Investment challenges | panel discussion

L–R: David Webster, Diana Callebaut, Michael Cummings and Michael Hanna

Investment challenges

Key points:

• Australia has a global reputation for good investments, in a sophisticated market, with predictable regulation. • Our reputation is being impacted by rapid changes to law and practice. • Australia’s governments and policymakers need to be clear about the rules of the game to encourage more investment – not less.

Panellists:

► Diana Callebaut, Head of Infrastructure, Cbus Super Fund ► Michael Cummings, Head of Infrastructure Funds,

Australia and New Zealand, AMP Capital ► Michael Hanna, Head of Infrastructure – Australia, IFM

Investors

Moderator:

► David Webster, Deputy Secretary, Commercial Division,

Victorian Department of Treasury and Finance

David Webster (DW): Infrastructure investment has been one of Australia’s success stories, with Australia well regarded overseas for our market. We have a long track record of vibrant investment activity, but there seems to be an undercurrent of discontent about what the horizon looks like for infrastructure investment. What were the preconditions for the Australian infrastructure market’s success, and has that changed following the Global Financial Crisis (GFC)? Are you seeing some headwinds in terms of the outlook for infrastructure investment?

Diana Callebaut (DC): Australia has been attractive for investors largely due to the quantity of deal fl ow of large transactions, underpinned by a stable regulatory system, a wellunderstood tax regime and low sovereign risk. There have been a lot of government asset sales following the GFC, starting off in Queensland, and then moving to South Australia and New South Wales. More recently, we’ve had the Commonwealth Government’s Asset Recycling Initiative, as well as further privatisations.

There isn’t really a formula for the preconditions for privatisations; it’s very complex. But one precondition that is consistent across all asset sales globally is that there is public acceptance of the benefi ts of privatising assets now, and

forgoing public sector ownership in the future.

Australia’s attractiveness as an investment destination is a relative question, as you have to look at what’s happening in other jurisdictions. How does Australia compete with others? Globally, the benefits of government asset sales are being challenged by the question of public acceptance. This was demonstrated earlier this year in the United Kingdom, when Jeremy Corbyn came very close to winning the election on a ticket that included re-nationalisation of infrastructure.

Looking forward, there’s a question of how public acceptance around asset sales will evolve. I would also observe that there are only so many assets you can sell, so there’s a question around how much primary asset sale activity there will be.

DW: Michael, could you share your observations and also reflect on the Commonwealth Government’s recent tax rules, particularly for overseas investors?

Michael Cummings (MC): We wrote an article with Preqin 12 months ago, looking at the Australian infrastructure investment market, and talking about what the strengths and attractions were, and they were really fivefold.

Firstly, we’ve had supportive government policy over a period of time from both sides. Secondly, there has been a strong pipeline of transactions. Thirdly, we’re using innovative models to facilitate infrastructure investment with the recent asset-recycling programme. Fourthly, Australia has a strong track record in infrastructure investment. And lastly, Australia has proximity to Asian growth, and we see that continuing. Those are the five things that we felt put Australia ahead of the pack.

Now, we’ve just done a similar update on the article this year, looking at how we are going against those criteria. In terms of the track record, Australia has had another year of growth, and that’s very compelling. On innovation and procurement models, we are moving into social housing and continuing to innovate, which is great.

The pipeline of opportunities is a challenge; however, the area that is getting more focus is government policy. Getting investor confidence and certainty are key criteria that we need to look at.

Overall, 12 months ago, I would have said that we were well ahead of the pack. Australia is still a very good place to invest in infrastructure, but our lead has certainly been cut.

DW: We see a trend of money going towards infrastructure, with institutions putting bigger allocations towards it. There’s a question about whether the deal flow is as robust as it was in the past. We also see infrastructure returns coming down, and some medium-term interest rate risk in the very low interest rate environment right now. Does that worry you in terms of the outlook for the sector overall, and the returns and assets being bid at the moment?

Michael Hanna (MH): There’s a sixth attribute of the Australian market that makes it so attractive, and that’s the savings pool that exists within superannuation funds. We have a savings pool that is the envy of the world, at over $2 trillion. It’s bigger than the Australian Securities Exchange, and it’s growing at a steady rate. It could be worth at least $6 trillion within the next 20 years. That savings pool has absolutely fuelled infrastructure growth in the nation over the last 30 years.

