Home' Future Building Australian Infrastructure Review : Volume 4 Number 1 Contents futurebuilding 7
Volume 4 Number 1
The Hon Mike Baird MP
cash ows are borrowed against, we'll build stage
two and then repeat the process to build stage three.
There is capacity for superannuation funds, and
obviously nanciers and banks, to participate in the
debt side of the arrangement. At the conclusion, we
then have the capacity to invite superannuation funds
to participate in the equity process, having already
eliminated the 'green eld' risk around patronage.
We're excited by the opportunities. Private
sector equity is not just a case of the Government
handing out money and moving out of the picture
-- I want a constant dynamic tension as we continue
In relation to tolling, which has historically been
a dif cult issue politically, I think the battle is largely
won. We have been honest with the community
in telling them that we cannot afford to build
infrastructure unless they are able to contribute. In
light of this, our policy has been to put a bene t in
place before we ask for contributions through tolling.
Obviously, we will try to minimise the toll cost, but
tolling continues to be part of the critical path when
New South Wales has a signi cant Public Private
Partnership (PPP) agenda. We are leading the country
on PPPs, because we can see that partnerships are
the critical way that we are going to deliver the
Another bene t of having the infrastructure pipeline
established and laid out on the table is the opportunity
for unsolicited bids. We are able to say to the private
sector: 'You have the list, you know the timing, you
know the capital we have -- can you think of ideas or
opportunities to bring these projects forward?'
For example, the project of linking the M1, which
currently terminates in Wahroonga, with the M2
has been around for a long time [formerly F3--M2],
but in terms of priority has sat below other projects.
An unsolicited proposal from Transurban suggested
that the project could be delivered with minimal
government contribution. Although the negotiations
are not yet nalised, there has been strong progress,
and this approach should be encouraged. This is
clearly an example where traditional tendering
would not have delivered the same innovation.
My nal point is about the constructive role of
the Federal Government, and it's encouraging that we
have one that is committed to infrastructure delivery
and that is prepared to provide incentives to the states
to invest in infrastructure.
One of the incentives I have spoken about
previously is in relation to tax-equivalent payments.
Governments are starting to unlock their assets,
as New South Wales is doing, and taking those
proceeds and putting them into new assets, which
brings huge bene ts. But when a state-owned asset
is privatised, there is also the loss of the income
stream that currently exists with tax-equivalent
payments. This becomes a company tax windfall for
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