Infrastructure Investment Index ranks Australia 11th globally for attractiveness
Source: Arcadis - www.arcadis.com
19 May 2016
Arcadis: Australia - According to the findings released today in our
third Global Infrastructure Investment Index, Australia appears to be
playing catch-up to make projects appear bankable to investors.
“In many states we are seeing infrastructure projects treated as
political handballs and often not completed, which is reducing investor
confidence in a government’s ability to see a project through and
deliver a ‘bankable’ investment." Gareth Robbins, Director - Built Asset
Consultancy.
Arcadis has today released its Global Infrastructure Investment Index
which reveals Australia has dropped two places on the international
scale. Released every two years, the index measures which global markets
are attractive for infrastructure investment relative to other regions
globally.
Australia’s drop in rank presents a serious issue according to Arcadis’
Director of Built Asset Consultancy - Australia Pacific, Gareth Robbins,
as public infrastructure funding dries up, Australia will become reliant
on private investment meaning projects need to be attractive to
investors.
“In many states we are seeing infrastructure projects treated as
political handballs and often not completed, which is reducing investor
confidence in a government’s ability to see a project through and
deliver a ‘bankable’ investment. Coupled with the economic turbulence of
the last two years it’s not a surprise to see Australia fall two
positions in terms of investment attractiveness.” said Mr Robbins.
“However, Australia has a tried and tested history of private investment
which has contributed our 11th position in the ranking. We have bright
spots, for example
New South Wales which is outperforming the rest of the nation, and
we are seeing continued investment appetite out of Asia, Canada and the
Middle East.”
The 2016 Global Infrastructure Investment Index found that nations with
stable political environments, secure business environments and strong
growth potential such as Singapore, Qatar and Canada are the most
attractive markets for infrastructure investors.
“The belief that devaluation has reached its bottom and commodity prices
are beginning to recover makes it a good time for investment in
infrastructure. Leading cities such as
Sydney and
Melbourne are setting out their infrastructure investment priorities
and privatising assets to finance new investment.
“For investors, the local market is presenting opportunities through
asset recycling initiatives, and is still offering solid long-term
infrastructure investments. The key is working with the right local
partners who have the depth of knowledge and can advise on potential of
an asset,” said Mr Robbins.
Despite infrastructure being a long term investment, our third Global
Infrastructure Investment Index also highlighted that short term factors
such as currency devaluations, commodity prices and security issues can
be a barrier to investment.
Given these issues, nations including the US, UK and Germany are in
strong positions to potentially attract more private sector finance
which could bridge the funding gap for the development of much needed
new infrastructure. According to the World Economic Forum this global
investment funding gap stands at US$1 trillion per year.
To download a full copy of the report, click
https://www.arcadis.com/media/3/7/E/%7B37E96DF6-82D5-45A6-87D8-5427637E736D%7DAG1015_GIII%202016_ONLINE%20FINAL_SINGLE%20PAGES.pdf
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