Australia - New South Wales Commits 'Unprecedented' A$87.2bn to Infrastructure.
Legal News & Analysis - Asia Pacific - Australia - Energy & Project Finance
25 June, 2018
The state government of New South Wales (NSW) will invest a record A$87.2 billion (€55.75bn) in infrastructure over the next four years, it has announced.
The planned investment, set out in the NSW budget for 2018-19, is the largest ever infrastructure commitment by a state government in Australia, according to the government. Treasurer Dominic Perrottet attributed the record funding allocation to the state's "strong fiscal management and asset recycling plan", as well as its prioritisation of strategic capital projects.
The state budget sets out plans for a wide range of infrastructure projects, incorporating transport, healthcare, education, water and waste water and housing priorities. It includes A$51.2bn for over 3,500 road and rail projects including a Sydney Metro West, F6 Extension Stage 1, Western Harbour Tunnel and Beaches Link; and A$8bn for the planning and development of over 40 new and upgraded hospitals, including redevelopment of the Liverpool Health and Academic Precinct.
"The NSW government's 2018-19 budget, on balance, represents a great outcome for the delivery of key infrastructure projects across New South Wales and provides measures to ensure certainty of funding," said Sydney-based infrastructure expert Max Ababio of Pinsent Masons, the law firm behind Out-Law.com.
"Although funding is an essential element in delivering vital and significant infrastructure projects, what is critical is that these projects are delivered on time, efficiently and in a manner that does not impose undue burdens on all stakeholders.
The successful implementation of the NSW government's recently-released ten-point action plan, intended to ensure collaboration with industry on the procurement of major projects, will be crucial to the efficient, timely and successful delivery of the NSW government's large long-term pipeline of infrastructure projects," he said.
Alongside its significant funding allocations for transport and healthcare-related infrastructure, the NSW budget includes A$6.8bn for education and skills infrastructure, to include over 170 new and upgraded schools and training centres; A$5.6bn for vital water and waste water infrastructure; and A$3.7bn for criminal justice and emergency services infrastructure. It also allocates A$2.4bn for housing and social infrastructure, on top of the previously-committed investment in social and affordable housing through the A$1.1bn Social and Affordable Housing Fund and the Communities Plus Program, which includes the A$2.2bn Ivanhoe project.
The government intends to establish a new sovereign wealth fund, the NSW Generations Fund, with an initial A$3bn in seed funding, according to the budget announcement. Further significant contributions into the fund will come from the state's residual interest in the WestConnex toll road project, after the planned sale of its 51% stake. The government will also establish a Snowy Hydro Legacy Fund with the proceeds from the sale of its shares in the Snowy Hydro renewable energy project, which will be used to invest in infrastructure across regional New South Wales.
The state is projecting a budget surplus of A$3.9bn in 2017-18, with average surpluses of A$1.6bn over the four years to 2021-22, according to the budget announcement. The state's net debt is negative for the third consecutive year, and its net worth based on NSW public net assets is set to reach a quarter of a trillion dollars by the end of June 2018, a year earlier than previously forecast, it said.
This article was published in Out-law here.
For further information, please contact:
Max Ababio, Pinsent Masons