John Marinopoulos - PwC
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Transcript of John Marinopoulos - PwC
Innovating the way infrastructure is funded Our approach to value creation and value capture
www.pwc.com.au
PwC
Investment in infrastructure creates value to a range of beneficiaries in addition to its intended users
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Community and
Beneficiaries
Service Need
Value creation &
new funding
Costs and Risks
Primary Driver Traditional infrastructure investment rationale
Secondary Driver Innovating through a value creation/ value capture approach
PwC
Framework for identifying and measuring the benefits from infrastructure
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Infrastructure Types On-site
Proximal to site
Local Govt. Area Metropolitan
Broader State Outcomes
Productivity & Livability
Property Standard approach to
value capture
Economic & WEBS for user benefits
Transport/ Connectivity
Amenity Value Capture for direct benefits to beneficiaries
Social
Environ-mental
Cultural
Economic
PwC
Phases of value analysis
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Value Delivery Value Capture Value Creation Value Planning
• Data investigation
• Market and planning analysis
• Assessment of locations for value creation
• Integrated land use planning
• Context assessment
• Opportunities for value creation
• Beneficiary mapping
• Quantifying value uplift
• Mechanisms analysis
• Revenue streams
• Land development options
• Optimisation of value capture
• Procurement and contracting optimisation
• Funding and financing
– City deals
– Securitisation of value capture revenue
PwC
Value capture as an integrated solution: for multiple infrastructure types – transport, health, property, social, cultural
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Transport Health & Medical
Parks & Recreation
Sustainability Civic & Cultural Entertainment
Housing Education Commercial & Retail
Roads & Bridges Utilities Environment
PwC
Value Creation Methodology
How does it work?
• The Value Creation methodology links the specific infrastructure element or ‘opportunity’ to the benefits it creates for each relevant beneficiary
• The benefit is then quantified through a ‘value determinant’
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The end to end process to deliver overall Value Creation is:
Opportunity Benefit Beneficiary Value Determinant
What can be created
or integrated?
What benefits will occur?
Who will benefit?
What is used to measure the
value change?
PwC
Methodology: example
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Increased amenity for properties
eg New tram stop
Reduced travel times
Residential property owners
Public transport users
Value of change in travel time
Change in property value
Benefit Beneficiary Location $ Value
Location of amenity to property
Location of amenity to user
PwC
Value Capture – a different approach for infrastructure assessment
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02 Choice Modelling Choice modelling developed from preference surveys provides required robustness
04 Property, Transport/ Connectivity, Amenity, Social, Environmental, Cultural Broader community benefits, based on amenity of new infrastructure
Direct Value Uplift Attribution by Area
03 Opportunity, Benefit, Beneficiary Identification and nexus between
opportunity, the benefit and beneficiary.
Historic Factors Models calibrated against historic
factors including land use, property values, transport,
and amenity.
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Shift focus from user pays to beneficiary pays
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Outputs example
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Value creation mapping
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Example of applying Value Creation and Value Capture
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Distance from new train station (km) 0 0.2 0.4 0.6 0.8 1.0 1.2
Change in value of properties by distance from a new train station (km)
1.6
Cha
nge
in v
alue
per
pro
pert
y ($
)
Value capture revenues that mirror
direct value uplift
Value created
Potential Value Captured
PwC
Identification and quantification of opportunities, benefits and dis-benefits for beneficiaries
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Direct beneficiaries of
potential scope
additions
Illustrative value of benefits (not to scale)
Direct beneficiaries of
initiatives inter-
dependent to the project
Direct beneficiaries of
project as currently defined
Direct beneficiaries of government
land and facilitated
dev’t
Traditional economic
appraisal of infrastructure
project
Government policy
initiatives without the
infrastructure project
Opportunities and initiatives
Net benefit of additional opportunities
Value of disbenefits
from the opportunities
Quantified enhanced benefits of
the infrastructure
project
User benefits and wider economic benefits
Direct value uplift through a benefit delivery model
PwC
Practical benefit of the integrated value creation and value capture approach
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Traditional delivery
Integrated opportunities for Value Creation and Value Capture
PwC
Examples of where Value Creation and Value Capture can be applied
Transport
• New transport infrastructure
• Network change projects, site specific changes and infrastructure enhancements
Urban planning and Property developments
• Urban renewal, city wide planning, greenfield, infill.
Tourism and sports infrastructure
• New and enhanced tourism infrastructure
• New sports arenas or sports precincts, cultural precincts
Social Infrastructure
• New and enhanced hospital precincts
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PwC
Value capture as an integrated solution
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Contribute to the funding of infrastructure equitably amongst beneficiaries
Evaluate options, optimise trade-offs and produce
bankable quality revenue forecasts.
Better decisions and benefits for multiple beneficiaries and
stakeholders.
Assess strategic options
simultaneously
Quantify potential
sources of revenue
Optimise capital allocation between competing projects
www.pwc.com.au
Thank you
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