Infrastructure Financing and Operation in the Contemporary City

Introduction

The provision of large economic infrastructure in Australian cities has become a major issue. Water and transport infrastructures have been prime concerns in the major capital cities for at least a decade. Electricity too has emerged as a leading concern as the New South Wales and Queensland state governments seek to shuffle the costs of new base load capacity off the public's balance sheet by submitting to privatisation. The funding and roll-out of new infrastructure, especially a communications broadband network with genuine national reach, are dreadfully delayed. Meanwhile, the backlog of maintenance on local- and state-owned infrastructure has reached alarming levels.

Yet there is also controversy in those circumstances where infrastructure investment spending is actually occurring. There is public unease at the rise and fall of large domestic infrastructure banking corporations especially the Macquarie Group, Babcock and Brown and Allco which specialise in mobilising infrastructure projects in forms that generate securitisable cash flows over long periods. Large urban infrastructure projects are also watched with alarm. Sydney's M7 Motorway, Melbourne's Eastern and Monash Freeways and Brisbane's Pacific Motorway are dramatically transforming land use on these cities' peripheries. New large-scale airport and (sea)port investments in association with new approaches to transport logistics are revolutionising production and consumption patterns across the nation's cities. And, as slow as it is, the rollout of broadband access is reshaping the location and configuration of manufacturing and service industries with major new suburban developments of employment being created at places like Macquarie Park and Norwest in Sydney and in a number of growing developments in Melbourne's southeast.

In short, both novel and newly powerful processes are emerging in the large economic infrastructure sector. These involve: accelerated change in the nature, financing, ownership and management of large economic infrastructure; altered modes of access; and related changes in infrastructure governance and regulation arrangements (for summaries see Coombs and Roberts, 2007; McInerney et al., 2007). These developments are having a major effect on the layout, efficiency and sustainability of Australian cities. Yet, as is argued in this paper, there is a worrying lag in the critical analysis of infrastructure rollout and spending. This lag means that we lack suitable criteria for the assessment of new infrastructure development with, as a consequence, hesitant decision making by politicians, poor planning and advice formulation processes within the states' apparatus, and uncertainty within both public and private sectors about their respective roles (see Priemus, 2007 for the Netherlands). The ongoing efficiency, productiveness and sustainability of our cities and their capacity to provide quality living environments for their residents require better performance in the infrastructure domain than that which is currently occurring.

With these concerns to the fore, this paper seeks to make a contribution to a reconstituted understanding of large economic infrastructure in Australia's cities. As such, it is an argument about an approach to the issue rather than an empirical audit of actual existing circumstances, which is the focus of other work. The focus of the paper is on large economic infrastructure in our cities, which McInerney et al. (2007), define as the electricity, gas, water, telecommunications and transport systems which have public good, positive externality and, often, monopoly characteristics; in other words, they are the foundations for an efficient, productive and sustainable city. This type of infrastructure can be distinguished from other categories like social infrastructure (especially health and education systems), which also make key contributions to city life; and private commodities infrastructure such as that provided for the mining industry. These have substantially different qualities and are not the subject of the discussion here. Concentrating on large urban economic infrastructure enables us to ask how infrastructure provision for Australian cities could operate more efficiently and support high quality, sustainable living experiences for their residents.

In brief, the argument advanced is that the current crisis in the provision of large economic infrastructure (hereafter abbreviated to ‘infrastructure’) flows from poor understandings of what infrastructure is and should be. These understandings need development since they underpin the formulation of state role, governance and regulation systems, financial arrangements, and even community needs and expectations. These understandings are very significant in many respects, as Graham and Marvin (2001) explain: infrastructure has become the key device for integrating the elements of the city and its people into dynamic relations, binding activity across cities, regions, nations and international boundaries. So there is much at stake.

A lost instinct for infrastructure rollout

Australian politics and the nation's state apparatus probably lost the instinct for planning and providing infrastructure during the 1980s as the nation confronted and embraced the emergence of the global economy and turned its attention to the development of structures and mechanisms for global engagement. Prior to the 1980s, the infrastructure instinct ensured that population and economic growth were accompanied by a rollout of the necessary hard infrastructure.

