Meeting the infrastructure challenges in the UK and Australia

Published: 18 Oct 2017

By: Philip Davies

Solar panels at sunset

Australia and the United Kingdom’s infrastructure sectors are rightly regarded as among the best in the world.

As both a UK and Australian citizen, I have seen first-hand the enormous benefits that have come from past reforms to the selection, procurement and regulation of infrastructure assets, and the creation of sophisticated and mature infrastructure markets in both countries.

However, as I made clear in my recent speech to the British-Australia Chamber of Commerce Infrastructure Conference, while these successes should be applauded, we can’t afford to rest on our laurels. Reform and continued infrastructure investment must be an ongoing priority if Australia and the UK are to meet the challenges ahead.


For Australia, our continued prosperity will depend in large part on a rethink of our approaches to infrastructure.

Up to this point the focus in Australia has been on market reform and building capacity. Going forward however, the focus must turn to extracting greater value from the assets we already have and continuing to mature our infrastructure markets. Across the energy and urban water sectors, Australia has more work to do to ensure services are delivered through well-structured, well-regulated markets.

In our urban water sector, Australia should move from a system in which state and territory governments must balance roles as owner, regulator and policy-maker to a more sophisticated, well-regulated market-based sector with stronger links between supply and demand and clear signals for efficient investment.

In our energy sector, more needs to be done to establish policy certainty and stability to ensure we have orderly private investment in new generation networks and storage capacity to adequately meet future electricity demand. We also need to be prepared to redesign our market rules to ensure we can accommodate for the continued rise in wind and solar generation in the energy mix.

The UK

As Lord Adonis has laid out, the clear challenge for the UK is to not lose sight of key infrastructure investment priorities through the Brexit negotiations.
I am confident that the National Infrastructure Assessment, like the Australian Infrastructure Plan and supporting Priority List, will provide a firm anchor through these times of upheaval and great change for the UK government to continue to make informed, evidence-based decisions about your future infrastructure needs.

The National Infrastructure Assessment will provide greater certainty to investors to help correct the comparatively low level of national capital investment and the slow erosion of the infrastructure skills base. But more also needs to be done in the UK’s energy and telecommunication sectors.

As is the case in Australia, greater policy certainty is required around the integration of electricity storage and smart energy systems, especially in light of increased future consumer demand for electric vehicles. The UK government will also need to provide investors, generators and retailers with a clear picture of the trajectory for emissions reduction moving forward.

In the telecommunication sector, the government and Ofcom should approach the auction of the 5G spectrum with the lessons of the 4G spectrum sale firmly in mind. As was widely reported at the time, the auction of the 4G spectrum was severely held up by challenges to the allocation process. This meant that many Western European countries had rolled out 4G networks before the UK had even held its spectrum auction.

The UK should set out a comprehensive plan for the 5G deployment to ensure this experience is not repeated, and that the commercial models adopted provide high quality mobile coverage in areas where people live, work and travel.

Both the UK and Australia, then, have some key challenges to overcome. These challenges are not insurmountable, but our future successes will depend on the ongoing leadership and commitment of our respective governments and our ability to draw on the wealth of experience internationally.

That’s why exchanges like the recent British-Australia Chamber of Commerce Infrastructure Conference are so important. It not only provides a forum for the exchange of ideas, but a valuable proof point that reform in our time is possible.

Philip Davies is chief executive of Infrastructure Australia.

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