Federation house in need of repair Cover Story Infrastructure

The proverbial brick and mortar remains the primary asset for most people – one they hope to pass on to their children debt-free and in good repair. We worry about the plumbing, ensuring the lights are working and the driveway is fixed.

However, according to the Infrastructure Report Card, we don’t have the same standards when it comes to the national assets. What’s worse, we don’t even have a plan for the future. John Arbouw reports. We complain about the state of our roads. The Sydney train system has a good month if trains are only 15 minutes late on average and there have been no disasters due to lack of maintenance. The sewerage system in some of our older cities is near breaking point but no one can predict when or where. Considering Australia as a house, then this valuable asset is in dire need of repair before it can be left to future generations. Yet no government or political leader wants to talk about rebuilding the nation.

One hundred years ago, Australia was a nation of states, with Federation providing the means to bind the country together legally and politically. What was required in the next 100 years was to build a nation whose economic viability was underpinned by an infrastructure network of rail, roads and ports. This is the legacy handed down to the current generation but, according to the 2001 Australian Infrastructure Report Card, the baby boomers and the me, me, me generation have squandered their inheritance. The bill for this neglect will have to be paid by our children and our grandchildren.

Twenty industry associations in conjunction with the Institution of Engineers, Australia, produced the report card that shows Australia's infrastructure (electricity, gas, telecommunications, rail, ports, irrigation, wastewater, airports, roads, potable water and stormwater) is at best in average condition, while some of it is in very poor condition indeed. Australians have become used to travelling the highways of cyberspace via computer and purchasing goods over the Internet. As the retail experience of many Australians last Christmas proved, it may be easy to order the Christmas ham over the Internet, but its quite another story having it delivered to your door in time. The e-commerce purchasing revolution is expected to see global sales revenues from Internet business reach as much as $US1300 billion by 2003 despite the dot-com meltdown earlier this year. According to Professor Luis Ferreira from the Queensland University of Technology School of Civil Engineering, e-commerce is allowing customers and businesses to access products from anywhere in the world and it is also creating increasing expectations for 'right now' deliveries.

"The result could be a 50 percent increase in intercity freight trips and a potential 50-100 percent increase in the kilometres travelled by light commercial vehicles in the major cities," he says. More than 65 percent of all freight tonnage is carried by road with 80 percent of this carried over distances of less than 100km. With a population of 19 million, Australia has 11 million vehicles on the road at any given moment. The transport infrastructure simply won't cope. What the infrastructure report card highlights is that Australia is a country without a plan for the future. This has economic implications for almost every business and it is an indictment on the current generation. Of equal concern is the fact that while the infrastructure report card paints a gloomy picture about this country's investment in its infrastructure assets, we are not even in a position to know how bad it is, thanks to lack of data. "The recent audit of the national highway system identified problems with accuracy, correlation and utilisation of road condition and performance data and concluded that the absence of such data may inhibit the Federal Transport Department's capacity to monitor future service levels of service," says the report.

"Good quality data is essential to ensure that the available funds are allocated where there is a demonstrated need ... It is only within such a framework that the needs can be equitably matched with the funds and the sustainable levels of service." Better data isn't the only problem. "One hundred years after Federation the development and maintenance of our infrastructure assets suffer from a lack of integration and co-ordination. This is obviously related to our form of government, with the three tiers each having separate and sometimes overlapping roles and responsibility," the report says. "The issues of long-term planning and integration have seriously affected progress in the transport sector. Consider the recent history of reports on road and rail transport. Over four years, five major reports were produced, examining the needs of road and rail which culminated in a Federal Government response in April 2000." The call for a national integrated transport strategy was supported by the majority of owners and operators but has not been supported by the Federal Government. In May 2001 in a report on implementation of the government response, the House Transport Committee again called for a single land transport commission.

"Our infrastructure needs significant enhancement before it can be said to meet Australia's current and future needs," says the report. "The major impediments to this are a lack of co-ordination between the levels of government, a failure to plan for infrastructure provision, except when failures occur.

