Project NINA information briefing


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The NINA Access Pathway is an important new approach to the design and operations of all sizes of communities, in country areas it can support new technology deployments, broadband, gas, water systems, cycleways, soil preservation, flood protection etc. The introduction of a broad fiber foot print in rural communities is important as it allows for much more effective communications via wireless to outlying hamlets and homesteads.

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Project NINA information briefing

  2. 2. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!TABLE OF CONTENTSINTRODUCTION 3THE NEED 5THE SOLUTION 8FEATURES OF THE NINA ACCESS PATHWAY 16RETHINKING WATER 20HELPING LOCAL GOVERNMENT 25REFOCUSING ON REGIONAL AND REMOTE AUSTRALIA 29THE NINA ECONOMIC MODEL 32INDUSTRY BENEFITS & METRICS 48NINA INTELLECTUAL PROPERTY 57ABOUT THE AUTHOR 60N.I.N.A PTY LTD COMPANY DETAILS 61ATTACHMENT 1 BILL OF MATERIALS 57ATTACHMENT 2 IMAGES 64 “N.I.N.A©™,” “NINA ©™,” “N.I.N.A Pty Ltd©™”, “NINA Pty Ltd ©™”, “NetworkedInfrastructure National Architecture©™”, “N.I.N.A Access Pathway©™”, “NINA Access Pathway”, “N.I.N.A Economic Model©™”, “NINA Economic Model©™” the “Gumleaf” logo©™ and all other graphics are trademark and copyright protected intellectual property of N.I.N.A Pty Ltd©™ and its founder Guy Dixon.The$NINA$Project$–$Information$Briefing$2012$ Page$2$
  3. 3. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________! INTRODUCTIONNetworked Infrastructure National Architecture Pty Ltd (NINA) has developed a new physical“operating system” for the efficient distribution of networked utilities and services globally.It is universal in its application to urban, rural and regional population centers including remoteand very isolated communities.The NINA Access Pathway is a low cost, flexible, easily deployed lidded modular pathway,kerb, gutter and utility ducting system, which addresses the failure of legacy distributionsystems (power poles, trenched and buried cables and pits) to deliver economies of scale andscope.The NINA Access Pathway is the first substantive review of infrastructure distribution in over120 years. It is a multi-utility pathway which: • Provides capacity for multiple infrastructure based service providers, in all key markets for utility service distribution; electricity, gas, water, data, communications and lighting. • Promotes competition in all key distribution sectors of the economy. • Would constitute, a step change in micro-economic reform and place downward price pressure on utility service prices and inflation. • Acts, as a primary water isolation and management system by isolating storm and run- off water from contact with road surface. • Enables, the deployment of alternate power distribution networks such as 480V that would enable high speed charging of electric cars within home garages and at the kerb side. This may remove a key barrier to the widespread introduction of such vehicles. • Has been designed for manufacture in precast reinforced concrete modules, which can be rapidly deployed with minimum construction interference to communities. • Has a very long economic life (100+ years). • Has been designed to be deployed in established, residential areas as well as in new developments and as such delivers core improvements in urban environments not just at the margins. • Increases the utility capacity of established areas and supports infill development of housing within those areas. • Greatly lowers the marginal costs of new service deployments. • Enables multiple utility distribution services to be deployed at low cost and isolates rainwater from contamination through contact with road surfaces. • If rolled out nationally would transform the urban landscape of Australia, greatly increase productivity, improve safety, lower utility access costs and be a central component in creating sustainable urban environments. • Reduces injuries due to power poles in car accidents. • Increases urban amenity, including high quality footpaths, improved mobility for pedestrians and a reduction in visual, air and noise pollution.As an aggregator of utility distribution services, the NINA Access Pathway greatly reduces thecost per service of civil works associated with utilities distribution. Civil costs are the largestThe$NINA$Project$–$Information$Briefing$2012$ Page$3$
  4. 4. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!component of consumer charges and underpin the monopoly characteristics of utilitydistribution markets. The civil costs of the National Broadband Network (in Australia) areestimated by McKinsey& Co. to represent 70% of the total project cost (approximately $30billion.) In the same market, a plan to upgrade power poles is projected to cost (as reflected inrecent price increases) $32 billion across the Australian national electricity distribution marketover the next 5 years. Globally there is a need within established economies and in emergingmarket economies for an upgrade of infrastructure where distribution is the largest and mostcostly component.This report considers in detail such a project within Australia but we believe the technology andsolution proposed is equally relevant to all modernising or upgrading economies.Within Australia, the timing is now perfect to consider a broad scale rebuild of our distributioninfrastructure and would constitute the wisest use of the proceeds of the current resourcesboom. As an Australian dollar denominated project it would also constitute a substantivestructural support for the growth of manufacturing and services in Australia at a time whenthese are weak. A Grattan Institute paper said:“Australia’s 1990s productivity ‘miracle’ owed much to a series of micro-economic reforms, explicitlydesigned to produce that outcome by consciously exposing both private and public enterprises togreater competition, both domestically and abroad, in order to spur managers into making changes tothe way in which labour and capital were combined to produce goods and services.”The NINA Access Pathway is the next major step stage in micro economic reform.Physical reform of distribution is possibly the last low hanging fruit in productivity gains. Ifimplemented it would propel Australia to a world leading position of economic growth in anadvanced economy. This has not been possible in the past because distributors have notinvented new physical forms of distribution. The NINA Access Pathway is neither a buriedcable/pit/pipe construction nor an aerial (pole) network- rather, is a surface accessible encasedchannel system.NINA would enable the widespread and cost effective introduction of competition intodistribution, lower barriers to entry of new distributed services, and remove the economic riskof technology “bets.” It represents an opportunity for lower cost services, greater innovation,increased accessibility and shorter times to market. It becomes possible to contemplate theubiquitous introduction of electric cars in urban environments, it allows us to move decisivelytowards complete water security without the need for high desalination and/or dam building,and enables a rapid transition to low emission transportation, increased urban efficiency andreduced road accidents due to collision.Economic growth, productivity and climate change are near constant themes of the currentpolitical debate in most countries.The NINA Access Pathway method of distribution addresses all of these themes and needs.The$NINA$Project$–$Information$Briefing$2012$ Page$4$
  5. 5. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!THE NEEDWithin Australia and globally there is a push for infrastructure renewal and innovation. This isoccurring in power generation, data services, water, gas, and many new services which areexpected to evolve in response to a range of growing needs. Competitive infrastructure iswidely recognised as key to productivity growth and international competitiveness.Efficient distribution infrastructure is essential for the economic success of these renewal andinvestment programs.NINA estimates that utility physical distribution (access) costs are now, subject to the numberof services accessed, between $150 and $230 per household per month. These costs havebeen, rising materially above inflation over the coming years, this trend is forecast to continue.By 2015 the cost of the current service mix will equate to approximately $22 billion per annumnationally within Australia. Physical distribution costs are an “embedded charge” and the cost isnot transparent to the consumer, though it is to regulators. When separated from the finalservice charge to the consumer, civil access is a very substantive component of householdexpenditures, amounting an average of up to $44 per household per week.This is the combined access cost across of range of services (water, gas, electricity, telecoms,data and Pay TV).There has been no major innovation in physical distribution technologies for 140 years!Australians remain reliant upon the existing infrastructure (buried pits, pipes and cables oroverhead power poles) of incumbent distributors, these costs are termed Layer 1 costs. Thecivil costs of distribution are the primary barrier to competition in Tier2 (cables, routers,transformers, spitters) and Tier3 (in broadband content and functionality and in electricity“green” source etc) and above utility service layers.The push for infrastructure renewal is being driven by:  Aging of established infrastructure- across the globe economies at all varied levels of development, infrastructure is failing to either match economic growth (emerging economies) and or sustain productivity in developed economies. This highlights the need for 21st century infrastructure models.  The need for broadband- high-speed Internet access is now recognized as a key factor in overall economic competitiveness and the move to information-centric economies.  Population pressure- due to urbanisation requires increases in urban utility capacity.  Climate change- the associated climactic uncertainty necessitates resilient and flexible distribution infrastructure that will survive over a long time and despite increasingly variable climactic conditions.  Carbon taxation (penalties) on emissions and demands to meet global or local carbon emission reduction targets are promoting new power, generation, transmission and distribution technologies.The$NINA$Project$–$Information$Briefing$2012$ Page$5$
