ALC boss backs NSW on asset privatisation in speech that advocates trial of high productivity vehicles on Hume Highway
By Brad Gardner | June 19, 2013
Governments should follow the lead of New South Wales in privatising assets to finance transport infrastructure projects, the Australian Logistics Council (ALC) says.
In a wide-ranging speech at the Victorian Transport Infrastructure Conference that touched on high productivity vehicles and an inland freight rail line, ALC Managing Director Michael Kilgariff applauded the NSW Government’s plan to lease the Port of Newcastle for 99 years.
The Government has already done the same for Port Botany and Port Kembla and will use the proceeds on road projects such as WestConnex, and Kilgariff has held the approach up as the ideal model for others to follow.
“ALC encourages federal and state governments to follow the lead set by the NSW Government and to identify infrastructure assets that could potentially be recycled,” he says.
Kilgariff says as much revenue from the Port of Newcastle lease as possible should be put into Restart NSW, a fund established in 2011 to bankroll major infrastructure projects.
“As we have seen in NSW with the long-term lease of Port Botany and Port Kembla, there are infrastructure assets in the marketplace which could potentially [be] transferred to the private sector,” he says.
“The money raised from the sale of assets which have been assessed by governments as being suitable for private ownership could be then used to improve supply chain efficiency.”
Toward the end of his speech, Kilgariff implored the Victorian Government to begin a trial of high productivity vehicles on the Hume Highway.
The Government earlier this year announced greater road access for B-triples and B-doubles, and Kilgariff says the Hume trial needs to happen “sooner rather than later”.
“It would significantly improve the movement of freight between Australia’s two largest markets and frankly has been a long time coming,” he says.
“The Victorian Government should announce the date the trial is to commence, and if there is to be a further delay, why is it so.”
Kilgariff says the ALC also wants the Government to release a study outlining potential options for a second Victorian container port. The Government has committed to Hastings but there is support among some sectors for the port to be west of Port Phillip Bay.
“Such a study should include issues such as port viability and the effect the port location may have on traffic flows and road and rail congestion,” Kilgariff says.
The Government is currently finalising a freight and logistics plan, and Kilgariff says the ALC will be paying close attention to see how it will identify, fund and preserve freight corridors.
He says the plan should build upon the National Land Freight Strategy released last month by the Federal Government.
“ALC would have liked to have seen a greater commitment to action on a number of issues, particularly in relation to corridor preservation and infrastructure funding and financing. However, the strategy is an important starting point,” Kilgariff says.
During his speech, Kilgariff told conference attendees the development of an inland rail freight line between Brisbane and Melbourne should be pursued over the development of high speed rail.
“An inland rail freight line would also come with a relatively modest price tag, with construction estimated to be around $5 billion, plus additional costs to ensure the line goes directly from Port of Brisbane to Port of Melbourne, which would be a must,” he says.
“Compare this estimated $10 billion to $114 billion for high speed rail.”
Kilgariff also reiterated the ALC’s position that governments should develop public-private partnerships (PPP) to fund freight logistics infrastructure, a move Victoria plans to use for the East-West Link.
“In addition to streamlining the PPP process, ALC would also like to see greater focus by governments on tapping the deep capital pool managed by Australia’s superannuation industry, which is estimated to be around $1.6 trillion dollars,” he says.
Kilgariff says he is encouraged by reports the superannuation industry plans to invest $15 billion in infrastructure over the next five years.
“But given the size of the super pool available, there is obviously the potential to invest much more if ground rules that can be established which make it attractive for super funds to invest in new infrastructure projects,” he says.
“ALC supports a call by the Industry Super Network for reforms to bid processes to encourage increased super fund participation in greenfields infrastructure investment.”