"The provision of adequate infrastructure underpins the Australian economy and the standard of living of all Australians. The current generation greatly benefits from the vision and commitment of those from the past, and must provide at least an equal legacy for future generations." As the report points out, we may be celebrating 100 years of Federation but the realisation of a nation rather than a nation of states is still a work in progress. Trying to have the states and the Federal Government work co-operatively in the national interest is no easy matter. The referral of Corporations Law powers from the states to the Federal Government as a result of the Hughes/Wakim court cases took a considerable time by any measurement. It required intensive lobbying on both state and federal level to convince politicians to act swiftly to what was an urgent matter. (AICD Law Committee chairman Bob Baxt headed the lobby group representing a number of business groups.)

According to the infrastructure report card, a number of significant regulatory impediments retard the management, maintenance and development of Australia's infrastructure. Major concerns are inconsistencies between States in the application of their regulatory frameworks, and difficulties with competition reform. "Where infrastructure regulation is under state legislation, each state has a slightly different view and approach, which increases compliance costs, reduces interconnectability, and results in differing objectives and legal frameworks," the report says. It took more than 50 years for Australia to agree on a national railway gauge system, but a train crossing the country from Brisbane to Perth via Sydney, Melbourne and Adelaide would still require 11 different radio systems. The Australian rail industry consists of 180 private and public companies employing 80,000 people and it contributes around $8 billion to the GDP. Rail transports all of the country's iron ore, 80 percent of the coal, 70 percent of the wheat and this accounts for 20 percent of Australia's exports and contributes $15 billion to the nation's economy.

The bulk of the rail infrastructure was built in the early 1900s and subsequent upgrades have tended to revolve around patching up the existing system or improving the networks serving the mining industry. The electrification of the Queensland rail network and track upgrade and the completion of the 8000km national standard gauge system have also been major projects. No one wants to invest in rail. The Alice Spring to Darwin railway finally received the go-ahead 30 years after the first spike was put in the Adelaide to Alice Springs rail link. The fast speed rail link between Sydney and Melbourne has been on the table for 25 years with no prospect that it will proceed in the near future, despite the collapse of Ansett. Between 1975-2000, the Federal Government spent $43 billion on roads and $2 billion on rail, according to the Australasian Rail Association. The Infrastructure Report summarises the rail situation thus: "the lack of reform of the planning, enhancement and maintenance of the existing network assets is disappointing. Asset management policies and processes show few signs of progress toward best practice although the controls in place in the privatised franchises of the Victorian system have potential".

The transport network isn't the only infrastructure under pressure. Australia's catchment systems are facing enormous and ongoing threats from human activities. Quoting from the 2000 Catchment Management Report: "Unless we, as a national community, begin to address these problems, the quality of our life will be substantially eroded over the coming decades. It is not overstating the matter to say that the ecologically sustainable use of Australia's catchment systems is the most pressing contemporary public policy issue facing the community." The Murray River basin is a classic case. Unless something is done about the salinity levels in the Murray River within the next 50 years, Adelaide's water supply is under threat. The 1999 Salinity Audit projected the amount of salt brought to land surface would increase by 5 million tonnes a year to 10 million tonnes by 2100. The National Land and Water Resources Audit published earlier this year found 5.7 million hectares were threatened by dryland salinity and this would rise to 17 million in 50 years.

The problem with the Murray isn't only salt. Four state governments and the Federal Government have dithered and passed the buck for more than 20 years over what to do, how much it would cost and who would pay for it. A 15-year Basin Salinity Management Strategy released on September 17 hopes to get agreement over a framework for communities and governments within the basin to agree on salinity targets. Whether agreement can be reached and salinity targets met remains to be seen. Even if you can desalinate the water, there are also problems with Australia's aging pipeline infrastructure for water and wastewater. Much of the pipeline infrastructure was built shortly after World War II and hasn't been replaced. Pollution from inadequate stormwater and sewerage systems is at unacceptable levels. Pipeline system failures are costing the nation more than $250 million annually and this figure is expected to escalate as the aging system passes its use-by date. The Sydney water quality scare in 1998 is only the forerunner of future events.

The problems of state parochialism, lack of capital, Budget priorities and political obstacles were as much an inhibiting factor 100 years ago as they are now. Yet despite these obstacles, our forefathers built the Australia we take for granted. The impetus for building a nation came largely from external events. Australian building booms occurred primarily after the two world wars and as a means to alleviate the ravages of the Depression. Australia needed to ride the economic wave of the Industrial Revolution and to do so required infrastructure arteries connecting the mines, the farms and the factories to our ports. This infrastructure network was largely built before 1970. No nation has ever aspired to economic prosperity without the ability to build, operate and maintain the physical infrastructure required to drive its economy. And, building a nation is also not without controversy or struggle. When the Sydney Harbour Bridge and its connecting highways were being built in the 1920s, it involved the demolition of 800 houses. Families living in its path were displaced without compensation.

