How do you navigate the present while building for the future?

How do you navigate
the present while
building for the
future?
whatwouldyouliketochange.com.au

Brendan Lyon
Infrastructure Partnership Australia
(IPA media release 28 October 2009)

Infrastructure investment is one of the most
important challenges facing Australia in the
next decade. Some present constraints
need to be addressed, however, so that
we can build prosperity and grow.
The processes are long and complex and require the best in class
experts at all stages to make the right choices and deliver the
results efficiently. Some infrastructure projects will also require
significant private capital. There will be a noticeable increase in
the national and international funds looking to invest in Australian
infrastructure if the transparency, certainty and the returns for all
stakeholders can be increased.
This document provides a number of recent examples of where
PwC is helping to address the challenges of the present and
build a better future for all Australians.

Public Transport
Taking Sydney’s public transport to the next level
Integrated electronic ticketing system
(New South Wales)
While most people would agree that Sydney needs streamlined ticketing across buses, ferries and
trains, actually implementing such a system is a significant task. PwC is currently helping NSW
Public Transport Ticketing Corporation achieve their goal of introducing an integrated electronic
ticketing system. Our experience in dealing with complex IT contracts and pricing mechanisms
was instrumental in the design of a long term operating contract, which aims to recover both fixed
and variable costs. Our work structuring a pricing mechanism with incentives will drive ongoing
efficiency benefits for the client and, most importantly, improve customer service – delivering a
better journey for all.
Economic advice on one of Australia’s largest investments in public transport
Sydney Metro
(New South Wales)
In one of the largest investments in Australian infrastructure, PwC took on the role as a trusted economic
advisor to the Sydney Metro. Our work included cost-benefit analysis which assisted in refining routes,
choosing station locations, modelling future lines and is playing a significant role in developing cases
for both state and federal funding. This work highlights our expertise with large scale, billion dollar
infrastructure projects and our knowledge of complex modelling situations. The project is set to
shape the city of Sydney for generations.
Policy
Helping the government to build the nation’s priorities
Infrastructure Australia
(National)
Infrastructure Australia (IA) was created to drive improvements in the assessment and
implementation of infrastructure projects and to identify national infrastructure priorities. Under the
guidance of Sir Rod Eddington, the organisation required the expertise to create a methodology for
the completion of a detailed infrastructure audit and the creation of Australia’s first infrastructure
priority list. PwC was selected for its international experience in reforming infrastructure policy,
including previous work for Sir Rod Eddington. Oliver Jones has been seconded part-time to IA
since March 2008. In addition, expert analysis of the economics which accompanied bids for IA
support and advice on best practice in project delivery for infrastructure was required. Additional
PwC economics team members have also been assisting IA on these tasks. Oliver and the PwC
team continue to provide ongoing support, including reviewing water security and regulatory
strategies in Australian cities, as part of an IA initiative to improve Australian water management.

