Season 3 Episode 4: Peter Regan - on being on both sides of the transaction table, making major infrastructure projects a reality for the right reasons, and shaping the future of Sydney Metro.

Speaker A: Welcome to Inside Infrastructure. We're joined today by Peter Regan, who's the CEO of Sydney Metro. Um, welcome, Peter.

Speaker B: Thank you, Adrian. Thanks for having me.

Speaker A: So we did some research for this podcast and we found out we've known each other for a long time. But I found out you're a Novocastrian.

Speaker B: That is correct.

Speaker A: Explain yourself.

Speaker B: Well, I was born there. Um, I didn't decide that. Um, but I did grow up in Newcastle. And, uh, I still love Newcastle. A beautiful place to grow up. Um, beaches, outdoors, very relaxed. Um, but I did leave Newcastle for Sydney once. Um, I finished school to come to university and I haven't lived back there since. But I do like visiting.

Speaker A: And, um, your dad was a town planner.

Speaker B: That's correct.

Speaker A: Yeah. And so there's like a genetic thing in city making.

Speaker B: Yeah, I think there's some infrastructure, city shaping genes that pass down. Um, and, uh, my dad also worked in public, uh, transport as well. So I guess I probably grew up being a little bit surrounded by some of the thinking around good planning and good transport, but I hadn't set out to work in transport myself.

Speaker A: So what did you want to do

Speaker B: when you were a kid? Well, I started as a fireman, like most people, and then moved on to being the prime minister. Um, and I was going to be a lawyer. Still time for people. You never know.

Speaker A: I think fireman might be out, though. Yeah.

Speaker B: Yeah, it's probably not my area. Um, but no, I went, um, through university. I did commerce, accounting, finance. And, you know, I suspected I would sort of continue down that sort of financing path. But, you know, as things turn out, uh, financing became financing of infrastructure. And then I sort of got into building infrastructure and transport infrastructure more specifically, and it sort of moved down that path. But it wasn't a deliberate choice.

Speaker C: No.

Speaker A: So when you got the financing of infrastructure, so you went and worked for a bank?

Speaker B: Yeah, so I worked at Pricewaterhouse for a while before it was PricewaterhouseCoopers. Um, sort of corporate finance, corporate advisory stuff.

Speaker A: Um, and they were just the deals coming through.

Speaker B: Yeah. And it was interesting. I learned financial modeling and so I became quite a gun. Sort of Excel guru for a while there. I've forgotten most of it now. Uh, but yeah, that led me into sort of the modeling and then project financing, and then I went to Deutsche Bank.

Speaker A: So I just want to deep dive in the Excel. Were you one of those people that could drive Excel without the mouse?

Speaker B: Yes. Wow.

Speaker A: Can you do that? Can you drive Excel without a mouse?

Speaker C: I'm not deep on Excel, but Yes, I mean I can, I can work within Excel.

Speaker B: I think it was one of those right place, right time things though, because. And you would have to be a bit of a modeling nerd to know this, but there was a sort of a quantum leap change in the capability of spreadsheet software, um, with Excel 97, which was a very particular upgrade that suddenly allowed you to do graphics and to make it look really good instead of looking just like reams of numbers. And I happened to be there right when that sort of came on. And so suddenly people thought, oh, look at these models. They must be accurate because they look so good.

Speaker A: It's the people who can do the formatting without the mouse. They're the ones that really scare me.

Speaker B: Yeah, look, I was pretty into it at the time. I did do Visual Basic coding in Excel as well, but I can tell you I cannot remember any.

Speaker A: So there were a bunch of um, project finance deals, transactions that came through that world. You were put on the modeling.

Speaker B: That's right. So the main one I did when, uh, I was still at Pricewaterhouse, um, which was sort of mid, mid to late 90s and everyone who's worked in infrastructure has had a turn. But I, uh, did do a lot of work on the high speed, what was called the very high speed train proposal at the time between Sydney and Canberra. Um, modelled all of that and I think at the time it was going to cost $3 billion and it was regarded as not affordable. In hindsight I think what I've learned is probably it was going to cost more than that. Um, but still it might have been better to do it then than that.

Speaker C: That would have been a good deal.

Speaker A: I think you'd have done a high speed rail business case at some stage.

Speaker C: My team had done, yes. And I've done some work, um, benchmarking actual um, faster rail versus high speed rail outcomes in terms of population and economic growth on different corridors.

Speaker A: And I was on panel for the 2012 High Speed Rail Stage 2.

Speaker C: Yeah.

Speaker A: Study, um, which was the production of a business case and it was 114 billion in $2010 or something then. And it was.

Speaker B: I think everyone's had a go.

Speaker C: Everyone has, yeah. It has gone around and around, hasn't it?

Speaker B: Um, oh, it has and look, it would be amazing but um, they are very, very big commitments and I think you're building that linear infrastructure, be it railways, roads, ah, electricity.

Speaker A: The latest live proposal is Sydney Newcastle. So I mean that, you know, maybe after Sydney Metro that could be.

Speaker B: Well, as I said, I do like

Speaker A: going to Newcastle, you could go there very quickly.

Speaker B: Yeah. Oh, uh, that would be fantastic.

Speaker C: Yeah. Do you catch the train to Newcastle sometimes? Yeah, I have to, yeah.

Speaker B: I did a lot when I was at university. All the time back and forward. But, um, I think, yeah, the, the changes though, in Newcastle and certainly, yeah, I was involved in the light rail up there for a while and it is quite amazing to see how huge, yeah, that kind of infrastructure investment can really change somewhere. So it's pretty spectacular.

Speaker C: I do, like, in the last couple of times I've been to Newcastle, just even the food culture there has changed as a result of it.

Speaker B: It's very different.

Speaker C: It's very different.

Speaker B: Yeah. Some really nice restaurants there, actually.

Speaker C: Quite nice. Um, and so at what point did you decide to move to London?

Speaker B: Uh, so I'd been living in Sydney University, worked at Pricewaterhouse, worked at Deutsche bank for a few years. And it was early, kind of. I was in around 2000 and Deutsche at the time were offering opportunities to move some people around. And, um, there was discussion about me going to New York or, uh, to London. And I was a lot more interested, uh, to go to London, um, and was really lucky that came off and did a sort of a job swap with a guy at Deutsche in London, um, and went over there. And that's really when I got into sort of a lot of this transport sort of financing and stuff. Because I thought it was really exciting that they'd all been working over there for years on this massive transaction. And I thought, this is great, I'll do get into this. And turns out that no one else wanted to work on it because no one thought it was going to happen. It'd been going for years and it was the, at the time the biggest public private partnership deal, um, that had been done worldwide, um, to upgrade the London Underground.

Speaker C: This is under the Blair government.

