Intelligent investment is characterised by knowing which infrastructure to invest in.
Australia's current and future infrastructure challenges include congestion, equitable access to health, and resiliency in the face of extreme weather events.
These and other problems can be solved without spending millions (or even billions) on building or creating new infrastructure facilities or assets.
Instead, governments have a range of non-build solutions that are often more efficient and quicker to realise, and are cost-effective to implement and maintain. For example, they can choose to create or modify policy, set pricing or set incentives and disincentives to change user behaviour.
Softer mechanisms, such as creating awareness campaigns and clear signposting or direction, are other effective tools. For example, in the case of:
Waste: Reduce food organics and garden organics infrastructure construction and operation costs by driving community awareness programs about composting.
Transport: Establish congestion charging arrangements to reduce peak demand and avoid emissions.
Water: Prioritise the use of stormwater for non-consumption uses to avoid downstream network investment and reduce the heat island effect and improve liveability.
Energy: Regulate pricing structures away from a high fixed-charge component towards usage charges, to promote energy efficiency.
" Intelligent investment is characterised by knowing which infrastructure to invest in. "
Governments have other inexpensive and intelligent ways to achieve outcomes commonly achieved by investing in new infrastructure.
They include better utilising the existing stock of infrastructure, 'debottlenecking' it, and/or capturing its underutilised capacity.
For example, in the transport sector, governments can make a relatively small investment - relative to the costs of major new capital works - in signalling equipment to run more trains or services simultaneously.
In social infrastructure, analysing patient flow may unearth opportunities to convert specific parts of a health facility into multi-use facilities. Such an investment would unlock the latent capacity of the hospital to better respond to patient's needs at a particular time.
A key part of understanding whether the current system, network or asset can generate more output requires a mature approach to asset management. Governments around Australia are beginning to advance their efforts and improve their maturity in asset management.
This progress should be accelerated and enhanced by investments in capability, capacity, systems, process and technology. This will generate social benefits as well as positive economic outcomes.121
| Decisions should be considered over whole-of-life Decision-making processes and governance arrangements need to ensure the right infrastructure investments are selected. Quality evidence-based decision-making requires a comprehensive understanding of whole-of-life cost, functionality, performance and condition. All these factors form the basis of quality asset management, in line with international standards (ISO 55000). Assessment of whole-of-life costs helps to determine if an infrastructure service or asset makes sense over a longer period of time. Governments should refocus on value and costs across the project and the asset lifecycle by ensuring whole-of-life costs are robustly evaluated in all project business cases. The Australian Government can require whole-of-life cost assessments to improve asset management. This will require the currency and quality of asset registers to improve. All public infrastructure owners can drive global best practices by ensuring they routinely capture the condition, use and quality of each asset. Organisations with limited asset management capability and capacity should leverage the community of practices led by industry and academia. Asset registers and information models should adopt recognised asset information structures, as described in Reform 3.2 of this chapter. For more information about asset management, including the establishment of a centre of excellence for the water sector, see the Water chapter. Should this asset be built? Before infrastructure is deemed shovel-worthy it must be first demonstrated that it is necessary. All tiers of government, as infrastructure owners and project proponents, should challenge the default position that new assets or further investment is needed in business cases.122 This safeguards finite taxpayer funds for truly required investments, and ensures government is creating an equitable funding environment. |