In This Edition Telstra Announces Sale of 49 Per Cent Stake in Infraco Towers

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In This Edition Telstra Announces Sale of 49 Per Cent Stake in Infraco Towers A weekly analysis updating you on the latest developments in the infrastructure sector. View the full report in your browser. Follow us on In this edition Telstra announces sale of 49 per cent stake in InfraCo Towers Market sounding commences for SA New Women’s and Children’s Hospital Federal Government releases 2021 Intergenerational Report IRENA outlines global energy pathway to net zero by 2050 Industry News Appointments On-demand Streaming & Podcasts TELECOMMUNICATIONS Telstra announces sale of 49 per cent stake in InfraCo Towers Telstra has announced the sale of 49 per cent of its mobile tower business, InfraCo Towers, for $2.8 billion. A consortium comprising the Future Fund, Commonwealth Superannuation Corporation, and Sunsuper will acquire the minority stake in InfraCo Towers. Telstra will retain majority ownership of InfraCo Towers and continue to own the active parts of its network, including the radio access equipment and spectrum assets. Completion of the sale is expected by the end of September. Source: Shutterstock This announcement represents a change to the approach outlined by Telstra in February. Indicative bids were originally expected to be called for InfraCo Towers in the third quarter of 2021, with binding offers due in the fourth quarter of 2021 and the sale of InfraCo Towers in March 2022. Telstra’s 49 per cent sale of InfraCo Towers ahead of schedule comes after Singtel announced in April the sale of the Australian Tower Network, primarily leased to Optus, would proceed. This includes approximately 2,300 mobile towers and rooftop sites. The InfraCo Towers business will operate under a Board, to be chaired by current InfraCo Chief Executive Officer (CEO) Brendon Riley and comprising other representatives from Telstra and the consortium. The CEO of the business will be Jon Lipton, currently head of the towers business within Telstra. SOCIAL INFRASTRUCTURE Market sounding commences for SA New Women’s and Children’s Hospital This week, the Government of South Australia has commenced a market sounding process for a Managing Contractor to oversee delivery of the New Women’s and Children’s Hospital. The new facility has an estimated total cost of $1.95 billion and will be located next to the Royal Adelaide Hospital on Port Road in North Adelaide. The new hospital will include 500 treatment spaces, 170 outpatient rooms, 14 Women’s Assessment Service treatment spaces, Source: Shutterstock two air bridges and a bridge over the rail line onsite. Responses to the market sounding close today. Expressions of Interest will open later this month and close in August. A Request for Tender phase is expected to commence in September and close in December. A preferred bidder is expected to be announced in February 2022. Project completion is scheduled for 2026. The project is being fully funded by the Government of South Australia, with the 2021-22 SA Budget allocating $1.1 billion over the next four years towards the project, including $84 million in FY2021-22. ECONOMICS Federal Government releases 2021 Intergenerational Report This week, the Federal Government released its 2021 Intergenerational Report. The Report is produced every five years, and examines the long-term sustainability of Australia’s current policy settings through a 40-year projection of key economic, financial, and demographic measures. The Report projects continued economic growth for Australia at an average of 2.6 percent, which would underpin a $5.5 trillion economy (in real terms) by FY2060- 61. This growth is contingent on labour productivity Source: Shutterstock returning from its current rate of 1.2 percent to the 30-year average of 1.5 per cent. The population is expected to grow to 38.8 million over the next forty years but – in a change from previous Intergenerational Reports – the annual population growth rate is projected to slow, falling below an average of one per cent annual growth by the 2040s. In terms of infrastructure, the Report assumes that Federal Government infrastructure spending will continue to increase in step with the population and is expected to be 0.4 per cent of Gross Domestic Product (GDP) over the long run. This is lower than the approximately 0.7 per cent of GDP for infrastructure outlined by the Federal Government in its recent 2021-22 Budget. This measure excludes the spending commitments by state and territory governments, which account for approximately three-quarters of public infrastructure investment nationally. ENERGY IRENA outlines global energy pathway to net zero by 2050 The International Renewable Energy Agency (IRENA) has released a new report, World Energy Transitions Outlook: 1.5°C Pathway, outlining the