Regional WA an infrastructure challenge

Infrastructure WA chairman John Langoulant has identified the needs of the state’s regions and opportunities for private finance as two of the biggest challenges facing the advisory group.

Mr Langoulant was speaking today after the launch of Infrastructure WA’s inaugural discussion paper.

This is the first step in the development of a 20-year state infrastructure strategy, due for release late next year.

When asked about the most challenging aspect of his work, Mr Langoulant said Infrastructure WA was still developing a methodology that it could use to prepare the strategy and identify priorities.

“That’s a big piece of work; there is no off-the-shelf model that we can use,” he told Business News.

“There are all sorts of approaches that other jurisdictions have adopted, but a special challenge we have here is the size of our regions and their significance in the context of the annual capital program.

“That’s why we’ve had Royalties for Region in WA, because those pressures are considerable.

“The question for us is going to be: how do we get a balance between the needs of the broader metropolitan area versus the regions in a way that is sustainable.”

The discussion paper sets out 10 objectives for the state infrastructure strategy including support for a strong, resilient economy, maximising regional strengths, enhancing infrastructure delivery, supporting access to social services and maximising liveability.

Acting chief executive Lance Glare said Infrastructure WA would seek public feedback on their ranking.

“We are asking people to tell us what they think the priorities should be,” Mr Glare said.

This would help the advisory body develop its assessment criteria.

“One thing we will develop is some pointed criteria based on these objectives that we will be using to prioritise all the ideas and proposals that come in.”

An online survey that Infrastructure WA conducted this morning ranked the economy as number one priority.

Mr Langoulant said the use of private finance was a difficult issue that his group needed to tackle.

“There is a strong expectation in the community the private sector should do more in the public sector space,” he said.

“A lot of people say, why doesn’t the private sector get more involved.

“You run into tricky questions on risk transfer between the public and private sector.

“You also run into tricky issues around accounting standards because a lot of private financing opportunities don’t actually relieve the state balance sheet of debt and that’s an issue that is not as fully appreciated across the community as it might be.”

Mr Langoulant noted that the public sector can borrow more cheaply than the private sector.

“The issue we have to address is, how can we leverage private sector involvement in what are ostensibly public sector projects that provide benefits that actually sit on the private sector balance sheet, and that’s a challenge,” he said.

“The other aspect you almost inevitably get to is asset sales, and then you have a whole set of other policy issues.”

Infrastructure WA will produce a 20-year state infrastructure strategy.

Its medium-term outlook (5-10 years) will be to have a bottom-up approach identifying priority projects and programs.

Its longer-term outlook (11-20 years) will be a top-down analysis considering different scenarios as well as policies, regulations, funding and technology trends.

The body will also seek to identify corridors and sites needed for things like airports, roads, railways, desalination plants and high voltage energy lines.