It’s off the back of that savings pool that we’ve been able to establish infrastructure as an asset class, invest here and then export that expertise around the world. That savings pool is fundamental to this nation’s position today, and going forward.

Regarding your question about returns and the low interest rate environment, these are challenges for all of us. We’ve almost generated too much success, to the point where the asset class is seen as very attractive, and the rest of the world has woken up to it.

Combined with a low interest rate environment, investors are asking us if there is still value in this sector. We’re absolutely fine with that challenge here in Australia; however, that savings pool is highly mobile, and is moving all around the world for good opportunities. We are finding them, but it’s more time consuming to find them, and these deals are often more complex. We can still get good returns, but it’s a lot different now compared to five or seven years ago.

DW: Michael, in terms of the deal horizon for you, what’s on your radar for the next three years or so? Also, how do you draw the distinction between those assets that you’re going to have a red-hot go at and others that you will pass on?

MC: That’s a good question and a timely one. Shortly, we will be assessing with our global team in Europe, which is where we will be focusing in terms of asset classes within infrastructure. It is a global asset class, and Australia needs to keep ahead of the pack to keep attracting funding.

DC: The volume of capital, and the question around what is structural and what is cyclical in terms of returns are important considerations. The allocations that you make for direct investment are changing compared to 20 years ago, when infrastructure investing was at a very formative stage. It is a more mature asset class now, and there is more capital available for infrastructure investment. This is particularly the case overseas, where some investors have no allocation to infrastructure, compared to our allocation of 11 per cent. This has implications on the opportunities you look at and who you partner with.

Regarding our direct investment programmes, we focus on mid-market opportunities in Australia and offshore, in addition to Australian greenfield projects. Some of the trends that we are seeing include increasing partnerships between limited partners (LPs) in transactions and requests for partnerships by offshore investors.

Image courtesy of Melbourne Airport

DW: What feedback are you getting from those international partners regarding how they are viewing Australia’s infrastructure investment market versus other markets?

DC: They still see it as a really attractive market. There’s plenty of equity for appropriately structured deals, for both local and offshore opportunities.

DW: Is political risk on anyone’s radar?

MC: The International Institute for Management Development (IMD) business school recently released a report comparing the competitiveness of countries in a number of different areas, and Australia has fallen outside of the top 20 for the first time in a long time. Political stability and governance around policy decisions are things that we need to get right, and this includes having governments and industry working together.

MH: The natural tendency of these sessions is to talk about deals and the pipeline, but our priority is very much the portfolio we have at the moment. We have more than $10 billion invested in key assets around Australia.

Our number one objective is to get the best out of that portfolio and deliver the best return back to investors. We’ve heard about the growth that’s occurring in Australia – this is not just a recent spike – and this is going to continue for the next 10 to 12 years, at least. We expect to be getting six million extra people living on the eastern seaboard, and we have a significant challenge in trying to stay ahead of that growth.

Over the next seven years, we’ve got more than $10 billion worth of new capital to be put into the Port of Brisbane, NSW Ports (Port Botany and Port Kembla), Brisbane Airport and Melbourne Airport, just to keep up with that pace of growth.

For example, at Brisbane Airport, we’re delivering the world’s largest ever privately financed and funded runway development. That’s $1.3 billion worth of new runway construction to accommodate growth in Brisbane and South East Queensland over the next 30 years.

We’re also trying to get existing assets to operate more effectively. Right now, we only have one track going into and out of Port Botany, which we hope will soon be Australia’s busiest port. Rail has been a great success, representing almost 20 per cent of container movements, and we are planning on significant further growth to address road congestion and the growth of nearby intermodal facilities, including our own at

Enfield. If that line is out of action for whatever reason, we’ll have big issues. It is a ‘no brainer’ for Government to invest a relatively small sum to duplicate the line.

One area in which we are very actively engaged with the Federal Government is Inland Rail. Not connecting Inland Rail to the Port of Brisbane seems to be very short-sighted, and we will continue to engage with them on this issue going forward.

MC: We’re seeing continued growth, both domestic and international, at Melbourne Airport. Getting the right framework for investment in transport, both to and from the airport, and runway infrastructure is essential.

