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brisbane
economic
series
issue two: march 2012
infrastructure
foreword
   Welcome to the second edition of the Brisbane Economic Series, a bi-monthly
publication providing vital insights into the city’s many exciting business,
investment and growth opportunities.
   Brisbane’s booming infrastructure sector is the focus of this issue which
features three industry leaders from the rail, infrastructure funding and digital
infrastructure industries.
   Business leaders Lance Hockridge, Mark Birrell and Martin Stewart-Weeks
share with us their forward-thinking visions for Brisbane.
   Learn first-hand how Brisbane will maximise its economic opportunity through
the continued delivery of world-class infrastructure.
   With Brisbane’s population set to reach 3.9 million by 2056, I recognise
our infrastructure challenge is significant, but with continued and substantial
investment in this area, I am positive it is a challenge we are well placed to meet.
   Brisbane’s position in the global digital economy is also a focus of this
edition because it is an area which will ultimately underpin the resilience and
sustainability of our economy.
   Our city’s success and the future prosperity of our residents and businesses
lie in collaboration, informed planning and investment in the crucial
infrastructure sector.
   Recent successful projects that demonstrate Brisbane’s capability to deliver
major infrastructure include Legacy Way, Clem 7, and the Go Between Bridge.
   Through the delivery of these key infrastructure cornerstones, Brisbane is set
to thrive.

Graham Quirk
Lord Mayor of Brisbane



2   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                         CONTENTS
contents                                                                                                                   Issue two


                                          04                                               08                                                     12
         Brisbane and Queensland’s                               Smarter connected: our world                         The booming resources sector
         infrastructure challenge is                             is growing exponentially more                        lies at the heart of Brisbane’s
         significant. Strategies from                            digital and networked. Advances                      unprecedented growth
         the government at all levels in                         in infrastructure in the digital                     forecasts, and is driving
         partnership with the private                            economy will contribute to                           substantial investment in rail
         sector are vital for supporting                         building Brisbane’s economic                         infrastructure that will have
         future growth.                                          resilience and sustainability.                       far reaching benefits.
         MARK BIRRELL                                            Martin Stewart-Weeks                                 L ance Hockridge
         Chairman, Infr a structure                              Senior Director (Public Sector),                     Managing Director and Chief
         Partnerships Austr alia                                 IBSG, Cisco                                          E xecutive Officer, QR National




3   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                                A C K N O W L E D G E M E N T S // C R E D I T S   CONTENTS
Brisbane is the engine room of the
                                                                                                                       Queensland economy. In 2011 its
                                                                                                                       contribution was valued at $114 billion,
                                                                                                                       accounting for 46.7 per cent of the
                                                                                                                       entire State’s economy.



                                                               The vitally important reconstruction task in the wake
Brisbane and Queensland’s                                  of last January’s floods understandably dominated
                                                           Queensland’s infrastructure program last year.
infrastructure challenge is                                But against this backdrop we saw significant progress on
significant. Strategies from                               a number of major infrastructure projects, including the
                                                           Sunshine Coast Hospital PPP, Gold Coast Rapid Transit
the government at all levels in                            and the ongoing construction of the Airportlink and
partnership with the private                               Legacy Way.
                                                               As we head further into 2012, the Federal and State
sector are vital for supporting                            governments will engage in an open debate around
                                                           the projects which will help the Sunshine State –
future growth.                                             and in particular Brisbane – maintain its economic
                                                           competitiveness and help reverse the nationwide
MARK BIRRELL                                               fall in productivity.
Chairman, Infr a structure Partnerships                        The infrastructure challenge remains significant.
Austr alia                                                 Traffic congestion, hospital waiting queues and
                                                           straining public transport networks are constant
                                                           reminders of the infrastructure task facing Australia’s

4   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                                                                               CONTENTS
major cities, and Brisbane is not alone in having to
deal with a number of challenges that come from                                                                               Partnerships will be particularly
booming population growth.
    Brisbane is the engine room of the Queensland                                                                             important because many of the
economy. In 2011 its contribution was valued at $114                                                                          major projects needed in Brisbane
billion, accounting for 46.7 per cent of the entire
State’s economy. The Federal Government’s State of                                                                            and its surrounds are simply beyond
Australian Cities report, released last year, predicted                                                                       the funding capacity for any single
Brisbane’s population would increase from 2.043
million in 2010 to 2.725 million in 2027. The population                                                                      government or industry alone.
across wider South East Queensland is forecast to
increase from 2.99 million in 2010 to 4.39 million by
2031 – by which time more than 15 per cent of all
Australians will live in South East Queensland.
    These projected growth patterns have attracted
the attention of policymakers, who are acutely aware
of the inevitable strain on the city’s transport, utilities
and social infrastructure networks. The focus moving
forward will rightly be on innovative ways to fund the
required investments.
    The State Government’s Queensland Infrastructure
Plan (QIP), released last year, identifies $134 billion            Legacy Way (Artist’s Impression)




FIGURE 1: BRISBANE GROSS REGIONAL PRODUCT ESTIMATE, 2011      worth of infrastructure investment for Brisbane and           and by 2031, is expected to fall to 44.1 per cent.
                                                              surrounding regions to 2031.                                     The regionalisation of South East Queensland will
                                                                 Progress will be made on the new motorways, rail           hasten the need for improved transport connections to
    BRISBANE                                                  networks and social assets through a joint effort from the    and from Brisbane to burgeoning satellite centres such as
    $114b; 9%                                                 Commonwealth, the Queensland Government, Brisbane             the Gold Coast and Sunshine Coast.
                                                              City Council and the private sector.                             That’s why there has been a broader discussion around
                                                                 Partnerships will be particularly important because        the funding models needed to deliver major infrastructure
re st of qld
                                                              many of the major projects needed in Brisbane and its         across South East Queensland – and farsighted dialogue
$102b; 8%                                                     surrounds are simply beyond the funding capacity for any      about the projects needed over the long term to grow
                                   re st of austr alia        single government or industry alone.                          Brisbane and regional centres.
                                   $1,029b; 80%                  And while the planned major transport projects in             With the right planning, evaluation and delivery
 re st of SEQ
 $39b; 3%
                                                              Brisbane gain the most national attention, consideration      frameworks in place, government at all levels will be well
                                                              will also be given to the regionalisation in South East       placed to turn their attention to delivery of the projects
                                                              Queensland.                                                   that Queensland needs.
                                                                 In 1986, nearly 47 per cent of Queenslanders lived in         In the case of Brisbane, this must include investments
                                                              the capital. That proportion eased to 45.4 per cent by 2006   that will deal with the city’s urban congestion, which cost
Source: Brisbane Economic Development Plan, 2012


5   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                                                                                               CONTENTS
Mechanical and electrical fit-out in
                                                                                                      Northern Busway tunnel


