Conference Day Two - Friday 21 November 2014

Click here for the Pre-Conference Learning Sessions

08:30 Welcome coffee

08:50 Opening address from the Chair

Ian Greer, Chair of the Australian Branch Council, International Project Finance Association

WHAT DO INVESTORS WANT? EXAMINING THE CRITERIA INVESTORS LOOK FOR IN AN INFRASTRUCTURE ASSET

09:00 Keynote panel discussion
Investor perspectives – what makes for an appealing infrastructure
asset?

Examining what investors are looking for in an infrastructure asset
Meeting investor needs and structuring infrastructure asset planning and delivery to appeal to them
Investors with exposure in infrastructure assets will offer their perspectives on what makes for a lucrative investment, offering the opportunity for the Australian infrastructure sector to learn from the insights of current and potential local and global investors.
Positioning Australia as a lucrative investment option on the global scale

Panel moderator:
Ian Greer, Chair of the Australian Branch Council of the International Project Finance Association

Panellists:
Jean-Etienne Leroux, Director, Investment, Infrastructure, Caisse de dépôt et placement du Québec
Andrew Major, General Manager Investments, Hesta
Hugh Funder, Senior Investment Specialist – Infrastructure, Australian Trade Commission (Austrade)

10:00 Panel Discussion
Reforming infrastructure delivery to improve coordination and value for the private sector

Improving coordination in infrastructure planning and development
Exploring the merits of collaborative frameworks for planning and development
Experiences to date in merging planning, financing and infrastructure development strategy
Examining key structural factors which make investments attractive to the private sector, guaranteeing an appropriate term of CPI linked income
Challenges around selection of asset classes and returns and service partnerships
Creating the right combination of asset or equity participation, operations participation and/or procurement participation
Interactions between assets and markets and potential impacts on revenue flows and private sector value
Understanding how the infrastructure asset class has evolved, how it might change in the future, and implications for infrastructure planning and development

Panel Moderator:
Ian Greer, Chair of the Australian Branch Council, International Project Finance Association
Panellists:
Peter Love, John Curtin Distinguished Professor, Department of Civil Engineering, Curtin University
John Scala, Chief Counsel, Commercial, Australian Government Solicitor
Garry Bowditch, Executive Director and CEO, SMART Infrastructure Facility, University of Wollongong
Liam Gordon, Executive General Manager, Projects, Queensland Rail

10:50 Morning tea

11:20 From PMA to PPP: Rapid transformation in infrastructure delivery

Peter will present on the ACT Government’s transition to more sophisticated delivery of infrastructure:

Moving from a reliance on ‘construct only’ to up to nine models, each with differing risk profiles – one size does not fit all
The adoption of two Design Construct Maintain (DCM) projects and two Public Private Partnerships in less than one year of policy release
Lessons learned so far from the Territory’s first PPP – the ACT Courts PPP Project (with an overview by Mr Neil Parker, Senior Commercial Manager)

Peter Murray, Executive Director, Infrastructure, Chief Minister Treasury and Economic Development Directorate, ACT Government

11:50 Debt capital finance and the role of debt capital markets in
infrastructure finance in Australia

The rationale for debt financing as a borrower/originator and as an investor and instrument syndicator
The structure and workings of international primary markets for debt
How to structure the most appropriate financing to meet your needs
Syndication and documentation of transactions
Financing in difficult markets
Calls to establish government brokered debt capital markets in Australia and the pros and cons of this proposed debt finance option

Simon Quinell, Director, Debt Capital Markets, Commonwealth Bank of Australia

12:20 Networking lunch

KEY TECHNICAL CHALLENGES AROUND INFRASTRUCTURE FINANCE

13:30 Navigating the challenges of risk allocation, bankability and risk
mitigation in infrastructure transactions

Examining the key risks that need to be allocated and managed to ensure successful project financing: construction and completion risk, operating risks, demand risk, force majeure and change in law, political and regulatory risk and expropriation and nationalization risk, environmental risk, social risk, tenor and refinancing risk, currency exchange risk, interest rate risk
Allocating risks to the party in the project best placed to manage them in a cost effective manner
Risk mitigation mechanisms such as hedging and futures contracts, use of insurance and guarantees
Managing key risks such as regulatory bottlenecks to cashflow, market bottlenecks, and revenue forecast estimates
Capping and collaring risk – setting a floor of investor liability
Which risk distribution and mitigation approach is appropriate for which infrastructure asset class and investor type? Examining case examples of successful and unsuccessful risk allocation and management in infrastructure projects.

Norman Heavener, Head of Project & Infrastructure Finance, Westpac

14:00 Round table discussion
Reducing Australia’s PPP bid costs

There are calls that the cost of bidding for PPPs in Australia ought to be reduced to
improve the appeal of investments. Infrastructure Australia’s KPMG commissioned
review in found that costs were significant - higher than some global equivalents – at
0.5-1.2% of project capital value, compared to 0.35- 1% in Canada. Compared to the
UK’s 2-3% figure, they are perhaps at the better end of the scale, however the move
towards lower costs may be justified in a growingly competitive global environment for
infrastructure investment. This discussion will examine this issue, how salient it is for
Australian infrastructure development, and ways in which it might be remedied, including:

Calls to reduce the length of procurement periods and pros and cons entailed by this
Impacts of taxation laws on bid costs
Requirements for detail and permanence in documents – how do they affect bid costs?
Opportunities for the reduction of bid costs through minimizing legal fees
Design cost reduction - is this achievable or desirable?
Managing the trade-off between competitively lower costs and due diligence

Round table leaders:
Charlie Reilly, Branch Vice-Chairman, IPFA Australia
John Henderson, Director Commercial, Linking Melbourne Authority
Jon Stanford, Director, Insight Economics
Mark de Medici, Principal - Global Infrastructure, QIC
Dr David Dombkins, Director, Complex Program Group

15:00 Afternoon tea

THE LAST WORD

15:30 Round table discussion
Fostering Australian infrastructure finance – a review of
summit proceedings

This interactive discussion with delegates, led by our event advisory panel and a select
group of keynote presenters and event contributors will close the summit discussions
and bring together a recommended action agenda to promote additional investment in
Australian infrastructure. A summit communique will be generated from this discussion
and distributed to participants after the event, focused around:

Key messages emerging from the past two days of discussions
Implications for stakeholders in infrastructure finance
Pragmatic take home actions for infrastructure planning, public private partnership model arrangement, finance market development, economic and regulatory reform to bring more finance into Australia’s infrastructure developments

Round table leaders:
Ian Greer, Chair of the Australian Branch Council of the International Project Finance Association
Roger Black, Executive Director, Infrastructure Association of Queensland
Jon Stanford, Director, Insight Economics
Peter Love, John Curtin Distinguished Professor, Department of Civil Engineering, Curtin University

16:30 Closing remarks from the Chair

16:40 Close of conference