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Duffield institutions and better infrastructure 2


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Duffield institutions and better infrastructure 2

  1. 1. Toward a new multi-partner Indonesian infrastructure institute Institutions and better infrastructure Dr Colin Duffield
  2. 2. Agenda 1. 2. 3. 4. 5. Objective Involvement in projects and Indonesia Global infrastructure outcomes Model of successes and reality Best practice thinking – the depth of the business proposition for investment 6. Concluding remarks
  3. 3. Objectives We seek to answer the following high level questions: 1. Can an independent infrastructure institute assist in overcoming Indonesia’s infrastructure issues? 2. Is now the time to establish such an institute? 3. What tasks would such an institute undertaken and what authority would it have?
  4. 4. What sort of infrastructure are we talking about? Shaping Infrastructure Following Infrastructure - Major roads Ports Freight routes Planning and land use plans, including industrial hubs - Energy grid - Choice of strategic infrastructure technology, e.g. telecommunications - Characterised as complex and requires integration with other services. Best optimised by responsible Departments and delivery Agencies Arterial roads Hospitals Schools etc
  5. 5. International approaches Country approach Leadership and thought leadership Underpinning driver Comments Master plan Requires strong leadership and authority Involvement from all key stakeholders to identify and optimise investments Value for money investment in a timely manner Requires complex process and procedures that facilitate innovation Company initiated – typically focused only at project level Profit Potential of monopolistic outcomes due to IP protection Control – Centralised Central Agency – planning input China from specialists as required EUStrategic direction (e.g. decrees, policy, frameworks, guidance Market driven AUS US
  6. 6. Conceptual models for infrastructure planning Concept, engagement Country input Working parties Research actions Local decision (including expert advice) EU decisions Local legislation Governmental decisions Advisory (nonpolitical) Departmental Agency ……. Funding policy
  7. 7. Indonesian process
  8. 8. Project level complexity
  9. 9. Complexity of finance
  10. 10. NZ approach A reference/advisory group provides technical and other advice to the project team as required. “The Quality Team” Members of the reference/advisory group have specific expertise that may not be required on a fulltime basis and is called on as needed. • Management of quality plan • Setting the quality standards • Audit of the deliverables as required
  11. 11. NZ: Note programme group and advisory group
  12. 12. Appraisal and Evaluation in Central Government (UK) • The purpose of the UK Treasury Green Book is to ensure that no policy, programme or project is adopted • without first having the answer to these questions: • ❑ Are there better ways to achieve this objective? • ❑ Are there better uses for these resources?
  13. 13. Infrastructure Australia Infrastructure Australia advises governments, investors and infrastructure owners on a wide range of issues. These include: • Australia's current and future infrastructure needs mechanisms for financing infrastructure investments, and policy, pricing and regulation and their impacts on investment and on the efficiency of the delivery, operation and use of national infrastructure networks. • Infrastructure Australia's focus is on assisting Australian governments to develop a strategic blueprint for unlocking infrastructure bottlenecks and to modernise the nation's economic infrastructure. • Infrastructure Australia reports regularly to the Council of Australian Governments through the Federal Minister for Infrastructure and Transport.
  14. 14. The General Australian PPP process
  15. 15. Investment Lifecycle Direction • Service strategy • Asset strategy Concept & feasibility • Strategy assessment • Options analysis • Problem definition • Solution definition • Benefit definition Validation & planning • Business case • Procurement strategy Implementation • Planning & scheduling • Delivery • Contract Management • Asset reporting Operation • Functional operation • Maintenance • Disposal • Benefit reports
  16. 16. Better business case structures
  17. 17. A business case provides the necessary support on which to make decisions for the approval and or funding (p17 IEPG). The decisions need to be informed by:  The government policy and priority context in which the investment proposal is made;  the financial and socio-economic impacts of the proposal on the State;  the degree of confidence that the Government can have in the proposal being successfully implemented to achieve its objectives within the stated budget, timeline, management structure, financial agreements etc; and  the relative “value for money” that the proposal has against other proposals being made to Government.
  18. 18. Lifecycle Stages • • • • • • • • Need Strategic assessment Options Business case Acquisition/Procurement Delivery Operation/maintain Disposal/extension/upgrade
  19. 19. Starting point: Identification
  20. 20. Analysis framework
  21. 21. Adaption of systems thinking – relates to authority
  22. 22. Thoughts on best practice • No one system is used universally • Independent input and critique is a common thread • Whole of life thinking is important and this is consistently outworked via comprehensive strategic thinking that is developed through a ‘business case’ • The style of system – eg master plan, strategic direction, market lead, informs the authority and reporting arrangements for independent input
  23. 23. Questions © Copyright The University of Melbourne 2013 cricos code 00116K