Five elements were key to the installation of an infrastructure instinct in post-war politics and the behaviour of the state apparatus. The first was the hegemony of the ideology of nation building. During the 1950s and 1960s nation-building as an idea and as practice produced and in turn was propelled by sustained economic growth. Economic growth generated continuous growth in fiscal capacity enabling capital works funding to become a fixed category in the pages of government budgets. Funding for infrastructure thus cut across political cycles relegating politicians to the role of unveiling cloth from commemorative plaques while the selection and development of infrastructure projects was largely entrusted to the bureaucracy.

The second driver of instinct was the enduring presence of the bureaucracy, bolstered by the faith of parliaments and the public in its impartiality, however deluded this faith might have been in many circumstances (RCAGA, 1976). The bureaucracy's strength came from its unique languages, knowledges, divisions of labour, work technologies, funding guarantees and power positions, all forged as part of western modernism (Weber, 1964; Clark and Dear, 1984; Pusey, 1991; du Gay, 2000). Infrastructure spending, design and delivery were core strengths of the bureaucracy and provided continuous reinforcement for its role and importance.

The third driver was the maintenance of a corps of specially skilled staff in the public service departments with work practices and tenure solidified by repetition, year-in, year-out, and by high levels of trade union membership. These staff acted as repositories of expertise within the departments with infrastructure nurtured as a core venture in the portfolio of state activity. The corps readily accepted custody of individual infrastructure projects through its involvement in their design, costing, delivery and operational activity. The existence of an infrastructure profession – with its skills, documents, books and working implements – inside a privileged arm of the state's apparatus ensured a reliable and continuous corporate memory of how to create and enact infrastructure projects in an orderly, sequenced and continuous fashion. As well, this part of the government apparatus intersected with professionals outside the public service, especially through the professional associations, to draw in skills and ideas and receive constant reinforcement for its work (Todd, 2004).

The fourth was the spawning and growth of the utilities, the monopoly specialists, as extensions of the state apparatus to enable concentrations of infrastructure experts, one step removed from the state and federal parliaments (for a history of the New South Wales experience see Beauchamp, 2006). Here civic society, through its representation on the boards of utilities, gained a direct say in infrastructure design and rollout bypassing parliamentary representation processes. This presence helped affirm the legitimacy of the utilities' monopoly market positions and their independence from politicians and the political process, while entrenching the flow of capital works funding into the infrastructure projects under their control (Beasley, 1988).

Finally, the infrastructure instinct was reinforced by public acceptance of infrastructure funding and rollout as essential to the conduct of modern society. This was a public with a fresh memory of depression and war and of the need for the collective provisioning of public goods including, as a high priority, those provided by hard economic infrastructure (Capling and Galligan, 1992, especially chapter 3). Other discourses of infrastructure rollout could not compete with the one which promoted orderly, state-controlled infrastructure provision.

The crisis in infrastructure rollout, and its reformulation

Infrastructure crisis has become a common phrase around the world. In Australia, its utterance arises from an extraordinary coincidence of historical moments in engineering cycles, political cycles, financial cycles, social cycles and natural cycles. It is spoken of at many levels: by the federal government (Export and Infrastructure Taskforce, 2005; Albanese, 2008), by peak councils of corporations (Bowdich, 2006; http://www.thechamber.com.au), by local government (ALGA, 2006, especially chapter 7), and by environmental groups (http://www.tec.org.au); just as it is proclaimed in the media on a daily basis.

