Imagine Melbourne

In Search of New Ground

Melbourne is in the midst of a rail renaissance. However, the real question must be how will this unprecedented investment in rail best serve our current and future communities? As Melbourne heads towards a population of eight million people by 2060, how can we ensure that this renaissance will enable the city to grow equitably?

The Government of Victoria is investing $57 billion in major infrastructure and smart technology projects to build more capacity on existing networks and to fund infrastructure improvements. New urban metro and suburban passenger rail projects will dominate the infrastructure pipeline for the next 30 years. These projects provide opportunities to fundamentally change future land use, evolve how Melburnians live, work and play, and continue to enhance Melbourne’s competitiveness as one of the world’s most-liveable cities.

With Asia Pacific home to the world’s fastest urbanisation, what can we learn from diverse and high-growth cities in the region to help Melbourne achieve the right balance between design, land use and density?

Imagine 2060: In search of new ground event summary

Melbourne is experiencing a rail renaissance, with Victoria investing $57 billion in major infrastructure and smart-technology to build more capacity on existing public transport networks, and fund infrastructure improvements that will serve as a catalyst for integrated land development.

To understand how the unprecedented rail investments can best serve our communities as they head towards eight million people by 2060 and how this renaissance will ensure that Melbourne grows equitably, AECOM and Asia Society Australia hosted, Imagine 2060: In search of new ground — Melbourne’s rail renaissance, on 4 September as part of our Imagine 2060: Delivering tomorrow’s cities together event series.

This year’s Imagine 2060 theme considered ‘earth’ and how Melbourne — and other Australian cities — can learn from our neighbours in Asia and other major global cities to achieve the right balance between design, land use and density.

Our conversation brought to light a number of important issues and potential solutions, including:

  • the need to consider broader, lasting benefits of infrastructure rather than just the traditional cost-benefit analysis
  • how to measure social value from new jobs, enhanced liveability, and productivity and environmental benefits
  • lessons from Hong Kong, such as finding ways to plan gain continuous value from land instead of one-time returns
  • maintaining cities’ authenticity, which requires deep community engagement, including consulting with diverse voices and being prepared to truly listen.

Melbourne and Sydney have an opportunity to build their communities, not just better infrastructure, through the unprecedented infrastructure investments and to learn from world leaders in Asia and elsewhere about how to ensure that everyone benefits. But doing so will require better governance structures to coordinate development and contain risk.

In Hong Kong, MTR has overseen some of the most-successful integrated transport and property development projects in the Asia-Pacific region, if not the world. Lessons we should take on board include the need to conduct intensive, integrated planning at the very beginning, before tenders are issued, and having a long-term vision for the community; MTR looks ahead five to 10 years to what will be needed in the future, not just what’s needed right now.

Government support should be focused on effective governance and enabling world-class design to achieve the goals of increasing density while making the community more liveable. It was mentioned that the Victorian government has, in fact, announced new institutions to do this, such as a suburban rail local authority, and other authorities, such as new school- and hospital-building authorities. These institutions have clear mandates that align with the government’s objectives. The Victorian government has been quite successful with level-crossing removals as the outcome affects so many people positively and, while each removal is small on its own, the network effect is considerable.

Looking at both Sydney and Melbourne, it was said that there has not traditionally been enough overarching coordination of agencies with responsibility for city-building. Take utilities relocation, for example; utility companies always have to approve relocations and it is a time-consuming and difficult process. An integrated ‘utility relocation authority’ could coordinate all interactions with utilities, which would be more efficient and reduce risk. In addition, in Sydney there are two separate development consents needed for over-station developments. This could be streamlined to just one, offering a new level of sophistication and more predictability for the private sector. And while things have improved on that front recently, additional reforms are still needed. It was emphasised that reforms produce economic growth, improve productivity and reduce costs, and every dollar saved is a dollar that can be reinvested in additional projects.

