Australia’s federal government this Tuesday signed off a A$5 billion (€3.6 billion; $4.1 billion) concessional lending facility to support private investors looking to fund or undertake ports, railways, pipelines and electricity generation projects throughout the Northern Territory (NT).
This is the first such facility granted to the state and a boost to its ambition to revamp its transport and social infrastructure. It will start accepting applications on July 1.
“I’m especially keen to see how this loan scheme may support the work we have begun on a possible rail corridor between the Tennant Creek and Mount Isa, as just one example,” said chief minister Adam Giles as he announced the new allocation.
In this financial year’s budget the government has allocated A$587.1 million to transport infrastructure, including road upgrades as well as an estimated 219 kilometres of new sealed roads; $152.4 million to education infrastructure; and $1.42 billion to health-related infrastructure.
The rail link project, which would be 600 kilometres long, could also involve the construction of auxiliary pipelines and telecommunications infrastructure.
“Previous investigations indicated a number of mining companies in the Mt Isa area had an interest in shifting their exports of bulk materials through the Port of Darwin, instead of Townsville, if the cost of transport was right,” said Giles. “Exporting minerals through Darwin could also alleviate shipping pressures in Far North Queensland.”
Last month, the state announced it was looking at various solutions to fund its ambitious infrastructure investment programme. This was followed by the approval of a $75 million expansion project for Darwin Airport last week.
In October last year, plans of divestments had progressed with regards to the state’s oldest insurance company and the leasing of Port of Darwin. The latter was reported to have generated profits of $11 million before tax for the financial year 2012-2013.
“The Northern Territory Government is beginning a mature conversation about the future of both the Territory Insurance Office and the Darwin Port so that we can deliver the best value for taxpayers’ money and ensure our infrastructure meets the future needs of a growing Northern Australia,” said Giles at the time.
The Northern Territory Government has also been exploring for several month opportunities under the Commonwealth’s asset recycling incentive program, a scheme which rewards states and territories that complete asset sales and manage to reinvest proceeds in “critical, new economy-growing community infrastructure” by paying their government 15 percent of the asset price.
Infrastructure Australia, which advises the federal government, has stressed that at least A$300 billion needed to be spent on new infrastructure to prevent a decline in productivity.
In February last year, the government announced the appointment of Flagstaff Partners as consultants to investigate private investment options at the Darwin Port.
“We’ve asked these highly credentialed consultants to come up with a strategy to address the need for investment in Darwin's port facilities, the development of the Marine Industry Park and the potential redevelopment of other foreshore infrastructure,” commented Giles then.