Innovating the way infrastructure is funded Our approach to value creation and value capture

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Investment in infrastructure creates value to a range of beneficiaries in addition to its intended users

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1

3

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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

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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

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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

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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

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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?

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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

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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)

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Cha

nge

in v

alue

per

pro

pert

y ($

)

Value capture revenues that mirror

direct value uplift

Value created

Potential Value Captured

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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

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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

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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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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

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Thank you

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