Infrastructure WA

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https://twitter.com/Robert_Dow/status/960908389348855809

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WA Today --> Politics finally set to butt out of WA's infrastructure future

WA has launched an independent body to take politics out of planning, and create a major infrastructure blueprint immune from the election cycles that can leave billion-dollar projects dead in the water.

The Infrastructure WA body will from 2019 comprise a panel of private and public sector experts whose job it will be to develop a 20-year plan for WA's key projects, a plan intended to become an apolitical guide to state and federal government funding.

The state government on Tuesday launched the proposed model for Infrastructure WA.

Tuesday's launch, the fulfillment of a Labor election promise, brings to an end years of desperate lobbying from the property and engineering industry and academics.

They called for an end to "cocktail party planning", pork-barrelling and costly backtracks associated with major projects, with Roe 8 being the most recent and spectacular example.

Infrastructure WA, they said, would protect the design and funding of major projects from the election cycle, and end the uncertainty hobbling the property, engineering and related industries.

With its launch, WA falls into line with New South Wales, Queensland, Victoria and Tasmania, which all have equivalent bodies, with South Australia's Liberal party promising one if elected next month.

The independent statutory body will vet infrastructure proposals of state significance, that is, for projects costing $100 million plus, or smaller but high risk projects. 

The projects might be government or private sector proposals or joint proposals, and evaluation will include consulting communities and evaluating business cases, including cost-benefit analyses.

From its evaluations IWA will form an overarching priority list of major projects covering a period of at least 20 years, with an overall update every five years, to inform state spending decisions and lobby for federal funding.

Mr McGowan said IWA would be an independent body to provide scrutiny for important, complex and high value projects that would restore the public's confidence in government decision-making.

It would ensure WA got major projects "at the right time, for the right price" through the "rational" allocation of government money.

A lot of money is at stake: this year $6 billion would be spent on infrastructure in WA.

    Where politicians now or in future decide to reject its advice, they will be required to account for those decisions.
    Premier Mark McGowan

"Infrastructure has long been held hostage to political cycles," he said.

"We've seen too many cases of major projects blowing out without business cases and government money being wasted.

"It will ensure government itself is less 'siloed' and we have decision making across portfolios rather than each portfolio making its own decision and each minister making their own decision without reference to a greater plan.

The strategy would be published and with updates published each year around the budget.

"I would expect political parties of all stripes, their infrastructure commitments will start to align with the strategy ... [which] will largely become a bipartisan document over time," he said.

"Where politicians now or in future decide to reject its advice, they will be required to account for those decisions.

"If we get proper business cases, decent submissions to the Commonwealth government, seeking infrastructure money, we're going to get more. That wasn't done over the term of the last government. What I want to do is milk as much as I can out of the Commonwealth for Western Australia. Other states do it; this body will let us do that."

Lessons from the past

The example of Roe 8 is helpful in explaining the impact it is hoped Infrastructure WA will have on state planning.

Infrastructure WA body's eventual published list of priority projects will form a pipeline for proposals to the national Infrastructure Australia, the independent statutory body mandated to prioritise and progress nationally significant infrastructure.

There had been an embarrassing lack of proposals from WA to the national IA in recent years.

The $1.9 billion Perth Freight Link was not mentioned in major state planning strategy, arriving to WA's consciousness in 2014 after former prime minister Tony Abbott included it in a round of funding promises known as "captain's calls" after crowning himself "Infrastructure Prime Minister".

Hasty planning and business cases were then manufactured to meet this funding, resulting in the contentious Roe 8 proposal.

IA assessed the project the following year and found the Perth Freight Link option was shortlisted, then selected, from a list of cheaper options.

These included expansion of the outer harbour at Cockburn Sound, and lower cost options including a $100 million Leach Highway/High Street upgrade.

But benefit-cost analyses were completed for Roe 8 only, not from all options to determine if the preferred option provided the greatest net benefit.

IA also said the "assessment of options had limited reliance on objective quantitative evidence".

It found "significant weaknesses" and "significant risks" in the government's benefit-cost assessment and found fault with the traffic modelling.

The best it could conclude was that the benefit-cost ratio would be "better than 1:1", and that the benefits were heavily weighted towards freight operators as opposed to the community.

Given this lukewarm response, it was widely supposed political expediency of pushing ahead with the project to make the most of the massive funding gift took precedence.

Planning Minister Rita Saffioti said IWA would make sure there was a range of projects on the table for assessment by Infrastructure Australia.

"The previous government wouldn't engage, wouldn't submit, so when they put forward one project [Roe 8] they got funding because basically the federal government had nothing else to fund," she said.

Western Australian projects remain scarce on Infrastructure Australia's priority list.

The body's November 2017 'highest priority' list featured no WA projects other than the recently scrapped Perth Freight Link, funding now redirected into other infrastructure projects.

The list was instead mostly made up of Sydney and Melbourne projects focused on improving rail capacity and easing road congestion.
How it will work

IWA will comprise five public sector representatives, five industry members and an independent chairman, also from the private sector, who will have the casting vote if one becomes necessary.

It will be established by next year after public consultation on the details of the model, which can be accessed online.