  6. 6. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!  New power sources – new power sources whether solar, geothermal, natural gas or nuclear require economically efficient access to end users. This is done through distribution networks.  New service creation – electric transportation, hydrogen distribution, data and control systems, intelligent management of energy grids, and other future services all require the ubiquitous presence and availability of both energy and data. Optical fibres are the nervous systems of advanced economies and enable the application of intelligence (measurement systems, control and application software).  Econom ic Efficiency – the economic performance of countries is now measured relative to global benchmarks and infrastructure quality, flexibility and adaptability are now key benchmarks. The distribution efficiency of all the above is a function of their ubiquitous presence (as many places as possible) and their competitive density (as many players as the market will efficiently bear).The Traditional Approach to Distribution is InadequateDistribution is essential to the effective performance of all primary utility services and all newservice models. It represents between 40-70% of end user prices for utility services. Within Australia, for example, the Australian Energy Regulator (AER) has identified powerdistribution as being between 40-50% of end user electricity bills. Its model is divided into threecomponents: Generation, Transmission and Distribution. Transmission prices are rising atsignificantly higher rates than inflation.The historic primary distribution models are pit and pipe (for telecoms, gas and water) andaerial poles for electricity, Pay TV, and some data/communications.Both these operating systems were developed in the 19th century and are no longer adequatedistribution platforms for existing and new services.These approaches fail our communities and economy for many reasons, some of which arelisted below:  They are prone to collapse in extreme weather, prone to fire, earthquakes and flood damage.  Poles are dangerous to drivers, within Australia and overseas they are a frequent element in fatal car crashes and serious injury.  Digging up footpaths and roads is expensive, time consuming and results in degraded curbs, footpaths and streets.  Poles are suitable for only a limited number of utilities (cable based) and do not capture full economies of scope.  They entrench monopoly pricing and inefficient market conduct such as low innovation.  They are unsupportive of efficient economic growth and are now making a disproportionate contribution to price inflation- leading to upwards pressure on interest rates.The$NINA$Project$–$Information$Briefing$2012$ Page$6$
  7. 7. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!  They increase technology risk by being inflexible i.e. long-term technology choices must be made prior to cables being buried.  They are limited in capacity and scope and lead to high marginal cost of new service deployment and slow down such deployments.  Poles and trenched footpaths are a key source of visual pollution.  Aerial cables impose height limitations on the transport of goods and services within urban environments, limiting, for example, the size of precast concrete panels used in construction.  Buried cables and pipes are hard to identify and frequently damaged by other digging activities. As displayed in Table 1, the overall status of Australian primary urban “life support” infrastructure is poor. Table 1.INFRASTRUCTURE ACT TAS VIC WA SA NSW QLD NTPotable Water B- B- C B- B B- B- C-Waste Water C+ C B- B B- C+ B- C-Storm Water C+ C- C- C D C C+ B+Electricity B+ B- C- B- B- C- C- C-Gas A- C C C- B+ C C A-Telecoms B- C+ C C- C C- C- C- Source: The Grattan Institute December 2010, Engineers Australia, Infrastructure Report Card The above report card is for those utility services capable of being delivered via the NINA Access Pathway. The ratings show a poor level of performance across the nation. An OECD Survey of Australia found that: “Australia faces a shortfall in infrastructure, which could worsen with the demand pressures exerted by the mining boom, population growth and environmental concerns. To respond to this demand and avoid bottlenecks the authorities have to bolster infrastructure at the top of their policy agenda” Source: The Grattan Institute December 2010NINA has revisited the urban streetscape, measured it, and invented a new, unique solution.The NINA Access Pathway is a new, patent protected invention designed specifically toaddress the above issues in the form of a physical solution. It is an encased distributionpathway. It removes the economic bottleneck described above by designing out the physicalbarriers to entry and designing in the economic reform required by Australian and global societyin the 21st century!The$NINA$Project$–$Information$Briefing$2012$ Page$7$
  8. 8. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!NINA designs out the natural monopolies, which form around access infrastructure. Thesemonopolies are predicated on high civil costs, limited capacity and long lead times to deploycompetitive services.While there is only room for one pathway (as there is only one efficient space to locate it), itsregulation will be easier and more transparent, and could occur at Local, State or FederalLevels. The NINA Economic Mode is predicated upon sharing economies of scope with alloccupants and thus supporting competitive entry.It is the economies of scope that provides the real micro-economic reform driver of the NINAAccess Pathway.THE SOLUTIONNINA Pty Ltd has developed a proprietary, patented solution to 21st century solution fordistribution infrastructure. They are: 1. The NINA Access Pathway©™ 2. The NINA Network Model©™ 3. The NINA Economic Model©™We describe these below.The NINA Access Pathway©™ is a low cost, flexible, easily deployed lidded modular pathwayand ducting system. The NINA is neither a buried cable/pit/pipe construction nor an aerial (pole)network, rather is a surface accessible encased channel system.It is easily manufactured as a precast concrete embedded beam. High volume productiontechniques can be used to generate economies of scale in manufacture, installation, andmaintenance. It generates economies of scope by allowing multiple services to be safelydeployed.The$NINA$Project$–$Information$Briefing$2012$ Page$8$
  9. 9. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!Once installed the pathway is accessed by removal of the covering lid, which is fastened inplace and tamper proof.The NINA Access Pathway, once installed, forms a frame around a residential block. There areapproximately 162,000 street bounded residential blocks in Australia whose averagecharacteristics (based upon detailed surveying by NINA) is shown below. The averageresidential block exhibits the following characteristics.  Perimeter – 800m  Area – 32,000m2  Number of serviced lots – 39  Number of households (SDU, MDU, Semi, other)1 – 50  Most blocks (~80%) are rectangular and of only modest slope  A high degree of uniformity exists in the general form of the residential block across Australia’s urban, outer urban, regional, remote and very remote communities!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1SDU=Single Dwelling Unit (Freestanding Houses), MDU + Multiple Dwelling Unit (apartments),Semi= semi detached houses (townhouse etc) other+ attached house, granny flat, shop/housecombination etc.The$NINA$Project$–$Information$Briefing$2012$ Page$9$
  10. 10. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________! Brunswick Melbourne – Source: Google EarthNINA has developed a complete suite of modular pathway elements to enable the constructionof complex pathways. These elements are designed to include the various requirements forstreetscapes in the “average” block (shown drawn to scale below.) A selection of the standardprecast concrete modular elements are shown in the diagrams (beginning p14). Other elementsnot shown include narrow profiles for inner urban narrow streets, the NINA Access PathwayThe$NINA$Project$–$Information$Briefing$2012$ Page$10$
  11. 11. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!configured as a cycle way or incorporated with retaining walls for sloped kerbs and soilretention. Other elements can of course be designed and manufactured if necessary.The NINA Access Pathway is comprised of a set of modular elements that allow the pathway tofollow the terrain of urban Australia. Elements are joined by flexible interstitial elements thatpermit graduated rotations of the pathways. The laying of the pathway is gravity based inside atrench on a compacted sand bed. When laid, the pathway acts as a linked flexible chainaround the block.The concrete volume required for an average block as shown above is 53m3 in finished form.The primary elements are: a standard Bottom casting, a series of covers representing astandard curb, a standard driveway, wheel chair access and transitional elements to allow forsmooth integration of covers.Cables and pipes can be installed within the channels in designated spaces, using PVCspacers where required. Cables can be installed in waterproof conduit in areas prone toflooding. Keyed bolts and the mass of the lids control access.Its major cost elements are: 1. Precast Concrete module production – this would require a major expansion of this industry and consume approximately 25% of current annual production. This represents approximately 45% of total costs. 2. Installation – While installation of the modules is relatively easy and simple, its scale requires skilled co-ordination, data gathering, module fitting, trenching, component manufacturing (gaskets, access cabling/piping, access boxes, waste removal and making good). Installation costs are estimated to represent 51% of total (excl. GST).The$NINA$Project$–$Information$Briefing$2012$ Page$11$