Speaker B: It was. Yeah, it was. And, um, it was massively big and complicated. Um, as it turned out, too big, too complicated and the wrong kind of structure ended up being put together. But it did get done and it injected an enormous amount of money into the upgrade of the Underground. But that's when I first learned about PPPs and concession agreements and all that sort of thing. And I was somewhat thrown in the deep end working on something that big. But it got me really interested in transport financing and the infrastructure sort of side of that, um, as opposed to just sort of not so much the operation of transport, but how you can finance and pay for it.

Speaker A: That time at Deutsche in Sydney, there's a whole group of people that were Deutsche at that time, that have subsequently gone on to be the people we now see leading pig parts to set. So I like, Kerry Schott was there. Ah, Scott Charlton was there. You were there. Alex Vendler. So what was it about that group at that time that have seemed to have emerged as preeminence?

Speaker B: Look, it is really interesting because there's a lot of people, um, the team I worked for Scott, For Scott Charlton, um, and we probably had a team of about 20, 25 of us. And yes, a lot of those people are still in infrastructure, um, here in Australia or around the world. Uh, it was one of those kind of right place, right time things. There were lots of deals happening. There was privatization deals, electricity sector. There was some other big infrastructure deals. And the market was, uh, really changing. There was really only the three really big players at the time in that part of project financing and banking. There was Macquarie, there was Deutsche, and there was Bankers Trust. And then Macquarie managed to get itself a job advising Deutsche on buying Bankers Trust. And so you ended up. There were two big players in the market. And then sort of the UBS team was growing as well, ABN Amro. But it was, um, pretty concentrated. And I think that group of people, we worked really hard, um, but we had a really sort of fun time doing it. And a lot of us have stayed either friends or have continued to sort of work with each other. Um, I don't know why one particular group necessarily create so many people who've gone on to different roles, but, you know, I guess they recruited well and it was a good environment. People learned well. Um, and if you ask Scott Charlton, I'm sure he'll tell you it's all to do with his, uh, training of all those people. But certainly he was a great guy to work and learn with.

Speaker C: So you were actually in the same team together?

Speaker B: Yes, yeah, I worked for Scott.

Speaker C: Interesting.

Speaker B: So, yeah, it's been interesting to see all those people sort of grow into different roles.

Speaker A: Well, you've been. You would have been at various times on the other side of those. The table from those people in subsequent.

Speaker B: Oh, look, absolutely.

Speaker A: It's.

Speaker B: Yeah, Australia's a big market, but it's not that big. Um, and certainly, uh, I have had a bit of a tendency through my career to work on the same kind of train, the same transaction from multiple sides. Um, both in London, I put some deals together with the underground. And then when I actually went to transport for London, I ended up undoing those deals. Um, yeah, I think more positively some of the stuff here in New South Wales with the WestConnex project, I worked on that sort of at Treasury, I worked on that at, uh, Sydney Motorway Corp. And at Transport. So you see it from different angles, but you do see that some of the same people keep popping up as well, either in the same companies or in different roles as they move around.

Speaker C: Can I ask about that? I think that's a really interesting part of your CV that you sort of created something on one side in London and then went back to Transport for London to help undo part, or at least fix some of it. And you've been a bit of a fixer. And one of the things I saw you had recommended to people was that they should switch sides through their career. But when you, when you see the same deal from a different angle, what do you learn about it that way? Um, you know, and what does that mean you've then been able to take into the deals you've done in New South Wales?

Speaker B: I think one of the really interesting things is when you look at a deal a second time that you were involved in putting together, you have to be really careful that you actually look at what the deal really says and what the contracts really say, not what you think it said when you did it. And I found that a lot of the time people who have been involved and they get involved again will say, no, oh, it meant this. And then someone else looks at it and say, well, no, actually that's not what it says. Uh, so there's a real learning there and make sure that you don't take over too much knowledge. But for me, the, it was actually that, that big deal in London, on London Underground, that it really became something that changed my career because I realized that it was driven by a sort of a philosophical desire to bring the private sector in. But the asset itself and the way the deal was structured couldn't really transfer any meaningful risk. But there was almost a political, um, philosophy to drive it through. And the deal was really well structured for the bankers and for the lawyers, but it didn't work for ultimately the taxpayer, um, because that risk ended up still sitting with them. And it got me very interested in, well, how can you use the skills from investment banking and the private sector would use in a government context, in a public sector context, uh, to do better deals. And that's why I went to Transport for London in the first place. Um, like a lot of people, Australians in London, I thought I was there for a couple of years. I ended up Staying in London for 10 years but really being able to find those opportunities where government is prepared to act commercially and to drive outcomes, but work creatively with the private sector to put things together that might not otherwise have happened, um, has been a real highlight for me right through my career.

Speaker C: And when you're doing that like to what extent is it bespoke and to what extent are you looking for a gold standard kind of, you know, value on both sides type, you know, what, what's, what's the aim of what you're

Speaker B: working towards in that Ultimately, in my experience, I think nearly all the transactions I've done have been pretty bespoke. Um, you do sometimes get more cookie cutter things where you can roll the same thing out, but that's not 10. Hasn't really tended to be the areas I've been working in. Um, mainly because of either the size or the complexity, uh, or there's a particular circumstance that's needed to be sorted out. And I've kind of oscillated a little bit between doing deals and then restructuring deals. I think you probably learn a lot more restructuring deals and especially deals that you didn't do yourself. Um, is probably where I've learned the most.

Speaker A: Um, I'm going to come back to the bespoke transaction stuff later. Before I do. How often did you find yourself at Transport for London castigating your former self for decisions made?

Speaker B: Oh well, of course, yeah, you forget quickly that you did that.

Speaker A: Um, it's easier to crack the ones that someone else did.

Speaker B: That's right. Um, you've got to live and learn. Right. And I think that was. But the way we were able to keep innovating, the types of deal structures we were using, they got better. Um, and certainly an opportunity to learn from things that didn't work out so well. I mean some of the things I did at London in banking work, some of them didn't. Uh, but certainly the experience of Transport for London was pretty amazing. It was at a time when it was an incredibly powerful uh, organization. Again really, really good people, but well funded lead up to the Olympics. And so yeah, there's lots of infrastructure that needed to get built and they had strong political will, strong support. Um, and they certainly weren't doing cookie cutter. It was very, very different in approach. And yeah, they became a real sort of leader in that space. It's a pity when you see now some of the challenges that um, they've had in being able to sort of not keep that model going. Um, and it's, it's incredible. Like when you look at the age of the infrastructure, somewhere like London, some of the other European cities that have been able to convert it, to run such modern technologies and to carry so many people and to generate, uh, money out of railways that can pay for the whole transport system is truly phenomenal.

Speaker A: Some of that legacy of how many people it can transport, that is a legacy of the time at which it was built and it was so extensive.