DW: Michael, you talked about that wall of capital that you have available to invest. We are seeing the Government talking about the use of Commonwealth equity and debt in infrastructure investment with the Infrastructure and Project Financing Agency (IPFA). Infrastructure Partnerships Australia has come out very strongly against the IPFA. From a practitioner’s point of view, what do you see as the risks and pitfalls? What would the collective panel message be to the Commonwealth around the use of Commonwealth equity and debt in infrastructure investment and the IPFA itself?

MH: On the face of it, we don’t have a major problem with it. We invest alongside local, state and national governments all over the world in several major investments, including Manchester Airports Group, Vienna Airport and Ausgrid, and this has worked extremely well.

Our experience on the whole has been very positive, provided that there is a clear objective for government involvement. In addition, the government needs to have capable people around the table, with long-term perspective and an understanding of the value of private capital.

We don’t have an issue with the Federal Government doing the same; however, it’s the first time they’re going to be doing it for many years. The track record has also been mixed in the past. The ‘first cab off the rank’ is Western Sydney Airport, and that’s a big step to take. Understanding exactly how to do that, what capability they have, and getting an understanding of the Government’s structure and overall objective is critical.

Being able to extend that beyond the single project to other things will also be a challenge. It’s unclear what the Government wants to achieve and how they want to be involved, whether it’s with equity or debt. So, in broad terms, it’s positive, but there’s a large question mark alongside it.

DW: Any other comments on the IPFA?

DC: I agree with Michael’s comment. It’s really about governments being very clear around what the objectives are, and assessing what the broader consequences of any interventions are. This needs to be articulated to all key stakeholders.

DW: Michael, any follow-up comments, or comments on the Badgerys Creek–type model, WestConnex and other more complicated transactions coming to market?

MC: In line with what Michael said, it is early days, and there are question marks; however, there are many examples of governments undertaking early-stage development where it was exactly what the industry needed. How they execute it will be the more difficult part of the policy process. We hope to see that evolve with input from the industry.

DW: One of the more wicked policy issues we’re seeing is around energy security, which would seem to be a natural investment home for institutional investors. If you all had a message to policymakers about energy policy and the way forward, what would they be?

DC: I think that certainty is key for any investment decision. While there is uncertainty in what the future looks like, it’s difficult to allocate capital to that part of the infrastructure spectrum.

MC: Investor confidence and a long-term perspective are key. My message would be to not bypass the proper policy development process for short-term populist decisions.

MH: I think that message, Michael, is key across every sector, and not just in the energy sector. We’ve voted with our feet, here in Australia and offshore, in exiting energy generation assets because the market is just so dynamic and in a high state of flux. We are long-term, core infrastructure investors. Once we start seeing significant uncertainty and volatility, we will do a fundamental review of our assets and businesses, and consider divesting to those better placed to manage the risks.

We have exited on both fossil fuels and renewables because we don’t have that long-term stable policy perspective or framework in place to give comfort to our investors that these are sound investments for the next 20 or 30 years.

DW: What are your views on the issue of political risk and recent actions by the Australian Competition and Consumer Commission (ACCC), and their impacts on businesses?

DC: It’s inevitable that there will be some commercial tension between infrastructure owners and operators. A balance also needs to be struck that accounts for both the commercial interests of your investors and the monopoly market power you have. Getting that balance right is an art, and it’s very difficult to have a prescriptive mechanism that achieves this; however, that balance is important for maintaining all infrastructure investors’ social licence to operate.

MC: I won’t respond specifically on that case, but generally, when you’re looking at any investment long term, you need to do your due diligence. You need to work out what your business plan is, and ensure that it’s executed and priced accordingly.

MH: We often hear about shared benefits of private ownership across the community. There’s the perennial battle

to defend why we’re a good owner of airports, our pricing decisions, and how our investment programmes are assigned and appropriate. Governments are under scrutiny as well. We absolutely think that private ownership of these assets is the right thing to do. Everyone in the room here has a role to engender greater trust across the community, and clearly explain what the benefits are of having private owners of these assets.

DW: The heavy lifting of communicating the benefits of private ownership to the public tends to get done by government. What more should the industry be doing to sell the benefits of the investments that you make?