the city $1.8 billion last year and is expected to rise to
$1.9 billion this year. By 2020, congestion costs will reach
more than $3 billion, creating further pressures on the
city’s productivity and efficiency.
   All political leaders agree that enhanced rail capacity
is a first order issue for Brisbane and Queensland.
   An Environmental Impact Statement for the
proposed Cross River Rail, released last September,
stated that without additional network capacity, the
existing rail system in the inner city will reach capacity
later this decade.
   The proposed Cross River Rail project would see an
18 kilometre rail line connecting Salisbury in the south
                                                                   The State has submitted a proposal to Infrastructure
with Bowen Hills in the north - including 10 kilometres
                                                               Australia for stages 2b and 3 of the Eastern Busway,
of underground tunnels, four new underground stations
                                                               valued at $685 million and $140 million respectively, with
and two new surface stations; and would substantially
                                                               IA deeming it a ‘threshold’ project in its 2011 report to the
increase capacity across the metropolitan rail network.
                                                               Council of Australian Governments (COAG).
But the floods in January saw a revised timeline for the
                                                                   By addressing the limited access to high frequency
CRR, with completion now estimated as 2020.
                                                               public transport in Brisbane’s eastern suburbs, the project
   The economic arguments for a mass transit solution
                                                               is viewed as important in easing congestion and opening
are solid. The EIS states that the CRR would deliver
                                                               up opportunities for further urban consolidation. The
more than $9 billion in economic benefits to the region
                                                               State said that the Eastern Busway also meets IA’s goal of
and would boost the number of trains through the CBD
                                                               growing national productivity and transforming cities.
from 84 trains per hour to 132 trains per hour at full
                                                                   The continued upgrade of the Bruce Highway is
capacity. No doubt the procurement of such a major
                                                               another key infrastructure priority. A report by the
project would be guided by the lessons learned from the
                                                               Australian Automobile Association (AAA), released in
procurement of the North West Rail Link in New South
                                                               January, found that the 1700 kilometre highway is the
Wales –the largest and most complex public transport
                                                               nation’s most dangerous road.
project in Australia.                                                                                                                All political leaders agree that
                                                                   An estimated $2.3 billion has been spent on upgrading
   And while more immediate term solutions – such
as track and signalling upgrades – would help deliver
                                                               the Bruce Highway over the past five years, with the                  enhanced rail capacity is a first order
                                                               Bruce Highway Upgrade Strategy (Brisbane to Cairns) put
additional capacity across the rail network, a decision will                                                                         issue for Brisbane and Queensland.
                                                               forward by Queensland to Infrastructure Australia as a
be needed on the long-term heavy rail requirements for
                                                               priority project last November.
Brisbane’s CBD.
                                                                   A sustained investment in Queensland’s most crucial
   Of course the Cross River Rail – or a similar rail
                                                               freight corridor will lead to safety improvements and
solution – will not be the panacea for the city’s congestion
                                                               better connectivity to key gateways - and also drive
concerns. The Eastern Busway project is another of the
                                                               Brisbane’s long-term productivity growth.
State’s top infrastructure priorities. Stage one of the
                                                                   While progress is being made on these major
dedicated bus-only roadway - between the University of
                                                               projects others remain under consideration, with
Queensland and Buranda - has already been completed
                                                               decisions still to come on funding commitments from
and Stage 2a is under construction.
                                                               the Federal or State Governments.

6   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                                                                                             CONTENTS
One major project awaiting commitments from
Aerial view of major Brisbane                                             the State and Federal Governments is the upgrade of
infrastructure under construction                                         Kingsford Smith Drive, which links the CBD to Brisbane
                                                                          Airport. Stage one of the upgrade has been completed
                                                                          and Brisbane City Council has allocated $1.5 million
                                                                          in this year’s budget towards further investigations for
                                                                          stage two of the upgrade.
                                                                              In spite of the size of the challenge, there is reason
                                                                          for real optimism about the future of infrastructure
                                                                          across Brisbane and Queensland. There is strong
                                                                          community appetite for substantial reform and a
                                                                          similarly strong commitment from governments
                                                                          to engage in a rational debate around the critical
                                                                          reform pathways.
                                                                              But as with the other states, the delivery of major
                                                                          projects will only be possible through sustained
                                                                          partnerships across all levels of government. n




                                                                          {
                                                                                  Mark Birrell is the Chairman of Infrastructure Partnerships
                                                                                  Australia. He is the national leader of the infrastructure group
                                                                                  at Minter Ellison Lawyers and serves on the statutory board
                                                                                  of Infrastructure Australia. He has extensive experience as a
                                                                                  company director and lawyer and is a fellow of the Australian
  There is strong community appetite                                              Institute of Company Directors. Previously he was Minister
                                                                                  for Major Projects and Government Upper House Leader
  for substantial reform and a similarly                                          in Victoria, working on successful PPPs and capital works
                                                                                  initiatives like CityLink and the Docklands.
  strong commitment from governments
  to engage in a rational debate around
  the critical reform pathways.




         7   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                                        CONTENTS
What started with a focus on cost,
                                                            carbon and convenience has
                                                            turned into an engine of ‘systematic
                                                            serendipity’ that fires innovation
                                                            and creativity.



Smarter connected: our world                                   In Amsterdam a couple of years back, a few business,        across the metropolitan regions of Amsterdam, all now
                                                            government and community organisations got together to         connected into a network that allows you to book online
is growing exponentially more                               solve a problem that is pretty familiar to cities all around   space to work, a room to meet or a telepresence screen
                                                            the world.                                                     to collaborate virtually. And sometimes just to get some
digital and networked. Advances                                How could the city escape the congestion and                work done over a cup of a coffee and a quick chat.
in infrastructure in the digital                            inconvenience that were increasingly the hallmarks of             From the initial pilot group of 7 centres, Amsterdam
                                                            growth as people spent more and more wasted and                now has a network of over 120. And interesting things are
economy will contribute to building                         frustrating time getting from home to work and back            happening. People are using the city differently as they find
Brisbane’s economic resilience and                          again? And, into the bargain, how could Amsterdam              more convenient, carbon-reducing and cost-saving ways
                                                            drive towards some aggressive targets to reduce carbon         to work. But the new shared workspaces are sparking
sustainability for the future.                              emissions and make the city greener and more efficient?        unexpected connections as people, almost literally, bump
                                                               The answer was a ‘smart work centre’. Think Qantas          into other people with useful ideas and skills.
                                                            Club, on steroids, in the suburbs.                                So what started with a focus on cost, carbon and
Martin Stewart-Weeks,                                          The idea is simple. You fit out a building to               convenience has turned into an engine of ‘systematic
Senior Director (Public Sector), IBSG, Cisco                accommodate a wide range of work styles and needs              serendipity’ that fires innovation and creativity.
                                                            – individuals at a computer, informal meeting spaces              In Seoul, the government has announced the intention
                                                            over the coffee machine, meeting rooms large and               to spread a network of 450 smart work centres. Not
                                                            small. Throw in the best available broadband-enabled,          surprising when you consider the population of Seoul is
                                                            networked collaboration technologies, like high-end            roughly the size of Australia. That’s what’s called taking it
                                                            telepresence video. And make sure the centre is close to       to scale.
                                                            transport, shops and services, child care.                        Take another example. The United Nations Secretary-
                                                               The result is the rapid growth of these centres             General has started a program of inter-cultural dialogue


8   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                                                                                               CONTENTS
and collaboration to make a contribution to reducing         becoming ‘table stakes’ for cities and regions that want to
                                                            tensions across political and cultural divides.              succeed in a more open and connected world.
                                                            One of the tools being developed is Dialogue Cafe                Infrastructure is all about the future.
                                                            (www.dialoguecafe.org). Basically, a Dialogue Cafe is            It requires often massive investments whose size and
                                                            a public space, like a cafe, that is easily accessed and     focus say a lot about our collective future. If you look at
                                                            informal, with a telepresence screen that allows people to   the way a company, a city, a State or a whole country
                                                            quickly and cheaply connect to other ‘Cafe’ spaces where     invest in infrastructure, you’ll learn a lot about the
                                                            they can talk with others around the world. What they        imagination, values and aspirations from which it is, quite
                                                            talk about can be pretty much anything – ideas for new       literally, being built. In a very real sense, our collective
                                                            social change programs, artists collaborating on a piece     identity is made manifest in the decisions we take about
                                                            of music, students swapping ideas and projects, social       what, where and how to build the infrastructure assets
                                                            entrepreneurs looking for great new ideas to help them in    that sustain resilience.
                                                            their work.                                                      Possibly the single most significant factor that has
                                                               What’s the link between these two initiatives?            changed the way we think about infrastructure in the past
                                                               They are both powerful examples of the new                20 years is the increasingly central role that networked
                                                            capabilities that cities need to create so people can        digital technology now plays in defining our world and its
                                                            get the most out of their engagement with the digital        risks and possibilities.
                                                            economy. And those capabilities - better communication,          Our world is growing inexorably more digital and
                                                            simple and effective collaboration and powerful new          networked.
                                                            connections – rely on a bunch of new infrastructure              Just to put that in context, Cisco estimates that, after
                                                            assets. Rising to these new infrastructure demands is        increasing eight-fold in the past five years, global web
                                                                                                                         traffic will quadruple during the next five years. Three
                                                                                                                         forces are at play - mobility, connected devices and video.
                                                                                                                         By 2015, the number of devices will be twice the world’s
                                                                                                                         population, traffic from wireless devices will exceed that
                                                                                                                         from wired devices and nearly two-thirds of consumer
If you look at the way a company,
                                                                                                                         traffic will be in the form of video.
a city, a State or a whole country                                                                                           How well and how easily we can connect across the
invest in infrastructure, you’ll                                                                                         Internet or other digital platforms will make or break our
                                                                                                                         aspirations for innovation, inclusion and sustainability.
learn a lot about the imagination,                                                                                           And that is certainly true for Brisbane and Queensland.
values and aspirations from which                                                                                            Rebuilding from last year’s floods and cyclone, there is
                                                                                                                         an opportunity to match Queensland’s boundless vision
it is, quite literally, being built.                                                                                     and optimism for the future – growth, inclusion, innovation
                                                                                                                         – with the infrastructure of resilience and sustainability.
                                                                                                                             And central to the new demands to build resilience and
                                                                                                                         sustainability into the heart of Queensland’s cities, towns
                                                                                                                         and regions is the imperative to invest in the human and
                                                                                                                         technology fabric of the digital economy.
                                                                                                                             The evidence suggests the results are worth the
                                                                                                                         investment.