Speaker B: Exactly. And you've got such great coverage, um, that it is such a genuine option that you don't need a car to get around day to day. Um, but I think we shouldn't be sort of sucked into sort of having a lack of ambition. Yes, Australian cities are big and they're spread out, but I think with really good infrastructure you can sort of close down those gaps. You know, we'll probably talk a bit more about the metro, I presume, but one of the interesting things is that there has been a bit of a view here that ah, people in Australia won't interchange. They want to just stay on a single mode. I think if you give them a good enough reason, they clearly do.

Speaker C: Yeah, yeah, if you make it easy.

Speaker B: That's right.

Speaker A: We'll come to the, um, decision to come back to Australia shortly. But in your career overall, one of the things we found striking in the research is you've stayed at places quite a long time. Like, if I was to think about other contemporaries that I talk to, contemporaries, uh, of yours that I talked in this sector often quite, you know, it's three years here, three years there. But you've done like. You haven't had many employers.

Speaker B: No, I haven't. Um, and look, I really like making quite a difference where I am and taking on a big, a big challenge and driving to it. Um, so, you know, that's. I've been lucky to get those opportunities and to be able to, to kind of really run with something and leave a particular legacy in a particular space, um, and then find the next interesting thing to do. Um, and it means that you get to really understand how and what is going on around you. Not just a single transaction, but I think, uh, a lot of that is an element of luck, of just arriving places at the right time and then creating the environment that, um, has allowed then further things to get done.

Speaker A: Which is a handy segue to the decision to come back to Australia, to New South Wales. And can you just talk us through that time and the decision.

Speaker B: Look, I was having a great time in London from a work perspective and it did really worry me. We were running massive investment program, um, lots of funky kind of structuring and the like. And when I used to come back to Sydney and there was nothing happening here in the infrastructure space, I used to really worry, what. What will I do when I come home? There's nothing of the same scale. Um, and it wasn't a sort of a conscious thing that I would move at a particular point in time. But I got approached. Um, I remember a, uh, recruitment guy called me up and he's like, oh, I'm wondering, um, I've heard you're a bit of a world expert in ppp, uh, restructuring in the railway sector. And I said, well, that's very narrow. Have you done any PPP restructuring? I said, yes. He says, in the railway sector? I said, yes, I have, actually. And he goes, well, that's a good start. He goes, how many have you done? I said, oh, I've done quite a few, actually. Yeah, you're a world expert. We haven't found anyone else. And he hadn't realized that I was from Sydney or from New South Wales. And, um, they were recruiting because they wanted to bring someone into New South Wales treasury, um, to sort of kickstart the, um, infrastructure program that was likely to happen. It was just back, uh, in 2011, just before the government changed to the new coalition government at the time. And so he said, oh, is that an Australian accent? I said, yeah, where are you from?

Speaker A: I said, oh, yeah, the Reliance Rail thing was in mind.

Speaker B: That's what they were looking for. Yes, yeah, the Waratah train. Um, and so they wanted someone who could come in and sort that out. Uh, I didn't know that at the time, but I thought, well, what an interesting opportunity, uh, to, to go back to Sydney and to work in treasury at a time when there was a fair chance they were going to try and do some different things. And they wanted to use some international experience. So I thought it'd be a good way to come back and just get to know the market. And so I was able to sort of get into those restructuring deals, sort out some of the challenges that they had. But the opportunity to come along and to look at some quite different ways of doing infrastructure and getting out the door quickly. Things like Northwest Rail Link, the city light rail, NorthConnex, WestConnex. Yeah, there was a lot going at the same time. I think we had five or six major projects going at once. So that was an incredible learning experience. But also I think it showed what you could do and it really repositioned the way that infrastructure was going to be procured for the next five or six years. It was a very difficult time though because it's still coming off the back of the global financial crisis and there wasn't you know a huge appetite um, in private markets to invest and things. The toll roads and things that all gone through the challenges with um, the Brisbane and Sydney toll roads going into receivership and the like. So it was a really difficult time. But.

Speaker A: And to what extent was the broader strategy of that government visible to you at that time with the transactions, the asset recycling therefore the capital that was available to that kind of self reinforcing cycle? Or was that.

Speaker B: I think there was an initial uh, sort of focus on getting the first rate sort of group of transactions done. And I know that certainly the whole concept of the asset recycling was sort of a strong philosophical view that M. The then treasurer held. Uh, but it was the way I think was then be able to explain to people that if you sell this you get, we will invest in that. That actually resonated at the time. Um, now that's not always going to work. But uh, some of those strategies did evolve and it was pretty ambitious. Um, certainly in the road space, the uh, railway space. If you look at the decision for example to build the Northwest Metro Northwest railing because it was at the time and not bring it to the city, there was a lot of people at the time who thought that was a bit, you know, short sighted or why would you just build what was essentially a branch line. But actually it then gave the platform for what is now our M1 city line. And it was the right order to do it because if you start with the biggest and most complicated bit it not necessarily, you know, when you don't have the capability. I think was a really clever call.

Speaker A: I am um. Yeah, my take on it would be that what was important about it is it got something done and it proved to the market that transactions have things going to happen and then that there was a retrofit of the strategic context.

Speaker B: I think that's probably right. And it was a bite sized. It was still a big project, 7 or 8 billion at the time. But it was something that actually people could get their head around from a size point of view.

Speaker A: But the problem is if you wait till the perfect plan's in place, the momentum would have then you may never leave the plan.

Speaker B: That's exactly right. So I think sometimes it's about sizing off enough that you can do so that it makes a difference and works standalone but then is a real launch pad for when there's an opportunity to uh, do something more. And that's been a big challenge when you're building infrastructure like Metros. They're not cheap and they require, we've noticed they require a lot of commitment and each one of them is 10 years really from start to finish. Um, so it really does require a very long term fit.

Speaker A: So um, there was that early range of transactions. I think some of the ports transactions would have been in that. But the really big stuff that paid for the early parts of WestConnect and some of the Metro were the poles and wires transactions. So you just knew were involved in those from a Treasury perspective? Um, no, no, you spent the money.

Speaker B: I spent the money, um, and then leveraged the money. Um, but no, I wasn't involved in the cell transactions themselves, the people sitting next door. Um, but certainly there was, you know, it was a particular strategy of the government of the day, you know, the Desale plant, the ports, the electricity assets, um, and to really sort of roll them through, um, you know, in a time when actually there was a very high demand for those kind of assets, both Australia and international funds. Uh, but no, I was more looking at the next, the build phase of the, and how to finance.

Speaker A: So you were standing store salivating about the idea of the money they could produce that you'd be able to deploy.

Speaker B: That's right.

Speaker A: That's brilliant. That's the best side of that table to be on. Yeah.