  12. 12. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________! 3. Transport and logistics – the project represents a massive logistics exercise. We estimate that it would require in excess of 2000 15 tonne truck movements per day. Transport is estimated to represent 4% of total.The above costs are for the access pathway and cable, hose and pipe links - connections toindividual households ~27%. Individual utility service providers install their own networks, theLayer 2 costs.Layer 2 infrastructure providers are expected to lease, rent or buy space within the Layer 1architecture. For broadband this is equivalent to duct access or indeed spectrum purchases formobile networks.Layer 2 providers are expected in turn to supply wholesale services to Layer 3 serviceproviders. The key difference between NINA and the NBN is that there is competition at thelayer infrastructure level. This has been proven essential for effective unregulated competition.The$NINA$Project$–$Information$Briefing$2012$ Page$12$
  13. 13. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________! 1. Standard pre-cast base module, indicative dimensions 2. Standard Bottom Casting CoverThe$NINA$Project$–$Information$Briefing$2012$ Page$13$
  14. 14. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!3. Standard Bottom Casting Cover (Driveway)The$NINA$Project$–$Information$Briefing$2012$ Page$14$
  15. 15. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________! 4. Bottom casting 3.6m Radius Corner 3. Bottom casting R3.6m CoverFEATURES OF THE NINA ACCESS PATHWAYThe NINA Access Pathway is a set of modular units linked by shaped interstitial elements.When joined these form a frame around a residential block. In cross-section this has a kerb, aThe$NINA$Project$–$Information$Briefing$2012$ Page$15$
  16. 16. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!gutter, two primary utility channels, and a water channel. It can be understood as analogous toa spinal cord.The cord contains power (electricity and gas), and water (potable and grey), for delivery to thehome. A stormwater harvest channel provides separate pathways for rain and run-off water.This is designed to isolate stormwater, which has fallen within the residential block and has hadcontact with the local road surfaces (thereby preventing that water from becomingcontaminated by contact with the toxic road surface). Power chambers are isolated from gasand fluid chambers.Key Design Param eters of the NINA Access Pathway System 1. Service life +100 years. 2. Must be capable of high-scale high-quality production. 3. Low slip surfaces to be used to increase the general safety of the streetscape for pedestrians and car drivers. 4. Must contribute to an improvement in ease of access for all residents, but in particular, the elderly and those requiring assisted mobility (users of wheelchairs, walkers, prams etc). 5. Must allow for a general improvement in the quality of footpaths. In many areas the condition of footpaths and walkways is seriously degraded. The NINA Access Pathway supplies a safe walking surface and supports investment in pathway upgrades in general. 6. Must remove the need to excavate footpaths. 7. High quality concrete with low porosity to prevent concrete cancer or surface degradation (spalling). 8. Clear identification as utilities infrastructure, thereby reducing the risk of damage from construction or digging activities. 9. Rainwater falling within the framed block to be isolated from contamination via contact with the road surface. This water can be managed separately from the existing ducting system. 10. Flexible jointing- a chain-like effect to permit moving response to settling, impacts and root lifting without compromising watertight integrity of ducting chambers. 11. Replaceable cover profiles to allow for normal evolution of urban environments (e.g. new driveways, mountable surfaces, new junction or connection points and new service delivery). 12. Compatibility with adjacent surfaces (e.g. grass verges, pathways, streetscape gardening, sealed surfaces, pavers). 13. Easy accessibility for utility installation, maintenance and repair. 14. Residual capacity for new service growth.Overhead power lines are a form of visual pollution. Until now no cost effective, national scale,removal solution has been presented. Nor has an improved cost efficient means of powerdistribution been proposed. The NINA Access Pathway achieves this and more.NINA has unique features for which Patents have been applied include:The$NINA$Project$–$Information$Briefing$2012$ Page$16$
  17. 17. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________! 1. The ability to closely follow the contours of the road surface and variable urban geographies 2. Two or more isolated internal channels which permit the installation of power lines and optical cables in one (the channel closest to the kerb.) A separate channel for the carriage of gas, water, copper, fibre optic, co-axial or other cables) 3. A third channel for the capture and transport of stormwater; and 4. An external channel which allows for the transit of pipes, cables and hoses between an integrated take-out box (a unique module) to a point immediately adjacent to an end- user premise. A channel is installed across the path to connect the premise to the NINA Access Pathway™. This means that once installed no cables need to transit beneath the footpath and thereafter there is no further or future need to excavate footpaths. 5. A collection of; corner bend sections to form both corners and cul de sacs.The base channels are covered with variable profile lids which can take a variety of forms andshapes such as a driveway, a wheel chair access point, or a wide cycle-way lid.Uniquely the modules are linked by interstitial members which ensure both directional flexibilityand watertight integrity. Some typical elements are displayed in images below.Installation of the pathway is easy, in most prevailing geographies. It involves trenching andassembly. Service installation within the pathway involves the location of cables, pipes, andconduits in easily accessed channels. Tight dimensional controls permit substantive pre-installation of utility elements, minimising on site works. Feeder channels incorporated into theexternal channel of the bottom casting allow for easy access from the take-out serviceconnection points to household meters.Aggregated metering is also a new and potentially valuable service made easy by the NINAAccess Pathway.Survey and fitting can be done quickly and NINA is developing new technologies to automatethis process.The$NINA$Project$–$Information$Briefing$2012$ Page$17$
  18. 18. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!Final module lengths are determined by compatibility with the SWL crane capacities on truckstypically used to transport bricks. Some elements are shown below:Primary network architectures capable of being deployed within the blocks can be classifiedinto 6 physical groupings:  Fibre Optics – broadband, backhaul, network intelligence for all services  Power services – 11kV, 415V, 480V, 240V, localized DC power, lighting power and networking power for communications services.  Gas – natural, coal seam, hydrogen  Water – primary potable, recycled storm and grey, hydrant services, filtered potable, heat exchanger  Legacy Cable - (Copper, coaxial), legacy communications (Telstra CAN)Networking between blocks is done via manhole accessible links between the blocks; thispermits the creation of larger loops and the laying of trunk lines.The location of the NINA Access Pathway along the existing curb line allows it to overlayexisting stormwater infrastructure, which is used as overflow. The inner water channel enablesrelatively clean water run-off from residential roofs and yards to be isolated from road surfaces,which may contain toxic automotive chemicals, which build up on road surfaces. This greatlyincreases the utility and value of stormwater, which may be retained for local use, redirection tostorage, natural water flows or numerous other purposes. These features are illustrated in thefollowing images.The$NINA$Project$–$Information$Briefing$2012$ Page$18$
  19. 19. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!RETHINKING WATERRedirecting Rain and Storm W aterManaging water: rain, storms, flooding, cleanliness and a new resource.When fully implemented, about 4.6 billion cubic meters of water per annum would fall within theboundaries of the NINA Access Pathway™. (Source: NINA Analysis, Bureau of Meteorology).This represents approximately 514 cubic meters per household per annum, or 184% of annualhousehold consumption! The value of this water resource is also increased by its proximity toend-users.The primary barrier to efficient economic use of this rainfall and storm water run-off is the healthand safety risks posed by contamination of this water in the urban environment. While organicmaterials, leaf litter, animal feces, and sewerage overflows can be treated with relative ease(e.g. chlorination) the removal of heavy metals and complex chemical compounds is a majorchallenge, both physically and economically. The major source of such contamination isthrough contact with the urban road surface.By locating a dedicated water flow path in the inner channel of the NINA system, rainwater run-off can be isolated from polluted road surfaces. This increases the water value- becausecleaning large volumes of water contaminated by complex chemical pollutants is both difficultand expensive. It is better to prevent it from getting dirty in the first place.The$NINA$Project$–$Information$Briefing$2012$ Page$19$