9   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                                                                                            CONTENTS
A recent study for the UK Government estimated that
spurring an additional investment of £15 billion in the UK’s
ICT infrastructure would create approximately 700,000
                                                                                                                               In the digital and distributed future,
UK jobs. They also estimated that over half of these jobs
would be in small businesses.                                                                                                  whether we are trying to make our
    In the US, a 2007 study looked at the economic                                                                             cities and towns easier to live in,
multiplier effects (increases in GDP, jobs, tax revenues)
that can be calculated from broadband investment.                                                                              to start new businesses and create
It found the increase in local GDP is more than ten-fold                                                                       new jobs, or to keep our water
the value of the investments in broadband infrastructure
    The OECD published a report a couple of years                                                                              clean and our energy sustainable,
back pointing out that broadband networks increase                                                                             we’ll be ‘smarter, connected’.
the impact and efficiency of other public and private
investments. “Broadband is needed as a complementary
investment to other infrastructure,” the report
suggested, “such as buildings, roads, transportation
systems, health and electricity grids, allowing them to         care of a collaboration of family, medical experts and
be ‘smart’ and save energy, assist the aging, improve           community support teams, they need to find people,
safety and adapt to new ideas.”                                 connect and talk with them easily and often work together
    A 2009 study (http://reason.org/news/show/gridlock-         across large distances and over long periods of time.
and-growth-the-effect) found that reducing congestion              The ability to connect – what you might call ‘soft’
and increasing travel speeds enough to improve access           infrastructure, becomes crucial.
by 10 percent to key employment, retail, education, and            In the digital and distributed future, whether we are
population centers within a region increases production         trying to make our cities and towns easier to live in, to
of goods and services by one percent. The study reported        start new businesses and create new jobs, or to keep
that achieving “free-flow traffic conditions” (that is,         our water clean and our energy sustainable, we’ll be
reducing congestion) around key urban and suburban              ‘smarter, connected’.
destinations in eight U.S. cities–Atlanta, Charlotte, Dallas,      Brisbane’s aspiration to be Australia’s ‘new world city’
Denver, Detroit, Salt Lake City, the San Francisco Bay          tells us a lot about its sense of the future. And that means
Area, and Seattle–could boost the economies in those            we know something of the city’s infrastructure priorities
cities alone by $135.7 billion and generate close to $9         and investments on which that future depends.
billion in new tax revenues.                                       Some big ideas and bigger ambitions are at stake.
    This is all important grist to the infrastructure              How does the city provision new models of working,
investment mill. Roads, bridges, schools, hospitals,            mobility, innovation and creativity? What are the new
ports, big public transport systems, new housing – all of       assets and capabilities that business, large small, need to
these traditional assets are still important.                   invest, create jobs and develop competitive products and
    But when an entrepreneur is looking for investors           services? How does Brisbane create thriving places and
or partners to develop a great new product or service,          lively communities that are inclusive, accountable and
when a teacher wants to connect her students to experts         resilient, places where people want to make their homes
on the other wide of the world or in the next town, when        and make their mark?
someone needs access to specialist health care or the              Creativity, inclusion, innovation, sustainability – these


10   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                                                                                    CONTENTS
are increasingly the hallmarks of successful cities and
communities into the future. And reaching for the rising
standards they imply will increasingly be a function of
the confidence with which the city and its citizens master
the new demands of the digital economy. Connecting,
communicating and collaborating are the new engines
of progress. And that means investing in the necessary
infrastructure assets, capabilities and culture. This is                     Connecting, communicating and
now the stuff of leadership in the digital economy.
                                                                             collaborating are the new engines of
   For Brisbane and Queensland, the task is how
to achieve economic resilience in a connected and                            progress. And that means investing
competitive world, make a transition to a low-carbon                         in the necessary infrastructure
economy and lifestyle and make communities safe,
creative, clever and inclusive places to live.                               assets, capabilities and culture. This
   That means investing in the digital fabric of the new                     is now the stuff of leadership in the
economy whose technology assets are becoming more
visual, virtual, social and mobile.                                          digital economy.
   More smart work centres and Dialogue Cafes, for




{
example? n


         Martin Stewart-Weeks has over 25 years’ experience in
         organisational management and consulting in the corporate
         and public sectors and with a wide range of not-for-profit
         organisations.
         Martin works with the Internet Business Solutions Group (IBSG)
         at Cisco with a focus on the public sector. In January 2007,
         Martin took up a position to lead IBSG’s public sector practice
         in Asia-Pacific, leading a small team of senior consultants
         working on transformation projects in government, education
         and urbanisation in India, China, South-East Asia and Australia
         and New Zealand. Martin writes and speaks extensively on
         changes in government, service design and policy driven by
         reform opportunities at the intersection of public sector reform,
         technology and public and social innovation.




11   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                                  CONTENTS
Growth will be sustained and
                                                           opportunities will emerge if we
                                                           continue reform in areas of labour,
                                                           productivity and infrastructure.



                                                                                                    It’s little more than a year since QR National made its
The booming resources sector                                                                     debut on the ASX – a momentous day for our Brisbane-
lies at the heart of Brisbane’s                                                                  headquartered company with over nine thousand
                                                                                                 employees across Australia. While the $4.6 billion float in
unprecedented growth forecasts,                                                                  November 2010 was the biggest IPO in Australia in more
                                                                                                 than a decade, equally it marked new beginnings for this
and is driving significant                                                                       iconic Queensland company with a 145-year history.
investment in rail infrastructure                                                                   Like many in 2011, we were confronted by the
                                                                                                 Queensland floods. Our operations fortunately withstood
that will have far reaching benefits.                                                            the onslaught remarkably well, and we start 2012 with
                                                                                                 renewed optimism and determination to deliver on the
L ance Hockridge                                                                                 changes needed for our company to support the rapid
                                                                                                 growth forecast for the region.
Managing Director and Chief E xecutive
Officer, QR National                                                                                This is against the backdrop of a strong, though patchy
                                                                                                 Australian economy and continuing global uncertainty.
                                                                                                 In this context, the focus is for individual businesses
                                                                                                 and the domestic economy to be more efficient and
                                                                                                 competitive. Growth will be sustained and opportunities
                                                                                                 will emerge if we continue reform in areas of labour,
                                                                                                 productivity and infrastructure.
                                                                                                    For our part, the transport and logistics industry in
                                                                                                 Australia should be a world-class enabler of competitive


