Here are some of the deficiencies encountered. Further, this type of decision process needs to be integrated more seamlessly among several governments. Critical mass is absent in many Australian regional infrastructure markets. Economically attractive projects often fall short of financial viability due to insufficient customers to provide a secure revenue base. This can be reinforced by high and relatively inflexible front-end project structuring costs, though the recent Review of Business Tax offers hope of reform in this respect.
Critical mass is absent in many Australian regional infrastructure markets.
Service Obligations may also be high relative to project size. Governments have not applied effective or consistent means to value these objectively or to reimburse private investors through co-payments, subsidies, incentives or grants to meet them. Instead, projects with high social returns currently must be funded exclusively through government budgets. This is changing, however, following the privatisation of telecommunications and a number of public transport systems allowing for faster capital investment. Service Obligations may also be high relative to project size.