Home' Future Building: The Australian Infrastructure Review : July 2011 Contents 38 futurebuilding
Volume 2 Number 1
Continued from page 36
On the rail network, the plan will need to consider
ultra-high value projects, like a new Harbour crossing
and a CBD relief line, on top of a radical upgrade in
signalling and rolling stock over the coming decades.
Other transport investments will have to be factored
in, like a decision on replacing the other half of the
urban train fleet not touched by Waratah Trains, the
replacement of the aged XPT and XPlorer country
trains, and the replacement of the Sydney Ferries fleet.
On top of multi-billion dollar futureproofing
projects, the state will need to liberate enough money
to deliver its part of the duplication of the Pacific
Highway, which will cost the Federal and State
Governments another $7 billion to finish. And then
there is the Princes Highway duplication – a massive
task all on its own.
None of those projects come cheap. And that’s
before you start to consider the desirability of replacing
a range of hospitals from the 1960s and 1970s that are
coming to the end of their economic lives, or the new
health, education, justice, water and freight network
investments that will be required to deal with economic
and population growth.
In short, the list of projects likely to be identified by
Infrastructure NSW is going to be important, it’s going
to be long and it’s going to be expensive.
In September, O’Farrell will receive an economic
audit of the state’s financial position. The audit, being
overseen by Treasurer Mike Baird and acting Treasury
Secretary Michael Lambert, will deliver a picture of the
state’s assets and liabilities and outline the opportunities
The economic audit can be judged a success if
it spells out a strategy to rein in the state’s expenses
and drive up service quality. It will need to identify
how the state’s budget can be transformed to provide
a sustainable way to fund recurrent service costs, and
fund the short and longer-term capital investments
identified by Infrastructure NSW.
An appropriate program of asset sales is an
obvious avenue to support infrastructure investment.
Candidates for an asset sales programme could
include the state-owned ports in Newcastle, Kembla
or Sydney, the state’s forestry businesses, and
some public sector maintenance and construction
The energy sector too will hold opportunities for
windfall revenues, although the current half-pregnant
structure makes it a much less straightforward
A fractious public debate and internal divisions in
the former state government saw a headlong pursuit of
a compromised reform model that has left the energy
sector in a mess. All generators remain publicly
owned, but the output of many has been sold to the
private sector – along with the retail businesses.
This effectively leaves the state halfway to
a poor reform – with no easy way back. Proper
reform would have delivered the state a clear-
cut, competitive and efficient energy sector, and
potentially delivered billions for renewed investment
in vital infrastructure.
But there are still opportunities to salvage value
from the state energy sector. Part of the generation
sector remains in full public ownership, and so do
the transmission and distribution businesses.
O’Farrell has commissioned an independent
inquiry, headed by Justice Brian Tamberlin, to
identify a way to fix the energy mess. Hopes are high
that the inquiry, due to report later this year, will
unambiguously call for a reform plan that will see
the straightforward sale of the remaining generators,
and a process to sell the part-reformed generators to
the private sector.
Of course, major reforms, like privatisations,
service outsourcing and meaningful public sector
reform, need to be tackled sensitively in a way that
engages the public and debunks the myths.
Beyond its own budget measures, there is no
doubt that New South Wales will also be looking for
Canberra to play its part.
O’Farrell was quick to point out after the election
campaign that New South Wales largely missed out
in the first round of Infrastructure Australia funding.
The day after the state election, O’Farrell said of
Sydney: ‘Now this is a city that has 20 per cent of
the nation’s population, and yet in the first round of
Infrastructure Australia funding, we got less than two
per cent of the funds.’
Barry the Builder – Can he fix it?
rIgHT: Newcastle Port
could be a candidate for
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