12   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                                                                   CONTENTS
and connect with regional communities. Brisbane has
                                                                                                      a great balance of dynamism, energy and the right
                                                                  The transport and logistics         opportunities to help us realise our aspirations for the
                                                                                                      region’s infrastructure development. Its world-class
                                                                  industry in Australia should        liveability and increasingly sophisticated social and
                                                                  be a world-class enabler of         cultural scenes provide an ideal platform for a company
                                                                                                      like QR National to breathe and grow.
                                                                  competitive advantage for local        Home-grown enterprises and a range of leading
                                                                  companies and industry. Rail can    national and multi-national companies now call
                                                                                                      ‘Australia’s new world city’ home. There’s a burgeoning
                                                                  make a genuine and sustaining       industry of IT excellence invigorating the business
                                                                  contribution to the next wave of    landscape. QR National, with its national footprint is
                                                                                                      very much at home in this city. It serves as the perfect
                                                                  productivity for the Brisbane and   hub from which to connect with other states, South-
                                                                  Queensland economies.               East Asia and further afield, with its world-class and
                                                                                                      easily accessible domestic and international airports via
                                                                                                      Brisbane’s Airtrain. And importantly many of our largest
                                                                                                      customers, the resource companies with extensive
                                                                                                      Queensland operations, are based here. This co-location
advantage for local companies and industry. Rail can make                                             allows us to remain engaged and in touch. We also share
a genuine and sustaining contribution to the next wave of                                             a large regional employment presence and a connection
productivity for the Brisbane and Queensland economies.                                               with regional communities.
   From a long, proud history in Queensland’s economic                                                   Like others, an emerging challenge for QR National
and social development, QR National has grown to                                                      has been the fierce competition to attract and retain
become the country’s largest rail freight company.                                                    talented people – both at the executive management level
The network carries more than $50 billion worth of                                                    and in engineering and trades. Brisbane, with its vibrancy
Australian exports each year. And now the move to a                                                   and energy, provides a positive context in which to face
publicly-listed company will help accelerate the changes                                              these challenges. The ‘lifestyle capital’ of Australia is now
required to sharpen our performance and customer                                                      matched by unprecedented migration rates and career
service, delivering better commercial outcomes for                                                    opportunities. That I could take a CEO role in Brisbane,
industries that rely on rail freight. Continued investment in                                         was a driving factor for me in repatriating with my family
growth projects will be a critical driver for future success                                          from the U.S. in 2007. I know my experience is shared
for both our organisation and the region’s economy.                                                   by many executives now residing in Brisbane and the
   Our business covers coal on the eastern seaboard, iron                                             Sunshine State.
ore in Western Australia, intermodal freight and a range                                                 In terms of infrastructure investment and growth,
of rail-related products such as heavy-engineering and                                                Queensland’s capital IS in the box seat.
track maintenance and construction.                                                                      The Deloitte Access Economics Investment Monitor
   QR National’s heritage and heartland are in                                                        released in February identifies planned or committed
Queensland, so Brisbane is the logical HQ for the                                                     projects in Australia totalling more than $900 billion.
company. From here, we can efficiently and effectively                                                Unsurprisingly, mining accounts for almost half of
run our operations, stay in touch with major customers                                                investment activity. Around 40 % of these projects are


13   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                                                                         CONTENTS
slated for the resource rich states of WA and Queensland.
                                                                      For QR National, which is 80% leveraged to the
                                                                  resources sector, and other Brisbane based companies
                                                                  servicing the resources sector, we see great growth
                                                                  opportunities in these type of numbers.
                                                                      Rail is a major player in Australia’s resource supply
                                                                  chains where bulk commodities account for nearly 90
                                                                  percent of total rail freight tonnages in this country.
                                                                  Coal and iron ore make up about 75 percent of this,
                                                                  primarily in coal on the eastern seaboard and iron ore in
                                                                  the west.
The challenge here for the transport                                  QR National’s focus is on supporting a strong and
and logistics infrastructure industry                             growing export market where Australian resources
                                                                  remain highly-competitive globally. We know that
is to align with the demand curve                                 Australian resource supply chains are among the best
for Australian resources and to                                   in the world but the pressure is on for accelerated
                                                                  improvement. The challenge here for the transport
continue to exploit all the benefits                              and logistics infrastructure industry is to align with the
that technology and operational                                   demand curve for Australian resources and to continue
                                                                  to exploit all the benefits that technology and operational
excellence offer.                                                 excellence offer.
                                                                      While Korea and Japan traditionally are the biggest
                                                                  consumers of Australian coal – about 54 per cent for
                                                                  FY 2011 - the emergence of the Chinese and Indian
                                                                  economies will underpin the next phase of growth.
                                                                  We’re also seeing a strong direct investment from
                                                                  these countries as they seek to create vertically
                                                                  integrated supply chains to lock in supply and price
                                                                  over coming decades.
                                                                      In Queensland, thermal coal reserves in the Galilee
                                                                  and Surat Basins will come into play, building on the
                                                                  continuing growth of high-quality metallurgical coal
                                                                  exports from the Bowen Basin to international markets.
                                                                      Coal infrastructure supply chains in Queensland and
                                                                  New South Wales are about to embark on their next
                                                                  phase of growth. Current nameplate capacity of coal
                                                                  ports stretching from Port Kembla to Bowen is around
                                                                  425 million tonnes per annum.
                                                                      Projects already announced would add another
                                                                  780 million tonnes, taking the total to more than
                                                                  1.2 billion tonnes. The value of these projects will


14   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                                    CONTENTS
run to tens of billions of dollars. Obviously these              The first component of the $1.1 billion GAP Expansion       In terms of infrastructure investment
will not all progress along the same approval and             was opened to rail traffic in December 2011. When
commissioning path, however it does underscore the            completed in June 2012, the project will take to 50 million    and growth, Queensland’s capital
scale of growth anticipated.                                  tonnes, the annual capacity on the Newlands system to          IS in the box seat.
   Here in Queensland, the current rail infrastructure        Abbot Point Coal Terminal. It’s a project underwritten by
and port capacity is in the order of 200 million tonnes       five foundation customers - BMA, Rio Tinto Coal, QCoal,
across QR National’s network and into ports at                Macarthur Coal and Lake Vermont Resources.
Gladstone, Mackay and Bowen. Our capital program                 Importantly, the project has been designed to allow
is growing this network capacity in alignment with            significant future expansion - from 50 to 100 to potentially
customer and industry needs and in a manner which is          200 million tonnes as customer demand dictates.
operationally efficient and commercially sensible.               Similarly, the $900 m Wiggins Island Rail Project,
   QR National is currently delivering a 30% step-change      announced in September 2011, is leveraging our existing
increase in this system capacity with more than 70            infrastructure to deliver a 30 % boost to coal exports from
million tonnes per annum being added from now through         the southern end of the Bowen Basin to meet increasing
to 2015. This will take total system capacity to around 300   demand from Asia and beyond.
million tonnes.                                                  It will deliver 27 million tonnes of extra capacity per
   Major projects, comprising more than $2 billion of         year through the proposed new terminal at Wiggins
investment, include:                                          Island, at the Port of Gladstone. Wiggins is being
  •	Goonyella to Abbot Point Expansion                        developed by a consortium of eight mining companies
    (adding an extra 34mt)                                    – the same companies with whom QR National struck a
  •	Wiggins Island Rail Project (27mt extra)                  commercial agreement on the project’s rail component.
  •	Hay Point Expansion (11mt extra)


15   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                                                                                   CONTENTS
These companies are Xstrata Coal, Aquila Resources,           As the ASX’s second largest Brisbane-based company,
                                                           Bandanna Energy, Caledon Resources, Northern Energy         QR National looks forward to continuing to invest and
                                                           Corporation, Yancoal Australia, Wesfarmers Curragh and      grow our business nationally, delivering benefits for
                                                           Cockatoo Coal.                                              customers, communities and the broader Brisbane and
                                                              First railings are scheduled for mid-2014 with           Queensland economies. n




