Defence Defence infrastructure investment will play a significant role in the coming two decades with a planned infrastructure spend in the Northern Territory of $20 billion over 20 years identified in the Defence White Paper. In 2015–16, Defence spending of $1.66 billion in the Northern Territory accounted for 7.3 per cent of gross state product. This is expected to increase to an average of $2.5 billion per annum. Defence personnel and their families are an integral part of the Northern Territory community. Defence currently base more than 5400 uniformed personnel in the Northern Territory, together with their families this represents some 12 000 people or five per cent of the Northern Territory population. The Defence White Paper and its supporting documents identified infrastructure investment in northern Australia (particularly Darwin and RAAF Base Tindal) as a high priority. Multi-user infrastructure offers the opportunity to develop infrastructure that benefits other sectors as well as Defence. The barge ramp facility at East Arm is an example of multi-user infrastructure, jointly funded by Defence and Northern Territory Government. Recognising increasing demand for marine industry services from Defence, Australian Border Force, the offshore oil and gas and commercial sectors, the Northern Territory Government is investing up to $100 million to develop a common user Ship Lift and Marine Industries facility. The facility will target expanded marine maintenance and repair expertise in the Northern Territory. Challenges and opportunities There are challenges for the Northern Territory to leverage the Defence presence and future investment in infrastructure. These include demonstrating the capability and capacity of our industry to undertake Defence work and working with the Australian Government to ensure local businesses are afforded the opportunity to compete for this work, securing enduring jobs in the Northern Territory. arriving Defence platforms, such as the Offshore Patrol Vessel and the Triton unmanned air vehicles, as well as existing platforms such as the Armidale Class Patrol Boats create significant opportunities for local industry to become embedded into the supply chains for these assets. Implementing and aligning the development of these platforms under the 2016 Defence White Paper, with the northern Australia Development agenda and the Indigenous Advancement Strategy, provides a valuable opportunity to work together for the benefit of all stakeholders. An alignment of the strategic vision for northern Australia would also increase the number of Defence Force personnel in the Northern Territory. Liveability and lifestyle are crucial to supporting the recruitment of defence personnel to the Northern Territory. Perceptions about the quality of healthcare and education services and infrastructure need to be addressed to support an increased Defence population.
Make the most of what we have Much of the infrastructure we will use in the future has already been built. How we use and maintain these assets will impact how much new infrastructure we need to build. Developing new infrastructure is costly, complex and may not necessarily be the most efficient solution. existing economic infrastructure linking the Northern Territory to national and global markets, like the Northern Territory’s rail and port infrastructure, have current capacity for further growth without significant new investment. There is an opportunity to increase asset utilisation and put downward pressure on the cost of services by unlocking investment around existing infrastructure and supply chains. Where infrastructure is approaching capacity, a range of options to potentially defer the need to construct new infrastructure could be considered, including: ensuring service delivery is as efficient as possible using regulation that is appropriate and fit-for-purpose encouraging behavioural change with policy settings or by improved price signals increasing private sector involvement in delivering and operating infrastructure to access innovative and efficient approaches to manage demand. Considering alternative service delivery options is essential to ensure the best and most efficient approach to meeting a need, or leveraging an opportunity, is adopted. Pursuing alternative delivery approaches allows government investment in infrastructure to be more efficiently and effectively targeted. What we will do Introduce a requirement for creativity and innovation in the approach to the design and use of infrastructure as part of the infrastructure project planning and delivery framework. Leverage new technology to increase the productivity and efficiency of our existing infrastructure networks. Consider the development of Strategic Asset Management Plans to support the appropriate management of government agency assets. Consider ways to make alternative use of underutilised government assets, including government real estate, to maximise asset effectiveness and efficiency.
Value capture methods Value capture is an alternative approach to sourcing funds to finance infrastructure delivery. It refers to government capturing a portion of the incremental value created by government policy and investment decisions. For example, government choosing to rejuvenate an industrial area into commercial and residential land could result in increased land values for adjoining landholders as their land parcels benefit from improved amenity. Value can be captured through a range of different approaches including levies, rates and taxes as well as the sale of commercial opportunities. An equitable and efficient policy to capture value created as a result of government decisions needs to be developed and tested before value capture initiatives can be introduced. The Australian Government and Infrastructure Australia are keen to progress capture initiatives as one approach to paying for new infrastructure. The Northern Territory is conscious of the need to approach this issue carefully, recognising that these policies lend themselves to larger, densely populated urban environments where uplifts in land and amenity value are significant and readily quantifiable. What we will do Investigate the feasibility of outcomes- based funding models for Northern Territory projects. Investigate a value capture framework, which recognises the Northern Territory context, as a potential model to fund infrastructure delivery. Review existing formal and informal infrastructure contribution policies to secure an equitable, transparent and integrated approach that supports private investment. Introduce innovative alternative models of infrastructure financing and funding to support the efficient delivery of strategic projects.
A transparent and consistent framework to plan, assess, select, prioritise and invest in infrastructure projects is critical to ensuring prudent management of government resources, accountability in project delivery and targeted outcomes are met. The Northern Territory Project Development Framework is a structured approach to project development that recognises competing project priorities and establishes a systematic approach to project evaluation. The NTPDF will be applied to projects that are Northern Territory Government funded or require some level of Northern Territory Government support, irrespective of whether they are projects funded through the government capital works program, government facilitated strategic projects or unsolicited private sector projects. The Infrastructure Strategy provides a high level outline of the NTPDF. Detailed guidelines in support of each element of the NTPDF will be separately promulgated. Project classification Projects vary in size and complexity and it is expected that application of the will reflect this. Nevertheless, it is expected that each element of the framework will be covered as part of the project development and delivery process. In particular, and consistent with the National Public-Private Partnership Guidelines, all projects above $50 million are required to be considered for delivery through a public-private partnership.
Delivery and funding model development and final approvals 5 considers the appropriate approach to project funding. The approach to project funding is guided by the type of infrastructure (i.e. economic, social, civic etc.) and may include early consideration of the allocation of Northern Territory capital funds that may need to be drawn down for the project. Opportunities for private sector participation in the project, through service provision, funding and financing are considered and tested, as well as sources of project finance and funding, including opportunities for local and Australian Government participation. The initial cost estimates developed as part of the detailed business case should be refined to develop a public sector comparator as part of this process. The public sector comparator is the benchmark against which different private sector delivery models are evaluated to determine the best value for money approach for project delivery. Final business case and recommended delivery approach Stage 6 incorporates the detailed work undertaken to align the business case and preferred delivery approach to put forward clear recommendations on the project scope, expected outcomes, and procurement and delivery model for government’s consideration. At the conclusion of Stage 6, the detailed business case will be considered and, if accepted, consideration will be given to how the project will be financed and funded.