The crisis has a number of dimensions. First, the large stock of infrastructure developed to accompany nation building projects and economic growth in the post-war period is now ageing and in need of renewal. Second, both urban growth per se in major cities, especially in the outer suburbs, and new patterns of non-metropolitan urban growth, especially along coastal strips and in key regional centres, have created new demands for substantial infrastructure rollout. Third, the ways in which the modern Australian economy and Australian communities now function are producing shifts in the nature of infrastructure requirements with rising demand for networked infrastructure, including integrated freight handling systems and high-speed broadband communications access. Fourth, methods for financing, delivering and managing infrastructure have changed dramatically stemming from far-reaching changes in fiscal and regulatory capacities at the level of the state (Altshuler and Luberoff, 2003; Brenner, 2004). Here, limited capacity (or willingness) by governments to borrow for capital investment generates a search for alternative funding arrangements, now involving consistently some level of private provision. Fifth, sustainability issues, especially in the context of prolonged drought and the high probability of climate change, have led to questions about the long term viability of large-scale infrastructure items in traditional formats, especially those involving water and sewerage systems, motorways and electricity grids (Betsill and Bulkeley, 2003). Awareness of sustainability issues also raises an awareness that infrastructure needs to play a role in moving cities towards sustainable forms and practices.

Redress, maintenance and new rollout draw public attention to the substantial sums of investment monies involved in infrastructure provisioning as well as to the significant spatial and environmental impacts and considerations that this generates. This means that infrastructure and the crisis talk that envelopes it are prominent in national politics, as noted for Europe by Priemus and Flyvbjerg (2007, 576). They add:

Vining and Boardman (2008) find similarly for Canada. Not surprisingly, crisis generates a new or invigorated attention to infrastructure within politics, both among investors and in public discourse. Resuscitating infrastructure as a prime national issue, therefore, should involve an examination of where the idea/ideal of infrastructure has been hiding, or of how it has been transforming. Curiously, we can uncover a persistent and significant re-engagement with infrastructure inside the state apparatus over at least the last two decades. Key things happened, but they seemed to have happened in ways that have eroded the earlier infrastructure instinct. New approaches to infrastructure provision have evolved, perhaps unconsciously. They arose from budget reform processes, changes to the regulation of financial markets and the adoption of market-based criteria for the ownership, operation and regulation of state assets and enterprises. In summary terms, the shift in the way the state apparatus has dealt with – or neglected to deal with – infrastructure and the loss of an infrastructure instinct by the political and bureaucratic arms of the state are directly associated with the rise of a new political and economic management hegemony, that of economic liberalisation (Peck, 2002). This rise is best illustrated by the relative ease with which National Competition Policy (NCP) reforms were enacted across the range of infrastructure domains in Australia. Here the behaviour of the state apparatus has been characterised not so much by obstinacy and opposition – as was common in the face of neo-liberalist reforms in so many other arenas (see O'Neill and Moore, 2005; O'Neill and Argent, 2005) – but by a willingness of the state to embrace and lead the processes of unbundling and privatisation (Lawrence et al., 1997, McInerney et al., 2007). Here we have seen a disregard for traditional approaches involving systematic assessment and ordered action, however bureaucratic and frustratingly inefficient, without recognising the social, economic and environmental consequences, especially the beneficial ones, of infrastructure rollout.

A number of specific consequences have followed this shift to privatisation As we have seen, most have reasonably long historical geneses, contingent in themselves but now conspiring to produce a neo-liberalist outcome (see O'Neill and Argent, 2005). Three are pertinent here. First, governments at all levels in Australia became reluctant to finance infrastructure (including maintenance, renewals and new projects) through budget-inscribed debt instruments. Second, the investment programs of the newly corporatised state-government utilities were constrained by governments' aversion to balance-sheet debt. Third, governments at all levels showed little competence in devising, managing and regulating privatised vehicles for infrastructure provisioning across the range of options in the privatisation spectrum be they leasing, public-private partnership (PPPs), contracting or outright sale (Clark and Evans, 1998; English and Guthrie, 2003; McInerney et al., 2007). To summarise, the crisis in infrastructure provision has intersected with a state apparatus that is ill-prepared to confront the infrastructure financing, construction and management tasks that have arisen.

