Allens

Infrastructure & Transport

Client Update: NSW takes Infrastructure Australia model to the next level

30 May 2011

In brief: The NSW Government recently introduced legislation into Parliament that, if passed, will establish a new government agency known as 'Infrastructure NSW', to facilitate the planning and delivery of infrastructure across that state. Partner Leighton O'Brien (view CV) and Lawyer Shannon Thompson report on the key features of the legislation and its broad scope to encourage infrastructure development in NSW.

Overview

As a key component of the Coalition's election policy platform and the NSW Government's '100 day plan', the establishment of a new model for delivery of State infrastructure in NSW has been widely anticipated. In setting up Infrastructure NSW, the Infrastructure NSW Bill 2011 has two express objectives, to:

  • secure the efficient, effective, economic and timely planning, coordination, selection, funding, implementation, delivery and whole-of-lifecycle asset management of infrastructure that is required for the economic and social well-being of the community; and
  • ensure that decisions about infrastructure projects are informed by expert professional analysis and advice.

To achieve those objectives, the Bill borrows some of the key concepts underpinning Infrastructure NSW's equivalent federal body, Infrastructure Australia. Like Infrastructure Australia, Infrastructure NSW will perform strategic planning, advisory, coordination, review, monitoring and auditory functions in relation to infrastructure delivery. Significantly, however, Infrastructure NSW will be tasked with responsibility for directly managing certain projects (identified by the Premier), which is not part of Infrastructure Australia's prescribed role. The Bill would also appear to afford Infrastructure NSW greater responsibility to oversee and advise on infrastructure funding.

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Isn't this just Infrastructure Australia on a smaller scale?

The short answer is no.

Infrastructure Australia has performed well in its first three years but its role is limited to advice only. That advice can be given both to the private and public sectors, and is focused on nationally significant infrastructure (transport, energy, water and communications). It is also focused on coordination between the states and territories (eg the infrastructure priority list).

Infrastructure NSW has three key differences:

  • It moves from advice to implementation. This is something that has been called for at a federal level, but has so far been resisted. While the implementation role will very much depend on the views of the NSW Premier, it is a sensible move, particularly for projects spanning various sectors (eg the third harbour crossing) and echoes the move to an integrated transport authority in NSW.
  • It acts as a gateway, both for funding submissions to the Commonwealth and for proposed projects by government agencies. On funding, in particular, there has been criticism of the standard of NSW submissions to Infrastructure Australia. If properly vetted by Infrastructure NSW, NSW should be more successful in gaining much needed federal funding.
  • A long-term role – both in oversight of delivery and reviews of completed infrastructure. Capturing the 'lessons learned' is invaluable, particularly when combined with its funding model advice.

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Projects affected

Infrastructure NSW will primarily be concerned with 'major infrastructure projects', which are infrastructure projects that have a capital investment value of more than $100 million or that are nominated by the Premier as a special project. It is important to note, however, that the Bill does not prescribe 'major infrastructure projects' for all of its functions.

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Operations of Infrastructure NSW

Infrastructure NSW will be overseen by a board comprising an independent chair, and a combination of private sector professionals appointed by the Premier, and executives from other government departments. The board will report directly to the Premier.

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Strategic planning functions of Infrastructure NSW

Infrastructure NSW will prepare and submit to the Premier:

  • a 20-year state infrastructure strategy, which assesses the needs and priorities of infrastructure in NSW;
  • five-year infrastructure plans, which underpin the 20-year strategy and prioritise specific projects; and
  • infrastructure strategy statements for sectors that the Premier considers of significance to the state.

The Premier will remain the key decision-maker, by retaining power to amend the plans prepared by Infrastructure NSW. Once adopted, however, the plans will be made available for Parliamentary and public scrutiny.

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'Step-in' functions of Infrastructure NSW

On receiving authorisation from the Premier, Infrastructure NSW will be able to exercise direct control over certain major infrastructure projects by:

  • carrying out a project; or
  • assuming responsibility for projects carried out by other government agencies.

To perform its 'step-in' functions, the Premier may transfer to Infrastructure NSW the assets, liabilities and rights of the public authority in relation to the relevant project. Infrastructure NSW may also acquire land required for the purposes of taking over the works. Infrastructure NSW will not, however, be relieved from the requirement to comply with the applicable legislative regime (eg, the Environmental Planning and Assessment Act 1979 (NSW)).

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Other functions of Infrastructure NSW

Infrastructure NSW's other key functions will include:

  • advising the Premier on funding models for infrastructure and coordinating funding submissions to the Commonwealth (including to Infrastructure Australia);
  • evaluating major infrastructure projects proposed by government agencies and the private sector; and
  • identifying major infrastructure projects that require monitoring through project implementation plans and preparing those plans.

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How will industry participants be affected?

Both government agencies and private-sector parties involved in major infrastructure projects in NSW should be aware of the effect that the Bill, if enacted, could have on the delivery of those projects, as outlined above. All participants should expect to be more closely scrutinised in the performance of their projects. Government agencies, in particular, will have an ongoing obligation to cooperate with Infrastructure NSW and notify it if its functions may impact adversely on a five-year infrastructure plan or project implementation plan.

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Next steps

The Bill is currently at the second reading stage, and still needs to be debated and passed by Parliament. We will monitor any significant developments in this process.

For further information, please contact:

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