Speaker B: Uh, so it sort of got a lot of traction. I don't think at the time people had worked out just how much money would be generated and then it was a reasonably attractive time for private capital. People were sort of getting that confidence back post gfc, um, to start investing in things as well.

Speaker A: Yeah, I also think that um, yeah, there's the direct transaction proceeds but I think what people probably failed to realize at the time is it became a self fulfilling prophecy because that investment generated growth. Yeah.

Speaker B: And I look, I think, I think yeah, uh, we were on quite a roll at the time and there was a very strong level of market interest. There wasn't a lot else happening in the big infrastructure space in Australia at the time and certainly the market turned. But at the time some of those initial projects came in 30, 40% below what sort of people thought they would cost, um, because the market was just very, very hungry. Uh, it's a really interesting example though of what happens when government does build a lot of infrastructure. By the time six, seven years into that rollout, um, things were coming in at 30 to 40% more than they'd been forecast because the market was starting to get saturated, uh, from the level of construction activity that was happening in that point. Not just Sydney, but Melbourne and Brisbane as well. Uh, but it was a bit of a sweet spot at the time, um, to get a lot of those things underway, um, when there was still a fair bit of competitive, um, tension and pressure to actually find things to invest in, find things to build.

Speaker C: And did you find. So, like you were mentioning that it was. You came back to Sydney at a point where government was quite receptive to innovative financing and did you find that you were bringing back things that sort of widened the playbook, or was there already a sort of demand for that and how. And what. You know, and as the sort of, as the sort of appetite has changed over time, how have you had to kind of balance that with the advice you keep giving?

Speaker B: Look, it's really interesting because Australia has always been very much at the forefront of a lot of these structured infrastructure transactions. Um, someone tried to explain it to me that's something to do with the per capita proportion of Australia, who are bankers and lawyers, that they just create fancy transactions because you need to. Um, so Australia's already big in that. And even then you could see a lot of the Australian funds and Macquarie and others operating in the US and the uk. Uh, but I did get a lot of transaction experience, um, in what I was doing in the UK in a reasonably sort of, um, specialist environment. Transport for London wasn't part of the same set of controls that existed across most of the UK government, where the UK treasury had a very strict approach to how and controls how all the PDP and PFI deals were done and Transport for London was allowed to operate outside of that. So we did do things quite differently. We innovated. And I guess I learned that and brought back a lot of different ways of thinking about it, but they kept evolving. But as I said, I've sort of oscillated a lot between putting these transactions together and then restructuring them. And unfortunately, over time, I think there's been a lot of examples where some of these big structured transactions really probably haven't been fit for purpose and they don't always work. Um, and as the accounting rules and things have changed, they don't provide all of the same benefits that they initially provided. Uh, so I think it's not at all costs. And there's some real basic things which I'd certainly seen in the UK Examples of where deals had been put together for the wrong reasons. So I was pretty determined in what I was doing, um, here in Sydney, that you'd use the private sector, where the private sector could genuinely take risk and add value, but not try and push things that they couldn't.

Speaker C: M. And do you find in that just that the more specialist or the more bespoke it becomes, the more that complexity creates risk? Just for government, in terms of its capability to manage, uh, totally does.

Speaker B: That's not to say you shouldn't do it. But I think I've learned over the years that you can spend so much time at the front end of transactions thinking about all of the different things that might happen and what you would then do if they happen and whose risk that is. And then of course, what happens is something that you didn't think about or that's something that is completely left field. And so I've kind of gravitated to a view. Well, you can't actually sort of prescribe for everything. You need to find ways ultimately to focus more on what the overall partnership is that governments and the private sector are entering into and not try and prescribe every detail because it just won't turn out that way. Things never turn out at this level of complexity how people think they will.

Speaker A: So let's just talk about some of the specific transactions then I think WestConnects will be the most obvious one to talk about. And then we can come on some of the Sydney Metro stuff. So WestConnex was a public, public partnership to some extent.

Speaker B: So it certainly was, uh, at the start there was no market. Um, up until that point there'd been plenty of toll road financing deals in Australia, Brisbane, Sydney and Melbourne. And the previous four that had been done just before the GFC had all failed. Uh, so there was no market available.

Speaker A: They'd failed. From a.

Speaker B: Failed from a financial point of view, yes, the infrastructure is fantastic. Infrastructure was fantastic. But, um, too heavily structured, too highly leveraged, too highly focused on traffic forecasts that were 10 or 20 years ahead of what was actually going to happen. And so there was no appetite in the private sector to invest in any of those. And the government was also in a pretty tight financial position um, at the time. So we did a lot of thinking as to, well, the market will come back. Um, is there a way to drip feed these things towards the market? And so we decided, um, to set up what was a public partnership. So you're setting things up so that when the financing market came back, it um, could be accessed um, and it could be accessed either by borrowing money and putting that um, into those structures or by selling the individual roads um, into sort of more traditional concession structures. So it was a strategy that evolved. The different roads at the time were set up to be separate and sold in tranches um, or financed in tranches. Um things changed along the way and um, there was opportunities and the federal government put some money in as well to accelerate the rollout debt in.

Speaker A: Right?

Speaker B: That's right. As a debt structure um, there was

Speaker A: no grant or equity from the.

Speaker B: There was some, some uh, there was federal grant and state grant which effectively was the equity in the structure. And then um, some debt um, from the federal government and then private sector debt and private sector um, equity came in later as well. So it was a structure designed to roll forward to the future.

Speaker A: I just think it's worth reflecting on the complexity of that. Uh so you had effectively balance sheet lending from the federal government to the state government and money from the Feds.

Speaker B: Yes, in as which came in the more traditional grant. Um but the difference.

Speaker A: Get paid out on that equity or the.

Speaker B: No, that was grant. The grant. The debt has been repaid. Um, and the, the difference though is that we. The, the financing was established into ring fenced vehicles so it couldn't be moved off for other purposes. It was all very ring fenced.

Speaker A: You also had value from the returning concessions for M4.

Speaker B: That's right. Look, it was a uh, decision made at the time um, that there were future toll road opportunities could be stapled um, to assist in the financing. And that hasn't um, remained politically attractive over time. But it certainly allowed a real kickstart um because a lot of capital could be raised to quickly roll out the development at the time. Um, and that was an effective way to kickstart it. I don't think anyone would really have predicted though that the cost of capital fell so rapidly that then long dated assets like that suddenly became worth a lot more money and people could borrow very cheaply. And so all that seed capital was put in place and then it got a lot cheaper for government to keep borrowing to keep that financing going. But it was a long run strategy that uh, was put in place. Uh, in the end WestConnex got built uh, a lot faster than was originally intended and was originally set out over 10 to 12 years. Uh but for me at the time I was much less involved and interested in the actual physical building or construction. It was the financial engineering um, side of it, um, that you know I think sort of probably set up a very different way for government at the time to get those assets built.

