-lived and contentious plans and projects which have
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been announced and subsequently shelved or cancelled. The lack of certainty arising from constantly shifting priorities, coupled with the cancellation of major projects under procurement, has resulted in a loss of public and business confidence in the State’s ability to bring forward major projects.
This experience demands a new, long term infrastructure plan and vastly improved government processes.
A long term infrastructure plan needs to outline a vision for the economic and social development of the State, identify the existing infrastructure gaps and shortfalls and detail priorities over a multi-decade time frame. The plan should also describe the sequencing, funding and delivery timeframe for each project.
Progress on implementation of the plan should be transparent, with regular public reporting of the State’s progress against the published plan.
The plan should also be integrally linked to the State’s budget process, meaning priority projects can be funded as capital becomes available.
Recommendation: Task Infrastructure NSW to develop a long term infrastructure plan, identifying existing and emerging infrastructure shortfalls and detailing project priorities over a 20-year timeframe.
2.2.2 – Major Infrastructure Planning Approvals
In 2005, Part 3A was inserted into the NSW Planning and Assessment Act 1979 (EP&A Act) along with the introduction of the State Environmental Planning Policy (Major Projects) 2005. These changes were designed to avoid planning risk for state significant projects, clearing impediments to faster project approvals.
Over time, the community’s acceptance of Part 3A has been eroded. This has particularly arisen because of the use of Part 3A to approve major private developments which do not have an infrastructure component. The community has also raised concerns about the degree of ministerial discretion and a perceived lack of transparency in the selection of projects for approval under Part 3A.
The concerns of the community require action and it is appropriate in that context to undertake a root and branch review of the State’s planning statutes and regulations. However, the State must retain the power to appropriately streamline planning approvals for major public infrastructure projects.
Therefore, a new government, in concert with a review of the Environmental Planning and Assessment Act, must provide new legislation that appropriately streamlines the approval process for major projects, providing certainty for business while maintaining public confidence.
One option would be to consider an approval pathway dedicated solely to major state infrastructure projects; with applications determined by an independent, expert body whose decision making is guided by government policies. The creation of a dedicated approval mechanism limited to major infrastructure projects – and
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determined by an independent expert body, coupled with rigorous, long-term infrastructure planning would do much to restore public confidence in the planning process for major projects in New South Wales.
Recommendation: Develop a new major infrastructure approval pathway to replace Part 3A, ensuring a streamlined, transparent approval process for major public infrastructure projects, while maintaining public confidence.
2.3 –Funding and Procurement
2.3.1 - The Funding Challenge
It is no secret that New South Wales is constrained by a lack of flexibility to fund major infrastructure projects.
The commitment to maintain a AAA credit rating means that other reforms will need to be undertaken to liberate capital for major projects. To increase major project investment capacity, the next New South Wales Government will need to undertake a thorough review of options, including:
1. Undertaking a programme of asset sales; including the Sydney Desalination Plant and remaining energy generators, amongst other assets; 2. Reducing operating expenses through work practices reforms, asset disposals and introducing competition in public services through contracting out arrangements; allowing savings to be directed to infrastructure programmes. Candidates for contracting out in the immediate term include Sydney Ferries and the State Transit Authority, amongst others. 3. Better targeting infrastructure investment into the best projects; and 4. Better harnessing superannuation and other sources of private investment into public infrastructure projects through an expanded use of public private partnerships.
There is no single or simple solution available to government to fund the backlog of projects; however a comprehensive assessment of reform options must be an immediate focus of the next government. A commission of audit would provide the State’s taxpayers with a clear understanding of how Government revenues are currently spent; and where opportunities exist to drive better services at better value to taxpayers.
A Commission of Audit should assess the State’s medium and long term financial performance, analyse the costs and quality of service delivery, and identify opportunities where it may be appropriate to introduce contestability or competition into the delivery of public services.
Recommendation: Undertake a full public audit of the State’s financial position prior to the first budget after the election. The audit should identify opportunities for asset sales, contracting out arrangements and other reforms to improve the states ability to fund better services and better infrastructure.
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2.3.3 – A greater role for the private sector
Even if significant reforms are undertaken to make government more efficient, there will still be a gap between the infrastructure New South Wales needs – and what it can afford. The role of private investment in public infrastructure will therefore be critical to the future of New South Wales.