                                                                                                                       {
                                                           completion by March 2015, subject to the project’s
                                                           approval by the Queensland Competition Authority.
                                                              Future expansions for Wiggins Island contemplate
                                                                                                                              Lance Hockridge became Managing Director & CEO of QR
                                                           construction of the Surat Basin Rail – or so-called                National after its structural separation from QR Limited in
                                                           ‘Southern Missing Link’ – to tap into Xstrata’s massive            July 2010.
                                                           Wandoan mine and others in the region. QR National                 Lance joined QR as Chief Executive Officer in November 2007
                                                           is part of the consortium for the Surat Basin Rail with            with more than 30 years’ experience in transportation and
                                                                                                                              heavy industrial sectors in Australia and the United States with
                                                           Xstrata and ATEC.                                                  BHP and BlueScope Steel.
                                                              The industry contemplates Wiggins Island terminal               In QR, and now in QR National, he has led a transformation
                                                           going to more than 80 million tonnes and our rail                  program aimed at delivering world-class safety, customer
                                                                                                                              service excellence and superior commercial capability.
                                                           network is well-positioned and capable of expanding to
                                                                                                                              Lance played a leading role in QR National’s preparations for
                                                           meet that future demand. We can use the existing 2,300             the IPO, overseeing structural separation and the company
                                                           kilometre Central Queensland coal network to support               through the transition from government to private ownership.
                                                           this on-going growth for existing customers.
                                                              There’s tremendous opportunity to leverage the
                                                           existing network in combination with greenfield railway
                                                           for emerging markets. This is the position we are
                                                           advocating in the Galilee Basin where we believe a
                                                           consolidated industry approach will allow an earlier path
                                                           to market.
                                                              While Galilee is a significant growth opportunity for
                                                           our company, we’re equally focussed on the next phase
                                                           of Bowen Basin expansion. The Bowen Basin remains
                                                           one of the world’s most outstanding reserves of coking
                                                           coal and already has established supply chains from
                                                           mines to ports.
                                                              One of our committed projects is the $185 million
                                                           Hay Point Expansion that supports growth of 11 million
                                                           tonnes per annum on the Goonyella network feeding
                                                           into the Hay Point Coal terminal. This project is well
                                                           underway and scheduled for completion in 2014.
                                                              Likewise, the $195 million Blackwater electrical
                                                           system upgrade is designed to cater for the growing coal
                                                           export demand in the region by increasing the electrical
                                                           capacity of the system. It is on track for completion in
                                                           June 2012, six months ahead of schedule.


16   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                                                                                              CONTENTS
acknowledgments
SPECIA L THANKS
Brisbane Marketing is indebted to our special contributors for their generous involvement
with the Brisbane Economic Series, namely:
Mark Birrell, Chairman, Infrastructure Partnerships Australia.
Martin Stewart-Weeks, Senior Director (Public Sector), IBSG, Cisco.
Lance Hockridge, Managing Director and Chief Executive Officer, QR National.

IMAGE CREDITS
Smart work centre images: Matthijs Borghgraef - http://www.kwikzilver.nl/
Airportlink images: Courtesy of Thiess John Holland

CONTACT
www.investbrisbane.com.au
Level 8, Roy Harvey House, 157 Ann Street, Brisbane, Queensland, Australia, 4000
PO Box 12260, George Street, Brisbane, Queensland, Australia, 4003
Phone: +61 7 3006 6200 Fax: + 61 7 3006 6250 Email: invest@brisbanemarketing.com.au

As a wholly owned subsidiary of Brisbane City Council and the city’s economic development agency, Brisbane
Marketing plays a key role in the ongoing evolution and success of our city.
We drive economic and social benefits to residents and business by profiling Brisbane globally as Australia’s
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17   BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE                                                 CONTENTS

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Brisbane Economic Series Issue 2

