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By Willow Aliento
June 4, 2018
Infrastructure delivery is about so much more than just the actual construction if the winners of the National Infrastructure Awards are any indication. Smart technologies, innovative financing, and the growing trend for public-private partnerships all featured in the list of top teams and projects.
Productivity Commission Chairman Peter Harris gave the address at this year’s Awards, held on May 24. Mr. Harris issued a call for the government to put road user charges on the agenda as a priority. The journey begins with clearly articulating the public interest objective of reform, he said.
According to Mr Harris, Australia needs to identify the public interest objective in terms of road reform, and then establish a structure that aligns the funds raised from road use with the selection of projects to be funded in the future.
“The biggest gains to this reform do not lie in getting more revenue. That will just be the catalyst. The true public interest objective is a system that selects the right projects — projects in which, as in other forms of infrastructure, people have a choice and yet show they are prepared to pay,” Mr Harris said.
Electric Vehicles An Opportunity
He also called for the government to treat electric vehicles as an opportunity rather than a threat, by ensuring appropriate road user charges were put in place.
Adrian Dwyer, Infrastructure Partnerships Australia Chief Executive, welcomed the message of the Oration and said the window of opportunity for action on road reform was swiftly closing.
“If we act now, we have an opportunity to institute reform at the thin end of the wedge by placing road user charges on electric vehicles before they become a car dealership mainstay,” Mr Dwyer said.
There were close to 600 guests at the Oration and Awards. In fact, as the organisers told Jobsite, it was the highest attendance in the 12-year history of the event.
The judging panel was chaired by CEO of the Infrastructure and Financing Agency, Leilani Frew.
New Prison Receives Project of the Year
The top award of the night, Project of the Year, went to the teams responsible for Victoria’s Ravenhall Prison project. The public-private partnership project involved the coalition of AECOM, Clayton Utz, EY and RPS Advisory Services as well as the GEO consortium comprising Capella Capital, GEO Group Australia, John Holland and Honeywell in partnership with the Victorian Department of Justice and Regulation.
The $650 million project delivered an additional 1,000 beds to the Victorian prison system, including 75 dedicated forensic mental-health beds. The facility will also provide mental-health services to another 100 prisoners.
For the first time in the state, the contract with GEO for the ongoing maintenance and operation of the medium-security prison has set targets for reducing the rate of re-offending after the release of the prisoners.
The project commenced construction in early 2015, and was completed in late 2017. Over 1,400 jobs were created during construction and around 700 additional ongoing positions once it became operational.
“It is exciting to see the Ravenhall Prison Project win the Project of the Year Award as it is the first privately delivered prison project Victoria has seen in about 20 years — delivered on-budget and on-time,” said Adrian Dwyer, Infrastructure Partnerships Australia CEO.
Australia is a world leader in bringing the private and public sectors together through PPP approaches: “The Ravenhall Prison Project is a stellar example of the evolution of the PPP model in Australia and shows what can be achieved when the public and private sectors collaborate to achieve good outcomes.”
Lendlease Wins Contractor Excellence Award
Lendlease won the Contractor Excellence Award for its Bendigo Hospital project — another PPP undertaking.
At the time it was under construction, it was Victoria’s largest regional hospital project.
Lendlease was part of the Exemplar Health Consortium, responsible for the financing, design, construction, and ongoing maintenance of the health facility. Other members of the consortium are Capella Capital, Spotless and Siemens.
In addition to delivering new hospital beds and surgery facilities, the project also involved the construction of a 65m two-storey bridge passing over a street, connecting a new helipad and carpark with the new hospital building.
To minimise traffic disruptions, Lendlease constructed the majority of the bridge offsite, in six sections. Then, it was craned into final position and completed. As a result, traffic was only disrupted for around three weeks while works were completed.
Other innovative features of the project include a 200kw solar power system to supply low-carbon electricity, extensive greening for therapeutic and wellbeing benefits both indoors and out, and the plan to use delivery robots as part of the hospital’s operations.
Financial Excellence Award
The winner of the Financial Excellence Award highlights the degree to which financing models are progressing for infrastructure delivery. The Award was shared by EY, KPMG and Plenary Group for the $1.8 billion Western Roads Upgrade project in Victoria. The team achieved Australia’s first Greenfield bond financing for a public-private partnership since the Global Financial Crisis to finance the wide-ranging package of works.