The next Government must consider how it can attract much higher levels of private investment into the next generation of major projects across New South Wales.
Public Private Partnerships have been a critical delivery and funding option to Australia’s governments. Independent studies have found that PPPs deliver significant value for money improvements to taxpayers, with average cost savings of 30.8 per cent compared to traditional government procurement models.
New South Wales was an early adopter of the PPP model and has a solid track record and significant skill in the use of PPPs to deliver public infrastructure. Examples include the delivery of Sydney’s motorways, major public hospitals, public schools and high schools and more recently, public housing redevelopments.
In recent years, shifting priorities have meant that the PPP pipeline in New South Wales has been effectively empty. A strong pipeline of PPP projects must be a commitment of the new government, ensuring a strong interest from the private sector. Projects that should be procured under PPP arrangements, subject to value for money assessment, include:
1. A new PPP convention centre for Sydney; 2. A rolling stock PPP to replace the other half of the CityRail fleet; 3. Several major hospitals, including the Northern Beaches Hospital; 4. The M5 East; and 5. The North West Rail Link.
The recent experience of failed toll roads in New South Wales and elsewhere means that reform to the economic PPP model will also be required. Infrastructure NSW should be tasked to deliver options to government - within the first year of the next term - to evolve the motorway PPP model so that major motorway projects can continue to be brought to market in New South Wales; particularly in terms of the M5 East motorway.
Recommendation: Spell out a pipeline of PPP projects, radically enhancing the pipeline of opportunities for private investment in public infrastructure. Infrastructure NSW should also be tasked with delivering new options to facilitate a PPP to deliver the M5 East motorway, within the first year of government.
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TRANSPORT
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3. TRANSPORT
Of the shortfalls facing New South Wales, the impacts of transport network congestion are the most obvious to taxpayers and businesses. Every day, hundreds of thousands of productive hours worth more than $14 million dollars are lost in Sydney’s urban congestion.
A major priority must be the development of a committed and transparent long-term transport network plan – as a constituent part of the broader, state wide infrastructure plan.
This section outlines some of the projects and policies that must form part of a long- term transport plan for New South Wales.
Recommendation: Develop an integrated, long-term, committed transport plan to finally spell out the future of transport in NSW.
3.1 – Public Transport
Sydney’s public transport network is comprised of an extensive legacy suburban rail network with some recent additions; a complex bus network; an under-utilised ferry system; a light rail and monorail route, and a taxi system.
Together with the road estate, these assets combine to create a complex transport environment, creating challenges for the development of a meaningful and integrated transport plan to reduce urban congestion.
3.1.1 – Urban Rail
Sydney’s suburban rail network has barely changed its scope or reach over the past forty years – with the exception of the addition of the Epping to Chatswood rail link.
The failure to expand the suburban rail network explains the significant network congestion in peak periods; and also helps to explain the significant road congestion.
Sydney’s major growth corridors in the south west and north west, have not been developed with complementary suburban rail infrastructure, creating an unsustainable dependence on motor vehicles in some areas.
In an operational sense, RailCorp also features extremely low cost recovery of around just 20 per cent. This means that taxpayers are forced to provide a massive subsidy to support the rail system. On a positive note, RailCorp’s below rail infrastructure is generally of a very high standard due to:
• A sustained programme of resleepering existing tracks; • The Clearways programme to remove network complexity and interdependence; and • A programme to develop new stabling yards.
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However, Sydney’s rail system now needs fundamental reforms to expand the reach and capacity of the network – and increase customer experience and comfort.
Projects which are critical to improving the rail network in the near term include:
1. The North West Rail Link – potentially as a Public Private Partnership 2. The upgrade of CBD railway stations – potentially through a Public Private Partnership; 3. The completion of the South West Rail Link; 4. The construction of the Western Express/City Relief Line; 5. The completion of the Clearways Programme; and 6. The delivery of the Waratah trains.
These projects are outlined in brief below.
In the medium to long term, other projects which should be explored for Sydney’s heavy rail network include:
• A second harbour crossing, if needed, after 2020. • ‘Metrofying’ the existing rail network, beginning with the Illawarra line. • Extending the Eastern Suburbs rail line to Bondi Beach.