MH: I disagree. Speaking on behalf of our superfund owners and investors, we have made significant inroads in terms of communication to super members about the dividends to the wider community from infrastructure investment, through to economic and social development, and supporting Australia’s growth. This is in addition to its contribution through member returns.

DC: It is difficult to work through the competing interests involved in a government asset sales programme. Our position is that governments are in the best position to inform the public about the role of private sector ownership. While we don’t have a view on which assets should be privatised, we do recognise that there are benefits to the private sector owning some public sector assets.

MC: Michael has alluded to the partnerships that we’ve got with a number of the electricity businesses here, so that is another model. The proof will be in the pudding, but I’m confident that it’s a good model and it should be part of the mix, as well.

DW: Are there any views on the tax rules being implemented at the moment, and how that’s being handled?

MH: We’ve got a ‘Jekyll and Hyde’ environment at the moment, and I can give you an anecdote. A Federal Minister recently met with industry and implored us to invest more in infrastructure. This was at a time when there was uncertainty about tax rules, with the Australian Taxation Office (ATO) releasing a taxpayer alert on stapled structures and then an unexpected, subsequent review coming over the top from the Federal Treasury.

The government can’t ask us to invest more and, at the same time, do a twin-pronged attack on stapled tax structures for infrastructure that could fundamentally impact the sector. The juxtaposition of the two issues left us scratching our heads. While the Minister’s defence was that, ‘Well, that’s another part of government’, that is simply not good enough. We need steady and thoughtful government policy applied consistently across the sphere. We can’t have one part of government undoing the great work that infrastructure investors have been doing in this nation over the last 20 years.

DC: Our view is pragmatic. It is reasonable that regulatory and tax frameworks evolve as environments change; however, it’s important to manage the process well, and understand the consequences of any changes on the future appetite for investment.

DW: Michael, are you optimistic about the future and the deal flow that you’re seeing? Is this something that you or your investors are concerned about?

MC: The mix of deals has changed. You’re seeing a lot of focus now on renewables. There are definitely hot areas, but whether investors think they’re good investments is another matter.

In general, there is deal flow, and we do get more refined around where we think there is value for investors. That’s ultimately what we’re going to be held accountable for.

DC: You’ve got to be optimistic. Nothing gets done unless you’re optimistic; there are always opportunities.

MH: I agree. We are thinking more about how we can be enablers for projects into the future. Going back to getting the most out of assets, and adding to them – the situation in Melbourne is that we don’t have a rail link between the city and the airport. I’m proud to have an Opal Card, and I’ve been using the train from Sydney Airport to the CBD for the last two years. In terms of patronage growth, I think it is up something like 30 per cent in the last two years.

Sometimes the trip from the CBD in Melbourne to the airport can be as long as the flight to Sydney. This isn’t sustainable, even in the short term. We’re currently moving 36 million passengers a year at Melbourne Airport, and this will increase to 60 million in 15 years’ time – that’s almost double. We can’t imagine what it would be like to try to commute to the airport. CityLink is a great piece of infrastructure, and it’s being widened at the moment, but in five or 10 years’ time, we’ll have huge challenges. We must offer other options. We’re playing our part, along with Melbourne Airport’s other shareholders and our investment at Southern Cross Station, to try and kickstart the business planning work to deliver the rail link. Both the Federal Government and the Victorian Government are supporting this work with an initial $40 million investment.

DW: If you each had one key message that you’d like to leave the audience and policymakers with, what would it be?

DC: Cbus is a long-term investor, and we believe that our primary objective in making appropriate risk-adjusted returns for the retirement outcomes of our members is complementary to making sustainable investments that benefit Australian communities.

MC: Policy development is like the ‘Goldilocks’ of projects: if you do too much too early, that has implications, similarly to if you do too little too late. In line with what others have said,

industry engagement, good planning and taking a long-term view are important for investor confi dence.

MH: Certainty and consistency around the policy framework are the key themes we’ve been battling with for a couple years. Also, going back to my geography and urban planning roots, this nation is ‘under the pump’ in terms of trying to accommodate growth. The eastern seaboard is one of the most urbanised areas in the Western world, but the regions need to be the ‘pressure valve’ for relieving the physical impacts of this growth and the exponential growth in costs required to manage it. More progressive policies need to be implemented to pump more growth into the regions than what we’re seeing currently.

