Japanese Embassy: Successful Infrastructure Meeting Held

Japanese Embassy: Successful Infrastructure Meeting Held

The Japanese Embassy in Canberra hosted its second Infrastructure Seminar in Canberra last month. The meeting was opened by Ambassador Sumio KusakaAJBCC representatives and member companies attended the meeting. It brought together Australian and Japanese companies involved in diverse aspects of infrastructure from financing to construction and included representatives of State and Federal Governments. Business matching meetings were held after the plenary sessions.

Mario D’Elia, Partner PwC gave some opening remarks about the Australian infrastructure landscape. This included the following observations:

Capacity:

Ageing infrastructure combined with a growing population has resulted in a renewed Government focus on investments in infrastructure with $125 billion to be invested into new projects over the next decade, with urban rail and road projects forming a significant portion.

“is there enough market capacity to provide competent and value for money bids when there is also so much other work going on”.

Affordability:

The second major issue that is slowing the announcement of shovel ready projects is “affordability”.

Whilst finance is available and cheap, the ability to repay ever increasing borrowings or fund budget deficits is becoming more problematic, especially with an economy that is not growing at a sufficient rate to generate the required revenues.

Governments are showing innovation in this space through such mechanisms as:

  1. Asset recycling
  2. Value Capture

a. All States and the Federal Government are drafting policy around how value uplift, created by introducing new infrastructure, can be best shared between those paying for the infrastructure and the beneficiaries of the uplift.

b. Through the Market Led Proposal process there has been some innovation in this area of value capture.