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In this edition 2019 Australian Infrastructure Investment Report released Infrastructure Partnerships Australia convenes NSW Major Projects Symposium in Sydney Te Waihanga releases update of Infrastructure Pipeline Expressions of Interest sought for Stadium Australia Redevelopment Productivity Commission releases draft report on National Transport Regulatory Reform Industry News Appointments Policy Taskforces and Events

Australian Infrastructure Investment Report 2019 Video

Infrastructure Partnerships Australia Chief Executive Adrian Dwyer sat down with Allens' Partner David Donnelly to discuss the findings of the 2019 edition of the Australian Infrastructure Investment Report. INVESTMENT 2019 Australian Infrastructure Investment Report released Today, Infrastructure Partnerships Australia released the 2019 Australian Infrastructure Investment Report in partnership with Allens and Perpetual Corporate Trust. A panel of industry experts discussed the report’s findings, and its implications for investors, regulators, policy makers, and the broader infrastructure sector at an event hosted by Allens this morning. The report captures the views of international and Australian investors who together collectively own or manage circa $490 billion of infrastructure assets across the globe. The 2019 report

Source:Infrastructure Partnerships Australia shows Australia still performs well among its international peers as a leading destination for infrastructure investment.

However, the report reveals that there are some emerging risks in the Australian infrastructure market that do not have commensurate rewards. Some risks are symptoms of a flourishing and competitive market, but others, including policy uncertainty and regulatory interventions, have little upside for investors, taxpayers or customers. The report provides clear evidence that government needs to work harder to support investor confidence and provide stability to Australia’s infrastructure market.

Infrastructure Partnerships Australia thanks Allens and Perpetual for their support of this paper and Allens for hosting the launch event. We also would like to thank all survey respondents for their contribution to the report.

SYMPOSIUM Infrastructure Partnerships Australia convenes NSW Major Projects Symposium in Sydney Senior public and private sector leaders gathered in Sydney last week for the NSW Major Projects Symposium. The Symposium is an annual forum centred on major infrastructure planning and investment in NSW. Opened by the NSW Premier, The Hon MP, the Symposium featured a cross section of government and industry leaders who provided an update on the record NSW pipeline of investments. Speakers highlighted that projects were being delivered in line with a range of policy

Source: Infrastructure Partnerships Australia initiatives in NSW around place making and focusing on the needs of their ‘customers’ in designing and delivering network upgrades.

Speakers in order of appearance, included:

The Hon Gladys Berejiklian MP, Premier of NSW Kim Curtain, Interim Deputy Secretary of Trade, Tourism, Investments and Precincts, NSW Treasury Roch Cheroux, Managing Director, Sydney Water Rebecca Wark, Chief Executive, Health Infrastructure NSW Jodi McKay MP, NSW Leader Jon Lamonte, Chief Executive Officer, Sydney Metro Ishaan Nangia, Partner, McKinsey & Company Chris Minns MP, NSW Shadow Minister for Transport and Corrections Sam Sangster, Chief Executive Officer, Western City & Aerotropolis Authority, and Amy Brown, Deputy Secretary, Strategy & Delivery, NSW Department of Premier & Cabinet.

The major projects panel discussion included:

Malcolm McDowall, Chief Executive Officer, Arcadis Marika Calfas, Chief Executive Officer, NSW Ports Geoff Culbert, Chief Executive Officer, Sydney Airport, and Andrew Head, Chief Executive Officer, WestConnex.

PROJECT PIPELINE Te Waihanga releases update of Infrastructure Pipeline This week, the New Zealand Infrastructure Commission (Te Waihanga) published an update to its infrastructure pipeline. The updated pipeline identifies NZ$21.1 billion (A$19.7 billion) worth of projects to be delivered over the next decade. The update follows the formal establishment of Te Waihanga in September. According to the Te Waihanga, NZ$670 million (A$627 million) of work is expected to enter procurement between now and March 2020.

The NZ Pipeline is complementary to Infrastructure Partnerships Australia’s own infrastructurepipeline.org, which is supported by the New Zealand and Australian Governments. Ninety-three per cent of the projects captured by the NZ Pipeline fall below the NZ$100 million threshold for infrastructurepipeline.org. In addition to providing further visibility, the pipeline will assist Te Waihanga in developing its 30-year strategy. Stakeholder consultation on the strategy is expected to commence shortly.

Source: Shutterstock

SOCIAL INFRASTRUCTURE Expressions of Interest sought for Stadium Australia Redevelopment

This week, Infrastructure NSW released expressions of interest for design and construction of the $810 million Stadium Australia Redevelopment. The existing site known as ANZ Stadium will be redeveloped into a permanent rectangular venue with 70,000 seats, in addition to corporate, member, and food and beverage facility upgrades. Expressions of Interest for pre- qualification will close on 29th of November 2019, with Request for Tender expected to be issued by February 2020.