Speaker A: And did you do the sale transaction for um.

Speaker B: So two parts?

Speaker C: Yes.

Speaker B: The sale of westconnex happened in two parts. Um, I didn't run the transaction but I was involved. I'd gone to Transport for South Wales at that time. Um, and we. So I've involved you know at a senior governance level in the transaction and a lot of the initial setup for the sale. Yes. But um, some other folks at treasury led the, the execution of it.

Speaker A: Yeah. And so then um, we sort of skip over Transport for New South Wales and then you, you take the job at Sydney Metro. Um and so there's a PPP augmentation. So.

Speaker B: Yeah.

Speaker A: Underway or not quite land. Yeah.

Speaker B: So that's about four and a half years ago now. I went to Metro um, early 2021 and what really excited me m about Metro was it is a combination of the things that I was most interested in. I mean the high tech railway, um, infrastructure, the city shaping the property sort of development, the precinct opportunities. But also this combination of, of government and uh, public and private sort of partnerships, um, all kind of put in together. So it was all the things actually I was really interested in. Um, it was at the time the city Metro, uh the tunnel works were pretty much done um and it was moving to the, to the station building um, aspect of it for the City line. Um and the two West Metros were still sort of um, sort of that business case or pre procurement or the procurement was underway for the airport Metro. Um which looking back now a lot's changed since then. Um and certainly I absolutely loved the first few months there and uh, getting out on site and seeing all that incredible work. Um, unfortunately um, in hindsight it kind of. It all got a little bit more difficult after that. Um and it was only three months uh since I went to Metro that the second round of COVID happened with all the closures and shut down the construction industry and uh, it completely shot the whole program out. Um, and it became increasingly obvious that all of the contracts that had been so beautifully and cleverly put together and intertwined with each other were actually all at large M and we had to then renegotiate every single one um midstream while trying to put the program back together. And that is probably the most PPP restructuring. Exactly. And I didn't see it coming. Um, and in the end uh, yeah, that was probably the most complex commercial, contractual sort of recut. But you know I absolutely think it Was a really amazing example of what governments and um, the private sector can do. Because although there were lots of different contracts, all of the different contractors we all would meet every month, uh, all in the same room discussing how we could deliver the project, not the contracts, um, and piece it all back together. And a lot of that was done based on trust between uh, the private sector and the government. And that trust had been gained uh, by the response in Covid in the very upfront statements that we would not kind of hide behind change in law and the like that actually there would be a uh, whole of government approach and Metro's M case we were big enough a whole of Metro approach to making sure that the contractors were looked after. And uh, that built a lot of trust. And so we were able to renegotiate, reset the programs, put in place incentive schemes to accelerate to re piece the thing back together. Um, but it's a classic example of. No one had contemplated that one. There were certainly no clause and said and then if there's a pandemic and the construction she gets shut down. The following happens.

Speaker C: Yes.

Speaker B: So it was very new territory and um, very challenging at the time.

Speaker C: A bit of luck with you being the right person in the right place at the right time there because in going over to Metro you it was almost widening your realm of responsibilities into kind of the operations et cetera. But this sort of dragged you right back into.

Speaker B: Yeah, it's funny how that happens.

Speaker C: Yeah.

Speaker B: And I have really enjoyed moving away from being financier and sort of restructuring and really learning about that overall delivery. But a lot of it did sort of get back into that world. Um, interestingly though it was less to do with the private financing because that we just. The PPPs in place, we just sort of set them aside in terms of the financing much more how to restructure the actual commercial agreements that multi party commercial agreements that interface. And it'll have to come together um, ultimately in a sequence. And that was the big challenge with COVID is that projects that relied on contract after contract having to be delivered in a particular sequence once they were all out of sync then your whole project's out of sync. Very ah, very hard to piece back together.

Speaker A: And while this is happening there's also the um, Metro west, the partnership structure.

Speaker B: Yeah. So and we, we did put the. And I think having done a lot of different rail PPPs, um and undone I was pretty determined for the airport Metro that if government wanted us to do a PPP that we put one together that made sense. And that would survive test of time. Um, so we, we did that with at the time. I think there's a fair bit of skepticism as to whether the, the market could take a ppp, if that of that size. Um, but we did conclude, and I think it was absolutely the right call, that MetroWest itself was just too big, um, to put a traditional or even a sort of um, more innovative public private partnership. Public private partnership structure in place. Just too big, too many interfaces, too much for any one party to bear. So we did look at a lot of different um, opportunities but in the end the need to keep some flexibility around the scope. Um, we've actually gone with a model that has Sydney Metro sitting much more in the middle as the integrator of all those contracts. And a lot of that was ultimately learning off the back of the way the City Line worked, that no matter how much you can try and pass all those risks to other people, ultimately at that scale, when you're dealing with a project of the survivors of the Metro, the government is still sitting in the middle taking the risk. So you know, maybe it's best to gear the government up to be able to take that risk rather than um, try and pass it to people who can't really manage the scale of the interfaces. So we did a lot of thinking but we've ended up doing something that's much more uh, I guess much simpler.

Speaker A: And so you went with the Metro west one then where they had that, that's had a sort of change in direction. You were going down one path and you've.

Speaker B: We were looking at doing a form of public private partnership, um, a different kind of form with a lot more shared exposure and shared management within the PPP structure. It was pretty different though. And a lot of people um, in the industry do a lot of work trying to work out whether you could make something like that work. But in the end it wasn't really going to be fit for purpose, um, particularly if there was a need to retain some flexibility around the scope.

Speaker A: So um, the reason I ask the question is that each of the transactions we've spoken about there's a fairly significant bespoke element to them. We mentioned earlier on, um, is there a danger that if everything's an experiment there's no kind of consistency?

Speaker B: Absolutely Adrian. And I think that's one of the key things. And as perhaps you get a bit older and a bit wiser, you realize that sometimes you've also got to call it that it's worth thinking about new ideas and doing things Differently. But if you can't explain them or get enough other people to understand them, then maybe they're too complicated. Um, and so I think the couple of times where I've been involved in things where we've had to pivot because we tried something new but just wasn't going to work. And I think it's a key learning is don't keep going, um, um, down a path if ultimately the particular thing you're trying to solve is not going to work at the time, um, it's probably better to be able to call that and to see that. So I have a lot of ideas. Uh, they don't all work, um, but I'll certainly have given some of them quite a good go before concluding, no, this isn't going to get up.

Speaker A: Um, I don't want to get into psychology and philosophy, but it's quite interesting to be able to have these unique, innovative ideas, but also to be able to stand back and say, uh, having sort of incubated this. Actually, no, it doesn't. So there's no kind of intellectual sunk capital type?

