The Civil Contractors Federation of Australia (SA Branch) has called upon major political parties to commit to a summit of infrastructure financing experts to discuss alternative funding options for infrastructure development in South Australia.
With the State’s finances in a critical position, the Federation believes that relying on traditional sources of funding will result in further slump in public investment in infrastructure.
With major infrastructure projects including the Adelaide Oval, Superway and Southern Expressway now in their final phase, the Federation is concerned that there is nothing of scale ‘shovel ready’ to sustain the sector going into the future.
Further, the impasse continues between the SA state government and the Federal government over investment in a major upgrade to the South Road (Darlington or Torrens Road).
Compounding the problem, Federation members are seriously affected by a marked downturn in private investment in infrastructure in South Australia with the sector experiencing a 20-year low.
The Chief Executive Officer of the South Australian Branch of the Federation, Phil Sutherland says that the Federation is taking the initiative as they are not prepared to leave the future of their industry entirely in the hands of government.
Pointing out that the state doesn’t have the money to invest in public infrastructure like in the past, he said both the public and private sectors should work together on solutions with experts. By calling a summit involving infrastructure financing experts from across Australia and overseas, with participation by the Government and Industry, alternative funding models that are likely to be effective in South Australia could be discussed and finalised.
The idea of a summit of infrastructure financing experts looking at South Australia’s unique economic, geographical, demographic and fiscal circumstances would have to go down well with the Federal Government.
For instance, the Federation is aware there are trillions of dollars for infrastructure investment to stimulate global economic growth and create jobs including the giant Singapore Sovereign Wealth Fund and Canadian Pension Funds. The summit could perhaps assist South Australia in unlocking some of these funds.
Issues such as the role of infrastructure investment in promoting stronger growth and making the economy more resilient against shocks, as well as impediments to private sector financing can be considered at the Infrastructure Funding Summit, which would also examine a number of better known funding mechanisms including private funding, public/private partnerships, joint ventures, user pays, taxation incentives, government subsidies, public debt, sale of public assets and reinvestment of proceeds into productive public infrastructure, as well as various market financial instruments.