1. North West Rail Link
The North West Rail Link has been announced and then cancelled several times since it was initially committed to in 1998. According to the State Government’s most recent Infrastructure Australia submission, the rail link is now at an advanced stage and ready to proceed, should funding be available. It could be commissioned as early as 2018/19.
By 2021, the north west of Sydney is expected to have an additional 57,000 dwellings, and around 485,000 people will live in the region, requiring a high-capacity transport link. The proposed 23km rail line, consisting of a tunnel, above ground track, six or seven new stations and a new stabling facility is a critical consideration.
Despite the North West Rail Link’s high cost (largely due to the fact that the tunnel is 16km in length), recent analysis has predicted a benefit cost ratio of 1.39, showing the project would have a positive impacts exceeding the project’s costs.
Recommendation: The North West Rail Link should be commenced in the next term of government; and as with major rail projects proposed for Melbourne and Brisbane, it should be assessed for delivery under a Public Private Partnership.
2. Upgrade CBD Rail Stations through a Public Private Partnership
The recent proposal by Thakral for the City One development above Wynyard Station, which includes a commitment to upgrade Wynyard Station concourse and
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facilities, shows that the private sector capital can be leveraged to upgrade rail infrastructure in the CBD.
Town Hall and Central stations in the CBD are in dire need of major refurbishment and modernisation. They are also Sydney’s busiest stations, with 90,000 people passing through both stations during every weekday peak hour. In contrast, only 17,000 passengers use the modern facilities at Parramatta every morning.
In 2007, a RailCorp spending plan identified an upgrade of Town Hall station alone could cost up to $600 million.
An option worthy of significant consideration is the ability to bundle CBD station upgrades into a Public Private Partnership. This kind of arrangement would see the private sector refurbish, maintain and operate CBD stations, deriving financial returns from commercial and retail development in and possibly, above railway stations, substantially lowering the overall cost to taxpayers.
Recommendation: Investigate the options to progress CBD station upgrades by harnessing the private sector through a PPP.
3. South West Rail Link
The south west rail link has now commenced and is a critical project to connect the south west growth corridor into Sydney’s suburban rail network. The project comprises a new transport interchange at Glenfield and the construction of 11.4km of new above-ground rail track, as well as new stations at Edmonson Park and Leppington, and a new stabling facility.
Over 850,000 people — or the equivalent of two-and-a-half Canberras — are expected in the South West and North West subregions between 2008 and 2036. South west Sydney will grow by more than 450,000 people over the next 25 years.
Both the NSW Government and the Opposition have now committed to this project, and it must remain a priority for the incoming government.
Recommendation: Continue the delivery of the South West Rail Link to be commissioned in 2016.
4. Western Express/City Relief Line
The Western Express Rail Program was announced in February 2010 as part of the Metropolitan Transport Plan, and is designed to support new express train services from Penrith and Richmond to the Sydney CBD.
A new 5.4 km priority tunnel known as the City Relief Line, is planned between Redfern and Wynyard with the intention of ‘unclogging’ the CityRail system. Other upgrades to the CityRail system between Penrith and the City are being planned, including platform lengthening, along with proposals for new underground stations in the CBD.
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Benefits of the new express services and Relief Line tunnel would include travel time savings across the network, particularly between Penrith and the City, 6000 extra daily seats on the Western Line and an improvement in the overall function of the rail network.
Both Penrith and Parramatta have been identified as key centres for future growth. Over the next 10 years, an additional 142,000 dwellings will be required in Sydney’s west to accommodate the rising population. Creating better transport linkages between these key centres and the CBD is vitally important. Of equal importance is the improvement of the train system functionality in around the Sydney CBD, allowing for increased capacity across the entire network.
Recommendation: Prioritise and sequence the Western Express and City Relief Line as part of a uniting transport plan for Sydney.
5. Continuation of the Rail Clearways Program
The Rail Clearways program is a long-standing initiative to improve capacity and reliability across the CityRail network. It aims to remove bottlenecks and junctions, reduce congestion and delays, and allow for simpler timetabling for more reliable and frequent services.
For the North West Rail Link benefits to be maximised it is imperative this program continue, including with the proposed quadruplication of the line from St Leonards to Chatswood, so that the connection to existing rail network is seamless and not disruptive to other services.
