Major projects and construction: 5 Minute Fix 07

By the Major Project & Construction team

29 Mar 2018

Get your 5 Minute Fix of major projects and construction news. This issue: Infrastructure and Project Financing Agency's first corporate plan, how construction must combat modern slavery, and the Western Sydney City Deal.

Infrastructure Australia releases its project priority list

Infrastructure Australia (IA) is the Commonwealth-level independent statutory body charged with prioritising and progressing nationally-significant infrastructure. IA released its latest Infrastructure Priority List on 27 March 2018, in print and online interactive forms. IA views the list as “a critical reference point for the most important infrastructure investments Australia needs over the next 15 years” and notes that the list identifies “over $55 billion worth of nation-shaping projects”.

The list is broken down into “Projects” (where full business cases have been completed and positively assessed by the IA Board) and “Initiatives” (where business cases have not yet been completed), and each of these is categorised as either “High Priority” (major problems or opportunities of national significance) or “Priority” (nationally-significant problems or opportunities).

There are six “High Priority Projects”:

  • the M80 Ring Road Upgrade (Victoria)
  • the M4 Motorway Upgrade (Parramatta to Lapstone), WestConnex, Sydney Metro: City and Southwest and Western Sydney Airport (all NSW); and
  • Brisbane Metro.

There are more than 20 “High Priority Initiatives”, including improvement of the connection between the Eastern Freeway in CityLink in Melbourne (which was the goal of the cancelled East-West Tunnel), Cross River Rail in Brisbane, widening and smart freeway technology in Perth, and preservation of a corridor for high speed rail on Australia’s east coast.

IPFA releases its first corporate plan

The Federal Government established the Infrastructure and Project Financing Agency (IPFA) in July 2017 to assist government agencies to develop, assess and broker financing options and develop innovative financing arrangements for infrastructure projects.

IPFA has now released its first corporate plan, which sets out IPFA's agenda for the next four years. It:

  • confirms that IPFA's purposes include providing independent, business-like advice to Government, assisting Government to build its infrastructure delivery capabilities and informing Government's infrastructure investment decisions;
  • allows IPFA to prioritise nationally significant infrastructure projects (particularly where those projects will generate a revenue stream and economic return);
  • requires IPFA to work collaboratively with all stakeholders at both the Federal and State level, including the private sector;
  • recognises that, if innovative financing arrangements are to be implemented, the Federal Government (and IPFA) will need to be actively engaged in the early-stage development of infrastructure proposals; and
  • sets out IPFA's KPIs over the next four years.

Commitment to new reporting requirements for modern slavery in supply chains

The Federal Government has announced an intention to introduce a "Modern Slavery in Supply Chains Reporting Requirement" in Australia to combat modern slavery. Modelled on the United Kingdom's Modern Slavery Act 2015, the proposed reporting requirements will be used to combat the human trafficking, forced labour and slavery-like practices which exist in some business supply chains. Draft legislation will be put before Parliament by 30 June this year with a view to enacting final legislation by the end of the year. The Act has already received bipartisan support.

The Government has proposed that large Australian entities (including government bodies and agencies) headquartered in Australia, or entities that have any part of their operations in Australia, with an annual turnover of more than AUD$50 million will be subject to the reporting requirements. Entities covered by the reporting requirements will need to publish an annual "Modern Slavery Statement", within five months after the end of the Australian financial year, reporting on the steps they have taken to combat modern slavery within their supply chains and operations. Those entities in the construction industry will need to pay particular attention as supply chains become increasingly global. This will be particularly important for entities engaging in large-scale infrastructure projects, or those with complex supply chain networks.

Hear Lauree Coci speak more about the requirements here and see further details here.

The Art of the City Deal

The Prime Minister Malcolm Turnbull, the NSW Premier Gladys Berejiklian and eight local councils recently announced that they had reached agreement on a Western Sydney City Deal.

The City Deal was driven by the needs of the rapidly growing western Sydney population, (currently two million people, expected to reach three million people by the early 2030s). Of those two million people currently residing in Western Sydney, over a quarter of them commute daily to destinations outside western Sydney for work, placing enormous pressure on all existing transport modes.

Western Sydney residents will have the opportunity to work in their own local area in the development of a new research and manufacturing hub, known as the Badgerys Creek Aerotropolis, to be based in the region surrounding the new Western Sydney Airport. This is supported by an upfront commitment from the Australian and NSW Governments to deliver the first stage of Western Sydney Rail, from St Marys to Badgerys Creek Aerotropolis via Western Sydney Airport.

To enable this development to occur, the City Deal includes six core commitments between all levels of Government:

  1. Connectivity – connecting the Western City by road, rail, aviation and digital infrastructure. This includes the upfront commitment to deliver the first stage of the North West Rail Link, the establishment of rapid bus services and exploration of 5G network and digital technology to better connect communities.
  2. Jobs for the future – building on the 13,000 jobs expected to be created by the Western Sydney Airport, to encourage business investment and employment opportunities. The development of the Badgerys Creek Aerotropolis research and manufacturing hub is expected attract knowledge-intensive job opportunities in aviation, aerospace, defence industries and advanced manufacturing.
  3. Skills and education – enabling people to take advantage of the knowledge-intensive job opportunities. This includes the establishment of a science, technology, engineering and mathematics university, a high performance secondary school and an advanced vocational education and training facility within the Aerotropolis.
  4. Planning and housing – improving housing supply and affordability. The City Deal will utilise the $15 million Commonwealth Housing Package for Western Sydney, with matched funding from the NSW Government, to create a $30 million Western Parkland City housing package to support planning systems and improve housing supply and affordability.
  5. Liveability and environment – ensuring future neighbourhoods are liveable and sustainable. A $150 million Western Parkland City Liveability Program, including $60 million each from the Australian and NSW Governments and $30 million from councils, is expected to deliver local facilities that promote healthy, active lifestyles and support the arts.
  6. Governance – enabling collaboration and monitoring. The three levels of government will establish a long-term governance arrangement to oversee the delivery of the City Deal, and agree to annual reporting and publication of key performance metrics in the implementation plan.

Related Insights

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.