It is Victoria’s largest single investment in arterial roads to date and the first time an arterial roads project has been procured as an availability-style PPP in Australia, a spokesperson for Plenary Group said.
Plenary is the financial arranger, joint project sponsor and joint SPV manager for the project as part of the Netflow consortium also comprising Cintra as joint project sponsor, WBHO Infrastructure as design and construction lead, and Amey and Broadspectrum as services contractor. Netflow has been contracted by the Victorian Government to design, build, finance, and maintain the project under a 20-year concession (plus construction).
The works include eight high-priority road upgrades, road widenings, intersection upgrades, close to 30 kilometres of duplicated road and over 260 kilometres of road rehabilitation and maintenance across Melbourne’s west.
The finance package for the project involves 60 per cent senior secured notes provided through US Private Placement (USPP) and 40 per cent via commercial lenders. The bonds are full-term AUD ‘natural’ bonds with a fixed interest rate.
“There was more than $2 billion of investor interest in this bond financing, underscoring the global investor demand for high-quality PPP projects and the innovative approach adopted by the Victorian Government, Plenary and Netflow,” Plenary Head of Origination Paul Crowe said.
“The long-term PPP bond market has been dormant in Australia for the past decade, resulting in shorter debt terms. This result will reduce the refinancing risk on the project and is a boon for the PPP project bond market in Australia.”
Bank debt is being provided by leading domestic and international banks Westpac, Bank of China, ICBC and Mizuho, with all chosen for their experience, capabilities and commitment to Australian road infrastructure projects.
“To win the Western Roads Upgrade is a vote of confidence in Plenary and Cintra’s Netflow joint venture, and to have the support of such an impressive line-up of banks and investors is a vote of confidence in the financial solutions Plenary can achieve for governments on major infrastructure projects,” Mr Crowe said.
Equity financing comes from Netflow joint venture partners and project sponsors Plenary (50%) and Cintra (50%).
Government Partnership Excellence Award
The Government Partnership Excellence Award was given to the collaboration of City of Gold Coast, the Commonwealth Government; GoldLinQ Consortium (Bombardier, CPB Contractors and Keolis Downer) and Queensland Department of Transport and Main Roads for the Gold Coast Light Rail Stage 2 Extension.
The extension to stage one operates between the Gold Coast University Hospital at Southport and Helensvale on the edge of the hinterland. It opened for passengers in mid-December 2017.
The project involved construction of a 7.3km light rail route, stations and associated infrastructure.
The $420 million project was delivered with a $270 million contribution from the Queensland Government, $95 million from the Australian Government and up to $55 million from the City of Gold Coast.
Smart Infrastructure Project
The Smart Infrastructure Project winner demonstrates how advances in technology can improve the operability of existing infrastructure.
The Nonlinear Channel Optimisation Simulator (NCOS) Online initiative by Port of Brisbane and DHI Australia is a world-leading software. It provides a seven-day detailed forecast of a vessel’s under-keel clearances and environmental conditions with a web interface, allowing for dynamic vessel scheduling.
In a media statement following another recent award win at Innovation Awards in London in 2017, Roy Cummins. Port of Brisbane Pty Ltd CEO, said the Port of Brisbane and DHI used the Port’s 90km shipping channel as a “living laboratory” to develop NCOS Online.
“NCOS Online is the only vessel UKC forecast system in the world to have the same high level of accuracy as a Full Mission Bridge Ship Simulator,” Mr Cummins said. “Its introduction means we can determine the UKC required to cater for larger vessels more safely and accurately, providing safety and flexibility benefits for customers and reducing the need for additional, expensive dredging.”
NCOS combines state-of-the-art technology with substantial operational port experience. It incorporates forecast and real-time environmental data, vessel specifications and transit information, thus enabling vessels of all classes to maximise their cargo and sailing windows while maintaining optimal safety. Moreover, it enables more precise vessel traffic models capable of increasing utilisation of the shipping channel.
The system has been live and in operation at the Port of Brisbane since August 2017.
Other Award Winners Included:
Women’s Achievement in Infrastructure: CEO of NSW Ports, Marika Calfas.
Advisory Excellence Award: Corrs Chambers Westgarth and KPMG for the Baptistcare Social and Affordable Housing Fund.
Operator and Service Provider Excellence Award: Metro Trains Melbourne consortium comprising John Holland, MTR Corporation and UGL Rail for the MR4 Melbourne Rail Franchise project.
National Infrastructure Awards
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