Recovering infrastructure ideas/ideals

Hence, we have witnessed a shift from publicly-owned monopoly provision of infrastructure, which dominated the post-war years, to more privatised, market-based provisioning. And, as we would expect from our understanding of the role played by discourse in these things (Barnes, 1996), the shift has been accompanied by significant changes in the assumptions about what infrastructure is and should be. This section explores these changes by attempting to resurrect four key characteristics of infrastructure, all key to the ways in which infrastructure was constructed as a part of urban living in the post-war period, and now all potentially antagonistic to the form of the infrastructure rollout we are now witnessing.

In general terms we can point to a shift that has involved a change in the idea/ideal of infrastructure. This is a shift from a device capable of generating (and then the financing, construction and provision) a public-capital good, based on a concept infused with universality; and designed to integrate cities and regions, add cohesion to social and economic communities, provide free positive externalities, counteract or minimise the negative externalities of private pursuits of the city – like driving a private motor car – and, when required, deliver Keynesian economic stimulus, via the construction sector, to lagging regions.

One important observation, looking back over fifty years of literature, is how significant the academic world was in constructing the idea/ideal of infrastructure. Academic textbooks commonly proclaimed the ‘publicness’ of infrastructure investments, the efficiency and productivity gains that flow from infrastructure, and the positive externalities, including improved economic and social equity, that can be generated by infrastructure provision (for example Samuelson, 1954; Coase, 1960; Atkinson and Stiglitz, 1980; Laffont, 1988; for a review see Fourie, 2006). Such relatively unproblematic understandings about infrastructure meant that the fiscal consequences that arose from infrastructure spending were also transparent and not politically risky. The questions were simple: what public goods should be provided? And what roll-out pace is possible? Fiscal generosity towards infrastructure spending was rewarded by the productivity improvements across the economy that came with the intensity of infrastructure spending and by dramatic – but socially acceptable, even desirable – transformations to production that were enabled by new types of infrastructure.

So, the orthodox economic literature of the time constructed infrastructure as a key provision inside an economic system –over the top of which economic activity was performed. In other words, infrastructure was seen as a key event necessary to, but exogenous from, the main (enterprise) realm of the economy. That infrastructure delivered other benefits, such as binding the social and cultural activity of a city, was a bonus uncontested by economists so long as the economic benefits of infrastructure provision were sustained. Infrastructure, then, was vital to the economy and critical to the circumstances in which economy could be successfully performed; just it was crucial to the broader social and cultural life of cities.

Four principles of infrastructure

The attractiveness of the idea/ideal of infrastructure can be seen to derive from four principles that infrastructure embodies: universality; bundling; access; and positive externality. First, to the principle of universality. This asserts the aspiration for infrastructure that it should be available in all circumstances. The principle of universality can be explained by thinking about the street. The simple idea of forcing people to live in dwellings lined along a street is rarely contested for the reason that living along a street ensures that the residents in every household receive an entitlement to basic, life-enabling services. The street was developed as more than a thoroughfare for vehicles and pedestrians. It is the most common expression of the civilised notion of a public right to water, to sewerage, to power and telecommunications. The street also gathers households into formations that demand, by their very presence, the expectation that governments provide a basic infrastructure entitlement to every household. These notions are central to the principle of universality. Of course, where daily life is not configured by the street, such as in rural areas or among remote Indigenous communities, then the principle of universality has to be argued for; and, while the response of government and the state apparatus has never been fully adequate, the legitimacy of the demand for basic services based on a citizen having an entitlement to them is rarely challenged.

Universality, then, has historical acceptance in Australia, but only to a degree. Beyond the basic spatial services arising from street-side urban living, how far universality can permeate other urban infrastructure provisioning has generally been determined by the adoption (or not) of the principle of bundling. Bundling refers to the delivery of items of infrastructure in braided channels so that access to any infrastructure item guarantees access to others, and so that all infrastructure items can deliver publicly in complementary fashion. Bundling comes naturally to infrastructure provided at the scale of the street. Most of the world's urban streets comprise just four infrastructures, however rudimentary: a water pipe, a drain, an electricity line and a telephone line. The point of having a common delivery device – the street – is that basic infrastructure items can be bundled so that every household has coordinated use of the whole package. Moreover, it is generally impossible, and often illegal, for a householder not to have access to the complete, braided set.

