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Five findings of the infrastructure audit

Melbourne tram. Photo State Government Victoria

Infrastructure Australia last week released its Australian Infrastructure Audit Report, and there’s a lot in it for the rail industry to digest.

The report, billed as Australia’s first-ever “comprehensive infrastructure audit,” suggests a huge amount of work is needed to get Australian infrastructure on pace with economic and population growth.

Five key factors stood out for the rail industry.

 

  1. There is a serious need for investment in transport

Releasing the report on Friday, Infrastructure Australia chairman Mark Birrell said Australia must act now before demand pressures affect living standards and economic competitiveness.

“Experiences of transport networks failing to keep pace with demand, water quality standards being uneven, energy costs being too high, telecommunication services being outdated, or freight corridors being neglected are now so common that they necessitate a strategic response,” Birrell said.

Infrastructure Australia said in its report that without investment in new transport capacity and/or means of managing demand, car travel times in Perth, Melbourne, Sydney, Adelaide, Brisbane and Canberra are expected to increase by at least 20% in the most congested corridors by 2031.

“In some cases, travel times could more than double,” the report warns.

“Demand for public transport in the capital cities (measured by passenger kilometres travelled) is set to rise by 55% in Sydney, 121% in Melbourne, and an average of 89% across all capital cities.

“Unless peak period passenger loads are managed and capacity is increased, commuters in all capital cities will see more services experiencing ‘crush loadings’, where peak demand exceeds capacity.”

Both public transport and road infrastructure will need to be expanded to meet this growth in demand, the audit found.

 

  1. Australia needs a long-term infrastructure plan

The report says Australia would benefit from a strong and consistent pipeline of well-planned infrastructure projects.

Infrastructure Australia says a consistent pipeline “would provide greater certainty for infrastructure constructors and investors, and provide the basis for a well-resourced environment for project procurement and informed decision making”.

It said state and federal governments need to take action to make major project procurement more efficient.

This will reduce administrative burdens, and streamline assessment processes across governments, the report says.

“Integrated infrastructure and land-use planning is essential if there is to be strategic decision-making at all levels of government.

“Whilst there have been improvements in this area, progress has been slow in securing the many benefits that will be gained from an integrated approach to managing infrastructure challenges.”

A key benefit of a more cooperative approach to infrastructure, the report says, would be the establishment of best practice principles for infrastructure planning, procurement, delivery and operation.

“Improvements in infrastructure project appraisal and project selection (including the consistent use and transparent reporting of cost benefit analyses) are necessary if Australians expectations are to be realised,” the report explains.

 

  1. Rail freight’s share will grow in the future, due to bulk

Infrastructure Australia predicts the mode share of rail freight within the national freight task to grow over the period to 2031, but says this will not be due to a major shift of container freight onto the rail network.

“This is mostly due to increased haulage of minerals for export,” the independent body explained.

“Demand for national rail infrastructure is projected to grow, especially in WA, Queensland and NSW.”

WA accounts for roughly 50% of the national rail freight value-add, due to mining in the Pilbara, and the audit projects that the value-add from rail freight services will grow to $9.5 billion in 2031, an increase of 75%.

 

  1. Total public and private funding needs to increase

As a proportion of GDP, spending on infrastructure has been higher in the last five years than in the preceding 20 years.

But the audit finds that fiscal pressures – such as the need to fund health, retirement and other social welfare programs – mean governments will struggle to maintain current levels of infrastructure spending in the medium to long term.

“Private investment in infrastructure has grown, with more private owners and developers of infrastructure,” the audit recognises.

“Creating the conditions for further private investment is an important strategy in meeting future infrastructure needs.”

To do this, the report says, Australia will have to increase the amount of funding available from both public and private sources, to maintain and grow our infrastructure networks.

“Current funding arrangements are unsustainable,” Infrastructure Australia said, “particularly for the transport sector.”

The audit says reform is needed.

“While users contribute a proportion of the cost of transport infrastructure through licensing and registration, fuel excise, public transport tickets and freight network access charges, governments still pay the lion’s share.

“The current system therefore relies on limited revenue sources … and it does not ensure that the revenue is directed to transport outlays, new projects or improved performance of networks.”

If there is no change to this, the report warns, maintenance of existing assets would need to be cut back, and new projects aimed at maintaining or raising levels of service in our cities and regions would likely not proceed.

 

  1. We need to sweat our assets

Infrastructure Australia urged a newfound focus on resilience and improved maintenance, noting that existing assets will need to be maximised to cope with future growth.

“Maintenance and resilience are major themes in the audit,” the independent body said on Friday.

“Most of the infrastructure that Australians will use in 2031 has already been built, but maintenance standards are often below par.

“Service providers will need to improve whole-of-life asset management processes, including adequate long-term funding strategies, to ensure infrastructure networks are able to provide reasonable levels of service in the future.”

 

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