Source: Shutterstock The release of EOIs follows the publication of Infrastructure NSW’s final business case summary for the project in September 2019. While NSW Government's 2019-20 Budget did not expressly provide funding for the project in FY2019-20, $810 million is budgeted under the Restart NSW and Rebuilding NSW funds.

TRANSPORT Productivity Commission releases draft report on National Transport Regulatory Reform This week, the Productivity Commission released its draft report on National Transport Regulatory Reform, examining progress against a reform pathway established by the Council of Australian Governments in 2009. The Commission notes that reform in the domestic freight transport sector has been slow and has not delivered the expected productivity gains. The draft report outlines the challenges for freight transport policy, which include the need for more flexible approaches to safety regulation, progressing changes in infrastructure provision and funding, and adopting new technologies to lift both safety and productivity.

The purpose of the COAG reforms was to improve safety and productivity by establishing national laws and regulators across the heavy vehicle, rail and maritime sectors, as well as to address competition issues within freight transport markets. According to the Commission’s report, reform has delivered more consistent Source: Shutterstock regulation across most jurisdictions, but considerable work remains around enforcement and compliance.

Submissions to the draft report are due by 15 January 2020 and the final report is expected to be delivered to the Federal Government by April 2020.

Industry news

Melbourne Airport has confirmed it will proceed on a north-south runway orientation as its third runway. The decision comes after the completion of a technical review, which found that a north-south orientation would provide a superior outcome in terms of availability, capacity, long-term investment profile and community impacts. Formal approvals for the project will now be sought, with the third runway expected to be operational by the end of 2025.

Napier Port has awarded the NZ$173-190 million contract to build its multi-purpose 350-metre wharf to HEB Construction as part of the Napier Port – Wharf and Dredging project. Essential dredging works will be undertaken by Heron Construction and Dredging Limited. Construction is expected to begin in the first quarter of 2020 and the Wharf completed by late 2022.

The South Australian Government has announced that Keolis Downer will deliver on-demand bus trials in Mount Barker and the Barossa, which will be funded by a $1.7 million grant. Keolis Downer were awarded the right to run these trials following a competitive process. Trials in both areas will commence in early 2020 and run for six months. The Federal Government has released its draft guidance note on the economic infrastructure staples tax concession. Under the concession, the Federal Treasurer has the discretion to approve applications for a 15- year concessional withholding tax rate for infrastructure projects with estimated capital expenditure of $500 million or more and that are deemed to be in the ‘national interest’. The draft note also indicates that the concession would apply a withholding tax rate of 15 per cent for non-resident investors – instead of the regular 30 per cent – for projects approved by the Treasurer. Federal Treasury is seeking feedback on the draft guidance note by 17 January 2020.

According to media reports, a consortium comprising Tetris Capital, DIF Capital Partners and Sarah Constructions have been selected to deliver the South Australian Schools PPP. The $200 million project involves the design, construction, commissioning, financing and maintenance of two large schools in Munno Para, in Adelaide’s northern suburbs, and Aldinga, to the south of Adelaide, over the next 30 years.

The Federal Government has announced a review of the Northern Australia Infrastructure Facility. The review will consider how to ensure the lending facility can meet its objectives to support development across Northern Australia. Additionally, the review will consider the cutoff date of 30 June 2021 for investment decisions, with a view to extending deadline. Three years after it was established, it is unclear whether the NAIF’s role as a financier of last resort fills a genuine market gap, or whether it represents a prudent use of taxpayers’ money. Submissions to the review are due by Friday 13 December.

The NSW Government has opened consultation on the $2.5 billion duplication of the Great Western Highway between Katoomba and Lithgow. Once complete, the upgrade will create a dual carriageway in both directions for almost 100 kilometres. Construction of the proposed route is expected to commence in 2021 and be completed in 2028. Consultation on the plan closes 16 December.

Global infrastructure group Salini Impregilo is a step closer to acquiring Italy's Astaldi following a €600-million (AU$974 million) capital increase. The capital raising it part of the Progetto Italia (Project Italy) plan, which aims to consolidate the country’s fragmented construction industry in order to gain the scale, skills, and resources required to compete for infrastructure projects.

NBN Co has released its first quarter results for the 2019-20 financial year. The results show a total revenue of $876 million, a 41 per cent increase on the first quarter of 2018-19. In the three months to 30 September, 500,000 premises were activated, with 90 per cent of Australians now able to connect to the NBN. The build phase is expected to be completed in 2020.

Malaysian infrastructure company Gamuda, has acquired a 50 per cent stake in Martinus Rail. The acquisition allows both parties to jointly tender for construction projects in Australia. Gamuda is currently building the A$10 billion Mass Rapid Transit Metro Rail system in Kuala Lumpur, and began its Australian operations in August 2019.