Recommendation: Continue and accelerate the completion of the Rail Clearways programme to untangle the CityRail network and increase network reliability.
6. Delivery of Waratah Trains
The Waratah Train PPP is a significant project that will vastly improve the quality of rail travel for Sydney commuters. The project deliverables include 626 suburban passenger train carriages (72 ‘Waratah’ train sets), a suite of training simulators and a $220 million maintenance centre located at Auburn.
The project has suffered a number of delays for a range of reasons. It is in the taxpayers interest that the next government work cooperatively with the private sector and RailCorp to ensure timely delivery of the new rolling stock.
Recommendation: Work collaboratively with Reliance Rail and RailCorp to expedite the resolution of remaining issues to allow the successful introduction of the Waratah Trains to the CityRail network.
3.1.2 – Metro
Levels of population growth mean that it is inevitable that New South Wales will need a mass transit ‘metro’ rail system in the medium term, and the incoming government
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should immediately engage the community in a conversation about the justification, shape and scope of a future metro network.
Metro offers a different type of service from that of traditional heavy rail, designed to serve high demand corridors with very frequent, high capacity services. Such corridors may include in areas where the heavy rail system cannot cope with future demand, such as the CBD to Parrmatta; or corridors where buses will not be able to cope with future demand, such as Victoria Road, Military Road and Anzac Parade.
The cancellation of the CBD metro was a profound disappointment to the business sector and a lost opportunity for the community, setting the state back years in the development of a modern, fit-for-purpose public transport system.
The network designs for the cancelled Sydney Metro system should be the starting point for engaging the public in a reasoned debate about the challenges and opportunities posed by the development of a new mass transit system in Sydney.
Much of the preliminary feasibility and demand analysis for such a network has already been done, so it is important not to discard this critically important work, but to use it to lead the public in an informed debate around the future role of a metro system.
Figure 1: Formerly proposed metro network design (Dec, 2009)
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Recommendation: Engage the public in an informed and considered debate about the future role of Metro rail in Sydney, clearly articulating the importance and benefits of such a system, to deliver a long-term plan for an eventual metro system; allowing a future metro rail network to be considered in the context of a long-term infrastructure plan for New South Wales.
3.1.3 – High Speed Rail and Regional Rail
Over the long-term, High Speed Rail is likely to be a valuable future part of the transport mix along Australia’s east coast; however a long-term vision for High Speed Rail means that planning needs to begin in the very short term, ensuring that future corridors are protected.
HSR has much to offer in terms of accommodating population growth in New South Wales. Modelling undertaken for IPA shows that at 350 kilometres per hour, HSR would bring regions like Canberra, Goulburn, the Illawarra, Hunter and Central Coast within easy commuting distance of Sydney. This would allow New South Wales to further regional development objectives and also allow for Sydney’s rapid population growth to be spread beyond the epicentre of the Sydney basin – increasing sustainability outcomes and allowing liveability to be maintained.
The first feasible segment of a future HSR network is likely to link Sydney to its second airport at either Newcastle or Canberra. It is therefore important that any long-term infrastructure plan for New South Wales identifies and protects future HSR corridors.
The Commonwealth Government is undertaking a major feasibility study into HSR which is likely to resolve an optimal corridor. The next Government of New South Wales needs to commit to a collaborative partnership with the Commonwealth to facilitate and guide the planning for a future east coast High Speed Rail corridor through Sydney and regional New South Wales.
In the shorter term, New South Wales needs to make decisions about the future of its existing regional rail network. Chief amongst these decisions is the replacement of ageing and increasingly unreliable XPT and Xplorer trains, which are well beyond their economic life.
The service quality provided by the XPT and Xplorer services does not encourage regional rail travel, and the offering compared to car travel would be substantially improved if a new fleet trains were delivered.
The next Government needs to commence a process to procure new rolling stock. Consideration should be given to the use of Public Private Partnership, allowing cost certainty and transferring risks away from taxpayers.
Recommendation: Engage with the Commonwealth in the high speed rail feasibility study process to ensure the best route selection is achieved and the corridor is future proofed.
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Recommendation: Replace the existing XPT and Xplorer trains with a new fleet of regional trains, potentially through a PPP, to boost customer satisfaction and efficiency.