  20. 20. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!The NINA Access Pathway system is designed to allow clean storm and rainwater to beharvested by communities, public water companies or commercial interests. It could charge forflows (volume based) passing through the NINA Access Pathway and delivered to collectionnetworks or it could charge interested parties for the use of the system in a given area (nonvolume based charge).It has become widely recognized that the design of existing storm water systems has beenbased upon the speedy removal of water rather than the retention of water in the communityfor non potable uses (gardening, washing, flushing etc) or for quality improvement to potablestandards. These designs are reflective of an era where there was no water shortage in majorcities and flood control was the primary concern.Australian cities, like their global counterparts, are characterized by “hard surfaces.” Theseinclude roofed buildings, roads, paths, concrete culverts and other urban Infrastructure. Thesesurfaces promote the rapid acceleration of water downhill towards receiving streams, rivers andthe sea.With the rapid movement of water through our storm water systems, high levels of pollutionThe$NINA$Project$–$Information$Briefing$2012$ Page$20$
  21. 21. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!from urban activities are transported .Pollutants include litter and general detritus, sewer overflows, vehicle emissions, animal feces,garden fertilisers, silt and vegetation. While natural ecosystems can absorb some pollutants,metropolitan centers produce waste streams that are too concentrated and which move tooquickly via concrete drains and pipes to be assimilated by receiving waters.The NINA Access Pathway system provides choices in the management of storm water, whichare currently not available. These include the option to “split” storm water into two, three ormore streams.One stream is water which has been isolated from contact with the urban road surface, butmay include surface water from footpaths, gardens or other sources. This water has avoidedcontamination by genuinely harmful road surface pollutants such as engine oils, coolant fluidsand exhaust fumes which have settled on road surfaces. Water isolated from these pollutants isuseful for general watering purposes such as gardens, environmental flows back into naturalwaterways and industrial uses.Another stream is water collected solely from downpipes flowing off roof surfaces. This water issubstantially free of organic pollutants and when combined with “first flush” systems it isgenerally the cleanest urban storm water, being free of fertilizers, pharmaceutical products,chemicals and anti-biotics- all of which can impact upon the local ecological health. This watercan be filtered locally and subject to testing and appropriate quality controls to be brought to apotable standard.The break-up of storm water flows may permit aggregate flow speed to be reduced, flashflooding diminished and the more targeted treatment of road water (whose volume would bemuch lower).Unmanaged flows have been accredited with causing algal blooms, fish kills, closed beachesand shrinking fisheries, all of which have direct effects on the health, prosperity and amenity ofurban areas.A national roll-out of the NINA Access Pathway would become an integral component of aNational Water Management Strategy.This is consistent and complimentary to the findings of the Senate Water Enquiry 2002-2004,whose frames of reference are described below:The$NINA$Project$–$Information$Briefing$2012$ Page$21$
  22. 22. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________! “The report addresses each of the Committee’s terms of reference and was written with two major factors in mind. First, the report aims to take a solutions based approach to urban water management, rather than simply recounting a list of problems. Second, the Committee is mindful of the fact that urban water management is a shared responsibility of all three levels of government in Australia, which ensures a degree of jurisdictional complexity. The report considers the roles of all three levels, but ultimately focuses its recommendations on matters that are the responsibility of the Commonwealth.”Should either the Commonwealth or the NSW Government adopt the NINA approachrepresented by the NINA Access Pathway™ then it would be a major contributor of value in theevolution of urban water management. Rainfall across Australia’s residential areas on apopulation weighted average (the average rainfall in areas where the population of Australia live)is more than twice the consumption per head of population.By combining water harvesting and redistribution in a common architecture the economic valueof the rainwater becomes a substantial economic contributor to the cost. Note that we haveonly modeled the infrastructure charge for water distribution and redistribution charges in oureconomic analysis, not the value of the resource. Fully captured and at a price of $2.00 percubic meter (the current urban charge for water in the State of New South Wales is $2.13 percubic meter or kilo liter), the value of this water resource could approach $10 billion per annum!The following table indicates the economic value at certain efficiency capture ratios at a price of$2.00 per cubic meter:Table 2. Efficiency Value 0.9 $9.9 billion 0.8 $8.8 billion 0.7 $7.7 billion 0.6 $6.6 billion 0.5 $5.5 billion 0.4 $4.4 billionSource: NINA AnalysisPotable water suitable for drinking and washing is the most stringently regulated for publichealth reasons. However, this is a relatively small proportion of all water usage, representingapproximately 25% of water consumed by urban and townsfolk.The NINA Access Pathway would greatly alleviate demand for water sourced from dams andThe$NINA$Project$–$Information$Briefing$2012$ Page$22$
  23. 23. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!reservoirs and reduce the costs of distribution. This represents substantial economic andenvironmental benefits.A further benefit of the NINA Access Pathway is that by isolating rainwater from the roadsurface it dampens initial “flash flood” flows, which are often of short duration but withsignificant impact upon communities. The system has the capacity to install a closed pipe inthe channel specifically to collect “roof water” from downpipes, which can be fed into a pipewithin the water channel. This is the cleanest of the environmental water flows in the built upurban environment. There is also capacity to install a dirty water capture channel under thegutter piece.The responsibility for land and water management in Australia rests primarily with thegovernments of the States and Territories, and also with local government under authoritydelegated by the State governments (Senate Water Enquiry 2002).Debt levels are high at these levels of government and their capacity to invest is limited. TheNINA Access Pathway relieves the need for this investment and allows capital to be redirectedto other service areas. NINA provides a framework to substantially reform the economics oflocal government.HELPING LOCAL GOVERNMENT “The PwC Report,” which was commissioned by the Australia Local GovernmentAssociation, to look at the sustainability of Local Government finances called for a range ofreforms to deal with the national backlog in local government infrastructure renewal work.This backlog of work has an estimated cost of $14.5 billion.This backlog has resulted from the growing gap, in many Local Government Areas (LGA),between their revenue base, the cost to deliver a broader range of services and the cost tomaintain and renew the infrastructure which supports these services. 2 We understand thatthis phenomenon, the under funding of local government, is present in the United States!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!2!(Source:!!The$NINA$Project$–$Information$Briefing$2012$ Page$23$
  24. 24. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!and in Europe as well.A national rollout of the NINA Access Pathway would relieve LGA of the costs ofmaintaining curbs, increase land values, and thereby boost local government rate income.In our economic modeling, we have assumed an annual payment to local government of10% of revenues. Upon completion, royalties would contribute nearly $3.2 billion perannum to local governments, (following a national rollout), O&M costs savings of $1-1.5billion plus an increase in rate income by $1 billion per annum (estimated at 1% p.a. of theincrease in the improved land value). A national rollout has the potential to improve LGAeconomics by $5.5 billion per annum. Funding of local governments to contribute to thecapital cost of development would also increase their long term financial strength.As a stable income stream these funds could be leveraged to support a major push toaddress, a now reduced infrastructure backlog, support greater service levels and allow forreduced or stable rates. LGA as one of the largest purchasers of utility services would alsobenefit by the improved productivity in these sectors and the increased competition.The above amount would flow directly to the LGA EBIT line. This would contributesignificantly towards a general improvement in the economics of LGA operations.The$NINA$Project$–$Information$Briefing$2012$ Page$24$
  25. 25. NINA - Pathways to the Future, Foundations for Life __________________________________________________________________________________ ! .Table 3. Backlog in local Government Infrastructure Spending and Income shortfalls (funding gaps)Access Economics & MAV Backlog in Underspend Est. funding gap per Est. funding % ofFinancial Sustainability Summary infrastructure on existing annum ($m) gap per councilsResults renewals ($m) infrastructure (to cover backlog & council per unsustaina renewals per annual underspend) to annum ($m) ble annum ($m) be generated via savings or extra revenue/grantsNSW (152 LGBs - Access) $6,300 $500 $900 $5.9 25% /1SA (68 LGBs - Access) $300 $20 $40 $0.6 38%WA (142 LGBs - Access) $1,750 $110 $220 $1.5 58% /2Vic (79 LGBs - MAV) $806 $81 $203 $2.6 10%Total NSW/WA/SA/Vic $9,156 $711 $1,362 $3.1 35%Low Case NationalEstimate $12,012 $922 $1,826 $2.6Mid Case National Estimate $14,533 $1,129 $2,163 $3.1 35%High Case NationalEstimate $15,305 $1,190 $2,281 $3.3 Source: PWC National Sustainability of Local Government Report 2006 Notes: 1. Access (Access Economics) estimate for SA based only the backlog developed over last 10 years and the full backlog will be higher. 2. MAV estimate of infrastructure backlog is in 2003-04 dollars, for the period between 1997-98 – 2003-04, hence is understated. Introduction of the NINA Access Pathway would also allow for a much higher quality streetscape, which is currently being repetitively degraded by infrastructure “upgrades”. The$NINA$Project$–$Information$Briefing$2012$ Page$25$