Speaker B: No, I mean it's always, there's always a little bit of, you know, you want it. If you start something, you put a lot of effort in something, you want it to work. But I found over, uh, the years, you know, I try and talk to a lot of people in industry, you know, whether they be lawyers or advisors or contractors or. And test these things constantly. Um, because often you can sort of get a sense as to. Are you pushing something too hard? Will people really understand it?

Speaker A: But is there an element that you're able to do that because of those formative years involved restructuring stuff that I

Speaker B: think, I do think that's been a big part of it. Because when you're having to restructure a big failed PPP or something, um, that hasn't necessarily failed because it was a ppp, but there's some other problem, fundamental problem, like a City Light Rail was a good example where, um, I ended up spending a year working on not much else other than trying to resolve,

Speaker A: ah, that I should say in the interest of balance. There are lots of PPPs that have not failed and that's right. Far more have been successful than haven't.

Speaker B: I just unfortunately seem to end up involved in the ones that have failed, but not all of them. Some of them worked well. But I think that concept of how you, um, have to understand the complexity of what someone else has put together, pull it apart, twist it and put it back together again with a Focus on actually getting the outcome. I think that you learn that in restructuring and then I'm, you know, have been, I guess able to use some of that thinking when putting together things that are new.

Speaker A: So tell me about that. Like the echoes of the things in London that have reverberated what you've done in Sydney.

Speaker B: I think the really key thing is that the big end, the London Underground and the problems that it had, it was just too big to try and really pass um, the risk in the way they tried to pass the risk and then they designed mechanisms to pretend they'd pass the risk or to pass the risk for a period of time and then have to renegotiate it all. And it just ultimately didn't survive being used in practice. But it had been set up so that it couldn't be cancelled, um, which is always a challenge and it required some real sort of clever maneuvering to cancel something that can't be canceled. Although it is one thing that I have ultimately learned in the infrastructure space is you can always buy it. It's just about a green price. Um, I think those contracts still exist. It's a public partnership sitting somewhere in London. Right. Um, but I think the things I enjoyed most in London were interestingly a lot smaller. Um, I did a lot of transactions um, on the Docklands Light Railway out in East London and they were sort of bite sized. Um, transactions could be quite innovative. They didn't sort of, they got done faster. They were pretty sort of under the radar transactions um, which allowed a lot more innovation and putting in place arrangements there that are quite similar. I think we try and work out how to share risk rather than pass it black and white. Um, structure deals in a way that has enough flexibility but also is very clear who was doing what. Um, but each of those deals then include clauses that government could buy it back if it needed to. And so you've got all that flex for the things that will happen.

Speaker A: What do you think about the discussion around the use of PPEs, around uh, the risk transfer or engagement of the private sector and private capital is best used? What do you think about them as a mechanism, kind of like a discipline on government to, to do what it says it's going to do and to not change things?

Speaker B: That's absolutely key. One of the reasons I still get quite nervous about any uh, kind of PPP structure is that the best PPPs are ones where you can properly draw a box around it, ring fence what you're trying to do and transfer that in totality to someone else and then the government has to keep out of it and not make decisions that actually change what went into that box.

Speaker A: But there's value in contractually forcing them.

Speaker B: And that's right. And that's part of the theory, um, that actually if it forces government to be much more specific upfront, um, but unfortunately it does then preclude the ability and some governments change and people may want to do something different or it could be an external event that it's often very hard for that kind of that real set and forget to hold. And I think some of the biggest challenges in the PPPs I've seen is when government for whatever reason has had to make a major variation too M far in but it's not all the time. Right. And maybe it's something to do with the size because I know, you know, in there's been very successful delivery, uh, in Victoria, in sort of some of the social infrastructure space where they haven't seemed to run into the sort of the scale of problems that have occurred in some of the.

Speaker A: There's an argument that the fact that that locked boss box exists makes it a, um, it's a high bar to cross to intervene. So I accept there's circumstances change and government might say, well, I don't know what black swan event happened and therefore we want to change this, but it's a sufficiently high bar where like if you don't have it, the temptation to tinker is too high.

Speaker B: Definitely. And for me one of the real strengths of PPP is that there is this weight of private capital that doesn't go away. That has to be. Eventually someone has to pay it back and it sometimes forces things back to a solution because that is sitting there and someone has to deal with it. Um, I think that entry point as to sort of, yeah, don't tinker, um, is really good, but is not always then understood by the other parts of government who then get given the project to manage. And I think that's often a problem that the procurement. It's all understood and then it gets managed, but it gets managed alongside some managing contractor projects, some other projects. And that sort of need to be hands off perhaps hasn't always been as well understood.

Speaker C: Well, there's an enduring sense of political risk felt by the government, isn't there? And so you get this, this propensity to want to step in if elements aren't proving their worth the whole way through.

Speaker B: Uh, I think it is really challenging and um, yeah, I think I probably learnt the hard way that you can set all that up with the best of intention but sometimes other things change that then do require sort of some kind of intervention. Um, and while having all that private capital there is, is helpful in um, forcing things to resolution. It's expensive when it doesn't go well. And time, time is money and on big projects time then becomes very expensive.

Speaker A: But there's a designed elegance then to the idea that Sydney Metro is both a developer of the new lines but an owner of the contracts for the operating components. Because it has that ton of DNA.

Speaker B: I think that's actually been a really good thing that um, and obviously we work very closely with Transport for New South Wales as part of a broader, more integrated network. But being uh, accountable for development, delivery and operation um, does put the long term thinking in the right spot. And yes we've contracted historically for elements of that with the private sector operating uh, contracts that are let vary early on. On our Metro west project we're not doing a PPP but we're still doing the operating contract early. So you've got that operator there. But ultimately we are still the long run owner, uh, the operator, uh, the developer of the project notwithstanding, we're contracting out elements of does provide the opportunity because we've had a sequence of projects to have consolidated that expertise. Um, if you go back to Northwest Rail Link, when it was first done, no one had built a Metro in Australia. No one knew how to do it. So it lent itself to a PPP structure that sort of outsourced a lot of that design, um, integration to consortia of people who could bring in those capabilities. A lot harder for government to do that from a standing start. But we're four lines in now so it's a lot easier to aggregate that.

Speaker C: It's sort of just listening to you talk about government changing course, et cetera. It is unusual to be talking about innovation in government and showing that there is that appetite to learn, to adapt, to experiment. Do you think you've seen that appetite has changed over time within government? Certainly there's a bit of a discourse around government being very risk averse. But you've not necessarily encountered that you've really had.