Beyond the street, an acceptance by authorities of the principle of universality in infrastructure provision in urban areas has depended on the power of the logic of bundling the street and its households into infrastructure services available at wider scales. The best example here is access to public transport, especially to urban rail networks, which became a feature of western cities from the mid-nineteenth century onwards. Later, arterial road systems became more important than rail in terms of user numbers, but they performed the same networking functions. So, an urban rail network in Australia's post-war suburbanising cities linked daily street life to productive, commercial and social life in other parts of the city. Important here was the way suburban rail networks bundled workers into wider urban divisions of labour. Each morning, suburban railway stations gathered local workers for train journeys to the CBD, commercial centres and industrial zones. Later, cars and buses replaced trains as the preferred transport means, and arterial roads became the key infrastructure for bundling urban life. The accompanying privatisation of the user's means of transport, however, played no small part in the eventual disintegration of both the universality and the bundling principles.

Together, universality and bundling produced and enforced the principle of access. Universality and bundling made it normal to accept a citizen's right to access basic services, and to access places of employment from new suburbs; these were designed explicitly to provide affordable housing options involving large scale public as well as private housing development schemes and tenure options. The way urban life became integrated by the coincidence of universality, bundling and access is intriguing. Together, universality, bundling and access produced a rhythm in daily life for urban communities. A normal day was bundled time-wise into sequences that were over-determined by the nature and role of the urban infrastructure with which householders intersected. The timing of the train or bus was linked precisely with the timing of the working day, the morning peak hour inscribing the start of the working day and the afternoon peak determining its end. The school day was then nested inside the paid-work schedule. So too the opening hours of shops were part of daily and weekly rhythms around infrastructure use and operation. Bundled, well-used infrastructure produced bundles of coordinated and sequenced time with urban activities and household routines in concordance, at least overtly.

Importantly, the accord between the state and the citizenry about the funding and rollout of infrastructure came not just from infrastructure items being characterised by universality, bundling and access but from the free positive externalities that were generated by the infrastructure package. An externality is the benefit that flows to those other than to the parties involved directly in the transaction (see Frischmann and Lemley, 2007; Martimort and Pouyet, 2008). In the case of infrastructure, externalities are enjoyed across the wider community. For each and every individual water and sewerage customer, for example, there is, concomitantly, a safe, hygienic city. From the power stations and electricity grids constructed to light and heat homes, there is also vast access to industrial power by manufacturers. From a road system that steers traffic onto efficient arterial roads there are (or there should be) quiet, safe suburban streets. And for (and, indeed, because of) every pubic transport user, there is cleaner air and there are fewer greenhouse gas emissions. Of course, the wider community also endures negative externalities from infrastructure. Power poles might be unsightly. Roads and railways generate noise and smells. Sewerage systems require expensive treatment plants and, often, environmentally-concerning discharge processes. Yet negative externalities are usually assuaged by positive ones and by the overwhelming benefits that come from universality, bundling and access. As part of the bundled urban infrastructure package, then, negative externalities were tolerated to the extent that they were often rendered invisible. Critically, positive externalities, the benefits that flowed across the city and across generations, reinforced the instinct that made infrastructure part and parcel of building the post-war city.

The new circumstances

We now know that the idea/ideal of universality and its accompanying principles of bundling, access and free positive externalities slipped from the consciousness of the state apparatus over the last three decades, replaced by the idea of a portfolio of public, public-private and private infrastructure offerings; designed for specific purposes; targeted at selected groups; available, if possible, under commercial arrangements; and capable of generating market-based returns for private investors. In this new configuration governments have shifted from being infrastructure providers, limiting their responsibility to infrastructure procurement (see Garry Bowditch, Executive Director of Infrastructure Partnerships Australia for an illustration of the use of this phrase (Bowditch, 2006)). The shift to a procurement model, then, is a shift away from a state-centred model of needs recognition, funding, ownership and control to one where the state takes responsibility for ensuring that large economic infrastructure is available, but in a targeted manner, and without concern for whether its provision is in private hands.

