Home' Future Building: The Australian Infrastructure Review : December 2010 Contents 46 futurebuilding DECEMBER 2010
Turchini laments gumption defcit in Australia's infrastructure battle
The private sector is less likely now
to take on as much risk as it has done in
the past. With the country's infrastructure
backlog growing, Turchini insists the sector
can’t rely on a one-size-fts-all approach.
'There is no silver bullet. We need all our
resources; private and public. We need to
use the most appropriate fnancing structure,’
According to Turchini, since the GFC,
Australian banks have tended to limit their
contribution on each project to $150 million
each. Even if all four major banks contribute
funds, their maximum total contribution
of $600 million will likely fall short when
project costs are measured in the billions
of dollars. Lending syndicates may number
as many as 15 banks, including overseas
banks, to provide funding for the very large
projects. While superannuation funds could
be a good source of funding, says Turchini, to
date many funds don't have the appetite for
construction, either because their investment
teams are too small, or the perceived risk in
the sector is too great.
Potentially, the view for some super
funds could change if they were to employ
people who could identify and assess the
risks and benefts associated with investing
in infrastructure assets.
But government leadership is still the
key if Australia has any hope of getting the
infrastructure it needs, Turchini says.
Turchini says that a key consideration
must be greater funds and delivery resources
at a Federal level. The lack of resourcing has
meant that too few Infrastructure Australia
projects are actually being built.
While statements from both major parties
during the federal election backing studies
for high-speed rail are encouraging, Turchini
worries he's seen this before.
For much of the 1990s, Turchini headed
an effort at Leighton to establish a high-
speed rail service between Sydney and
Canberra. The intention was that the network
would eventually expand to Melbourne and
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