Speaker B: Oh I've definitely encountered it, I have. Um, look, it changes over time and uh, government in my experience can be subtly different, um, with each minister, with each premier. It's not so black and white or red and blue yet, it's one or the other. Um, and the other circumstances change. So the financial circumstances, the constraints, um, in a post Covid environment, you know, government balance sheets are Just not in the same position that they were in, um, pre Covid. And that has made it a lot more difficult. Um, and you know, other things change as well. The accounting rules and things. Some of the benefits of using um, private structures are not so much there anymore. So I think it's, it's not always, you know, a free reign to be able to innovate. Um, I guess I think when things work best is when a government's got a very clear idea of what it's trying to achieve and it sets that out, um, and allows people to think of different ways to how to get there, um, and not be too prescriptive. Um, and that sort of allows different approaches. Um, but it's constantly evolving in the same way as the market evolves and transactions sort of styles evolve, you know, government of whatever persuasion, you know, state and federal, they sort of oscillate back and forward as well.

Speaker A: So as we sit here today, um, we're some months after the opening of the award winning city, uh, and Southwest Metro, um, uh, where do we, where do we stand today? Like there's the, the glow, the halo of it having opened. What things are different to what was expected. How's it going?

Speaker B: Yeah, look, it was an extraordinary um, moment for everyone who's been involved in a Sydney Metro, um, journey. Um, it's just six, it's six years actually, uh, this week since the Northwest metro opened and I guess we're up to about nine months since the city line opened. Um, what was I think most amazing for a lot of people at the time is there was a kind of euphoric public reaction that we hadn't quite anticipated. Um, we knew the systems worked and the stations were quite different to what had been um, in the network previously.

Speaker A: They're quite different. They really are.

Speaker C: Well, I mean it goes to your earlier point about the sequencing of the projects because it wasn't really until the city, Metro City opened that Sydney felt different. Yeah, I think people thought differently about it.

Speaker B: It's very, very different. I mean the Northwest has been really successful but you know, a lot of people uh, in Sydney don't get the opportunity to use it. Whereas coming right through the city under the harbour, um, you know, it's touching a lot more people's lives um, every day. It is amazing how many people did not know that those large office towers actually were metro stations underneath. Um, and we did got lots of interesting questions at the time. It was like, oh, but how did you do this? We didn't know this was being built. Which is a bit odd when you've had. You spent the last four or five years of your life, uh, five years

Speaker A: ago, if you like, we were trying to find office space in Sydney. You knew, because it's about five blocks of city blocks.

Speaker B: So look, I think what's been good um, is obviously the railway itself has worked um, incredibly well. Um, the performance, you know, day in, day out, it's been 99 point X percent. There's been a few incidents and um, yeah, that's been a real learning experience for us as well is that when you don't have very many incidents, um, the pressure is so much on.

Speaker A: But they've m. Been well managed, isn't it?

Speaker B: Look, I think we've had three incidents in the city that have, that have had sort of. Yeah, um, they've got some attention. Um, the. We can learn from every one of them. Um, and I think the fascinating thing to see is that it's a very different technology to other railways in Australia. We can recover from incidents a lot faster um, and get the trains moving back. There's a lot more flexibility in the operating patterns that the trains can be switched to at very short notice and those things actually limit the impact of the incident. Um, we're still seeing patronage grow which is great. Um, and I think the M M1 city line is now the busiest rail line in Australia.

Speaker C: Is it beyond expectation? So where's it sort of at relative to what you thought it would get to?

Speaker B: Yeah, it's a little, it is a bit above expectation um, in the pre opening. But interestingly, if you track right back to um, when the project was originally planned m, it hasn't hit those patronage levels because the overall public transport patronage um, has sort of stubbornly only recovered to about 80, 85% of pre Covid levels and with changes in work patterns and the like. So we're very, very pleased with the number of people who are on it.

Speaker C: Um, surprisingly stubborn, isn't it?

Speaker B: It is surprisingly stubborn. Um, there has definitely been a mode shift within public transport. Um, there's definitely been a mode shift from outside of public transportation, um, onto the metro. And I think what's been really most interesting is there's definitely been a significant uptick in interchanging between modes. Um, yeah, small things like rerouting bus, local buses to go to the new metro stations has been hugely popular and people have changed their habits. Um, and that's been really exciting.

Speaker A: So what are some of the unexpected M behaviors or travel patterns? I mean there's the macro numbers of how many people. But are people doing things different to what.

Speaker B: Yeah, there are. There's a couple of examples. I mean, we knew that a lot of people would change at Chatswood who were coming down the north shoreline because they could get to the city faster. And that's happening. It's happening in very high numbers. Um, but there are people who come down from the Central coast in Newcastle, um, who changed to the metro at Epping, um, to come across to North Sydney and the city who would have previously taken the train around to Central. And we hadn't expected that volume. And they're doing that because it's quicker. Um, and even though they might not get a seat, it's a faster journey and a more frequent journey. We've also seen a change in pattern, particularly between the city and North Sydney. People in the city are going to North Sydney for lunch and coming back. Or people in North Sydney are taking the metro under the harbour to Barangaroo to go for a run around the park and then going back to the office. So you can see that sort of stuff happening which we hadn't predicted.

Speaker A: Much more lifestyle it is.

Speaker B: And that's generating journeys. I think it's going to be really interesting next year when we open the. The Bankstown Line section into Sydenham. And that will create, um, a whole range of much faster journeys for people along that line. Because once you get to Sydenham, then it is a lot faster to the city, particularly to North Sydney, or for people, you know, going out to Macquarie park or something like that. So that, that will be the next big, big boost.

Speaker A: And that's more economic as well, because you get better job matching.

Speaker B: Yeah. And it really connects different centres that are actually quite hard to get to at the moment by public transport. Um, so I think we're looking forward to that and that will be a big leap.

Speaker C: And Bankstown is getting really exciting, like, just even in anticipation of that.

Speaker B: I think it's going to be pretty, pretty incredible. And the opening up of the town centre there between what's now the Sydney trains and the metro station. Uh, it's looking great now.

Speaker C: I took one of the bus services out there along the rail corridor to Lakemba Nights recently and it just. Even the bus service was really good. Like, it just was very efficient and

Speaker B: people have been very patient. It is really difficult to do, um, you know, those kind of conversions. People have been very patient. Um, it is quite difficult work that we're doing, but, um.

Speaker C: It's quite crowded, but it was.

Speaker B: But look it's coming along and I think it's going to be quite um, you know, a real, a real win for customers when that opens.

Speaker A: So just fast forwarding, um, there's four lines now, um, m in operations and threat to planning. Fast forward 50, 100 years. What does it look like?

Speaker B: Well it's an interesting question and I get asked a lot about which line is next and the like. Uh, the way I see it is that there's always going to be multiple competing pressures on government, uh, budgets for infrastructure, for housing, for whatever. Um, what I think is really important is that we show the benefit of what the Metro can do in terms of increasing the ability for people to move around, generating trips, supporting housing, creating opportunities for new precincts. Um, and yeah, we've got a big program out to 2032, um, with the southwest Metro, the new airport Metro, Metro west and then there's lots of different options. All the lines are designed to be extended at either end, um, and progressively. I think it is really important that we continue to work out, well, where would the corridors be if they're on the surface, where would they come? Even if government of the day will potentially look at them in different orders, uh, different priorities. But the key thing is to sort of really develop out a whole body of opportunity for what the Metro network could look.