This shift from provision to procurement in economic infrastructure places at risk the idea/ideal that infrastructure delivers benefits relatively equally to producers and households, with significant potential for the generation of positive externalities. It also threatens the pivotal role played by urban infrastructure in combining a city's residents and facilities with some level of cohesiveness. Instead, infrastructure increasingly mediates opportunities for producers and householders to access the benefits of a city, or a region, according to their capacity to access particular forms of infrastructure. There are two issues here. One, as highlighted in the Priemus and Flyvbjerg (2007) observation above, is that the shift has not necessarily been an operationally successful one. The new formats for infrastructure procurement are not necessarily successful according to engineering, financial or quality-of-services criteria (Bevan, 2008).

The other issue is identified strongly in the work of Graham and Marvin (2001, 8). These authors note that, while infrastructure is a key element of the city, infrastructure has been neglected in analyses of the city in recent times, notably in infrastructure's present-day guise. They say that, ‘. . .  cities and urban regions [are] staging posts in the perpetual flux of infrastructurally mediated flow, movement and exchange’ of materials and information across a city to the point where infrastructure has become ‘. . .  the key physical and technological asset of modern cities’ in a context (citing Gabriel Dupuy, 1991, 110) where the networked character of modern urbanism is ‘perhaps its single dominant characteristic’. Graham and Marvin argue, then, that infrastructure provisioning is crucial to the functioning of a city since it underpins a city's ‘sociotechnical geometrics of power’ (citing Massey, 1993). Access to and use of infrastructure are central, they say, to the way competition and struggle for social, economic, ecological and political power in a city are played out. In its current configuration, they say, infrastructure provisioning is ‘splintering’ the contemporary city.

Graham and Marvin's thesis can be applied readily to Australian growth cities like Sydney, Melbourne, Brisbane and Perth. As ever, the way infrastructure is being delivered in these cities is shaping their form and operation in significantly different ways. At the most basic level, infrastructure is a major distributional entity in socio-economic terms. With infrastructure use now invariably requiring user payments as infrastructure development and operation become privatised, and with the selection of infrastructure projects based increasingly on economic productivity criteria (e.g. Infrastructure Australia, 2008), the principles of universality, equitable access and free use of positive externalities are diminished. In provisioning for a city as a whole, then, governments elevate those infrastructure projects with clear economic benefits – increased port capacity, intermodal hubs and CBD-airport accessibility being good examples – over projects with broader social benefits. For households, infrastructure use and access to its benefits – tolled-motorways and expensive user-rates for high speed broadband being good examples – become determined by a household's income level than by its or its neighbourhood's need. At another level, rather than infrastructure being delivered as an accompaniment to urban expansion, private sector infrastructure projects are commonly propelled by the opportunities for private gain that come from the ways in which infrastructure can steer urban expansion into new areas or mine existing areas for private gain. The rollout of Sydney's M7 orbital motorway, for example, has been accompanied by significant private sector investment in both residential and industrial ventures in areas made more accessible to other parts of the city because of their adjacency to the motorway.

The financing of infrastructure has also become significant to the nature and vitality of a city's urban economy. Rather than infrastructure spending being determined by a complex interplay of information and argument from state treasuries, utilities, and local governments, within bureaucratic and political contexts, infrastructure spending is now an urban track for the flow of global and domestic finance as investors are attracted to the favourable, long-term returns available from the securitisable cash flows that privatised infrastructure projects are capable of generating (O'Neill, 2009). Infrastructure spending, then, becomes an autonomous external variable capable of generating major positive or negative economic effects according to its timing and level; and decisions about these are increasingly taken outside the realm of government, and often by admitting new players and organisations into the governance arrangements of a city. These include infrastructure construction and management firms, financial institutions and the new industry associations that provide private sector brokerage spaces for infrastructure ideas to be mobilised and formal access routes to governments so that infrastructure projects can be provided with necessary support and approvals.