options, technologies, investments and policies needed to limit global temperature rise to 1.5 degrees Celsius and reach net zero emissions by 2050. The Report estimates the vast majority of solutions required to meet the 2050 target involve renewable energy, through direct supply, electrification of other sectors, Source: IRENA improvements to efficiency, and new technologies like hydrogen and bioenergy. IRENA also stresses the need for targeted policies and investments to ensure the transition happens soon enough to limit global warming to 1.5°C. Globally, this will require a 30 per cent increase on the planned investment in the energy transition between now and 2050. Regarding infrastructure, the Report highlights the importance of governments accelerating investments in grid and hydrogen infrastructure to support the transition to renewables. This means upgrading old infrastructure, modernising grid systems to provide system flexibility and ensuring infrastructure is developed in line with long-term plans and targets, including boosting investment in storage and transmission infrastructure. The Report also discusses the need to electrify the transport sector and the required infrastructure needed to support that change, such as charging stations for the light vehicle fleet. Industry News The Federal Court has dismissed the Australian Competition and Consumer Commission’s proceedings against NSW Ports concerning Port Commitment Deeds agreed with the NSW Government as part of the long-term lease of Port Botany and Port Kembla. The Federal Court’s full judgment will be publicly released once confidentiality issues have been resolved. Calibre Group has secured $130 million in financing, comprising a $40 million bank guarantee and revolving credit facility with NAB, and a $90 million syndicated term facility with Longreach Credit Investors, Wingate, Nomura, and Pacific Equity Partners. Calibre has also announced Executive Director of Diona, John O’Connor, has been appointed Executive General Manger of soon to be launched renewable services entity Sevengen. TSA Management has launched two new business streams: TSA Projects and TSA Advisory. TSA Projects will comprise TSA’s existing project management service. TSA Advisory will comprise the former advisory firm Calcutta and the Capital Projects Advisory team acquired from Advisian. Paul Griffiths has been appointed to lead TSA Advisory. MUFG has signed a Memorandum of Understanding with the Western Australian Department of Jobs, Tourism, Science, and Innovation to promote economic cooperation. The Memorandum covers renewables, resources and energy, agribusiness, international education, tourism, and manufacturing, and seeks to facilitate investment opportunities for Japanese companies in Western Australia. Ashurst is seeking industry feedback through a Resilient Infrastructure Survey, which explores the impacts of technological advancement, the net zero emissions agenda, climate change, and increased political risk on future planning and investment in the infrastructure sector. The survey can be accessed here. Brisbane City Council has awarded the Design and Construct contract for the Kangaroo Point Green Bridge to the Connect Brisbane consortium, which includes BESIX Watpac, WSP and Rizzani de Eccher. Construction is expected to commence in late 2021 and be completed by late 2023, pending planning approvals. The Victorian Government has announced 480 social housing homes will be built at Collingwood and South Yarra, as part of the $5.3 billion Big Housing Build. Under the program, 150 new homes will be constructed at Wellington Street in Collingwood, with a further 330 new homes planned for Simmons Street in South Yarra, as part of a broader redevelopment. Rail Projects Victoria is seeking feedback on concept designs for sections of the Melbourne Airport Rail project. The concept designs cover the Sunshine Station, Albion elevated rail and station works, bridges over the Maribyrnong River Valley and the Western Ring Road, and shared use overpass in Sunshine North. Consultation closes on 6 September. Sydney Metro has lodged a Scoping Report with the NSW Department of Planning, Industry and Environment, requesting Secretary’s Environmental Assessment Requirements for major civil construction work between The Bays and Sydney CBD on the Sydney Metro West project. An Environmental Impact Statement is expected to be released in early 2022 for public consultation. The New Zealand Government has announced its intention to establish four-publicly owned entities with responsibility for drinking water, wastewater, and stormwater infrastructure, as part of the Three Waters Reform Program. The new entities would operate across four geographic regions and be responsible for ongoing investment and service delivery, which is currently managed by 67 councils across
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