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Making private investment in transport viable calls for a clearer federal stance, Philip Hopkins reports.
The role of private investment in the Federal Government's five-year $11.8 billion AusLink transport program needs to be fleshed out, transport groups and experts believe.
One lobby group, CISSES (Chain of Intermodal Shared Services on the Eastern Seaboard) says AusLink underestimates the difficulties for private enterprise in making money from transport infrastructure.
CISSES represents a range of groups that want to create an efficient freight system across eastern Australia. These include the City of Hume in Melbourne, Wagga Wagga Council, the NSW Department of State and Regional Development, the Federation of Automotive Products Manufacturers, rice growers, and exporters such as Cargill and Heinz Wattie.
A consultant who advises CISSES, Martin Feil, said urban tollways were the only businesses that so far had made money from land transport infrastructure. "Major infrastructure assets such as the airports and rail have been privatised after a long period of government investment and ownership," he said.
Feil said the question of who should fund land transport infrastructure was not a simple government or private sector equation. "Some major infrastructure projects will be viable in the long term, but cannot be financed to provide an appropriate return on investment at the time of its creation."
He pointed out that for more than 40 years, the industry policy debate had recognised the legitimacy of the infant industry argument. "That is, the community will fund or partially fund industries in the short term if it receives a payback and a profit in the long term."
Fred Affleck, professor of transport studies in Perth - a collaborative position shared by Western Australia's four public universities - said this issue highlighted the need for the return of long-term government debt to finance infrastructure.
There needs to be a new approach for priorities in spending on passenger and
freight transport in urban areas.
FRED AFFLECK, professor
Affleck, who is also head of the Planning and Transport Research Centre, said long-term public debt was a good idea for long-life projects.
"You can bring forward big projects, and it spreads the cost over current and future generations," he said. "You can carefully and judiciously select projects with adequate finance and a payback period, otherwise you wait forever for a project and get nothing."
TTF Australia (Tourism & Transport Forum) managing director Christopher Brown said the Federal Government needed to articulate further its position on public-private partnerships. Tax matters also needed to be resolved to encourage private investment in infrastructure.
Affleck said a weakness of AusLink was that it did not look at the need for better co-ordinated planning of urban freight and urban public transport. "There needs to be a new approach for priorities in spending on passenger and freight transport in urban areas. This may need a separate program."
He said AusLink also did not put in place a mechanism to co-ordinate and integrate transport planning between federal, state and local governments.
The creation of a National Transport Advisory Council, which would include the private sector, was intended to take this role, but that had not yet happened. "This would be a fairly high-powered body with a degree of independence. The council would try to do a better job of planning infrastructure for transport and logistics from a broader perspective. It would look at the integration of investment and pricing policy."
Feil said AusLink did not contemplate shared private-public funding except in rail infrastructure. This benefited Pacific National and provided a strategic advantage for PN's owners, Toll Holdings and Patrick Corp. "There is obviously a case to repair this market failure to enable stakeholders other than Toll and Patrick to access some funding to develop shared service facilities directed at the goals of AusLink," he said.
Feil praised the AusLink white paper for recognising the need to integrate road and rail and improve intermodal services. But he said the paper lacked well-funded approach to deliver intermodal terminals, although the $400 million for regional councils was a chance to create large intermodal hubs.
"If the goal is to double rail freight in the next 20 years, it is essential that intermodal physical hubs of substantial size and efficiency be developed.
If this is not achieved, the road/rail enhancements will be . . . frustrated by blockages at the point of transfer."
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