Diana Callebaut – Head of Infrastructure, Cbus Super Fund

Diana Callebaut is Head of Infrastructure at Cbus Super Fund, and is responsible for developing and implementing the $4-billion infrastructure investment strategy. With extensive business and corporate fi nance experience, including more than 10 years’ coverage of the infrastructure sector, she has lead and participated in infrastructure greenfi eld projects and transactions across the globe. She was most recently a director at KPMG and, prior to that, an investment banking associate at Credit Suisse London. She has also held various other investment banking and fund roles. Ms Callebaut holds a Master of Business Administration from the University of Cambridge, a First Class Honours in Finance and Portfolio Management from the University of Cape Town, and a Bachelor’s degree in Business from the University of Technology, Sydney. She is also a Chartered Financial Analyst. Ms Callebaut is on the steering committee of the Women’s Infrastructure Network, Australia’s peak female infrastructure industry body, which aims to increase the visibility and representation of women across the sector.

Michael Cummings – Head of Infrastructure Funds, Australia and New Zealand, AMP Capital

Michael Cummings is AMP Capital’s Head of Australian and New Zealand Infastracture Funds.

He is Director of Endeavour Energy, Powerco NZ, a Director of Australian Pacifi c Airports Corporation (Melbourne and Launceston Airports), and an Alternate Director of Interlink M5 and energy start-up Evergen.

Before joining AMP Capital, Mr Cummings was the Chief Operating Offi cer (Energy) at Brookfi eld Infrastructure. This involved international governance roles as the Chair or Director on a number of company boards around the world, including NGPL and Cross Sound Cable in the US, the International Energy Group in the UK, DBP and Gas Networks in Western Australia, and the Tasmanian Gas Pipeline.

With more than 27 years of experience in the infrastructure sector, Mr Cummings is a Graduate Member of the Australian Institute of Company Directors, and a member of the Institute of Directors New Zealand, as well as the Institution of Professional Engineers New Zealand.

Michael Hanna – Head of Infrastructure – Australia, IFM Investors

Michael Hanna joined IFM Investors in July 2006, and is responsible for managing IFM Investors’ Australian Infrastructure Fund. He is also a member of the Investment Sub-Committee for IFM Investors’ Global Infrastructure Fund.

Prior to joining IFM Investors, Mr Hanna held senior executive positions at the Victorian Department of Treasury and Finance (public-private infrastructure group) and global consulting engineers, Arup, in the United Kingdom and in Australia. Mr Hanna represents IFM Investors as a Director on the boards of Ausgrid and NSW Ports (Port Botany and Port Kembla), and previously represented IFM Investors as a director on the boards of Pacifi c Hydro, Eastern Distributor (M1 toll road in New South Wales), Interlink Roads (M5 toll road in New South Wales), Ecogen Energy (power generation business in Victoria) and Wyuna Water (publicprivate partnership in New South Wales).

Mr Hanna holds a Master of Science in Urban and Regional Planning from the University of Strathclyde, is a Graduate Member of the Australian Institute of Company Directors, a Senior Associate of the Financial Services Institute of Australia and a Chartered Member of the Royal Town Planning Institute.

David Webster – Deputy Secretary, Commercial Division, Department of Treasury and Finance (Victoria)

David Webster is Deputy Secretary in the Commercial Division of the Victorian Department of Treasury and Finance, where he is responsible for providing strategic commercial, fi nancial and risk-management advice to the Victorian Government. Activities include asset sales and recycling, managing the state’s balance sheet, prudent supervision of the public fi nancial corporations, public-private partnerships, infrastructure investment, commercial and property transactions, and the monitoring and governance of the state’s major government business enterprises. Mr Webster led the lease of the Port of Melbourne.

Prior to joining government, Mr Webster had 20 years’ experience in equity, advisory and debt transactions in economic and social infrastructure and transport (including airports, rail, road, hospitals, schools, water/wastewater), and project fi nance, oil and gas.

Prior to joining the Department of Treasury and Finance, Mr Webster worked for RBS Funds Management in Sydney as Executive Director, running the RBS Australia Social Infrastructure Fund. Previously, Mr Webster was Investment Director at EISER Global Infrastructure Fund in London, and Head of Infrastructure Advisory at RBS London, before which he held a number of senior structured fi nance positions in banking, also in London. Mr Webster qualifi ed as an Australian Chartered Accountant in 1987 and has a Master of Business Administration from London Business School.