  26. 26. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________! Above: An inner city Sydney road displays typical damage caused by utility service providers regularly digging and patching to access their infrastructure. NINA alleviated this problem by installing all physical pipes, cables and wires in the curb- lowering distribution costs and increasing urban amenity.The$NINA$Project$–$Information$Briefing$2012$ Page$26$
  27. 27. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________! REFOCUSING ON RURAL REGIONAL AND REMOTE AUSTRALIAA major policy objective of the NBN and current economic debate has been to redress realimbalances between communities located in rural, regional and remote Australia, andthose in the major city urban centers.This imbalance is often reflected in community access to broadband and sophisticated,affordable infrastructure services as well as social services such as health, education andcommunity services. Broadband access is widely promoted and regarded as hardeconomic infrastructure which supports the expansion of social services.The NINA system is equally applicable to rural, regional and remote communities and willenhance access to remote household and isolated communities. It achieves this bycreating fibre islands of rural townships. These islands allow the majority of regional trafficThe$NINA$Project$–$Information$Briefing$2012$ Page$27$
  28. 28. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!to be handled directly by fibre access. In the process it provides many more low costwireless base stations which can be targeted towards homesteads and outlyingresidences. This concept is displayed in the above image for the town of Tamworth.Australia’s population distribution is best seen at night. Where there is light and electricpower there are people. Technology is dependent upon access to the power grid.NINA advocates close co-operation between all utility service providers to co-ordinate andco-locate. This includes water irrigation and road and rail networks. We support theGovernments plan to address regional broadband blackspots and view this as a nationalconnective network which, when combined with networks such as that of Telstra, TPGand Optus would substantially connect rural, regional, and remote Australia into thenational and international fibre networks.The$NINA$Project$–$Information$Briefing$2012$ Page$28$
  29. 29. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!Rural, regional and remote communities are also organized into block formations. This isdisplayed in the images below. (Source: Google Earth). The roll-out of RBBP infrastructurealso has the advantage of creating large loops which increase network resilience and allowfor self-healing characteristics to pervade the national backbone network. This is highlycomplementary to the creation and support of the “fibre islands” concepts.The$NINA$Project$–$Information$Briefing$2012$ Page$29$
  30. 30. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!THE NINA ECONOMIC MODEL“Productivity isn’t everything, but in the long run it is almost everything. A country’s ability toimprove its standard of living over time depends almost entirely on its ability to raise its outputper worker. “Paul Krugman, The Age of Diminishing Expectations (1994)The Economic BackdropThe rate of growth in Australia’s productivity following a decade of out performance relative toits peers in the OECD has over the past 5 years flat lined and more recently begun to decline.Part of the national strategy to address this decline is to invest in economic infrastructure3 theseare massive investments. They include:  The $40 billion NBN project- of which 70% is civil works (pits, pipes and poles)  A committed $32 billion in upgrades to the power distribution networks.  A $13 billion fund for improvements to water security and recycling.Australia’s relative labour productivity in utility infrastructure has been poor relative to that of theUSA and suggest that we need to lift our game. Unfortunately the relative outperformance ofthe USA is achieved by a more intense competitive landscape, intense competition betweenstates for business and a more assertive regulatory environment. The current plannedinfrastructure investment is high cost and coming at a time when environmental policies areseeking to drive down consumption of key commodities such as power and water. Accordinglywe shall most likely see higher prices and reduced consumption which is a negative event inproductivity assessments.Table 4 - Performance of utility market sector industriesAustralian relative labour productivity levels, USA = 100 1980 1990 2000 2005Market SectorElectricity, gas and water supply 40 47 58 37Post and telecommunications 33 51 68 61Source: Productivity Commission,!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!3!Economic infrastructure typically refers to roads, ports, water, communications, power systems and sewerage,Social Infrastructure refers to Educational, Health, Justice and Community services.The$NINA$Project$–$Information$Briefing$2012$ Page$30$
  31. 31. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!Infrastructure modernisation is necessary to stimulate productivity and improve internationaleconomic competitiveness. Australia is currently experiencing an infrastructure crisis, this iswidely recognised across government, the Reserve Bank of Australia, academia, business andthe community generally.The provision of infrastructure services is a large part of economic activity. The efficiency of theprovision of these infrastructure services therefore directly influences the overall productivity ofthe economy.Cumulative capital expenditure on distribution infrastructure is expected to exceed $150 billionover the next 15 years. This figure includes the new capital expenditure identified above ($75billion plus an annual maintenance and expansion capital expenditure cost of approximately $5billion per annum). This assumes no new service introduction and the prevalence of the legacyarchitecture models i.e. no substantive or transformative innovation. This is evidenced by theproposed use of pits, buried and trenched pipes and ducting. These platforms have not beenmaterially altered since 1842.It is well understood that infrastructure can raise productivity in the economy if the infrastructureindustries provide their services more efficiently and if the provision of infrastructure servicesenables using firms and industries to improve their productivity.4NINA has carefully examined all major current plans from an economic, technology and politicalrisk perspective and considers that:  Major broadband initiatives such as the NBN in Australia have marginal business models, under best case monopoly scenarios and are characterised by high economic, technology, and political risk.  It widely believed that the NBN, in its current form (early 2012) pass a Productivity Commission assessment as viable as a standalone project.  Upgrades to the power distribution networks while necessary to reduce distribution losses and increase reliability are high cost and are forcing up retail prices at a time when demand is being suppressed due to the carbon tax and the natural response of consumers to higher usage charges.  Investment in both an inefficient power distribution platform and an inefficient broadband platform now in the face of the NINA Access Pathway invention constitutes an unnecessary diversion of scarce capital from investment in efficient clean power generation and higher order (Layer 2 and above) broadband services.  In the case of broadband we are seeing a return to monopoly service provision in fixed network services at Layer 1 and 2 levels and for power we are seeing a reinforcement of barriers to entry into the retail distribution markets.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!4 Shanks, S. and Barnes, P. 2008, Econometric Modelling of Infrastructure and Australia’s Productivity, InternalResearch Memorandum, Cat No. 08-01, Productivity Commission, Canberra, January, unpublished.The$NINA$Project$–$Information$Briefing$2012$ Page$31$
  32. 32. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!  Proposed stormwater capture and recycling plans have not been substantiated and there has been a lack of viable projects to attract the funding which is available under Commonwealth Grants ($13 billion).  Local Governments are struggling to meet their required maintenance capital expenditure in roads and basic community infrastructure and in Australia are approximately $14 billion in arrears. Local Government infrastructure investment is being constrained by general inflation concerns, limitations on pricing and a competition for funds via grants.  The Victorian Bushfires Commission report identified that $30 billion should be spent to make Victoria bushfire proof, such an investment cannot be afforded on a standalone basis.Our analysis allows us to assert that the benefits sought by the above standalone projects areachieved at lower cost, greater efficiency and with larger and broader productivity spillovers tothe wider economy, if an efficient co-location strategy such as that enabled by the invention ofthe NINA Access Pathway is employed.Infrastructure assets are by nature large and may take a number of years of formation beforethey become fully operational 5. There may also be lags between the time that infrastructurebecomes operational and when users are able to make use of the investments in productivity-enhancing ways. The NINA Access Pathway is unique in that, its basic unit, the residentialblock, becomes economic from the moment of its completion. It creates a productivity benefitfor both incumbents (lower more competitive operating cots) and an entry opportunity for newinfrastructure based service providers to enter that micro market “unit”. It does this in the water,electricity, communications and gas markets. In a broad based deployment across regional orgeographic markets Incumbents are compensated by gains access to new markets, this inturns increases there returns to high layer platforms such as customer service and supportsystems, purchasing and service overheads.Maintenance costs are lowered across the board due to the removal of external threats such astrees, car crashes, storms and floods etc. Economies of scope are also made possible inmaintenance services.The rollout of the network of linked blocks, can commence from known points of infrastructurepresence. Examples of which are transformer stations, local exchanges or data centres. Asthese elements are already in place the cost of deploying new cable and pipe routes in cleareasily accessed channels is low, i.e. the marginal cost of cable, pipe or power line laying isgreatly reduced by the presence of a surface accessible pathway for these services whichpasses directly in from of end-user premises. End users are linked to connection points at thecurb, by efficient pre-installed cable, pipe and line linkages!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!5!Shanks, S. and Barnes, P. 2008, Econometric Modelling of Infrastructure and Australia’s Productivity, InternalResearch Memorandum, Cat No. 08-01, Productivity Commission, Canberra, January, unpublished. !The$NINA$Project$–$Information$Briefing$2012$ Page$32$
