Australia’s ageing infrastructure is set to receive a cash injection, after the newly appointed IFM Investors chairman Greg Combet announced the industry fund-owned business has set its sights on domestic infrastructure projects.
Mr Combet, who will take over from Garry Weaven as chair of IFM Investors in January following a board election on December 4, said there were “plenty of opportunities for growth” in the infrastructure sector.
A major priority for Mr Combet will be to “look at how we can build the country and work in collaboration with government and the business community more generally”, he said in a press conference.
“There are significant infrastructure needs, we’ve got a large pool of capital – Finding ways to work together to deploy that capital in a way that delivers good returns for superannuation fund members and delivers economically and socially for the community will be an important focus of my work,” Mr Combet said.
This will include more ‘market-led’ projects, including the proposed train link between Melbourne’s Southern Cross station and Tullamarine airport, which IFM Investors has already engaged the state government on.
“We will be thinking more along those lines in order to identify where we can deploy capital in the domestic economy in a way that will deliver solid returns for members and help meet the infrastructure needs that various governments have,” he said.
‘Inconsistency’ in project creation
Australia’s infrastructure has suffered from “decades of underinvestment”, according to University of Melbourne senior lecturer of urban planning Dr Crystal Legacy, and continues to face challenges in the way new projects are organised and selected by the government.
“Infrastructure in Australia is a complicated and political issue,” Dr Legacy said.
Part of the problem facing the development of roads and public transport options is the “fragmented” approach to selecting new projects that many governments have adopted.
In Melbourne, for example, multiple large-scale infrastructure projects have been floated but little attention has been given to how each piece will fit together as part of a broader network.
Many governments are also announcing projects before a business case, which outlines the potential economic risks and benefits of a project, has been made. This means no one can point to an evidence base when arguing for or against investing in the pitched piece of infrastructure.
Infrastructure agencies, whose intended role was to de-politicise these projects, have also been sidelined rather than actively engaged.
As a result, Dr Legacy said there were plenty of necessary projects in need of financing.
The New Daily and IFM Investors are both owned by Industry Super Holdings, which is owned by a group of industry superannuation funds