NAB champions community-led approach to social infrastructure

The approach will present opportunity to renew public assets and help communities across Australia.

Steve Lambert

National Australia Bank (NAB) is leading new thinking on social infrastructure models that will empower and strengthen communities – and go on to spark the next wave of projects.

As Australia’s leading infrastructure bank, NAB is uniquely positioned to champion a communityled approach to projects built on collaboration and innovation.

The future, argues NAB, is communities, investors and businesses working together to solve problems, and communities taking greater control of their infrastructure needs.

‘We must re-imagine how social infrastructure projects are conceived, funded and delivered,’ says NAB Executive General Manager, Corporate Finance, Steve Lambert. ‘We need to get things done for communities through new financing models and a do-it-yourself approach.’

NAB’s vision is timely. An estimated $47 billion of community infrastructure requires renewal or upgrade, says the Australian Local Government Association’s (ALGA) National State of the Assets Report 2015.

Local governments have a critical role. They managed assets with an estimated gross replacement value of more than $438 billion in 2015, found ALGA. These assets influence the way of life for millions of Australians and the livability of communities.

But local government is receiving less government funding to maintain and renovate infrastructure – a shortfall compounded by an expanding, ageing population.

Another recurring issue is overreliance on governments to solve social infrastructure problems. ‘Over the last century, governments have increasingly taken on a substantial role in funding community infrastructure,’ wrote Garry Bowditch, Executive Director of the John Grill Centre for Project Leadership at The University of Sydney, in a May 2017 research paper.

‘As a result, communities have largely been displaced from identifying and meeting their own infrastructure needs as do-it-yourself protagonists.’

As the inaugural Global Leadership Partner of the Better Infrastructure Initiative at the John Grill Centre, NAB is encouraging a new conversation on social infrastructure. ‘Most of the focus is understandably on large privatisations and public-private partnerships,’ says Lambert. ‘But we must also think about community-based micro projects.

‘NAB is good at bringing Australian and international investors together on billion-dollar infrastructure projects. The challenge is to leverage that expertise into financing new sporting ovals, parks, schools, hospitals, university projects and social housing.’

That challenge is complex. Australia has 537 local government bodies, and different state and territory laws are a complication. Innovative financing

models that encourage stakeholders to collaborate and to reduce projectfunding costs are vital.

‘A council might want to spend $20 million on a sporting facility,’ says Lambert. ‘The opportunity is getting 50 councils with similar aspirations to work with NAB to raise $1 billion to fund new sporting infrastructure across the country.’

NAB has shown what’s possible. In 2014, it led the delivery of a revolutionary financing model for the Municipal Association of Victoria, which has saved millions of dollars for councils through lower borrowing costs. The Local Government Funding Vehicle (LGFV) allows domestic fund managers to invest in council debt.

‘LGFV is an example of communities working together to raise capital,’ says Lambert. ‘It reinforces the potential of using capital markets to fund social projects through bond issuance. There is an appetite among investors for these assets.’

Financial and social outcomes

Lambert says the time is right to connect large and small investors with social projects. ‘Superannuation funds are incorporating environmental, social and government considerations into investment decisions. They want to do the right thing and fund significant community projects that help members.’

Australia’s booming $697 billion self-managed superannuation sector is another opportunity. ‘Why can’t retail investors invest in community projects?’ asks Lambert. ‘Why can’t we develop a new type of asset class that aids portfolio diversification and has an appropriate risk-return profile? Why can’t we create products that provide attractive long-term financial and social returns?’

This thinking, says Lambert, could address affordable housing and other social problems. NAB has funded socialhousing projects in Australia, Europe and the United States, and wants to do more. ‘We know communities need affordable housing, we know it’s vital for social inclusion and we know institutions want to fund it. NAB is working hard to develop new models to fund socialhousing projects, but there’s a long way to go.’

This year, Lambert visited affordable housing projects in the United States. ‘In some parts of America, you cannot tell the difference between social and owner-occupied housing. That’s not the case in Australia. Too often, people who rely on affordable housing must live too far from their work and risk becoming socially excluded from their community.’

