Australia: New Principles Set Infrastructure Decisions Blueprint.
Legal News & Analysis - Asia Pacific - Australia - Energy & Project Finance
27 July, 2018
New infrastructure decision-making principles released for future infrastructure projects in Australia are designed to lift government works to the same level of accountability, planning and cost rigour as the private sector.
The principles were published by Infrastructure Australia on Tuesday (5-page / 889KB PDF). Infrastructure Australia is an independent statutory body with a mandate to prioritise and progress nationally significant infrastructure.
The principles were developed out of a recommendation in the 2016 Australian Infrastructure Plan and are designed to ensure major public infrastructure investments deliver the best outcomes for the community and the best value for taxpayers.
The new principles seek to complement the guidance offered in the existing Assessment Framework developed by Infrastructure Australia by providing clear, straightforward statements of expectation for infrastructure decision making in Australia, and call for infrastructure projects to be robust, transparent and accountable.
Infrastructure Australia chief executive, Philip Davies, acknowledged that "Australia's governments and the community would benefit from a set of clear principles to provide a benchmark for high-quality infrastructure decision making".
In the current climate of unprecedented government infrastructure spend in New South Wales and Victoria, it is critical that we continue to reform our approach so that continued investment is sustainable.
The 11 principles are:
- Governments should quantify infrastructure problems and opportunities as part of long-term planning processes.
- Proponents should identify potential infrastructure needs in response to quantified infrastructure problems.
- Proponents should invest in development studies to scope potential responses.
- Where an infrastructure need is identified, governments should take steps to ensure potential responses can be delivered efficiently and affordably.
- Governments should undertake detailed analysis of a potential project through a full business case and should not announce a preferred option or cost profile before undertaking detailed analysis involving multiple options.
- Proponents should assess the viability of alternative funding sources for each potential project.
- Project proposals should be independently assessed by an appropriate third party organisation.
- Governments and proponents should undertake meaningful stakeholder engagement at each stage, from problem identification and option development to project delivery.
- Governments and proponents should publicly release all information supporting their infrastructure decisions.
- Governments should commit to, develop and release post-completion reviews.
- Where projects are funded as part of a broader program, the corresponding decision-making processes should be robust, transparent and prioritise value for money.
Importantly, the 11 principles provide a longer term view of infrastructure investment, a view that goes beyond the forward estimates and a view that is untainted by the electoral cycle.
In an article published by the Australian on Tuesday, Davies warned that, "the population growth will cripple Australia's capital cities and consign them to a future of congestion unless the federal and state governments radically improve the way they plan and deliver major road and rail projects".
As the Turnbull government prepares a population policy, with Australia poised to reach 25 million people next month, "if planning for major projects did not change at all levels of government, the major capitals would not cope with the population growth," said Davies.
"The reality is, if we don’t improve the way we plan and deliver our infrastructure, we won’t cope with this growth and our cities will be characterised by congestion and constraint," he said.
Too often, projects are committed to before a business case has been prepared, a full set of options have been considered and rigorous analysis of a potential project’s benefits and costs have been undertaken.
The principles are not focused on past decisions, rather on what can be achieved if we invest in projects that bring strong productivity benefits for the economy and support our quality of life.
These principles should act as a useful guide for not only those making decisions as part of infrastructure development and delivery, but also for the broader community to use as a clear set of expectations with which to hold decision makers to account.
This article was published in Out-law here.
For further information, please contact:
Adam Perl, Legal Director, Pinsent Masons