In its recent Budget, the Queensland Government announced a planned capital expenditure of $18.2 billion, an increase of 12.8% on 2008/09. This includes a planned capital expenditure of $7.307 billion for transport and main roads and $1.121 billion for water.
Major Infrastructure Projects
Summarised below is the planned capital expenditure for major infrastructure projects in 2009/10.
Ports
- $215.9 million is allocated to the Port of Brisbane Corporation Limited for the continuing development of the Port of Brisbane and the Port of Bundaberg.
- $108.6 million is provided to Gladstone Ports Corporation Limited, including $28 million of ongoing works at the RG Tanna Coal Terminal.
- $14.1 million is provided to Mackay Ports Limited for the development and continued upgrading of port infrastructure projects.
- $349.8 million is provided to the Ports Corporation of Queensland Limited for various port development projects including $287.9 million for the Abbot Point Coal Terminal X50 expansion, which will increase the capacity of the terminal to 50 million tonnes per annum.
Energy
- $56.8 million for improvements to the Callide Power Station including overhauls and major refurbishment work on Callide B as part of a mid-life refit.
- $39.6 million for improvements to the Swanbank Power Station including major overhauls.
- $54 million for efficiency enhancements to the Kogan Creek Power Station.
- $32.4 million for improvements to the Mica Creek Power Station
- $65.6 million for major overhauls and efficiency upgrades at Stanwell Power Station.
- $7.7 million investment in low nitrogen oxide burners at Stanwell Power Station to focus on emissions reductions.
- $6.1 million estimated investment in ongoing capital works at the Kareeya and Barron Gorge Hydro Power Stations.
- $64.5 million on mine development to secure the fuel supply for the Tarong Power Stations.
- $56.2 million for instrumentation and control systems upgrade and overhaul expenditure, which includes a major overhaul of unit 4 at Tarong Power Station.
Water
- $211.5 million has been allocated for the construction of the Northern Pipeline Interconnector Stage 2. This pipeline will be approximately 48 km and extend from Eudlo to Cooroy on the Sunshine Coast and is due for completion in 2012 at a total cost of $450 million.
- SunWater's capital budget of $36.9 million for 2009-10 includes $13.6 million for the ongoing asset refurbishment program, $13 million for the Tinaroo Dam spillway upgrade and $4.9 million to finalise the business case for the Connors River Dam.
Rail Projects
A total of $862 million will be spent by QR Limited on coal network track works and new and upgraded locomotives and wagons to support the haulage of coal in central Queensland. Projects include:
- $178.3 million for the Jilalan yard upgrade
- $41.6 million for the Vermont spur and balloon loop
- $34 million for the Coppabella to Ingsdon duplication
- $29.9 million for the Goonyella to Abbot Point expansion initial infrastructure works
- $26 million for the Electric Locomotives Upgrade Program
- $21.1 million for the Grantleigh to Tunnel duplication
- $14.3 million for the Dalrymple Bay Coal Terminal third loop
- $28.5 million to complete the upgrade of 66 high-risk public • level crossings on the Queensland rail network
- $12 million for the Jondaryan Track Upgrade project to replace some track components between Jondaryan and Gatton
Proposed Sale of Assests
As expected, the budget projections include the sale of a number of its State-owned infrastructure assets and enterprises. The Queensland Government anticipates that the sale of these assets and enterprises will raise $15 billion.
These include:
- Queensland Motorways Limited;
- Port of Brisbane Corporation;
- Queensland Rail's above and below rail coal businesses;
- Ports Corporation of Queensland's Abbot Point Coal Terminal; and
Forestry Plantations Queensland.
To facilitate the sale of these assets and enterprises (referred to as “declared projects”), the Queensland Government has introduced into Parliament the Infrastructure Investment (Asset Restructuring and Disposal) Bill 2009.
Major Features of the Bill
The Bill adopts the approach of other asset sale legislation introduced by the Queensland Government in recent years, including the recent energy asset sales, the sale of wind farms and the sale of the Enertrade gas business under the Energy Assets (Restructuring and Disposal Act) 2006 and the Airports Assets (Restructuring and Disposal Act) 2008.
To facilitate the restructure, due diligence and sale of the declared projects, the Bill confers upon the Minister extensive powers including:
- deciding the most appropriate way of restructuring or disposing of the asset or enterprise,
- transferring shares in the asset or enterprise;
granting or extinguishing a lease, easement or other right of the asset or enterprise;
- transferring or seconding employees of the asset or enterprise; and
directing the asset or enterprise to do something the Minister considers necessary or convenient for the restructure or sale. This may include forming a company for the purposes of transferring a business, asset or liability to the company, or making a particular decision for the purpose of returning the proceeds of
- the asset sale to the State of Queensland.
It is important to note that a decision by the Minister under the Bill is final, conclusive and cannot be challenged in a tribunal or court.
Timing of Asset Sales
Consistent with the announcement by the Queensland Government of a three to five year timeframe for the asset sales, the powers of the Minister under the Bill may not be exercised until 1 July 2014.
Currently, the asset sale program is intended to occur in two stages:
- the first stage will comprise the sale of Forestry Plantations Queensland,
- Port of Brisbane Corporation and Queensland Motorways Limited. This will likely be completed in around two to three years. It is anticipated that Forestry Plantations Queensland and Port of Brisbane Corporation will be sold first, subject to the condition of the financial market.
- the second stage will comprise the sale of Queensland Rails’ above and below rail coal business, along with Ports Corporation of Queensland’s Abbot Point Coal Terminal. The restructure and sale of these assets are expected to occur within three to five years.
Implications
The Bill does not address the potential competition and access to infrastructure issues may arise from the sale of the assets. It is anticipated that these issues will be addressed when the identity of the purchaser(s) of these assets are known.
In particular, the Queensland Government would aim to avoid a situation that restricted competition as a result of the asset sales, particularly if it were to accept a bid for multiple and related assets. As an example, it would not be expected that the same bidder would be awarded both Queensland Rail’s above and below rail assets.
Marty Mayhew
Consultant
Phone: 61 7 3004 3525
Marty_Mayhew@tresscox.com.au
With Andrew Beruton and Ben Yeoh.
Please click here to view a PDF version of this NewsFlash.
To see the contact details of the entire TressCox Infrastructure Team, please click here.
|