3.1.4 – Light Rail
Sydney’s existing light rail system consists of a single, linear service running from Central Station to Lilyfield. It is owned and operated by the private sector without subsidy and serves a relatively small market.
Light rail will never be a ‘heavy lifter’ in the transport mix compared to heavy rail or mass transit, but could play an expanded role in the wider transport task over the medium term. The currently planned extension to the Inner West has a modest benefit-cost ratio, but the community has largely welcomed its development.
A planned expansion through Sydney’s CBD is the subject of a current review, and decisions on the future of this link should not be made until thorough planning and feasibility studies have been undertaken; however connections to Sydney’s south east – and particularly the entertainment precinct surrounding Moore Park and the Showgrounds – could offer some benefits in advance of future metro connections along that corridor.
Recommendation: Consider the role that an expanded light rail network could play – particularly between Sydney’s south east and Moore Park precinct in advance of future metro connections. Such consideration should be undertaken by Infrastructure NSW and Transport NSW in the context of formulating the long-term infrastructure plan.
3.2 – Roads
Traffic congestion in Sydney is the worst in Australia, costing the economy around $5 billion every year in lost productivity.
A blended approach is required to improve urban congestion, but key road upgrades will inevitably form a component of any considered solution. Sydney’s motorway network continues to be characterised by missing segments, most of which have been planned for many decades.
The next Government needs to commit to progression of the M5 East – the most advanced in a planning and approval sense – in the first term of Government; and provide a robust timetable for other major motorway segments, including the M4 East, F3-Sydney Orbital connection and the F6 Motorway. A solution to the capacity constraints on the Northern Beaches corridor must also form a focus.
3.2.1 – Key Road Projects
1. M5 East and M5 South West Widening
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The duplication of the M5 East has become necessary because the existing tunnels regularly exceed capacity. The projected growth of container traffic from Port Botany and the mounting passenger task from Sydney’s airport make this project even more pressing.
The M5 East Duplication would address a number of future growth futures, including:
• the future development of Port Botany, where the movement of containers is forecast to reach 3.2 million in 2021. Improving access to the port is critical to the efficient movement of this growing container traffic. • the growth at Sydney Airport, where passenger and freight movements are forecast to double over the next decade. Improving access to the airport is critical to the efficient movement of this growing passenger and freight traffic. • a predicted 1.8 million containers remaining to be transported by road even if rail takes up 40% of mode share.
The M5 East duplication could be delivered with little call on public finances. Because traffic usages is already visible, there remains considerable scope to procure this road under a PPP with a patronage risk component – even in spite of the challenges of other recent motorway PPPs such as the Lane Cove and Cross City tunnels.
One option could also see the consideration of a corridor toll along the existing M5 Motorway, M5 East and Eastern Distributor to offset the degree of market risk for the private sector; or the use of a minimum traffic guarantee over the early years of operation.
Irrespective of the evolutions of the model that are used, the M5 East duplication needs to be commenced in the next term fo government; with a robust, sequenced programme to deliver the other motorways according to need and budget capacity.
The widening of the M5 South Western Motorway has been the subject of long-term negotiations between its owner, Interlink, and the New South Wales Government. This expansion could be undertaken at no cost to taxpayers and agreement should be expedited.
Recommendation: Finalise planning of the M5 East, then put the project to market in the next term of government, as a Public Private Partnership.
Recommendation: Finalise negotiations with Interlink to allow for the expansion of the M5 South Western Motorway in the next term of Government.
2. F3-M2 Connection
The need for a connection between the F3 motorway and Sydney’s orbital motorway network has been recognised for some time. In 2004, SKM undertook a study of route options on the potential corridor, concluding that the ‘purple option’ – a route under Pennant Hills Road - would be the best solution.
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In 2007, a Federal Government review undertaken by the Hon. Mahla Pearlman AO concluded that SKM’s assumptions in this study were valid, and recommended the development of this road connection.
The study recommended the development of a link between the F3 at Hornsby and the M2 Motorway; and that a longer-term ‘Type C’ Corridor between the M7 and the F3 near Kariong should be planned and the corridor reserved for future development.
