Transport infrastructure projects must be carefully costed and beneficial

In the case of local roads, attention needs to be focussed on upgrades and maintenance. These issues are less glamorous than flashy new major road construction with its ribbon cutting opportunities but just as important to local communities. In these areas too the private sector has demonstrated that it is capable of delivering significant savings to taxpayers where governments are broad minded enough to consider partnerships.

For example, Transfield has a 10-year contract to maintain local roads in the North East region of Sydney. As well as guaranteeing a certain quality of service, and paying financial penalties if these standards are not met, that company has been able to demonstrate a massive 38 per cent saving compared with the expected cost of maintenance and renewal from within the public sector. Similar contracts have been used in regional areas.

We need to understand where the costs and benefits associated with these projects and upgrades lie. Will the Commonwealth fund these projects in full or will it ask State and local governments, local residents and businesses to chip in? Many questions remain unanswered.

However, one thing is clear. Nations are not built on high quality, new but under-used roads. They are built on reducing business costs and encouraging local community development and job creation. It is only by embracing partnerships with the private sector and by transferring risk to those companies that the Federal Government can ensure value for money. Private investors will not be interested in the pork barrel, only in real projects driven by real community and business needs.

Without clear analysis of the most needy projects made available to all, and the most efficient delivery of those projects in partnership with the private sector, there is a danger that we will not be engaging in nation building at all, only road building.