  33. 33. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!In order to measure these benefits we have undertaken detailed economic modeling anddeveloped, the NINA Economic Model. This model has carefully measured the aggregateaccess market and the micro economic reform benefits that would flow from a large scale(national deployment) of the NINA Access Pathway. Key findings are:  Average households in Australia, with a weighted average service mix incur access charges of $300 per month.  There are currently approximately 8.9 million addressable household within Australia (this value corresponds to households connected to the electricity grid).  The medium growth forecast for new houses is approximately 130,000 per annum, this is not being achieved currently with the current annualised rate of new commencements (seasonally adjusted at 122,000 per annum)6  Australian households currently spend approximately $33 billion per annum to cover the distribution network costs embedded in their utility and distributed service bills, this is greater than 2% of GDP.  These rates are rising at a greater rate than inflation, the most recent increases in electricity distribution are 9% and are part of an overall 18% increase.7  The physical access networks comprised pits, poles, trenched channels, ducts and feeders into houses represent from 50% and 70% of these charges we estimate the average charge across utilities is 56%.  NINA Access Pathway can be deployed at a capital cost, which is highly competitive with the current disaggregated infrastructure plans.  NINA Access Pathway will generate higher rates of return (~20% IRR,) even at substantially lower access prices.  The cumulative capital cost is estimated at $104 billion, this represents a capital cost of $11,298 per household including GST.  The project becomes self-funding as the rollout progresses at the 7 year point assuming a 12 year national roll-out.  The project is high fixed cost with strong cash generation and a very long life.  Our analysis indicates that the project would require approximately $34 billion in a mix of equity and debt funding. Gearing can be increased with proof of concept and take up by utilities.  The use of debt funding and a general move by incumbent utilities into the pathway could see equity funding requirements fall to less than $10 billion.  The benefit to utilities from moving early is that it would lower their own capital expenditure and reduce operating and maintenance costs.  NINA Access Pathway increases competition within distribution markets and promotes new entrants and new services by removing barriers to entry and increasing speed to market of new services.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!6!!IPART June 2012!The$NINA$Project$–$Information$Briefing$2012$ Page$33$
  34. 34. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!  The NINA Access Pathway is essentially future proof and would be a key enabler of all technologies e.g. wireless, intelligent networking, intelligent lighting, information distribution, data collection and other current and future technologies.  The NINA Access Pathway is fireproof (indicatively 4 hours at 1500°C,) thus meeting the bushfire safety requirements.  The NINA Access Pathway does not float and, can be made waterproof for flood prone areas.  The NINA Access Pathway cannot fall or collapse and so is cyclone proof.  The NINA Access Pathway is essentially earthquake proof with the advantage that ease of access and identity reduces the risk of underground rupture or breaking of pipes or cables.  The NINA Access Pathway, is an innovation driver of productivity growth. Innovation is widely recognised as a key determinant in productivity growth.  NINA Access Pathway greatly increases the social amenity of the urban, rural, regional and remote environments through improved walkways, soil retention, improved waterways, the removal of visual and noise pollution and reduction in urban transport emissions.  Spillover benefits are valuable and demonstrable and should be included in any productivity assessment. An example of such a benefit is that low marginal cost acces to residential households would enable the cost effective building a power distribution network customized to optimise the charging of electric cars e.g. 480V or a direct current network.  Other benefits such as reduced incidents of falls amongst the elderly which are responsible for approximately $1 billion per annum in health care cost could be reduced by improved footpaths, increased ease of mobility etc amongst this age group.The$NINA$Project$–$Information$Briefing$2012$ Page$34$
  35. 35. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!The following Tables outline some of the metric used in assessing the economic andproductivity benefits.Table 5. Indicative monthly access charges for key distributed services and utilities. Utility Access Cost/month Mode of Distribution Data $25 Optical fibre cable (conduit optional) Pay TV $25 Co-axial (conduit optional) buried in footpath poles Legacy telephony $15 Copper (conduit optional) buried pipes, pits, poles Electricity $150 HV and LV cables, poles, drop lines Gas $30 Low pressure gas pipe or hose (50mm) buried in footpath Water $15 PVC, ceramic, metal, pipes buried in footpath Street lighting $10 Pole light power charged to councils passed on in ratesSource: AER, Utilities reports, press briefings, NINA analysisTable 6. Weighted average cost per household of key distributed services and utilities. Thisallows for varying service penetrations and the relative size of the civil component. Utility Network Access Mode of Distribution Current Civil Component “Ducting & Pole Cost/month Revenue” per household per month (average civil is 56% of total access) Data $24 Optical fibre cable (conduit optional) $17 Pay TV $20 Co-axial (conduit optional) buried in footpath poles $14 Legacy $22 Copper (conduit optional) buried pipes, pits, poles telephony $16 Electricity $171 Copper HV and LV cables, poles $117 Gas $28 Low pressure gas pipe or hose (50mm) buried in footpath $8The$NINA$Project$–$Information$Briefing$2012$ Page$35$
  36. 36. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________! Water $20 PVC, ceramic, metal, pipes buried in footpath $10 Street lighting $15 Pole light power charged to councils passed on in rates $10 Total $300 $169Source: AER, Utilities reports, press briefings, NINA analysisThe NINA Access Pathway economic model is predicated upon the creation of a competitivebut economic access environment in which the benefits of increased economies of scope(more users of the pathway) will be shared between all parties- including the pathwayowner/operator.As modelled access prices fall as the number of occupants increase. Our detailed modellingshows that under such a scenario, higher rates of return are achieved than is possible withcurrent "stand alone" utility investments, even at substantially lower access prices. Themodelled competitive density and subsequent rates underpinning these assertions aredisplayed in the following tables.The access charges are for the physical use of the ducts- what is known in the interconnectenvironment as Duct Access Charges. These compare to Layer 1 charges in the NBNImplementation Study.Utilities will still be required to deploy cables, piping, isolation valves, splitters and physicalequipment within the duct. This will be their own investment. However, the barrier of the cost ofbuilding and maintaining a unique physical distribution network are removed and speed tomarket for new services or physical upgrade such as fibre to the home or shared fibre servicesare effectively removed.Maintenance of the physical network is much lower as it does not involve poles and removesthe risk of accidental damage due to digging. These maintenance costs are shared, and areincluded in the pricing model.The NINA Business Model allows for costs to be shared across multiple Layer 2 infrastructure-based service providers. These costs include capital (maintenance and expansion),depreciation and operating expenses. This is what economists refer to as ‘economies ofscope’.The more users, the lower the access charges become- because they are shared. This alsoreduces resistance to new entrants because there is a compensatory reduction in costs forexisting operators. The NINA model is purely wholesale. Its clients are the Layer 2infrastructure owners deployed within the NINA Access Pathway.The NINA Model has asset characteristics similar to a property asset.The land is currently occupied by curbs and gutters which are built and maintained by localgovernment. NINA believes that this land is under-utilized, largely neglected and in need ofserious upgrade.The$NINA$Project$–$Information$Briefing$2012$ Page$36$
