NSW warns Canberra to leave infrastructure to the states

*Simon Evans https://www.afr.com/by/simon-evans-j7gbc*and*Jenny Wiggins https://www.afr.com/by/jenny-wiggins-j7gf5*
Jun 13, 2019 — 11.48am
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The states should be the prime drivers of big infrastructure projects and the federal government needed to be careful it didn't start duplicating those functions, the NSW transport minister has warned.

"The expertise largely resides with the states,'' Andrew Constance told theAustralian Financial Review National Infrastructure Summit https://www.afr.com/topic/afr-infrastructure-summit-1n1y.

He said the federal government should set policy that encouraged the momentum of big infrastructure projects, such as those now being led by NSW and Victoria, but leave it to the states to decide what is built.

NSW Transport Minister Andrew Constance and Premier Gladys Berejiklian inspect the M4 East tunnels. AAP

"We don't want a duplication of functions across the tiers of government,'' Mr Constance said.

This comes after federal Infrastructure Minister Alan Tudge on Wednesday said the Morrison government was keen to bring forward smaller infrastructure projects, from commuter car parks, bridges and traffic lights, to help kickstart the economy.

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Although some of the multi-billion dollar commitments made in the $100 billion promise in the April budget would take years to be "shovel ready", Mr Tudge said he wasworking with state and territory governments to fast-track smaller projects https://www.afr.com/news/economy/infrastructure-speed-up-to-aid-economy-20190607-p51vmg.

Mr Constance said there needed to be a clear outline of the ''role and delineation'' of which level of government was best positioned.

"I think it's really important that we look very closely at where the expertise resides in terms of infrastructure here,'' he said.

He said he didn't want to diminish the Federal Government's contribution to infrastructure, but it didn't make sense to have all three tiers of government clambering over similar projects.

"At the same time we've got councils building car parks, we've got the state building car parks and the national government building car parks,'' Mr Constance said.

'They should reconsider that policy'

Mr Constance also urged the Morrison government to reinstate an asset recycling program which had been introduced by then Treasurer Joe Hockey in 2014, where states that sold existing infrastructure assets via lease or sale, received federal top-up payments.

"I believe the Morrison government should head down that path,'' Mr Constance said.

"I think they should reconsider that policy."

He said a re-reinstatement of that asset recycling program would also be an important weapon in helping lift confidence in the economy at a time when ''clouds'' were gathering.

But Mr Constance declined to specify which assets NSW might look at in a next round of privatisations to help fund more large transport infrastructure projects.

Asked if the NSW government might consider the sale of its 49 per cent stake in West Connex motorway in whichTransurban now holds 51 per cent https://www.afr.com/business/transurban-secures-control-of-sydneys-westconnex-with-93b-bid-20180831-h14rh5after paying $9.3 billion to secure control last year, Mr Constance bypassed the question.

"The government hasn't committed to anything at this stage,'' he said.

He said the latest state election results in NSW and Victoria showed that local communities responded to local infrastructure projects and governments getting on with things.

'Lost skin' on Sydney light rail

But to be able to keep funding the large pipeline of projects and tap into the vast amount of superannuation money looking for a home and long-term investment returns, it made sense to re-invigorate an asset recycling approach by the federal government.

"We need to look at the best ways to build and fund the projects,'' he said..

"Asset recycling is one way to do that."

Mr Constance also said that while all of the parties involved in the dispute over Sydney's new CBD light rail line had ''lost skin'', he said it was important that bureaucrats didn't lose their enthusiasm for public-private partnerships.

"From time to time you do need to re-set your PPPs,'' he said.

The NSW government paid $576 million extra to contractors in a settlement deal. The Sydney Light Rail project was originally forecast to cost $1.6 billion when contracts were signed at the end of 2014.

The government and the contractor, Acciona, both underestimated the risks of tunnelling under the city's historic George Street. Thefinal cost of the project https://www.afr.com/business/transport/concrete-action-needed-to-resolve-infrastructure-disputes-acciona-20190604-p51u99will be at least $2.68 billion.

https://www.afr.com/business/infrastructure/nsw-warns-canberra-to-leave-infrastructure-to-the-states-20190613-p51x7b