Infrastructure Reform in Queensland Part 1 - Solutions for the 21st Century

Construction_1.jpg

This is the first instalment of a three-part article on infrastructure reform in Queensland.

Important infrastructure projects in Queensland are being hampered by outdated legislation which is in urgent need of reform. Problems exist across a variety of gas, water, electricity and rail projects and affect both State owned and controlled entities and the private sector.

The current legislative framework is outdated. It shows the hallmarks of a model designed when most major infrastructure was provided by the State (or bodies owned by or representing the State).

Historically, utility services (other than retail gas distribution) have been provided by government controlled entities and local governments.  These bodies have relied on the State acquiring land and interests in land (such as easements) to secure the corridor for the relevant infrastructure.  Local governments have also had compulsory acquisition powers.

Nowadays the private sector plays a far greater role in delivering major public infrastructure projects (such as toll roads and light rail).

There are also many private infrastructure projects.  For example, major resource projects often require privately constructed and owned infrastructure for roads, railways, water supply, waste water disposal, electricity, bulk gas transportation and communications.

These projects are struggling under a legal framework designed for a bygone era where government was virtually the sole supplier of infrastructure.

Universal problems

While there are industry specific challenges needing resolution, a number of issues arise across most sectors.

Limited compulsory acquisition powers

Major projects generally require the acquisition of land. While Queensland’s Electricity Act 1994 and the Petroleum and Gas (Production and Safety) Act 2004 offer private entities some scope for compulsory acquisition, the reality is most projects have little capacity to compulsorily acquire land and easements.

Assistance to compulsory acquire land is available under the State Development and Public Works Organisation Act 1971 (Qld), but only if stringent criteria are met. The acquisition must relate to an ‘infrastructure facility of significance’. This means the infrastructure facility must be approved as being economically or socially significant, to Australia, Queensland or the region in which the facility is to be constructed.

Needless to say, few projects meet the ‘significance’ test. Furthermore, the process for achieving this status can be very expensive.

The SDPWO Act should be amended to allow other projects to have the benefit of the compulsory acquisition powers under the Act.  The existing guidelines which require all reasonable efforts to have been taken to reach agreement with the land owners should be retained.

Current restrictive requirements of easements

Types

A review of the existing statutory and common law requirements for the subject matters of easements is long overdue. The law of easements relies heavily on cases decided in the 19th and 20th centuries.  They contain arcane discussion about what can constitute the subject matter of an easement – largely driven by the desire to limit the creation of easements by use.  However, where easements are negotiated between the parties, it is difficult to see the basis for some of those restrictions.

Public Utility Provider

Statutes now provide for easements in gross (for purposes such as power lines, water pipelines and gas pipelines).  Nevertheless those provisions have been interpreted so that they can only be used where the easement is to provide a public utility service.

This creates problems for private infrastructure.  For example a power line or a water pipeline which will only provide power or water to a single mine may not qualify as a public utility service.

There does not seem to be any policy basis for requiring an easement in gross to be for the purpose of providing a utility service to the public. We recommend this condition be removed from the Land Act 1994 (Qld) and the Land Title Act 1994 (Qld).

Creation of sub‑rights

The existing statutory framework assumes that the owner of the easement corridor (ie. the holder of the easement) will own the infrastructure contained in the corridor.

This is hindering the ability to create multi‑use corridors.

A simple solution would be to have a statutory ability to create sub‑easements (in the same way that it is possible to create a sub‑lease).

Non-tidal boundary water courses

Generally it is not possible to obtain any form of tenure over a non‑tidal boundary water course.  This means that there are gaps in tenure for important infrastructure such as railways, roads, power lines and pipelines.

Lack of security of tenure

In the case of roads, railways, State forests and water courses, it is very difficult to obtain any form of long term tenure.  This creates issues for proponents and financiers of private infrastructure projects.

Going forward

These issues have been well known for many years and there is generally a recognition within State government that reform is needed.

Nevertheless, to date, there has not been a uniform approach to these problems.

Rather, there have been one off industry specific solutions such as the proposed amendments to the Petroleum and Gas (Production and Safety) Act to allow easements in gross in certain circumstances without the need to be a public utility provider. 

The current arrangements have stretched the existing framework to breaking point.  Urgent reforms are necessary to avoid major infrastructure projects being delayed or thwarted by outdated legislation which no longer reflects or serves the economic realities of the delivery of infrastructure in the 21st century.


Click 'Download' at the top of this article for a more detailed discussion of the legislative issues impacting infrastructure projects in Queensland.




The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.


Related Content

Contacts

Daryl Clifford

Partner. Brisbane
+61 7 3228 9778

Profile

Jo-anne Atkinson

Special Counsel. Brisbane
+61 7 3228 9801

Profile