Speaker A: So you see it uh, turn into almost a program where the debate is about the order, uh, look, certainly if

Speaker B: you look around the world, um, where Metro systems have grown progressively and very incrementally, it is very much on that program basis. And so what we are looking at, and it's a difficult time at the moment in terms of budget challenges. But in order to help with that we also need to look at how can we develop ways to develop the Metro in smaller, um, incremental bite sized pieces. Maybe it's a few stations at a time, not sort of 10 stations at a time. How can we do that commercially without making it all too complicated to then be able to deliver? But also how can we provide the same level of high quality, high frequency, high reliability railway, um, that people want to and are attracted to, but do it more cheaply? Um, that takes you into considerations around modularization, more modern methods of manufacturing, what can be done in a prefabricated way, how can we make these things easier to build, um, cheaper to build without compromising the standard of the actual Metro railway product itself. And certainly I've had the opportunity to see a bunch of different Metro systems around the world, not all of them. There's Lots of different versions. But I've been really impressed with that incremental approach that applied um, particularly in places like Singapore and Hong Kong where there is a program and yes you can change the order but there's a real well considered pathway. So if I can help get people to that then when funds are available in the future then you can sort of buy down the next tranche. But there is something to be said for at least trying to have some kind of ongoing pipeline, um, to retain the knowledge, um, both within the government but also within industry. Um, but it is challenging at the moment and they're very expensive to build.

Speaker A: M. Ah, it's a 50 year outlook, not a five year one.

Speaker B: I think that's right. And these assets, some of them are built 50 to 100 years in mind. So I just think the Metro itself is also not ever going to be the sole part of the transport network. You're going to have different, you're going to have light rail, you've got the existing heavy rail network, you've got all the other connections and they all need to kind of work seamlessly together. Um, and they're not really designed to sort of sort of replace each other. But certainly what we have seen with the Metro City line is that the ability now between ourselves and Sydney trains to flex when the other one has like you know a maintenance closure or there's an operating incident. The two lines ah, are working quite well in parallel. Um, and we are, you know, that's, we can increase frequencies if there is major works being done on Sydney trains. But also if there is, luckily there haven't been too many. But when there are instance on Metro, people still got another option. I think they've got to work in parallel with each other.

Speaker A: And just on that global comparison, this isn't really a question, it's more of a statement. But it is legitimately world class. Uh, the stations in particular in the cbd, they are stunning pieces of architecture. Um, I can see where we spend the money. Um, but it makes Sydney feel a bit more like a grown up global citizen.

Speaker B: And I know people have different views around uh, the stations and sort of the architecture but they were deliberate decisions that were made at the time, um, to make them statements. Again, I think there's a balance to be found.

Speaker A: So I think there were the decisions for the, like the marquee stations, I

Speaker B: think for the flagship stations and I think that's the other key thing. Right. And we're looking for metrowest, you know, sort of maybe there's a Distinction between the big flagship stations and some of the suburban stations that perhaps don't need, you know, all of that. Uh, and that's why I say I think there's ways to build them cheaper, um, and to also to learn so that we don't have to design from scratch each time. And they are quite bespoke and there's certainly benefits in having the back of house stuff that you don't see, um, a lot more standardized so that it can be built out, um, without as much design and redesign, uh, and the like. So there's definitely learnings. But certainly it has been amazing. We've attracted a lot of attention, um, around the metro world. Um, and you know it's been, it's been great to see that there are people who now come to Sydney to look at our metro and learn rather than us having to go on trips to learn about how other people do things.

Speaker A: We'll call this episode Peter Regan does Bespoke Stuff. Uh, we've come to the end of the time, but we always ask all of our guests the same final question. Uh, which is what's your favorite sort of infrastructure and why?

Speaker B: Well, my favorite sort of infrastructure. Well, certainly, um, I go struggle to go past the metro.

Speaker A: Uh, they're not a specific project. I mean you choose a specific one. Come on.

Speaker B: But I know I, I do, I do really like that combination. Um, as I said before of high technology, um, railway that is not just connecting places but creating places. I think the place element is something I haven't talked too much about today, but I really love what that can do. Um, and creating integrated precincts around infrastructure I think is pretty exciting.

Speaker A: How would your former WestConnex colleagues feel about you saying your favorite type of infrastructure is the other mode?

Speaker B: Um, look, I think the WestConnex infrastructure is impressive and with city shaping in its own way. Um, but for me, I think railways, um, and what they can bring, um, in particularly in that context, in the place making context, um, is probably more of the future. Um, and for me I've worked more in public transport infrastructure than not. Um, for me at the time my interest in some of the toll roads was more in the financial structure than the, than the delivery. But my career has moved across into delivery. But no, I think high capacity, attractive railways will make a much bigger difference in the long run. Um, and really allow Sydney to grow and develop around those corridors. Um, that's not to say though that completing those key sort of motorway connections weren't important. It was important. Um, but, uh, the real growth um, will come, um, I think in sort

Speaker A: of, you know, but it's the confluence of the, the mode, the technology. So is it metros specifically?

Speaker B: Oh no it doesn't. Not just Metro. See, I mean high speed rail could do the same thing.

Speaker A: Um, and then we'll really see where the market's.

Speaker B: Yeah, that's right, that's right. Uh, well it might have to be done in an incremental basis. Maybe not three stations at a time, maybe one station at a time. Um, but I just think that um, the long term planning. And you know what, I think it's great that we're starting to see some of it more in Australia, but I look at, I've always been amazed sort of in Japan and in Singapore and they're planning so far in advance and planning whole new cities around where they'll put the rail infrastructure. And it's so carefully considered and then it's executed from a long way out. And I'd like to think that yeah, we should be more ambitious in that.

Speaker C: What's their planning timeframe like how far out do they go with that?

Speaker B: 40, 50 years. And I think we have plans that are 40, 50 years but they're not to that same level of uh, certainty and ambition.

Speaker A: But Sydney Metro can be the pathfinder for that in Australia you move to that more program, sort of strategic look.

Speaker B: I think so. And I think the debate um, over the last couple of years has been really positive around the role of um, that metros and other high capacity railways can play in housing as well and really enabling a focus. But housing of itself doesn't work. It has to be in a context of a good mixed use sort of precinct. Um, but trying to concentrate, um, that development around where you're already investing in infrastructure makes a lot of sense and I think more of that for the future would be a good thing as well.

Speaker A: It does and it's a great note to finish on. So Peter, thank you very much.

Speaker B: Thank you very much for joining us. Thank you. Thank you, good sir.