  37. 37. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!The shape and form of the NINA Access Pathway provides space which can be sold,leased or rented to Layer 2 infrastructure service providers.Ownership arrangements may take multiple forms- depending upon the availability ofcapital and geography. NINA could be built using state, private or combined capital. Forexample, the rollout of the infrastructure may be sub-divided to different entities on local,state, territory or a national basis. Parties may wish to compete to occupy duct space incertain geographic footprints such as Sydney, Melbourne or Albury.This is equivalent to the spectrum auction mechanism. Alternatively, a national singleownership structure may be preferred which incorporates a universal service provision.Commercial arrangements could take multiple forms: lease, rental, capital +rental, IRU orother combinations.A peculiarity of infrastructure investment within Australia is an acceptance that it is subjectto natural monopolies (big fish in a small pond) and that there is an important role for 8government regulation. This premise has dominated both the telecommunications andenergy markets within Australia. Notwithstanding that the original micro-economic reformpolicy of the telecommunications sector, initiated by Labor Party in 1991, was to promoteinfrastructure based competition in telecommunications (as reflected in the 1991Telecommunications Act) this has been steadily abandoned since 1997, when the amendedTelecoms Act (1997) allowed a movement away from the principle of facilities basedcompetition as it applied to the fixed line network and instead focused on uneconomicduplication of fixed line infrastructure investment. This occurred notwithstanding thesuccess of the mobile telecommunications industry, which was built around facilities basedcompetition and has since grown to dominate the voice telephony market within Australia.The driver was an unwillingness of new competitors to invest heavily in fixed line servicesably supported by regulatory pricing constraints applied to fixed voice, in particular the highcharge of calls from fixed to mobile phones. The role of high bandwidth data services in theresidential and SME markets was not anticipated in this shift in focus.RiskMajor infrastructure projects with high upfront fixed costs and long expected asset lives aresubject to a variety of risk, these include technology risk, (is it the right choice? will it besuperseded?, Will it work?) economic risk (will its benefits outweigh the costs?, will theforecast usage assumptions be realized?, will users like it?), environmental risk (will isdamage the environment? Are environmental costs reflected in the cost benefit analysis?).We consider some of the relative risk factors in the following paragraphs.Technology Risk!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!8 Grattan InstituteThe$NINA$Project$–$Information$Briefing$2012$ Page$37$
  38. 38. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!By being active in Layers 1-3, either fully or partially, and reliant on buried and thereforelargely inaccessible ducting and access routes, the NBN bears a material degree oftechnology risk. It is required to anticipate both long-term future capacity requirements andmake decisions as to whether each household should have a dedicated fibre connecting itto a local exchange (or server), a shared fibre with dedicated capacity or a shared fibre withundedicated capacity. Under the NBN model the marginal cost of new fibre deployments isstill high because its physical civil access network is inflexible. The primary fibre installationmust make important assumptions as to the type of network topology and electronics to beemployed.The NINA Access Pathway, by virtue of the ease of access (open the lid rather than dig upa road or footpath), can allow for growth in fibre and changes in access electronics(splitters, routers and others). It also changes the location of the point of connection to thecustomer i.e. it provides a fibre, electricity, copper line, water and gas pipes to a point onthe curb where layer 2 service providers can make a connection.This means that individual fibre infrastructure owners can make choices as to the densityand timing of the fibre they wish to deploy knowing that capacity expansion is relatively lowcost. The risk of these choices is lowered if the marginal cost is lowered. The demand andtherefore revenues are known and the time required to install new capacity is reduced. TheNBN recognizes that such transitions and upgrades could be difficult in the absence of 9market mechanisms .Econom ic RiskThe creation of a multi-utility pathway enables the risk associated with the investment to bedistributed across multiple utility service platforms. In so doing NINA also creates futuregrowth opportunities as new services are developed.Our analysis indicates that a market rate of return can be achieved in the absence of majorindustry sectors such as broadband or electric power distribution.The extent and rate at which current distributors would move across to the NINA AccessPathway™ does involve a degree of risk. However, as the NINA Access Pathway removes akey barrier to entry, civil access costs, we believe that the risk of new entrants entering themarket on the back of a genuine innovation i.e with a lower cost structure and moreappealing delivery shifts the balance of risk to the legacy providers who do not moveacross.The NINA Access Pathway is a “disruptive” technology which challenges the status quo.We believe that the superior cost structure of NINA makes this inevitable- failure to do so!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!9!NBN Implementation Study, McKinsey & Co p. 442!The$NINA$Project$–$Information$Briefing$2012$ Page$38$
  39. 39. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!simply allows a competitor to enter the market unchallenged at a lower cost point and withextensive consumer backing. The greater risk is for legacy distributors to commit largeamounts of capital to outdated and unpopular, high cost distribution models.As a simple ducting access provider NINA would operate with a relatively small number ofclients. These would be utility service companies who themselves have made considerableinvestment in infrastructure. They can be considered reliable corporate clients. NINA hasthe opportunity to set terms of access and default in its lease or rental arrangements, andthese would include a provision regarding failure to perform.Australia requires substantial and varied infrastructure to be provided over the short,medium and long term, estimated as ranging from $455 billion to $770 billion over the next10 years, in order for demand to be met and our economic and social prosperity to becontinued.10Economic modeling and analysis confirms that, rather than considering such spending tobe a burden, it positively contributes to the economic wellbeing of society. This well-beingis maximized if the allocation of capital is to the most efficient economic use of that capital,this is what is known as allocative efficiency.The NINA Business Model design is based around five segments, which occupy corevolumes within the pathway. We have modeled up to 30 different networked serviceproviders may locate their networks within the pathway. Liquids (water and gas) require ahigher internal volume and electrical services require a dedicated channel with a largervolume for safety reasons. These are described within Table 4.The charges indicated in the following Table 7 are substantially lower than those assumedfor broadband in the NBN Study (p. 39) and for those of electricity currently being charged.For instance, the NBN study identifies a charge of $35 for a basic wholesale service in anuncontested market. Under the NINA model, infrastructure providers will compete forcustomers in blocks where they have a presence.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!10!Infrastructure Partnerships Australia – Submission to Australia’s Future Tax System Review Panel,2008The$NINA$Project$–$Information$Briefing$2012$ Page$39$
  40. 40. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!Table 7. The core services and average price per addressable residence/household Number of infrastructure providers Core Description Year 10 (Average charge per block residence accessible) Broadband, 13 Data Telecommunications, Pay TV, ($5.50) wireless, backhaul 220V, 480V(Car Power), Green 6 Electricity Power(dedicated), Street ($14.67) lighting 2 Gas Low pressure/natural/car ($11.00) Primary, Storm, Grey, hydrant, 3 Water filtered ($4.00) Community networks: security, 4 Other notice boards, alarms, CCTV, ($6.00) control (traffic lights)For example, in the provision of a broadband data service of 100 megabits per second, aservice provider would face a per customer charge equal to the above rate divided by theirmarket share within the block. We have assumed that in Year 10 there would be fourbroadband infrastructure based providers competing. Therefore, the effective access costper customer is $22 (nominal Year 10). At 21% this is materially below the high demandassumption (best case) as modelled in the NBN Study. We have assumed Pay TV andstandard telephony services will continue to operate separate networks, with their owncharging mechanism (notwithstanding an increasing degree of service bundling).Electricity is a more expensive service due to the fact the power requires its own isolatedchannel. This is for safety, principally to avoid sparking with gas, electromagneticinterference, and shorting due to flooding.NINA will also support lower and more competitive electricity pricing. Electricity distribution(pole and line) charges are currently estimated at 50% of the total electricity bill (IPARTReference). With average bills forecast to rise to approximately $800 per quarter, thedistribution component will represent a cost to the consumer of approximately $107 permonth.The$NINA$Project$–$Information$Briefing$2012$ Page$40$
