The federal government should establish a pipeline of energy projects that can be rigorously assessed as it prepares to take on billions of dollars of debt to boost infrastructure investment, experts say.
Infrastructure Australia's priority list is skewed towards transport and water projects, and does not currently include any energy projects.
Given the amount of public discussion and "angst" over electricity blackouts, gas shortages and rising energy costs, energy projects should be added to IA's list, said Bruce Tanner, chief operating officer of engineering group Arup. "In a lot of cases that will be about storage."
The federal government has started looking for solutions to the energy crisis, committing to a $2 billion expansion of Snowy Hydro and is also investigating the potential to build a gas pipeline connecting the North-West Shelf with the eastern states.
John Clarke, founding director of the Infrastructure Capital Group (ICG), said the complete prohibition on unconventional gas exploration in NSW and Victoria was contributing to gas shortages. "Rather than a 'knee-jerk', politically based prohibition, there needs to be a clear set of exploration principles developed, and a sensible assessment against these on a case-by-case basis," Mr Clarke said.
IA chief executive Philip Davies said the group, an independent statutory body, would review any projects over $100 million. "If there were any major Commonwealth investments [in energy projects] we would expect to see those coming to us in the future," Mr Davies said.
Adani seeks loan
IA would also review any investments by the Northern Australia Infrastructure Fund over $100 million, he said. India's Adani Group wants to borrow $1 billion from the fund to help pay for rail links from the coast to its proposed $22 billion Carmichael coal mine in Queensland.
John Matthews, a partner at EY specialising in infrastructure, said the Commonwealth's plans to distinguish between "good" and "bad" debt in the budget – with borrowing for economically beneficial infrastructure considered "good" – made sense.
"A lot of our public debate has been either demonising debt or putting an undue focus on the surplus or the deficit and we've been missing opportunities to invest in the things that would develop the country," Mr Matthews said.
But Garry Bowditch, executive director of the University of Sydney's Better Infrastructure Initiative, said the government needed to spend more time analysing the forecast benefits of projects and how it could better use existing infrastructure before taking on debt to build new projects.
"Mega projects have been slow to deliver higher productivity and tangible results for the economy," Mr Bowditch said. "Just because the government says we should build a railway doesn't mean that is the best solution to a problem."
Rail line concern
Some infrastructure specialists have raised concerns about the government's plans to spend $10 billion on an inland rail line between Brisbane and Melbourne, pointing out that the amount of freight travelling between states may have declined since the project was first mooted as more goods are imported from overseas.
ICG's Mr Clarke said the federal government's proposed infrastructure financing unit was an "unnecessary" intervention and the government should instead directly subsidise projects.
"There is extensive debt and equity funding from the private sector, both from domestic and international institutions, for all 'sensible' infrastructure development projects in Australia," he said.
"If such projects are not 'sensible' and the private sector turns them down, then the government should either provide an explicit subsidy for them or dismiss the project and move on."
AECOM director James Rosenwax said the government needed to look beyond financial returns on single road, rail or transport projects and consider the broader social impact infrastructure investment could provide, such as adding bike and walking paths to encourage people to exercise.