Roads
Finding the right answer to the right question
Peninsula Link
(Victoria)
The $700million Peninsula Link PPP will extend 25 kilometres of road connecting East Link and the
Mornington Peninsula Freeway in Melbourne’s outer South East area. The PwC team, as the lead
financial advisor on the roadway project was able to leverage the firm’s international knowledge
to develop an innovative and tailored solution. This project marks the first Availability Payment
based road PPP project in Australia. PwC played a crucial role advising the State throughout the
procurement process, including its landmark approach to deliver the project as an availability style
PPP, with a private sector consortium making regular payments for the delivery of services. This
strategy then ruled out the need for road tolls. Importantly, this was another example of PwC’s role
advising governments on the successful delivery of large-scale infrastructure projects within a difficult
economic climate. Our commercial and financial expertise in the area equipped us with the skills
required to develop and implement a robust PPP solution to drive optimal outcomes for Government.
Water
A big deal in difficult times to secure our water supply
Victorian Desalination Project
(Victoria)
PwC was the lead strategic, financial and commercial advisor to the Capital Projects Division of the
Department of Sustainability and Environment on the PPP procurement of the $4billion+ Victorian
Desalination Project. The project will deliver the largest reverse osmosis desalination plant in the world
(capable of delivering 150 billion litres of water per annum). The project also requires the construction
of an 85 kilometre transfer pipeline and a major upgrade to the power supply network in the area. PwC’s
role spanned over two years from the assessment of procurement options, through development of
the business case and conduct of the tender process to successful financial close in September 2009.
This experience is current and has had the focus and attention of leading debt and equity providers,
construction contractors and operators around the world. It will be a benchmark against which other
projects will look to measure themselves, in terms of process, timing and outcomes.
An alternative contract model for the SE Queensland Southern Regional water pipeline
LinkWater
(Queensland)
The Alliance contract and delivery model is increasingly being considered by our clients to better manage complex projects.
LinkWater and their Alliance partners were reaching finalisation stage for a $1billion SE Queensland regional water pipeline.
Project sponsors unfamiliar with the alliance contracts can underestimate some of the challenges of this delivery model,
given the open book nature and significance of the capital involved.
During the Alliance development and delivery, the sponsors must be fully aware and resourced to address commercial
alignment and project risks. In addition LinkWater also sought advice in relation to the reconciliation of performance
payments against realised risk/opportunity for the project.
PwC’s deep knowledge and understanding of Alliance contract and delivery models across industries and projects
enabled us to help LinkWater to consider and manage to a successful project outcome.

Power
Valuing power assets across international borders
Pacific Hydro
(National and Regional)
Comprised of a complex portfolio of infrastructure renewable energy assets in operation, construction
and project development stages with significant growth opportunities, PwC conducted independent
valuations of Pacific Hydro’s assets and development projects across Australia, Brazil, Chile,
Philippines and Fiji. PwC brought a wealth of industry knowledge within the renewable energy sector
and an extensive infrastructure valuation capability to provide the assurance needed for Pacific
Hydro and its key stakeholders. In conjunction with Pacific Hydro, PwC developed a robust valuation
methodology to assess the value of individual assets and development projects. This included
assessment of the appropriate cost of capital for the assets across the different geographies taking
into account specific development risks of individual projects. The engagement also profiled the
firm’s deep understanding of the impending ramifications from a climate change perspective in
relation to renewable energy targets.
Social
Building affordable accommodation for Australia’s students
UNSW
(New South Wales)
In what has triggered the beginning of several university housing projects across the country, PwC
assisted UNSW to structure a deal that will deliver 1000 new beds for students. Many universities
face the dilemma of capital projects competing for limited funds and this groundbreaking apartment
project with Campus Living Villages will deliver affordable on-campus student housing for the next 40
years without funding from UNSW. Our solution of a student accommodation PPP can secure private
sector involvement to meet both the needs of students and allow universities to focus on their core
business of teaching and research.
Helping redevelop Australia’s hospitals
Royal North Shore Hospital
(New South Wales)
What stands as the largest hospital PPP project to be completed in NSW, PwC assisted to bring a $950million
development to life with the redevelopment of Royal North Shore Hospital. This project was particularly
challenging as this is the main hospital for residents of Sydney’s north shore and the redevelopment needed
to allow the hospital to continue to function throughout a three year rebuild. Moreover, the project entailed
the redevelopment of the entire campus including the new car parking and retail facilities.
Ports
Providing insight to Australia’s major ports
Oakajee Port
(Western Australia)
Yilgarn Infrastructure sought assistance from PwC to prepare its bid to develop the new deep water
port at Oakajee, a vital infrastructure project in Western Australia to catalyse the development of the iron
ore mines in the Midwest region. Yilgarn pioneered the partnering of Chinese investors alongside West
Australian super funds and PwC played a critical role in harnessing support from China Eximbank.