  • 2. foreword Welcome to the second edition of the Brisbane Economic Series, a bi-monthly publication providing vital insights into the city’s many exciting business, investment and growth opportunities. Brisbane’s booming infrastructure sector is the focus of this issue which features three industry leaders from the rail, infrastructure funding and digital infrastructure industries. Business leaders Lance Hockridge, Mark Birrell and Martin Stewart-Weeks share with us their forward-thinking visions for Brisbane. Learn first-hand how Brisbane will maximise its economic opportunity through the continued delivery of world-class infrastructure. With Brisbane’s population set to reach 3.9 million by 2056, I recognise our infrastructure challenge is significant, but with continued and substantial investment in this area, I am positive it is a challenge we are well placed to meet. Brisbane’s position in the global digital economy is also a focus of this edition because it is an area which will ultimately underpin the resilience and sustainability of our economy. Our city’s success and the future prosperity of our residents and businesses lie in collaboration, informed planning and investment in the crucial infrastructure sector. Recent successful projects that demonstrate Brisbane’s capability to deliver major infrastructure include Legacy Way, Clem 7, and the Go Between Bridge. Through the delivery of these key infrastructure cornerstones, Brisbane is set to thrive. Graham Quirk Lord Mayor of Brisbane 2 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
  • 3. contents Issue two 04 08 12 Brisbane and Queensland’s Smarter connected: our world The booming resources sector infrastructure challenge is is growing exponentially more lies at the heart of Brisbane’s significant. Strategies from digital and networked. Advances unprecedented growth the government at all levels in in infrastructure in the digital forecasts, and is driving partnership with the private economy will contribute to substantial investment in rail sector are vital for supporting building Brisbane’s economic infrastructure that will have future growth. resilience and sustainability. far reaching benefits. MARK BIRRELL Martin Stewart-Weeks L ance Hockridge Chairman, Infr a structure Senior Director (Public Sector), Managing Director and Chief Partnerships Austr alia IBSG, Cisco E xecutive Officer, QR National 3 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE A C K N O W L E D G E M E N T S // C R E D I T S CONTENTS
  • 4. Brisbane is the engine room of the Queensland economy. In 2011 its contribution was valued at $114 billion, accounting for 46.7 per cent of the entire State’s economy. The vitally important reconstruction task in the wake Brisbane and Queensland’s of last January’s floods understandably dominated Queensland’s infrastructure program last year. infrastructure challenge is But against this backdrop we saw significant progress on significant. Strategies from a number of major infrastructure projects, including the Sunshine Coast Hospital PPP, Gold Coast Rapid Transit the government at all levels in and the ongoing construction of the Airportlink and partnership with the private Legacy Way. As we head further into 2012, the Federal and State sector are vital for supporting governments will engage in an open debate around the projects which will help the Sunshine State – future growth. and in particular Brisbane – maintain its economic competitiveness and help reverse the nationwide MARK BIRRELL fall in productivity. Chairman, Infr a structure Partnerships The infrastructure challenge remains significant. Austr alia Traffic congestion, hospital waiting queues and straining public transport networks are constant reminders of the infrastructure task facing Australia’s 4 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
  • 5. major cities, and Brisbane is not alone in having to deal with a number of challenges that come from Partnerships will be particularly booming population growth. Brisbane is the engine room of the Queensland important because many of the economy. In 2011 its contribution was valued at $114 major projects needed in Brisbane billion, accounting for 46.7 per cent of the entire State’s economy. The Federal Government’s State of and its surrounds are simply beyond Australian Cities report, released last year, predicted the funding capacity for any single Brisbane’s population would increase from 2.043 million in 2010 to 2.725 million in 2027. The population government or industry alone. across wider South East Queensland is forecast to increase from 2.99 million in 2010 to 4.39 million by 2031 – by which time more than 15 per cent of all Australians will live in South East Queensland. These projected growth patterns have attracted the attention of policymakers, who are acutely aware of the inevitable strain on the city’s transport, utilities and social infrastructure networks. The focus moving forward will rightly be on innovative ways to fund the required investments. The State Government’s Queensland Infrastructure Plan (QIP), released last year, identifies $134 billion Legacy Way (Artist’s Impression) FIGURE 1: BRISBANE GROSS REGIONAL PRODUCT ESTIMATE, 2011 worth of infrastructure investment for Brisbane and and by 2031, is expected to fall to 44.1 per cent. surrounding regions to 2031. The regionalisation of South East Queensland will Progress will be made on the new motorways, rail hasten the need for improved transport connections to BRISBANE networks and social assets through a joint effort from the and from Brisbane to burgeoning satellite centres such as $114b; 9% Commonwealth, the Queensland Government, Brisbane the Gold Coast and Sunshine Coast. City Council and the private sector. That’s why there has been a broader discussion around Partnerships will be particularly important because the funding models needed to deliver major infrastructure re st of qld many of the major projects needed in Brisbane and its across South East Queensland – and farsighted dialogue $102b; 8% surrounds are simply beyond the funding capacity for any about the projects needed over the long term to grow re st of austr alia single government or industry alone. Brisbane and regional centres. $1,029b; 80% And while the planned major transport projects in With the right planning, evaluation and delivery re st of SEQ $39b; 3% Brisbane gain the most national attention, consideration frameworks in place, government at all levels will be well will also be given to the regionalisation in South East placed to turn their attention to delivery of the projects Queensland. that Queensland needs. In 1986, nearly 47 per cent of Queenslanders lived in In the case of Brisbane, this must include investments the capital. That proportion eased to 45.4 per cent by 2006 that will deal with the city’s urban congestion, which cost Source: Brisbane Economic Development Plan, 2012 5 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
  • 6. Mechanical and electrical fit-out in Northern Busway tunnel the city $1.8 billion last year and is expected to rise to $1.9 billion this year. By 2020, congestion costs will reach more than $3 billion, creating further pressures on the city’s productivity and efficiency. All political leaders agree that enhanced rail capacity is a first order issue for Brisbane and Queensland. An Environmental Impact Statement for the proposed Cross River Rail, released last September, stated that without additional network capacity, the existing rail system in the inner city will reach capacity later this decade. The proposed Cross River Rail project would see an 18 kilometre rail line connecting Salisbury in the south The State has submitted a proposal to Infrastructure with Bowen Hills in the north - including 10 kilometres Australia for stages 2b and 3 of the Eastern Busway, of underground tunnels, four new underground stations valued at $685 million and $140 million respectively, with and two new surface stations; and would substantially IA deeming it a ‘threshold’ project in its 2011 report to the increase capacity across the metropolitan rail network. Council of Australian Governments (COAG). But the floods in January saw a revised timeline for the By addressing the limited access to high frequency CRR, with completion now estimated as 2020. public transport in Brisbane’s eastern suburbs, the project The economic arguments for a mass transit solution is viewed as important in easing congestion and opening are solid. The EIS states that the CRR would deliver up opportunities for further urban consolidation. The more than $9 billion in economic benefits to the region State said that the Eastern Busway also meets IA’s goal of and would boost the number of trains through the CBD growing national productivity and transforming cities. from 84 trains per hour to 132 trains per hour at full The continued upgrade of the Bruce Highway is capacity. No doubt the procurement of such a major another key infrastructure priority. A report by the project would be guided by the lessons learned from the Australian Automobile Association (AAA), released in procurement of the North West Rail Link in New South January, found that the 1700 kilometre highway is the Wales –the largest and most complex public transport nation’s most dangerous road. project in Australia. All political leaders agree that An estimated $2.3 billion has been spent on upgrading And while more immediate term solutions – such as track and signalling upgrades – would help deliver the Bruce Highway over the past five years, with the enhanced rail capacity is a first order Bruce Highway Upgrade Strategy (Brisbane to Cairns) put additional capacity across the rail network, a decision will issue for Brisbane and Queensland. forward by Queensland to Infrastructure Australia as a be needed on the long-term heavy rail requirements for priority project last November. Brisbane’s CBD. A sustained investment in Queensland’s most crucial Of course the Cross River Rail – or a similar rail freight corridor will lead to safety improvements and solution – will not be the panacea for the city’s congestion better connectivity to key gateways - and also drive concerns. The Eastern Busway project is another of the Brisbane’s long-term productivity growth. State’s top infrastructure priorities. Stage one of the While progress is being made on these major dedicated bus-only roadway - between the University of projects others remain under consideration, with Queensland and Buranda - has already been completed decisions still to come on funding commitments from and Stage 2a is under construction. the Federal or State Governments. 6 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
  • 7. One major project awaiting commitments from Aerial view of major Brisbane the State and Federal Governments is the upgrade of infrastructure under construction Kingsford Smith Drive, which links the CBD to Brisbane Airport. Stage one of the upgrade has been completed and Brisbane City Council has allocated $1.5 million in this year’s budget towards further investigations for stage two of the upgrade. In spite of the size of the challenge, there is reason for real optimism about the future of infrastructure across Brisbane and Queensland. There is strong community appetite for substantial reform and a similarly strong commitment from governments to engage in a rational debate around the critical reform pathways. But as with the other states, the delivery of major projects will only be possible through sustained partnerships across all levels of government. n { Mark Birrell is the Chairman of Infrastructure Partnerships Australia. He is the national leader of the infrastructure group at Minter Ellison Lawyers and serves on the statutory board of Infrastructure Australia. He has extensive experience as a company director and lawyer and is a fellow of the Australian There is strong community appetite Institute of Company Directors. Previously he was Minister for Major Projects and Government Upper House Leader for substantial reform and a similarly in Victoria, working on successful PPPs and capital works initiatives like CityLink and the Docklands. strong commitment from governments to engage in a rational debate around the critical reform pathways. 7 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