The project however, produced much needed employment to cope with what was then the Great Depression. Sixteen workers were killed and taxpayers in the bush thought the city and this bridge was just a vampire sucking the life out of the country. Governments of the time had limited financial resources. By the 1890s much of the needed infrastructure was built, owned and operated by the private sector, Sydney's Pyrmont Bridge being a classic example. It was only after World War II that governments on both a state and federal level took real control of the infrastructure agenda. This was the era of huge state electricity, public works, rail and water and sewerage authorities. During the 1990s, the transition from public to private ownership of essential services and infrastructure began in earnest. Publicly-owned infrastructure businesses were either sold outright or corporatised to mirror private sector imperatives. Unfortunately during the period of government owned and operated infrastructure, the emphasis was on efficiency reform rather than on investment in new technology, growth and service. In turn efficiency reform was hampered by community service obligations that demanded government authorities provide unprofitable services.

For instance, the Government, as Telstra's major shareholder, requires the telecommunications company to provide better phone services to the bush. Telstra's other customers pay for this service. The half-way world where some essential infrastructure is owned and operated by government and other bits by the private sector is clearly not working in the best interests of the nation. While some progress has been made, particularly with the agreement to sell off National Rail and Freightcorp to try and have a unified national grid, other areas such as energy reform lag behind. According to the infrastructure report card, the first issue in rebuilding a nation is to have a plan requiring a co-ordinated approach to overcome the inconsistencies of regulation and priorities between different levels of government. The report recommends the establishment of a national infrastructure advisory council in the same way that there is a Board of Taxation and a Science Council. It also recommends development of an integrated national transport strategy.

The Canadian Government in the early 1990s put sensitive monitoring devices into their major infrastructure assets to provide an early warning system. The report recommends greater emphasis on collection, allocation and analysis of data to facilitate better decision making on where and when to spend money on infrastructure. The report card does not put any dollar numbers on rebuilding a nation. What the report does do is remind business and government that we cannot take our infrastructure assets for granted and we cannot simply rely on ad hoc methods of repair. And history will not judge the current generation kindly if it is unable to provide a plan for the future.

Don't shoot the messengers

Industry associations responsible for the 2001 Australian Infrastructure Report Card include: Association of Australian Ports and Marine Authorities Australasian Railway Association Australian Automobile Association Australian Business Foundation Australian Business Ltd Australian Council for Infrastructure Development Australian Council of Social Service Australian Electrical and Electronic Manufacturers' Association Australian Gas Association Australian Local Government Association

Australian Pipeline Industry Association Australian Telecommunications Users Group Australian Trucking Association Australian Water Association Business Council of Australia Electricity Supply Association of Australia Institute of Public Works Engineering Australia The Institution of Engineers, Australia National Infrastructure & Engineering Forum Tourism Task Force

Report Card

Electricity B- Gas C Telecommunications B Rail D- Ports B Irrigation D- Wastewater C- Airports B Roads (National) C Roads (State) C- Roads (Local) D Portable Water C Stormwater D

Ratings used are:

A Very Good Infrastructure is fit for its current and anticipated purpose in terms of infrastructure condition, committed investment, regulatory appropriateness and compliance, and planning processes.

B Good Minor changes required in one or more of the above areas to enableInfrastructure is fit for its current and anticipated purpose.

C Adequate Major changes required in one or more of the above areas to enable infrastructure is fit for its current and anticipated purpose.

D Poor Critical changes required in one or more of the above areas to enable infrastructure is fit for its current and anticipated purpose.

F Inadequate Infrastructure is inadequate for its current and future needs

Disclaimer

The purpose of this database is to provide a full-text record of all articles that have appeared in the CDJ since February 1997. It is aimed to assist in the research and reference process. The database has a full-text index and will enable articles to be easily retrieved.It should be noted that information contained in this database is in pre-publication format only - IT IS NOT THE FINAL PRINTED VERSION OF THE CDJ - therefore there might be slight discrepancies between the contents of this database and the printed CDJ.