Regarding the first stage of the project linking the M2, the review concluded “there is a need for the link now”. Since the report was released in August 2007 there has been little action. The need to provide a freeway-grade link to the major northern road corridor is a critical and urgent priority for New South Wales, while it would be prudent to begin planning and corridor reservation for the long-term F3-M7 link in the short term.
Recommendation: Prioritise and sequence the delivery of the F3-M2 link as part of the long-term infrastructure plan.
3. M4 East
The M4 East has been planned for many years, in various configurations. The key issues requiring resolution are connectivity to the port and airport precinct and resolving the congested route between the end of the M4 motorway at North Strathfield and the CBD.
The lack of an above ground corridor will require tunnelling along two alignments; one to connect the M4 corridor to the Anzac Bridge; and the other to connect the M4 to the port and airport precinct through either a Marrickville Tunnel, Inner West Tunnel or Annandale Tunnel alignment.
A potential third link travelling north under Victoria Road to the Fig Tree Bridge is also worthy of greater consideration. The Roads 2000 plan set in place a strategy to promote three expressway grade links to the CBD from the city’s West. The M4 Corridor is only remaining one of the three which has not been completed, following commissioning of the Lane Cove Tunnel in 2007.
Recommendation: Prioritise and sequence the delivery of the M4 East as part of the long-term infrastructure plan.
4. Pacific Highway
The commitment to have the Pacific Highway entirely duplicated by 2016 will not be achievable unless new funding commitments from the NSW and Federal Governments are forthcoming.
The Pacific Highway is one of Australia’s busiest regional freight and passenger routes, yet remains little more than a two-lane road in some sections. Completing the upgrade and duplication is a pressing requirement in terms freight network efficiency, as well as reducing road related injuries and deaths.
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Significant additional funding from the Commonwealth and New South Wales Governments will need to be prioritised if the completion date is to be achieved.
Recommendation: Seek further Commonwealth support and provide additional State funding to complete the duplication of the Pacific Highway by 2016.
5. Bells Line of Road
The Bells Line of Road is presently the subject of a joint State and Federal Government study into the corridor, seeking to identify options for the future upgrading of the corridor. The Bells Line of Road provides an important link between central and western New South Wales and Sydney.
Due to urban expansion and land use changes in north western Sydney, there is a need to ensure that an effective connection between the Bells Line of Road and the Sydney motorway network is identified, the corridor reserved, and the link developed as part of a long-term plan. The early identification of this link is important to ensure that costly tunneling in years to come is minimised.
Recommendation: Investigate a future Bells Line of Road corridor and ensure it is protected for future development as part of the long-term infrastructure plan.
6. F6 Extension
The F6 Corridor, running from St Peters through to Waterfall, is one of the few preserved above-ground road corridors left in Sydney which is yet to be developed. While road projects such as the M5 East and F3-M2 present more pressing priorities, the F6 Extension is nevertheless required to cater for future freight and passenger growth from the South.
In addition, the F6 Corridor would present an ideal opportunity to integrate a new mass transit system along the above-ground corridor, similar to the Perth-Mandurah rail link, to provide high quality public transport to the Sutherland Shire and surrounding areas.
Recommendations: Undertake further feasibility work on the F6/M6 corridor and prioritise it as part of the long-term infrastructure plan.
3.3 – Freight and Ports
Many of the State’s busiest freight rail lines are also passenger rail lines, creating conflicts and bottlenecks in the supply chain. In New South Wales, passenger rail is given priority over freight; meaning freight rail is often difficult to schedule and prone to delays.
Freight rail paths to and from Sydney are extremely congested and require new dedicated freight rail links to separate the passenger and freight tasks. The Northern
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Sydney Freight Corridor (NSFC) and the Southern Sydney Freight Line are designed to do just that, and are vitally important for the future of rail freight.
The NSFC Program would improve freight capacity on the Main North Line between Sydney and Newcastle. The Main North Line combines passenger and freight operations and priority is given to passenger services, restricting access to the rail network for freight trains. Access for freight trains into and out of the Sydney on the Main North Line is the greatest impediment to rail freight efficiency on the east coast interstate network. The NSFC will provide infrastructure to separate passenger and freight services at locations along the Line which are a significant constraint to mixed passenger and freight operations. The total cost of the NFSC is around $8 billion, so it is likely that additional federal funding will be required.