  • 8. What started with a focus on cost, carbon and convenience has turned into an engine of ‘systematic serendipity’ that fires innovation and creativity. Smarter connected: our world In Amsterdam a couple of years back, a few business, across the metropolitan regions of Amsterdam, all now government and community organisations got together to connected into a network that allows you to book online is growing exponentially more solve a problem that is pretty familiar to cities all around space to work, a room to meet or a telepresence screen the world. to collaborate virtually. And sometimes just to get some digital and networked. Advances How could the city escape the congestion and work done over a cup of a coffee and a quick chat. in infrastructure in the digital inconvenience that were increasingly the hallmarks of From the initial pilot group of 7 centres, Amsterdam growth as people spent more and more wasted and now has a network of over 120. And interesting things are economy will contribute to building frustrating time getting from home to work and back happening. People are using the city differently as they find Brisbane’s economic resilience and again? And, into the bargain, how could Amsterdam more convenient, carbon-reducing and cost-saving ways drive towards some aggressive targets to reduce carbon to work. But the new shared workspaces are sparking sustainability for the future. emissions and make the city greener and more efficient? unexpected connections as people, almost literally, bump The answer was a ‘smart work centre’. Think Qantas into other people with useful ideas and skills. Club, on steroids, in the suburbs. So what started with a focus on cost, carbon and Martin Stewart-Weeks, The idea is simple. You fit out a building to convenience has turned into an engine of ‘systematic Senior Director (Public Sector), IBSG, Cisco accommodate a wide range of work styles and needs serendipity’ that fires innovation and creativity. – individuals at a computer, informal meeting spaces In Seoul, the government has announced the intention over the coffee machine, meeting rooms large and to spread a network of 450 smart work centres. Not small. Throw in the best available broadband-enabled, surprising when you consider the population of Seoul is networked collaboration technologies, like high-end roughly the size of Australia. That’s what’s called taking it telepresence video. And make sure the centre is close to to scale. transport, shops and services, child care. Take another example. The United Nations Secretary- The result is the rapid growth of these centres General has started a program of inter-cultural dialogue 8 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
  • 9. and collaboration to make a contribution to reducing becoming ‘table stakes’ for cities and regions that want to tensions across political and cultural divides. succeed in a more open and connected world. One of the tools being developed is Dialogue Cafe Infrastructure is all about the future. (www.dialoguecafe.org). Basically, a Dialogue Cafe is It requires often massive investments whose size and a public space, like a cafe, that is easily accessed and focus say a lot about our collective future. If you look at informal, with a telepresence screen that allows people to the way a company, a city, a State or a whole country quickly and cheaply connect to other ‘Cafe’ spaces where invest in infrastructure, you’ll learn a lot about the they can talk with others around the world. What they imagination, values and aspirations from which it is, quite talk about can be pretty much anything – ideas for new literally, being built. In a very real sense, our collective social change programs, artists collaborating on a piece identity is made manifest in the decisions we take about of music, students swapping ideas and projects, social what, where and how to build the infrastructure assets entrepreneurs looking for great new ideas to help them in that sustain resilience. their work. Possibly the single most significant factor that has What’s the link between these two initiatives? changed the way we think about infrastructure in the past They are both powerful examples of the new 20 years is the increasingly central role that networked capabilities that cities need to create so people can digital technology now plays in defining our world and its get the most out of their engagement with the digital risks and possibilities. economy. And those capabilities - better communication, Our world is growing inexorably more digital and simple and effective collaboration and powerful new networked. connections – rely on a bunch of new infrastructure Just to put that in context, Cisco estimates that, after assets. Rising to these new infrastructure demands is increasing eight-fold in the past five years, global web traffic will quadruple during the next five years. Three forces are at play - mobility, connected devices and video. By 2015, the number of devices will be twice the world’s population, traffic from wireless devices will exceed that from wired devices and nearly two-thirds of consumer If you look at the way a company, traffic will be in the form of video. a city, a State or a whole country How well and how easily we can connect across the invest in infrastructure, you’ll Internet or other digital platforms will make or break our aspirations for innovation, inclusion and sustainability. learn a lot about the imagination, And that is certainly true for Brisbane and Queensland. values and aspirations from which Rebuilding from last year’s floods and cyclone, there is an opportunity to match Queensland’s boundless vision it is, quite literally, being built. and optimism for the future – growth, inclusion, innovation – with the infrastructure of resilience and sustainability. And central to the new demands to build resilience and sustainability into the heart of Queensland’s cities, towns and regions is the imperative to invest in the human and technology fabric of the digital economy. The evidence suggests the results are worth the investment. 9 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
  • 10. A recent study for the UK Government estimated that spurring an additional investment of £15 billion in the UK’s ICT infrastructure would create approximately 700,000 In the digital and distributed future, UK jobs. They also estimated that over half of these jobs would be in small businesses. whether we are trying to make our In the US, a 2007 study looked at the economic cities and towns easier to live in, multiplier effects (increases in GDP, jobs, tax revenues) that can be calculated from broadband investment. to start new businesses and create It found the increase in local GDP is more than ten-fold new jobs, or to keep our water the value of the investments in broadband infrastructure The OECD published a report a couple of years clean and our energy sustainable, back pointing out that broadband networks increase we’ll be ‘smarter, connected’. the impact and efficiency of other public and private investments. “Broadband is needed as a complementary investment to other infrastructure,” the report suggested, “such as buildings, roads, transportation systems, health and electricity grids, allowing them to care of a collaboration of family, medical experts and be ‘smart’ and save energy, assist the aging, improve community support teams, they need to find people, safety and adapt to new ideas.” connect and talk with them easily and often work together A 2009 study (http://reason.org/news/show/gridlock- across large distances and over long periods of time. and-growth-the-effect) found that reducing congestion The ability to connect – what you might call ‘soft’ and increasing travel speeds enough to improve access infrastructure, becomes crucial. by 10 percent to key employment, retail, education, and In the digital and distributed future, whether we are population centers within a region increases production trying to make our cities and towns easier to live in, to of goods and services by one percent. The study reported start new businesses and create new jobs, or to keep that achieving “free-flow traffic conditions” (that is, our water clean and our energy sustainable, we’ll be reducing congestion) around key urban and suburban ‘smarter, connected’. destinations in eight U.S. cities–Atlanta, Charlotte, Dallas, Brisbane’s aspiration to be Australia’s ‘new world city’ Denver, Detroit, Salt Lake City, the San Francisco Bay tells us a lot about its sense of the future. And that means Area, and Seattle–could boost the economies in those we know something of the city’s infrastructure priorities cities alone by $135.7 billion and generate close to $9 and investments on which that future depends. billion in new tax revenues. Some big ideas and bigger ambitions are at stake. This is all important grist to the infrastructure How does the city provision new models of working, investment mill. Roads, bridges, schools, hospitals, mobility, innovation and creativity? What are the new ports, big public transport systems, new housing – all of assets and capabilities that business, large small, need to these traditional assets are still important. invest, create jobs and develop competitive products and But when an entrepreneur is looking for investors services? How does Brisbane create thriving places and or partners to develop a great new product or service, lively communities that are inclusive, accountable and when a teacher wants to connect her students to experts resilient, places where people want to make their homes on the other wide of the world or in the next town, when and make their mark? someone needs access to specialist health care or the Creativity, inclusion, innovation, sustainability – these 10 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
  • 11. are increasingly the hallmarks of successful cities and communities into the future. And reaching for the rising standards they imply will increasingly be a function of the confidence with which the city and its citizens master the new demands of the digital economy. Connecting, communicating and collaborating are the new engines of progress. And that means investing in the necessary infrastructure assets, capabilities and culture. This is Connecting, communicating and now the stuff of leadership in the digital economy. collaborating are the new engines of For Brisbane and Queensland, the task is how to achieve economic resilience in a connected and progress. And that means investing competitive world, make a transition to a low-carbon in the necessary infrastructure economy and lifestyle and make communities safe, creative, clever and inclusive places to live. assets, capabilities and culture. This That means investing in the digital fabric of the new is now the stuff of leadership in the economy whose technology assets are becoming more visual, virtual, social and mobile. digital economy. More smart work centres and Dialogue Cafes, for { example? n Martin Stewart-Weeks has over 25 years’ experience in organisational management and consulting in the corporate and public sectors and with a wide range of not-for-profit organisations. Martin works with the Internet Business Solutions Group (IBSG) at Cisco with a focus on the public sector. In January 2007, Martin took up a position to lead IBSG’s public sector practice in Asia-Pacific, leading a small team of senior consultants working on transformation projects in government, education and urbanisation in India, China, South-East Asia and Australia and New Zealand. Martin writes and speaks extensively on changes in government, service design and policy driven by reform opportunities at the intersection of public sector reform, technology and public and social innovation. 11 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
  • 12. Growth will be sustained and opportunities will emerge if we continue reform in areas of labour, productivity and infrastructure. It’s little more than a year since QR National made its The booming resources sector debut on the ASX – a momentous day for our Brisbane- lies at the heart of Brisbane’s headquartered company with over nine thousand employees across Australia. While the $4.6 billion float in unprecedented growth forecasts, November 2010 was the biggest IPO in Australia in more than a decade, equally it marked new beginnings for this and is driving significant iconic Queensland company with a 145-year history. investment in rail infrastructure Like many in 2011, we were confronted by the Queensland floods. Our operations fortunately withstood that will have far reaching benefits. the onslaught remarkably well, and we start 2012 with renewed optimism and determination to deliver on the L ance Hockridge changes needed for our company to support the rapid growth forecast for the region. Managing Director and Chief E xecutive Officer, QR National This is against the backdrop of a strong, though patchy Australian economy and continuing global uncertainty. In this context, the focus is for individual businesses and the domestic economy to be more efficient and competitive. Growth will be sustained and opportunities will emerge if we continue reform in areas of labour, productivity and infrastructure. For our part, the transport and logistics industry in Australia should be a world-class enabler of competitive 12 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
