Financing Local Infrastructure

The Department of Transport & Regional Services, the Australian government department responsible for regional economic development, wanted to improve local government's access to private sector finance for infrastructure delivery. It funded the "Financing Local Government Infrastructure Study" to collect base information on the options available for, use of, and barriers to private sector financing of local government infrastructure. The information was to inform the preparation of an infrastructure financing manual for local government. SGS was chosen to carry out the study.

SGS reviewed published literature, surveyed local government across Australia and facilitated workshops with infrastructure investors and local government. The study findings differentiated between the 'funding' and 'financing' of infrastructure and outlined mechanisms of private sector involvement in infrastructure delivery. The existing use of private sector financiers in municipal infrastructure delivery is subsequently outlined, as are:

  • Guidelines for the 'appropriate' involvement of the private sector given the natural monopoly and public good characteristics of infrastructure services;

  • The perceived barriers to increased public/ private risk sharing; and

  • Case studies of successful public private financing of infrastructure.

  • The study concluded with recommendations regarding how a private sector financing manual for local government should be drafted.

The Australian government has published the study on its website as a resource for councils.