In Graham and Marvin's terms, then, the social and technological mobilities of the more affluent and the more powerful are being deepened and extended in the city by infrastructure privatisation processes. Yet those poorly located or poorly remunerated – and we know the two go together – are not just denied access. Each and every access denial compounds disadvantage and the worse side of difference. Unbundled, privatised infrastructure erodes the uncommodified resources of city. The public externalities disappear, or are privatised, and those without the wherewithal are excluded, not just from the now-private goods, but from access to the basic circulations of the city, and thus from the life of the city itself.

Conclusion

My argument, then, is that, in losing our instinct for infrastructure, we have also turned away from the principles of bundling, universality, access and externalities, with little or no consciousness or debate. The idea of the cohesive city is threatened; the provision of the basic set of entitlements to every household regardless of location or income is undermined. But this is happening when our need to be connected physically and electronically is greater than ever. So, increasingly, we accept it as our personal responsibility to produce the conditions for ordinary life (Martin, 2002). Graham and Marvin say that this is causing our cities to splinter between those who have the private means to use the city's infrastructure and enjoy its resources, and those who do not. The bundled, coordinated city is therefore becoming the splintered city.

Yet, times change, ands ways of doing things change. The state-run, centralised monopolies, the utilities and authorities of post-war Australian cities, are no longer apt for many reasons; and these are beyond the scope of this paper to discuss. In any event, those utilities cannot be resuscitated. At the same time, the growing intersection of circuits of financial capital with state operation throws up opportunities for new approaches to infrastructure financing while shutting down traditional approaches. Strong arguments can be made for private funding and operation of infrastructure (for example Infrastructure Partnerships Australia, 2006; King and Pitchford, 1998; Makin, 2003; Paul, 2003; Malone, 2005; OECD, 2006; compare Jefferis and Stilwell, 2006). There are also strong arguments for user pays access to certain forms of infrastructure in order to control usage rates and even to produce better distributional outcomes. A tolled tunnel to reduce traffic congestion across elite neighbourhoods, for instance, could warrant a levy on local residents. Efficiency rather than unmitigated universality can make sense in certain circumstances. The state has limited resources and it always has new demands to meet.

But, in acknowledging that some sort of change, even drastic change, in infrastructure provisioning is needed, we should not abandon our understanding of the purposes of providing infrastructure and thereby set aside the task of re-assessing the criteria for deciding what infrastructure to provide, in what form it should be provided, who should provide it, who should pay for it, and who should operate it. The failure of some urban infrastructure projects in Australia cities – the cross-city tunnel in Sydney, for example – and the failure to fund adequately non-economic or social infrastructure in new suburbs are failures of understanding of what infrastructure is and of what we want it to be.

Finally, mention needs to be made of the impacts on infrastructure of the global financial crisis and its recessionary aftermath. The crisis and the downturn immediately exposed the paucity of infrastructure planning in developed nations. Despite the attractiveness of infrastructure spending as an income and a jobs generator, and the large backlog of demand both for infrastructure maintenance and for new infrastructure items, the sector had few ‘shovel ready’ projects available for commencement. The instinct for delivering and operating well-maintained infrastructure was shown to have been severely eroded. Simultaneously, we have seen infrastructure sector corporations suffer major financial and capacity losses. Some have collapsed.

There is much to be analysed by future researchers about this devastation. Here, though, we can draw the lesson that the privatisation of the infrastructure sector has not produced an apparatus capable of infrastructure delivery at that part of the economic cycle when it is most needed and warranted. During the period of prosperity, large construction companies, investment banks and service providers turned to the infrastructure sector for growth opportunities. We can now observe that their involvement stripped the sector of its counter-recessionary qualities. A major re-think of what infrastructure is and how it should be delivered must now occur.