Greiner hits out over state's 'awful' infrastructure record

NSW has a "plain awful" reputation for infrastructure delivery, the head of Infrastructure NSW, Nick Greiner, said yesterday, at a time when tight government finances mean it has little choice but to tap private-sector funds for projects.

NSW has a "plain awful" reputation for infrastructure delivery, the head of Infrastructure NSW, Nick Greiner, said yesterday, at a time when tight government finances mean it has little choice but to tap private-sector funds for projects.

At the same time, Mr Greiner, a former NSW premier, had a swipe at former Labor premier Bob Carr for being either "politically courageous or politically cowardly" - depending on your point of view - for not privatising the state's power sector, which has cost taxpayers tens of billions of dollars.

"NSW's reputation is plain awful" in terms of infrastructure delivery, Mr Greiner told an infrastructure forum, pointing to the large number of projects promised but not delivered, such as the Metro project and many others in the public-transport sector.

The serial collapse of projects funded through public-private partnerships, such as the Cross City Tunnel and the Lane Cove Tunnel, has also tainted public perceptions of this funding model, he said.

"There is no such thing as a perfect [public-private] partnership there is no magic formula there is no best formula."

In the early days, public-private partnership (PPP) models were driven by investment banks, which were not the natural holders of these long-term assets, he said, arguing that projects needed to be structured with a view to the assets' long-term holders, such as superannuation funds.

Mr Greiner said that given their slender surpluses, none of the states, except Western Australia, were in a financial position to invest heavily in infrastructure, leaving them little choice but to look to private investors to fund large projects.

Limited growth in GST revenue, combined with a fall in transaction revenue from property sales in states such as NSW, has given state governments little room to manoeuvre.

"There are only two groups of people who pay for infrastructure ... taxpayers - or the government, if you like - and the users," Mr Greiner said.

Governments can recycle assets via privatisation, which is what the O'Farrell government is doing in NSW with the sale of the port and desalination assets, using the proceeds to invest in greenfields assets, he said. "You can keep that process going for quite a while", otherwise, it's user pays - essentially by tolls.

"At the end of the day, there is going to be some tolls, and there is going to be taxpayer funding. The notion of anyone else paying is a little bit bizarre.

"People still, in 2012, want to see [PPPs] as some sort of left-right thing," he said, which it is not. Rather, it's about public infrastructure - which the public wants - and it's about how you manage to fund it most effectively."

Referring to the failed attempts to sell off the power industry, Mr Greiner said: "Mr Carr was told by the unions he couldn't sell the poles and wires, or the electricity industry as a whole. He went to water and said, 'OK, we won't do it'.

"That decision, [which] was either politically courageous or politically cowardly - depending on your point of view - has cost the people of NSW tens of billions of dollars."