  41. 41. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!With efficient distribution and higher voltage rapid charging, electric cars become a morecompetitive alternative to fossil-fuel based cars. As the NINA Access Pathway is designedwith this scenario in mind, electric power will become a substitute for liquid fuel bills, whichwe estimate are currently $100 per month per small car. Current fuel distribution systemsincur significant direct distribution costs ( including fuel trucks, petrol stations, refineries).These costs represent a significant component of fuel bills, and are likely to be at leastequivalent to current electricity distribution. There are also substantive indirect costs e.g. tothe environmental and health which can be avoided by mass distribution of transportpower, irrespective of the generation source.Assuming 40% of revenues for both services distribution per month, the combined powerdistribution charges would be $147. Under the NINA model the aggregate access cost forall competitive power distributors is approximately $70. This leaves a substantial margin tocover the costs of new cabling and high voltage transformer networks. Importantly, forpower distributors, the NINA Access Pathway does not require replication of ground basedtransformer networks as these are already located along the pathway. Our designincorporates plans for an We believe this will be sufficient to induce price-competitivecurrent and new generators, and distributors, to enter the electricity market.The NINA system reduces the need for both purpose-built and car-park dedicated electriccar fuelling stations. By removing the need for this infrastructure, significant savings aremade whilst still promoting the mass take-up of electric cars in city and urban regions.A more complete and competitive power distribution system will also support investment inupstream generation. The economic efficiency savings of having both a curb-based andhouse-based rapid charging system should not be underestimated.Execution RiskNINA proposes a series of manufacturing, construction and activation trials comprised ofsmall groups of blocks in differing locations (inner city, urban, rural and regional.)The aims of the trials are as follows:-Test designs for ease of manufacture and installation.-Test survey process, data capture, ordering and quality control.-Test stakeholder participation by investors, communities, Federal, State and Local Governments.-Test impacts on legacy systems, streetscape and environment.-Develop greater cost visibility and review designs for cost efficiency.-Allow infrastructure suppliers to test cable, pipe and network element installation processes.-Test community reactions and responses.The$NINA$Project$–$Information$Briefing$2012$ Page$41$
  42. 42. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________!NINA believes a trial that targets approximately 1,000 residences (SDU, MDU, Semis andOther) would cost approximately $25 million. This is not representative of whole of projectcosts, but is for information gathering for systems processes, construction andcommissioning.Political RiskThe political risk to the government from a “nation building” project such as the NBN ishigh. This occurs due to the sum of the above risks, but also due to the specific andaggregate public perceptions of the project. Some examples: 1. The NBN may assume ‘lifeline’ characteristics such as is the case for the current Telstra copper network where 99.999% (five nines) service reliability is required for the standard telephone service. Many people, particularly the elderly, rely on the telecommunications networks for access to ‘000’ and services such as Home Alert Monitoring and home security systems. Failure to perform a lifeline function if required, or assumed by the public, would lead to grave perceptions of incompetence and/or negligence. 2. The term “white elephant” has already been used in discussion about the NBN. This could be amplified if a superior solution such as the NINA Access Pathway is deployed. Unlike the innovative NINA Access Network, the NBN Study does not consider alternative access methodologies (largely because they have not existed). Such pressure could come from offshore when an obviously superior method is applied. 3. Some areas (LGA) may insist upon a NINA deployment, and then offer access to alternative competing Layer 2 service suppliers, this may cast the NBN rollout in an unfavorable light compared to NINA. 4. If the access methodology indicated by the NBN is widely employed, then damage to footpaths and streetscapes will occur. As the NBN struggles to turn around poor economics is will seek to increase its use of power poles and consequently visual pollution will also increase. The Federal Government should anticipate rather than underestimate public dislike for power poles. The current inactivity of public opinion about power poles is due largely to the lack of an economic alternative. Some LGA are actively lobbying for the placing of power lines underground. By establishing a long-term solution with multiple benefits, the government is in a position to win broad approval. The NINA solution permits the long-term resolution of a range of infrastructure needs. By working to support the distribution plans of the power companies, these large capital works objectives can be better achieved at lower costs. This is achieved by rolling-out in sync with the power companies. This concept applies similarly to water and gas. It is better to tackle the problem directly because repeated abuse of footpaths and roadways will continue to generate community resentment. and lost productivity 5. The government is exposed to the accusation that the NBN is a return to full government ownership in telecommunications. NINA is a move to increasedThe$NINA$Project$–$Information$Briefing$2012$ Page$42$
  43. 43. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________! competition and definitive structural separation.By solving many different problems the NINA model is resilient to incidental disaffection thatmay be generated in the process of implementation or operation. An example might bereduced road-width in a small number of cases. (Note: NINA has developed a thin profile-stacked chamber form, and tight radius bends for narrow streets, typically in heritage areas.)Regulatory RiskThe NINA Access Pathway is simple in its technology and will be highly transparent in coststructure and capital costs. Accordingly, subject to access being available on reasonablecommercial terms, (see ownership discussion) it should be very simple to regulate.NINA effectively sells three simple access services: 1. Space within the pathway to place cables, pipes, linkage elements, valves and splitters. 2. An access link comprised of cables (fibre, electric, copper), and water and gas pipes/hoses running from the channel take-out box to the household via the external open sided access channel. Consumers exercise choice in the selection if the primary utility platforms to which these lines are connected. We term this as bringing the consumer to the curb. NINA would provide a switch-over service. 3. A multi-utility house mounted metering box.NINA anticipates there may be intense competition for space within the ducting. This couldbe rationalized by the employment of an auction (similar to spectrum auctions). The NBNStudy recognizes that the Layer 1 network is simple to regulate (NBN Study p. 441). It is afeature of the NINA business plan to seek pre-commitment from utility services providers asareas are rolled out, thereby reducing uncertainty as to revenue streams and theircommencement date.The NBN Report also recognizes the risk of the NBN Co monopoly expanding its scopeand highlights the following competitive risks.While the NINA Access Pathway poses a risk of becoming a monopoly in the long term, thiscan easily be mitigated by the following actions. 1. Limit the scope of geographical ownership and allow bodies such as Local Government to invest in the NINA Access Pathway. 2. Allow LGA to compete between each other for business and low cost of living. 3. Review design standards to allow increased multi-utility access of each channel and structurally separate channel ownership. 4. Support a pricing model that shares the benefits of increased occupancy betweenThe$NINA$Project$–$Information$Briefing$2012$ Page$43$
  44. 44. NINA - Pathways to the Future, Foundations for Life__________________________________________________________________________________! the pathway owners and the tenants so as to encourage new entrants into the Layer 2 market.C o n d u c t R is k sV e rtic a l in te g ra tio n u p th e lo g ic a l s ta c kAs the demarcation between Layer 2 and 3 is ‘blurred,’ this could see the NBN effectively 11"competing against its customers."Under the NINA model, the access pathway provider benefits from an increase in thenumber of utilities using the network and is not engaged at Layer 2. NINA does notnecessarily believe that the NBN should not offer Layer 2 services, but that this serviceshould be structurally separate so as to provide flexibility for Government of its ownershipof a Layer 2 element. In the future it may wish to sell this element, operate it commerciallyor position it as a USO provider or as a National Information Distribution service similar tothe ABC.V e rtic a l in te g ra tio n in to o th e r m a rk e tsThe NBN network offers a national backhaul transit product- thereby competing withcarriers such as Optus, Telstra and Vodafone (who are expected to be substantialwholesale customers).Within the NINA Pathway, capacity will exist for the provision of backhaul services via theestablished fiber distributors or for low cost deployment of competitive backhaul. Unlike theNBN model, Points of Interconnect (POI) can be ubiquitous and subject to the competitivedynamics between primary infrastructure providers.Table 8 – Comparative Analysis NBN vs NINA NBN passive & active layer National Power Network Upgrade NINA passive layer Single Utility Model $32 bn over 5 years ~7m households Multiple Utility Access addressed, civil component (pole, trench, duct) Cost per premise $2,000 - $10,000 $2500 $5,000 - $11,000 Asset life 5 (active) - 30 years 30-40 years 100 years Rate of Return Low Low High Technology risk High Moderate Low Economic risk High High Low!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!11 NBN Implementation Study, McKinsey and Co.The$NINA$Project$–$Information$Briefing$2012$ Page$44$