ANDREW Barr says the Capital Metro project will receive an injection of around $60 million in Commonwealth funding under an agreement with Federal Treasurer Joe Hockey.

“The Commonwealth will make a contribution to this investment under its Asset Recycling Initiative. Under this scheme the Territory is eligible for a 15 percent bonus from the Commonwealth Government when the ACT sells surplus assets to pay for new infrastructure. The sale of surplus assets together with the support from the Federal Government will see an estimated investment of up to $450 million (including around $60 million from the Commonwealth) in the Capital Metro project,” Andrew said.

“On asset recycling, our approach is different from other States and Territories because our circumstances are different. Our agreement with the Commonwealth spells out the type of assets that will be sold. We don’t have ports to sell, our electricity networks, retail and distribution are already partially privatised and we have low electricity prices compared with NSW.

“The ACT will earn a bonus of $15.8 million alone from last year’s sale of ACTTAB to TabCorp for $105.5 million.

“As the Territory’s renewal of public housing progresses and outdated accommodation is replaced roof-for-roof, surplus land will be sold under the scheme and attract further bonuses. Similarly other government buildings are scheduled to be replaced and when these become surplus they can also be sold and attract bonuses, which will be reinvested in light rail.

“The combined future proceeds from selling these surplus assets over the next four years is estimated to be around $287 million – subject to individual sale prices – earning a bonus of $43 million under today’s agreement.

“Capital Metro is a vital project for Canberra’s economic future. It will deliver a billion dollars in benefits to our city and create 3,500 jobs in the construction phase alone so it is great to have the Commonwealth on board.

“Procurement is underway and construction work on Capital Metro is due to begin next year, delivering on an ACT Labor 2012 election commitment,” Andrew concluded.

The Liberals’ Alistair Coe, however, bemoans that Capital Metro was the only option given to the Government.

“It is unfortunate that the only infrastructure project the ACT government nominated is light rail.

“Treasurer Joe Hockey has highlighted the controversy and concern around light rail but noted that it is still infrastructure, and therefore qualifies for the generous scheme.

“The Coalition government’s gift to the ACT could have been spent on any number of projects, such as road upgrades, bus infrastructure, or a convention centre. However, given the ACT has no such projects planned, light rail was the only option.

“I commend the Commonwealth government for its gift to Canberra but lament that the ACT government is squandering it on light rail,” Mr Coe concluded.

UPDATE: The Property Council has expressed its happiness:

The ACT Government’s leadership in signing the nation’s first Asset Recycling Agreement has been applauded by Canberra’s property industry.
Federal Treasurer Joe Hockey and ACT Chief Minister Andrew Barr signed the first agreement under the Abbott Government’s Asset Recycling Initiative.

Under the scheme, the ACT Government is eligible for a 15 per cent bonus from the federal government when the ACT sells surplus assets to pay for new infrastructure. This sale, together with the bonus, will secure an estimated $450 million for infrastructure projects.

“This is an exceptionally positive outcome for Canberra, and we applaud the ACT Government and the Chief Minister for progressing this important initiative,” says the Property Council of Australia’s ACT Executive Director, Catherine Carter.

“This investment is timely, as it will enable essential new infrastructure to be built. Freeing up scarce government capital is important for all governments at the moment, especially in the ACT.

“As the Chief Minister has said today, prudent asset recycling is an effective way to fund new public infrastructure. It’s also timely given the focus on the need for urban renewal in the Territory.

“What’s more, this asset sale will provide the private sector with the opportunity to create exciting new precincts that better meet the needs of Canberrans in the twenty first century,” Ms Carter concludes.