Our SE Asian neighbours are catapulting themselves into game changing solutions like High Speed Rail that connect Smart Cities to existing business districts enabling short travel times. This is accelerating their ability to create wealth and rapidly grow their economies.

China, Indonesia, Korea and Japan have significant High Speed Rail projects connecting cities.  Malaysia and Singapore are being connected, the west coast of the US, Russia, South America and Africa.  The range of these projects indicates the cost effectiveness of the funding models, and the delivery of affordable fares.

Australia has always had great infrastructure and been an icon in the region for its productivity.  However, are we suddenly in danger of being left behind?  Our young people are struggling with road congestion and the cost of housing as they try to get to work in the CBD. 

Innovation is the commercialization of the sparks between teams of collaborating experts.  World economic growth is currently being created most reliably through innovation. 

The Australian Government recognizes the need for innovation and funds business incubators.  But it is thinking on a much smaller scale. The new entrepreneurial offices, for Gen X, Gen Y and Millennials like WeWork recognize this through great open planned offices that support collaboration.  However, in the face of what is happening in Asia this is not enough.

Asian cities are decreasing their travel times, increasing the education and cultural experience of their workforce and recognizing the power of connectivity to drive collaboration, and hence innovation.

We need a High Speed Rail solution too to step up to our place in the region.  Why is Australia struggling to adopt and implement High Speed Rail?

Firstly, the costs are considerable for ultra large infrastructure projects.  Current Australian funding models would capitalize the interest costs into the fares.  This would make them so unacceptably high that the trains would be empty. 

A well know funding process called value capture is being implemented internationally.  Basically, the increased value of the land, through Smart City creation, is used to pay for the construction of the infrastructure project, such as High Speed Rail.  This means the Australian project to deliver High Speed Rail from Melbourne to Sydney and Sydney to Brisbane can be fully privately funded and deliver affordable rail fares.  

Secondly, ultra large projects require a whole new framework for planning, management and implementation milestones.  Government’s need to change their in-house expertise rapidly to deliver.  They need to be able to assess world class projects; and, sophisticated value capture funding models backed by substantial business guarantees, from consortia of business partners that have the extensive demonstrated experience to bring ultra large projects to life. 

This month’s Federal Government budget delivered $20M to support development of the business cases for High Speed Rail on the eastern seaboard of Australia. 

China Railway Signal and Communications Company, with 15,000 employees, is a participant in one consortia.  It is currently implementing sophisticated, safe, state of the art, train management solutions for High Speed Rail projects in China.  They have won numerous awards for their innovation in finding solutions to complex engineering issues.  They are currently selling that proven expertise to projects in Uzbekistan, Vietnam, Argentina, Pakistan and other countries. 

Utilising demonstrated expertise, from world class companies, to support our local work force is part of de risking the delivery and implementation of the project.

Ultra large infrastructure projects also offer the opportunity to deliver socially responsible solutions.  High Speed Rail funded by the construction of Smart Cites can assist in providing significant access to affordable housing, invest in the delivery of more social housing, run on low carbon energy sources, use sustainable design for the rail and the cities, and embrace cultural diversity to enrich the Smart Cities. Our Governments have been crying out and allocating resources for solutions to these issues. 

The agility of our Government is on show as we seek to leap frog forward and ensure our position as a regional power house.

Author Rosemary Johnston, Client Experience, Forrester Cohen. www.forrestercohen.com.au  If you would like more information or to continue the social commentary, please email rosemary@forrestercohen.com.au