When completed, the Southern Sydney Freight Line will be a 30-kilometre single- track railway line running parallel to the Main South Line between Sefton Station and Macarthur Station. The Southern Sydney Freight Line was granted approval from the Federal Government in 2008 and construction of the line began in 2009. On completion, the new line will separate passenger and freight services that currently share the same track, ease pressure on the network and provide additional freight capacity, improve reliability and provide direct access between key freight centres at Chullora, Enfield and Port Botany.
Other freight rail upgrades around the State are also required, including on parts of main north-south corridor, though much of this falls within the responsibility of the ARTC.
New South Wales needs to consider a uniting freight strategy, along the lines of Victoria’s excellent Freight Futures plan, which considers future growth in freight volumes and the infrastructure and other connections needed to service this growth.
New South Wales also needs to consider the development of an intermodal strategy, allowing the State to meet its 40 per cent freight on rail target. The most pressing and critical intermodal development in NSW remains the Moorebank facility in Sydney. Recent progress by the Federal Government is welcome, and the NSW Government must continue to facilitate and drive this process.
In the longer term, there will be a need for other intermodal facilities, including a far Western Sydney intermodal, currently mooted for Eastern Creek. Planning and feasibility work should continue for this project.
Recommendation: Develop a uniting freight strategy to inform the state-wide infrastructure plan, mapping out future demand for sea, road, rail and air freight and future infrastructure upgrades and intermodal terminals that will be required to meet this growth.
3.4 – Additional Transport Considerations
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3.4.1 – Building for Future Capacity
In recent decades, Australia’s infrastructure has been planned and delivered without the level of capacity to provide for long-term growth. This means expensive reengineering projects, like the M5 East duplication, are required at significant expense.
The creation of a sufficiently long-term infrastructure plan, integrated with land use planning and informed by robust growth projections, will equip New South Wales to plan and deliver projects that are fit for purpose over the long term.
When the Sydney Harbour Bridge was planned and constructed, the road was planned with road, light and heavy rail capacity to provide for a rapidly growing city. The benefit of foresight is clear – it was 72 years before the harbour tunnel was required, and Sydney’s CityRail system still operates with the same cross-harbour capacity as it did in the 1930s.
3.4.2 – Preserving Corridors for Future Infrastructure
Another benefit of a long-term infrastructure plan is the early identification of future projects. This will allow New South Wales to identify corridors for projects that may not be required for several decades and provide the opportunity to protect and acquire corridors for these future connections. Taking steps now to preserve the corridors for these routes will future-proof the State and significantly reduce the future costs of acquisition, or avoid the need for costly tunnelling.
An example of this approach is the 1951 County of Cumberland plan, which identified and protected corridors for what is now the Sydney motorway network. A long-term infrastructure plan presents a prudent opportunity to specify corridors which will be required in the future, such as:
• Protection of a corridor for a future M9 Far Western Sydney Orbital; • A future F3-M7 connection; • Preservation of underground alignments for a future Sydney metro rail network; • Protection of future CityRail corridors through the Sydney CBD; • Protecting a future corridor for an East Coast High Speed Rail corridor.
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ENERGY
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4. ENERGY
The New South Wales energy sector is currently facing the perfect storm of challenges; they are: • An ageing, publicly owned transmission network requiring tens of billions in investment; • A partially reformed generation sector with a confused mix of public and partial private ownership; • A 50 per cent increase in generation demand to 2030; and • The need to transition to low or lower carbon technologies.
These challenges are further compounded by a legacy of under-investment in network infrastructure requiring capital expenditure of $17.4 billion over the five years to 2013/14. This represents an 80 per cent increase on the previous five-year period.
As much as $7.6 billion of this new capital expenditure on networks is ‘growth- related’.
An incoming State Government should – as a matter of priority - take immediate steps to shift the crippling capital expenditure requirements from the state balance sheet and undertake a straightforward privatisation of the remaining generators.
Recommendation: Undertake a considered privatisation of the remaining generation assets and invest realised capital in major infrastructure projects.
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Infrastructure Partnerships Australia Level 8, 8-10 Loftus Street, Sydney NSW 2000 T: 02 9240 2050 F: 02 9240 2055 E: [email protected] www.infrastructure.org.au