A draft report by the Productivity Commission on public infrastructure was released on Thur 13.3.2014. It found an abundance of flaws, mythologies and forgone opportunities in infrastructure financing, funding and procurement. The draft outlines a proposed process for improving infrastructure investment across all levels of government; and as a consequence attracting increased private investment.
Peter Harris, the Presiding Commissioner and Commission Chairman said “Governments have it in their power to attract higher levels of private infrastructure investment, and to improve their own capacity to fund infrastructure, even in the presence of apparent borrowing constraints. They can do this through the judicious use of pricing mechanisms and by collectively establishing stronger transparent processes for project identification, selection, design and implementation.”
The Commission also proposes to examine further a number of potential improvements to financing mechanisms for infrastructure, including options proposed to address specific concerns related to the role of superannuation funds in greenfields projects.
The report cautions against imagining “magic pudding” solutions will arise from private sector financing. Ultimately, the report said taxpayers or users must pay for infrastructure. Many projects will still need public funding and quite often this will involve public financing. Nevertheless, the report says that, if executed well and for the right projects, private sector involvement can deliver vital new efficiency gains.
COMMENTS on the draft report are due by 4 April 2014. A final report will be provided to the Government in late May 2014.
[LTN 49, 13/3/14]