The model is primarily based upon that of Infrastructure New South Wales, the most "mature" equivalent Australian body, with the most marked difference being that the NSW body is also tasked with implementation – WA's will be advisory only.

It also takes some structure ideas from the UK's Infrastructure Projects Authority, as lobbied for by Perth academics.

Its five public-sector roles will be filled by the Department of Premier and Cabinet under-treasurer and director general and the Department of Planning DG, with the remaining two spots rotating from departments of primary industries, regional development and transport.

Currently, government infrastructure projects are proposed by individual departments and evaluated by Treasury's state asset investment framework; details are often not publicly available.

IWA's evaluation role will be publicly available, and structured to avoid duplication of existing Treasury processes.

Given the state-wide focus of IWA, the proposal says it may be appropriate for IWA to also evaluate high value/risk projects and programs in the regions before Royalties for Regions funding can be approved.

The government must legislate to create IWA as a clearly defined statutory body.

The report released on Tuesday for public comment says while a non-statutory body would be simpler to establish and more flexible to change over time, it was more vulnerable to influence from the government of the day, which could impact credibility.

"Infrastructure advisory bodies set up in other states without legislation have not been successful and have been criticised by industry for a lack of independence and credibility. To ensure oversight at the highest level, it is proposed that IWA report directly to the Premier," the report said.

"This will allow for a whole-of-government perspective, rather than having a narrower sectoral view or focussing on a particular category of infrastructure. To ensure IWA can maintain its independence while being appropriately responsive to government, the Premier will be able to direct IWA in limited circumstances. Any directions will be made publicly available to ensure transparency."

A small team of experienced staff will initially be formed as a sub-department within the Department of Premier and Cabinet, reporting directly to the Premier, with DPC providing administrative and corporate support to minimise duplication and cost.

There will be provision for the IWA board to be supported by a stand-alone agency in future if the need arises.

"This model strikes the right balance between the need for independence and the need for efficiency, while remaining consistent with the focus on consolidating agencies through current public sector reforms," the report said.

Consult Australia, earlier this year, called for all Australian infrastructure bodies to be strictly independent from state governments.

The Australian Financial Review reported Victoria was the only state with legislation stating ministers could not direct or control activities relating to the state's long-term infrastructure projects.

In NSW, projects are open to influence from the Premier. The 2011 Infrastructure NSW Act says the state's infrastructure body is "subject to the control and direction of the Premier in the exercise of its functions".

The Premier is also allowed to appoint up to five people from the private sector to Infrastructure NSW's board.

"IBodies should report to Parliament rather than the government of the day," said Consult Australia chief executive Megan Motto.

"That will help reduce the politicisation of projects."
What other states are doing

INSW's strategy covers a 20-year planning horizon and was first published in 2012. INSW is required to review the strategy every five years (and at such times as the Premier directs or INSW considers appropriate). An update was published in 2014. The INSW Act provides broad direction on the contents of the strategy. The Premier is required to consider the strategy, and adopt the strategy with or without amendments or refer it back to INSW for further consideration.

IVIC's strategy addresses a 30-year planning horizon and was first published in 2016. The strategy must be reviewed every three to five years. Similar to INSW, the IVIC Act provides an outline of the scope of the strategy. Public consultation on the draft strategy must be undertaken, and the government is required to provide a formal response. The strategy is tabled in Parliament.

In Queensland, the government prepares a long-term infrastructure strategy. The strategy sets a vision to guide infrastructure investment, identifying infrastructure challenges and objectives, and a set of directions to address them.

At the Commonwealth level, IA prepares the Australian Infrastructure Plan, covering a period of 15 years, or such other period as determined by the IA Board. The Plan must specify priorities for nationally significant infrastructure for Commonwealth, state, territory and local governments, and be reviewed every five years, or at other intervals as determined by IA.

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[Stillwater]

WOW           

Perhaps another case of Queensland needing to emulate a WA initiative and curtail the urge of politicians to head to the Tweed, face Canberra and shout "SHOW US THE MONEY" as a means of funding major infrastructure projects in this state.

QUOTE:

"Infrastructure has long been held hostage to political cycles," he said.  "We've seen too many cases of major projects blowing out without business cases and government money being wasted.
"Where politicians now or in future decide to reject advice, they will be required to account for those decisions.

"If we get proper business cases, decent submissions to the Commonwealth government, seeking infrastructure money, we're going to get more. That wasn't done over the term of the last government. What I want to do is milk as much as I can out of the Commonwealth for Western Australia. Other states do it; this body will let us do that."

"Infrastructure has long been held hostage to political cycles," he said. "We've seen too many cases of major projects blowing out without business cases and government money being wasted.

"There had been an embarrassing lack of proposals from WA to the national IA in recent years."

The article then discussed projects announced without much planning and with an artificial dollar amount in mind (ahem, Townsville Stadium anyone) and goes on to say ...

"Hasty planning and business cases (are) then manufactured to meet this funding."

With other states getting serious, WA in particular as it stands to benefit most from any new carve-up of the GST, Queensland has better change its bluff and bluster politics when it comes to big new infrastructure for this state.

The planning and funding fudge around CRR and the aggressive 'do it the Queenslander way' re NGR trains and the AHRC just won't wash anymore against superior bids for Commonwealth funding from other state that get their s**t together.  WA is.

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