The Federal Government has released the implementation plan for the $200 million Darwin City Deal. The plan includes a range of elements including a new education and civic precinct, and planning measures for the Darwin Harbour Foreshore. In a separate announcement, the Federal Government released the implementation plan for the Adelaide City Deal. The deal includes investments in cultural and environmental sites and the upgrade of the Lot Fourteen precinct.

The Australian Energy Regulator has commenced proceedings in the Federal Court against four subsidiaries of AGL Energy. The AER alleges that AGL subsidiaries were late in submitting accurate performance data for each of the quarters for FY2017-18. Additionally, the AER alleges that the data initially submitted and then resubmitted was inaccurate for 544 of 600 performance indicators. The AER is seeking declarations, pecuniary penalties and costs.

The national Meeting of Environment Ministers has agreed to ban the export of certain categories of waste, beginning 1 July 2020. Waste plastic, paper, glass and tyres that have not been processed into value-add materials will be subject to the export ban. The export ban will apply to waste glass by July 2020, mixed waste plastics by July 2021, tyres by December 2021, and remaining waste products, including mixed paper and cardboard by 30 June 2022.

The Mott MacDonald and SMEC FutureRail joint venture has been appointed as the technical advisor for the next tranche of the More Trains, More Services program by Transport for NSW. The More Trains, More Services program includes a range of upgrades to Sydney’s rail network, including improvements to network efficiency, digitalised train control and management systems and station upgrades. The FutureRail joint venture will assist with planning, feasibility studies, business cases and procurement.

The Victorian Government is now inviting feedback on the designs for a road bridge to replace the Cherry Street level crossing in Werribee as part of the Level Crossing Removal program. The bridge will connect Tarneit Road in the north to the Princess Highway in the south. Major work on the project is expected begin in 2020 once a contract has been awarded. Feedback on the bridge design closes 29 November.

The NSW Government has opened feedback on Landcom’s concept proposal for the Hills Showground Metro Station Precinct. The proposal seeks approval to allow nine buildings ranging from 4 to 20 storeys, with up to 1,900 homes and up to 13,600 square metres of non-residential floor space. Additionally, the proposal includes public spaces, new roads and landscaping. Exhibition closes 10 December.

The NSW Government has announced that trains delivered under the Regional Rail Fleet Replacement will be built to allow the fleet to enter electrified parts of NSW’s rail network and switch to diesel when travelling along non-electrified sections of the rail network. Momentum Trains was awarded the contract to design, build and maintain the new fleet, to be rolled out from 2023, on a 15-year concession in February 2019.

University of NSW will hold a two-day course on ‘Understanding Infrastructure Mega-Projects’ on 4-5 December at their Sydney CBD Campus. The course will provide an introduction to the ‘infrastructure tool kit’, and outlines what is covered in business cases, development of procurement strategies, mitigating and allocating project risks and the commercial and financial structuring of mega-projects. To register click here.

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Appointments

Simon Atkinson has been appointed Secretary of the Department of Infrastructure, Transport, Cities and Regional Development. Mr Atkinson was previously Deputy Secretary in the Federal Treasury.

David Fredericks has been appointed Secretary of the Department of Environment and Energy. Mr Fredericks was previously a Deputy Secretary at the Department of Finance and Attorney General’s Department.

Hugh Funder has been appointed Commercial Strategy Manager Oceania with Salini Impregilo. Mr Funder was previously Senior Investment Specialist, Major Infrastructure with Austrade.

Kate McKenzie has been appointed to the Board of NBN Co Limited, effective 1 December. Ms McKenzie was previously CEO of Chorus New Zealand and Chief Operations Officer of Telstra. Justin Milne and Patrick Flannigan concluded their terms on 10 November.

Michele Mauger has been appointed Executive Director, People at Metro Trains Melbourne, effective 28 January 2020. Ms Mauger was previously Executive General Manager, People, Capability and Communication at Thiess.

Rebecca Strang has been appointed Global Service Leader for Land Infrastructure & Spatial Insights at Aurecon. Ms Strang was previously the Digital Practice Leader for Aurecon’s New Zealand region.

The WA Minister for Water has appointed Gningala Yarran-Mark to the Water Corporation Board for a three-year term. Board Chairman Michael Hollett, Deputy Chairman David Lock, Board members Jemma Green and Ross Holt have all been reappointed.

Stephen Leane has been appointed Victoria’s Road Safety Camera Commissioner, effective 9 December. Mr Leane was previously Victoria Police Assistant Commissioner for Road Safety.

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Policy Taskforces and Events

Tax Taskforce

With Jeremy Hirschhorn, Second Commissioner, Client Engagement Group, ATO and Rebecca Saint, Deputy Commissioner, Public Groups, ATO

Date: Monday, 25 November 2019

Time: 2.30pm-4.00pm

Location: DLA Piper Sydney, dial-in details are available

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