NAB’s work in student housing projects shows the potential for affordable housing. NAB is the market leader in organising capital market deals for Australian universities and funding student housing developments.

Connie Sokaris

Outstanding infrastructure credentials

NAB has broad infrastructure expertise across industries and the largest global reach of Australia’s big four banks due to its trans-Tasman, United Kingdom, European and United States operations. The integration of NAB’s capital markets and infrastructure approach is another strength.

NAB is also the market leader in social-impact bonds, climate-change bonds and Islamic finance, and a leading lender to local government. ‘We can draw on these skills to do something unique for communities,’ says Lambert.

NAB’s infrastructure commitment is reflected in its pledge last year to help finance $100 billion of Australian infrastructure projects over seven years.

‘As an industry, we need to rethink the future of banks in helping build stronger communities,’ says Lambert. ‘It must begin with finding ways to fund billions of dollars of social infrastructure and helping communities around Australia.’ ♦

To learn more about NAB’s infrastructure work, visit www.nab.com.au.

Canberra’s light rail network

As one of the world’s most livable cities, Canberra deserves an integrated transport network to futureproof our easy way of life.

Artist’s impression of Canberra Light Rail Dickson stop

Canberra continues to grow quickly thanks to an annual influx of students, families, and businesses; the Australian Capital Territory’s population is projected to increase to more than 500,000 people over the next 20 years.

As with all globally emerging cities, Canberra requires a smart, integrated public transport system that is easy to use, safe, efficient, and reliable.

‘It’s been a priority of the Australian Capital Territory Government to build a state-of-the-art transport network for the last decade, with Canberrans emphatically declaring at the last two elections that they are ready for light rail,’ Australian Capital Territory Minister for Transport and City Services Meegan Fitzharris said.

‘It’s exciting to think that in just over a year from now, Canberra will have an integrated transport system linking our buses, a bike-share system, and light rail network, from Gungahlin to the city and into the suburbs.

‘With work on Stage 1 now well advanced, the next step in connecting the northern and southern reaches of Canberra is Stage 2.

‘We know that the time to build Canberra’s light rail network is now. Public transport planning and investment must not be left until traffic delays reach unacceptable levels, and impose social, environmental and economic costs on the Canberra community.’

Why does Canberra need light rail?

Quality transport will manage Canberra’s growth sustainably by changing and improving movement options, settlement patterns and employment opportunities. Once complete, the light rail network will link residential developments with areas of employment, and retail and entertainment precincts.

Light rail master plan – 2015/16

Community consultation and expert analysis undertaken to inform Stage 2 route options

Feedback to the community regarding outcomes from consultation and expert analysis

Business case development, as well as route and procurement options presented

Environmental and other Planning processes undertaken

Business case complete

Procurement

Contract signing and construction commencement

Light rail will reduce Canberra’s car dependency by providing an efficient, sustainable and environmentally responsible alternative.

Canberra’s proposed light rail network

The Australian Infrastructure Audit Report, prepared by Infrastructure Australia in May 2015, found that without additional investment, the cost of road congestion in the Australian Capital Territory will increase from $208 million per annum in 2011 to $703 million per annum in 2031.

‘Without improvements to public transport infrastructure, road congestion will continue to grow as the Australian Capital Territory’s population increases, impacting on travel times and the overall quality of life Canberrans currently enjoy,’ says Minister Fitzharris.

‘In late 2015, the Australian Capital Territory Government released the draft Light Rail Network Plan, which presented a city-wide 25-year vision for building a strong, accessible, costeffective and efficient public transport network with light rail as its spine.

‘The Light Rail Network plan will futureproof Canberra against the significant congestion issues our friends in Sydney and Melbourne experience every day, while also providing for urban renewal and greater cultural opportunities right across the Australian Capital Territory.’

Stage 2 – Civic to Woden

The Australian Capital Territory Government has already started work on the next phase of Canberra’s cityshaping transport network. Stage 2 of the light rail network will link the northern centre of Gungahlin to Woden in the south, through the heart of Canberra’s city centre.

Stage 2 will provide commuters with access to Canberra’s major educational institutions, retail and entertainment precincts, and employment hubs.

Earlier this year, the Government engaged with the Canberra community about which route Stage 2 should take to get to Woden, with two primary routes left open for comment. More than 4000 people joined the online conversation to have their say, with the majority of respondents suggesting the best route should travel through Barton and the Parliamentary Triangle.