Rail
Helping our railways to deliver best in class transport
NSW Rolling Stock PPP
(New South Wales)
A transaction that demonstrates how private finance can drive efficiency benefits in the rail sector
and lead to significant overall cost reductions for the government, 626 new carriages are currently
being delivered for RailCorp under a $3.6billion PPP contract with Reliance Rail. This outcome set
a new precedent for rolling stock purchases in Australia. Starting in July 2004, PwC structured
the contract, ran the tender and successfully negotiated with Reliance Rail. PwC received the
Advisory Excellence award for innovation in the delivery of these advisory services.
Helping to move a legacy state rail system towards a national link
Australian Rail Track Corporation (ARTC)
(National)
The Federal government commissioned the ARTC to conduct a study to determine the economic benefits and
likely success of a new multi-billion dollar inland railway connecting Melbourne to Brisbane on one gauge.
Depending on the outcomes of the study, the inland route would be one of the largest investments in freight
infrastructure in Australia and has the potential to reduce the time and increase the capacity for freight and
passengers from Melbourne to Brisbane and directly to Sydney by rail. PwC is playing a leading role in assessing
whether or when the railway will achieve enough demand to be financially viable and the economic benefits to the
broader community. This analysis will in turn provide the government with a basis for evaluating private financing
options for the project.
Helping to bring the city and the country closer together
Regional Rail Link
(Victoria)
Having advised on a number of pathfinder mega-projects both within Australia and internationally, PwC took the
leading role as commercial and financial adviser for Victoria’s Regional Rail Link project. This $4.3billion major new
rail line will further connect regional Victoria. Responsibilities have included advising the Department of Transport on
the best governance structure to manage such a large and complex project and to prepare a report providing all key
stakeholders with a baseline understanding of the project packaging and delivery options. PwC is currently leading
the development of the strategic procurement plan, which will plot the course of how the project is taken to market.
Our experience in developing sound commercial approaches coupled with our understanding of the global bidding
market has given PwC the knowledge and insight into the approaches needed to deliver the best outcome for the
government and the community.

Australia Capital Territory
Terry Weber, Partner
Advisory - Consulting
+61 (2) 6271 3522
terry.weber@au.pwc.com
New South Wales
Clara Cutajar, Partner
Transaction Services
+61 (2) 8266 3497
clara.cutajar@au.pwc.com
Mike Davidson, Partner
Corporate Tax
+61 (2) 8266 8803
m.davidson@au.pwc.com
Scott Lennon, Partner
Economics
+61 (2) 8266 2765
scott.lennon@au.pwc.com
Martin Locke, Partner
Project Finance
+61 (2) 8266 5856
martin.locke@au.pwc.com
National
Joseph Carrozzi, Partner
Infrastructure Market Response Leader
+61 (2) 8266 1144
joseph.carrozzi@au.pwc.com
Niall McConnell, Partner
Financial Assurance
+61 (2) 8266 3719
niall.r.mcconnell@au.pwc.com
Kevin Reeves, Partner
Corporate Value Advisory
+61 (2) 8266 0617
kevin.reeves@au.pwc.com
Queensland
Craig Fenton, Partner
Project Finance & Economics
+61 (7) 3257 8851
craig.fenton@au.pwc.com
Mark Ingham, Partner
Project Finance & Economics
+61 (7) 3257 5714
mark.ingham@au.pwc.com
South Australia
Mark Coughlin, Partner
Performance Improvement Consulting
+61 (8) 8218 7760
mark.coughlin@au.pwc.com
Victoria
Mario D’Elia, Partner
Project Finance
+61 (3) 8603 6799
mario.delia@au.pwc.com
James Van Smeerdijk, Partner
Economics
+61 (3) 8603 4814
james.vs@au.pwc.com
Jock O’Callaghan, Partner
Transaction Services
+61 (3) 8603 6137
jock.ocallaghan@au.pwc.com
Kirsten Arblaster, Partner
Corporate Tax
+61 (3) 8603 6120
kirsten.arblaster@au.pwc.com
Nigel Smythe, Partner
Corporate Value Advisory
+61 (3) 8603 3970
nigel.smythe@au.pwc.com
Western Australia
Roger Port, Partner
Transaction Services
+61 (8) 9238 3476
roger.port@au.pwc.com
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