  • 13. and connect with regional communities. Brisbane has a great balance of dynamism, energy and the right The transport and logistics opportunities to help us realise our aspirations for the region’s infrastructure development. Its world-class industry in Australia should liveability and increasingly sophisticated social and be a world-class enabler of cultural scenes provide an ideal platform for a company like QR National to breathe and grow. competitive advantage for local Home-grown enterprises and a range of leading companies and industry. Rail can national and multi-national companies now call ‘Australia’s new world city’ home. There’s a burgeoning make a genuine and sustaining industry of IT excellence invigorating the business contribution to the next wave of landscape. QR National, with its national footprint is very much at home in this city. It serves as the perfect productivity for the Brisbane and hub from which to connect with other states, South- Queensland economies. East Asia and further afield, with its world-class and easily accessible domestic and international airports via Brisbane’s Airtrain. And importantly many of our largest customers, the resource companies with extensive Queensland operations, are based here. This co-location advantage for local companies and industry. Rail can make allows us to remain engaged and in touch. We also share a genuine and sustaining contribution to the next wave of a large regional employment presence and a connection productivity for the Brisbane and Queensland economies. with regional communities. From a long, proud history in Queensland’s economic Like others, an emerging challenge for QR National and social development, QR National has grown to has been the fierce competition to attract and retain become the country’s largest rail freight company. talented people – both at the executive management level The network carries more than $50 billion worth of and in engineering and trades. Brisbane, with its vibrancy Australian exports each year. And now the move to a and energy, provides a positive context in which to face publicly-listed company will help accelerate the changes these challenges. The ‘lifestyle capital’ of Australia is now required to sharpen our performance and customer matched by unprecedented migration rates and career service, delivering better commercial outcomes for opportunities. That I could take a CEO role in Brisbane, industries that rely on rail freight. Continued investment in was a driving factor for me in repatriating with my family growth projects will be a critical driver for future success from the U.S. in 2007. I know my experience is shared for both our organisation and the region’s economy. by many executives now residing in Brisbane and the Our business covers coal on the eastern seaboard, iron Sunshine State. ore in Western Australia, intermodal freight and a range In terms of infrastructure investment and growth, of rail-related products such as heavy-engineering and Queensland’s capital IS in the box seat. track maintenance and construction. The Deloitte Access Economics Investment Monitor QR National’s heritage and heartland are in released in February identifies planned or committed Queensland, so Brisbane is the logical HQ for the projects in Australia totalling more than $900 billion. company. From here, we can efficiently and effectively Unsurprisingly, mining accounts for almost half of run our operations, stay in touch with major customers investment activity. Around 40 % of these projects are 13 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
  • 14. slated for the resource rich states of WA and Queensland. For QR National, which is 80% leveraged to the resources sector, and other Brisbane based companies servicing the resources sector, we see great growth opportunities in these type of numbers. Rail is a major player in Australia’s resource supply chains where bulk commodities account for nearly 90 percent of total rail freight tonnages in this country. Coal and iron ore make up about 75 percent of this, primarily in coal on the eastern seaboard and iron ore in the west. The challenge here for the transport QR National’s focus is on supporting a strong and and logistics infrastructure industry growing export market where Australian resources remain highly-competitive globally. We know that is to align with the demand curve Australian resource supply chains are among the best for Australian resources and to in the world but the pressure is on for accelerated improvement. The challenge here for the transport continue to exploit all the benefits and logistics infrastructure industry is to align with the that technology and operational demand curve for Australian resources and to continue to exploit all the benefits that technology and operational excellence offer. excellence offer. While Korea and Japan traditionally are the biggest consumers of Australian coal – about 54 per cent for FY 2011 - the emergence of the Chinese and Indian economies will underpin the next phase of growth. We’re also seeing a strong direct investment from these countries as they seek to create vertically integrated supply chains to lock in supply and price over coming decades. In Queensland, thermal coal reserves in the Galilee and Surat Basins will come into play, building on the continuing growth of high-quality metallurgical coal exports from the Bowen Basin to international markets. Coal infrastructure supply chains in Queensland and New South Wales are about to embark on their next phase of growth. Current nameplate capacity of coal ports stretching from Port Kembla to Bowen is around 425 million tonnes per annum. Projects already announced would add another 780 million tonnes, taking the total to more than 1.2 billion tonnes. The value of these projects will 14 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
  • 15. run to tens of billions of dollars. Obviously these The first component of the $1.1 billion GAP Expansion In terms of infrastructure investment will not all progress along the same approval and was opened to rail traffic in December 2011. When commissioning path, however it does underscore the completed in June 2012, the project will take to 50 million and growth, Queensland’s capital scale of growth anticipated. tonnes, the annual capacity on the Newlands system to IS in the box seat. Here in Queensland, the current rail infrastructure Abbot Point Coal Terminal. It’s a project underwritten by and port capacity is in the order of 200 million tonnes five foundation customers - BMA, Rio Tinto Coal, QCoal, across QR National’s network and into ports at Macarthur Coal and Lake Vermont Resources. Gladstone, Mackay and Bowen. Our capital program Importantly, the project has been designed to allow is growing this network capacity in alignment with significant future expansion - from 50 to 100 to potentially customer and industry needs and in a manner which is 200 million tonnes as customer demand dictates. operationally efficient and commercially sensible. Similarly, the $900 m Wiggins Island Rail Project, QR National is currently delivering a 30% step-change announced in September 2011, is leveraging our existing increase in this system capacity with more than 70 infrastructure to deliver a 30 % boost to coal exports from million tonnes per annum being added from now through the southern end of the Bowen Basin to meet increasing to 2015. This will take total system capacity to around 300 demand from Asia and beyond. million tonnes. It will deliver 27 million tonnes of extra capacity per Major projects, comprising more than $2 billion of year through the proposed new terminal at Wiggins investment, include: Island, at the Port of Gladstone. Wiggins is being • Goonyella to Abbot Point Expansion developed by a consortium of eight mining companies (adding an extra 34mt) – the same companies with whom QR National struck a • Wiggins Island Rail Project (27mt extra) commercial agreement on the project’s rail component. • Hay Point Expansion (11mt extra) 15 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
  • 16. These companies are Xstrata Coal, Aquila Resources, As the ASX’s second largest Brisbane-based company, Bandanna Energy, Caledon Resources, Northern Energy QR National looks forward to continuing to invest and Corporation, Yancoal Australia, Wesfarmers Curragh and grow our business nationally, delivering benefits for Cockatoo Coal. customers, communities and the broader Brisbane and First railings are scheduled for mid-2014 with Queensland economies. n { completion by March 2015, subject to the project’s approval by the Queensland Competition Authority. Future expansions for Wiggins Island contemplate Lance Hockridge became Managing Director & CEO of QR construction of the Surat Basin Rail – or so-called National after its structural separation from QR Limited in ‘Southern Missing Link’ – to tap into Xstrata’s massive July 2010. Wandoan mine and others in the region. QR National Lance joined QR as Chief Executive Officer in November 2007 is part of the consortium for the Surat Basin Rail with with more than 30 years’ experience in transportation and heavy industrial sectors in Australia and the United States with Xstrata and ATEC. BHP and BlueScope Steel. The industry contemplates Wiggins Island terminal In QR, and now in QR National, he has led a transformation going to more than 80 million tonnes and our rail program aimed at delivering world-class safety, customer service excellence and superior commercial capability. network is well-positioned and capable of expanding to Lance played a leading role in QR National’s preparations for meet that future demand. We can use the existing 2,300 the IPO, overseeing structural separation and the company kilometre Central Queensland coal network to support through the transition from government to private ownership. this on-going growth for existing customers. There’s tremendous opportunity to leverage the existing network in combination with greenfield railway for emerging markets. This is the position we are advocating in the Galilee Basin where we believe a consolidated industry approach will allow an earlier path to market. While Galilee is a significant growth opportunity for our company, we’re equally focussed on the next phase of Bowen Basin expansion. The Bowen Basin remains one of the world’s most outstanding reserves of coking coal and already has established supply chains from mines to ports. One of our committed projects is the $185 million Hay Point Expansion that supports growth of 11 million tonnes per annum on the Goonyella network feeding into the Hay Point Coal terminal. This project is well underway and scheduled for completion in 2014. Likewise, the $195 million Blackwater electrical system upgrade is designed to cater for the growing coal export demand in the region by increasing the electrical capacity of the system. It is on track for completion in June 2012, six months ahead of schedule. 16 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS
  • 17. acknowledgments SPECIA L THANKS Brisbane Marketing is indebted to our special contributors for their generous involvement with the Brisbane Economic Series, namely: Mark Birrell, Chairman, Infrastructure Partnerships Australia. Martin Stewart-Weeks, Senior Director (Public Sector), IBSG, Cisco. Lance Hockridge, Managing Director and Chief Executive Officer, QR National. IMAGE CREDITS Smart work centre images: Matthijs Borghgraef - http://www.kwikzilver.nl/ Airportlink images: Courtesy of Thiess John Holland CONTACT www.investbrisbane.com.au Level 8, Roy Harvey House, 157 Ann Street, Brisbane, Queensland, Australia, 4000 PO Box 12260, George Street, Brisbane, Queensland, Australia, 4003 Phone: +61 7 3006 6200 Fax: + 61 7 3006 6250 Email: invest@brisbanemarketing.com.au As a wholly owned subsidiary of Brisbane City Council and the city’s economic development agency, Brisbane Marketing plays a key role in the ongoing evolution and success of our city. We drive economic and social benefits to residents and business by profiling Brisbane globally as Australia’s new world city and as a destination for business investment, export, international students, conventions, tourism, major events, and CBD retail. PUBLISHED BY www.investbrisbane.com.au 17 BRISBA NE ECONOMIC SERIE S – IS SUE 2: INFR A S T RUCT URE CONTENTS