Australia to spend big on new airport, rail and roads

In addition to its $52bn infrastructure budget, the federal government is setting up a project finance agency to help expand its current financing programme.

The Australian government has pledged over A$70 billion ($51.6 billion; €47.4 billion) to infrastructure funding and financing over the next 10 years, a measure announced as part of its 2017 federal budget. 

New investment initiatives include an A$1.6 billion commitment for transport infrastructure projects in Western Australia, an A$1 billion infrastructure package for Victoria and A$844 million for upgrading Bruce Highway in Queensland. 

The government said it will commit up to A$5.3 billion in equity to develop Western Sydney Airport, which the current Sydney Airport Group has declined the government’s offer to build. While the development model is yet to be determined, the new airport is expected to serve 10 million passengers per year when it opens in 2026. 

Canberra is also establishing an A$10 billion National Rail Programme, which will fund urban and regional rail projects across the country. An additional A$8.4 billion equity investment will be made to fund the Melbourne-to-Brisbane Inland Rail project under a PPP model, while an A$20 million cheque has been allocated to developing business cases of fast-rail projects. 

A plan to establish the Infrastructure and Project Financing Agency is also outlined in the budget, building on a similar model to the UK, to help the government identify new financing solutions. 

The agency would help expand a financing programme through which the government is currently providing A$370 million in equity funding to the Moorebank intermodal freight precinct in New South Wales, an A$2 billion concessional loan for the stage 2 of Sydney’s WestConnex project and the A$5 billion Northern Australian Infrastructure Facility. 

The NAIF will provide A$5 billion of concessional loans to Northern Australia’s infrastructure projects, so as to encourage and complement private sector investment with support from the Export Finance and Insurance Corporation, the country’s export credit agency. It started assessing applications for concessional loans shortly after its creation in July 2016, according to the government. 

In addition to support from the NAIF, Northern Australia’s Minister Matt Canavan said federal funding for the state also includes A$600 million for its Roads Programme, A$200 million in defence capability in the North Territory, A$170 million for water-related projects, A$147 million for the Townsville Eastern Access Rail Corridor and A$100 million for the Beef Roads Programme.

 

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