And while Melbourne and Sydney have become more sophisticated in engaging communities around disruptions and changes resulting from major infrastructure investments, they need to make sure their communities understand the benefits. You can’t ‘sprinkle community engagement around the edges’ when developing a strategy to engage the community in development. Deep engagement is required, and this requires compelling examples of how infrastructure is benefitting people. With few exceptions, residents generally don’t seek out engagement, but they still want to be consulted on matters directly affecting them. It is important to listen to a wide range of people, including young people, disabled people and Aboriginal Australians. The panel also acknowledged that it’s very important to be transparent and give people straight answers. The private sector recognises it has more work to do to build trust and that it can do so through transparent business practices.

The private sector and government need to think through the value proposition for investment in both the transit and urban-development aspects and to become more proficient at doing this. The point was made that they need to look at real estate and infrastructure as one, rather than as discrete things. In Hong Kong, government policy is to link transportation and real estate development deliberately, which helps with planning and funding. They look for the best alignment of infrastructure (i.e. train track routes) not just from a transportation-efficiency perspective, but to maximise the benefit of real estate developments, since the business case for rail alone can be difficult in some cases. The government strives to achieve not just an upfront value capture, but an ongoing stream of income, which helps to fund maintenance and further expand the system. Hong Kong is also particularly adept at capturing value created in the whole precinct from over-station developments, not just increases in value immediately in and around the station.

Governments have struggled with value capture in Australia. While the private sector is quick to capture it, the benefit to the community can be lost as prices rise as soon as plans are announced. But we need to move away from viewing benefits only in financial terms. We have to think about community benefits, including job creation, time-savings for commuters, more public transport users resulting from greater coverage, better liveability, and environmental benefits. Government has a broader concept of value capture than the private sector, because it has a commitment to a ‘care-based’ society, with a strong welfare system and attention to the needs of lower socio-economic groups. This creates a need to model and measure the success and performance of developments to include social and environmental benefits, as well as economic benefits like job creation. This can be done through means such as promoting social procurement and apprenticeships, for example.

Asset recycling has also been effective at unlocking value, especially in NSW, and often leads to a return on capital invested as the assets can be sold for more than what was paid for them. Finally, it is very important to learn lessons from projects and share those across government so other departments can benefit from those lessons learned in their own developments. Governments need to get better at communicating these lessons among departments.

We would like to thank the hosts, Philipp Ivanov, CEO, Asia Society Australia, and Sean Chiao, President, Asia Pacific, AECOM, the evening’s facilitator, Tim O’Loan, Director, Cities – Australia and New Zealand, AECOM, and the following panellists at this year’s event for their time and their valuable insights:

  • Terry Wong — Deputy Director – Australian Business, MTR Corporation Limited
  • Jim Round — Acting Deputy Secretary, Department of Jobs, Precincts and Regions, Government of Victoria
  • Jenni Forrester — Technical Director, Nation Partners
  • Chris Mitchell — Partner, King & Wood Mallesons.

We will hold the concluding symposium in the 2019-20 series, In Search of New Ground, in Hong Kong early next year. You can learn more about Imagine 2060 at https://lnkd.in/ghyzAzH.

Speakers and Panelists

31299-MLS-Philipp Ivanov
Philipp Ivanov
CEO,
Asia Society
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0925_AECOM-Asia-Society_Sean-Chiao-Photo_s
Sean Chiao
President,
Asia Pacific, AECOM
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Terry Wong_bw
Terry Wong
Deputy Director – Australian Business,
MTR Corporation Limited
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Jim Round_s
Jim Round
Acting Deputy Secretary,
Department of Jobs, Precincts and Regions,
Victoria State Government
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Jenni Forrester_CV_headshot_bw
Jenni Forrester
Technical Director,
Nation Partners
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cpmitche_jpg_bw
Chris Mitchell
Partner,
King & Wood Mallesons
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Tim.O'Loan@aecom.com_s
Tim O’Loan
Director, Cities
Australia and New Zealand, AECOM
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