The development of the Australian Capital Territory’s light rail network has encouraged urban renewal in major town centres and growth along the Stage 1 corridor, and has stimulated external investment for a range of diverse opportunities.

The development of Stage 1 has played a large role in the emergence of Gungahlin as one of Canberra’s most attractive locations to work, live and visit. Gungahlin was recently identified as Australia’s second-fastest growing suburb.

Light rail Stage 2 will also make a significant contribution to the continued growth and transformation of Woden, its town centre, and its surrounding suburbs.

Woden’s employment population is estimated to reach 120,000 by 2041, clearly illustrating the benefits the region will enjoy thanks to light rail and an integrated transport network.

Stage 2 will not be without its challenges. The business case must

Transport Canberra Light Rail Stop Names Map

GUNGAHLIN

Gungahlin Place

Gungahlin Pl Manning Clark North

Manning Clark Cr

FRANKLIN

Well Station Dr

MITCHELL

Sandford St

t on R d F l eming

GUNGAHLIN

Manning Clark NorNORTH th

Gungahlin Place

Mapleton Avenue

Mapleton Ave

Nullarbor Avenue

Nullarbor Ave

HARRISON

Well Station Dr Well Station Drive

Morisset Rd

Light Rail Line

Randwick Rd EPIC and Racecourse

WATSON

Barton Hwy Federal Hwy Phillip Avenue

D Phillip AveOWNER

Swinden Street

Mouat St

LYNEHAM

Macarthur Ave

Condamine St

TURNER

ne A v e r thbou No r

Gould St

Rudd St

Alinga St

CITY

Swinden St

Antill St

Dickson Interchange

DICKSON

Macarthur Avenue

Ipima Street

Ipima St

BRADDON

Elouera Street

Elouera St Bunda St

Alinga Street

Stops Light Rail Line Swinden Street

Stops MAP NOT TO SCALE

Artist’s impression of Northbourne Plaza terrace

consider crossing the lake, protection of heritage buildings, the sensitive landscape around the Parliamentary Triangle and gradient along the route.

However, we know these challenges can be planned for and managed in order to build the most important stage of Canberra’s light rail network.

Linking with Canberra’s other priorities

It is also important that the Australian Capital Territory Government’s other major infrastructure projects are carefully considered during the design process of Stage 2.

Significant land use, planning, and development commonalities, have been identified between Stage 2 and the upgrade of Parkes Way.

The Australian Capital Territory Government is simultaneously progressing the business cases of both projects to take advantage of several shared opportunities, which include: ► how potential light rail stops and the future shape of Parkes Way might impact development of the West Basin precinct, and their role in connecting the city to the lake; and ► planning for integration of broader traffic and road network changes to include public transport modes.

‘The development of Stage 2 and its business case must strike a balance between protecting Canberra’s natural beauty and garden suburbs, while stimulating economic activity and activating land use in new ways along the network corridors and beyond,’ says Minister Fitzharris.

‘As is the case with all major infrastructure projects, the Australian Capital Territory Government undertakes, it is important we are thinking about how light rail might play a positive part in the future of the West Basin and other future developments earmarked between Civic and Woden.

‘Light rail and integrated transport are one part of a bigger plan to make Canberra an even better place to live as the population continues to grow each year.’

Working with Canberra Metro – a public-private partnership

Canberra Metro, the successful consortium for the 20-year public-private partnership (PPP) project for Stage 1, will design, build, operate, and maintain the first stage of the Light Rail Network between the city and Gungahlin.

Once complete in 2018, Light Rail Stage 1 will deliver 12 kilometres of light rail, with 13 stops, and 14 light rail vehicles, with services every six minutes during peak times. The Stage 1 PPP contract has a capital budget of $707 million, which is estimated to account for less than one per cent of Australian Capital Territory Government expenditure over that period.

‘This PPP contract is an example of how government can work with the private sector to renew assets, and deliver economic and social benefits now that will exceed the project’s cost,’ says Minister Fitzharris.

‘The Australian Capital Territory Government is investing in a network that will benefit Canberrans of today and tomorrow, once and for all providing a better way to get to where we need to be.’ ♦