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Standing Committee on Infrastructure, Transport and Cities
07/04/2016
Role of transport connectivity in stimulating development and economic activity

CASSON, Mr Brett, Digital Infrastructure Leader, Autodesk Australia

Committee met at 09:06

Evidence was taken via teleconference—

CHAIR ( Mr Alexander ): I declare open the committee's public hearing for the inquiry into the role of transport connectivity on stimulating development and economic activity. Today's public hearing will provide the committee with an opportunity to hear from a number of witnesses as part of the inquiry. I welcome the representative of Autodesk. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the House. I would invite you to make a brief opening statement if you wish before we proceed to discussion.

Mr Casson : Thank you, I would like to do that. Good morning, Chairperson Alexander, and good morning to the committee. Thank you once again for the opportunity to address the committee. I would also like to thank the chairperson and the committee for being flexible and allowing me to submit this testimony via teleconference. I think it is fitting to do that in light of the content of our submission being around technology.

I am addressing the committee on behalf of global technology provider Autodesk. Autodesk is a world leading provider of design technology that services 200 million customers, including design professionals, engineers, architects and digital artists. They are all using our technology to help them unlock their creativity and solve important design and business problems and challenges. We are headquartered in San Rafael in California in the United States. We have around 9,000 employees across globe, around 120 of which sit in Australia. We have previously submitted to the ICT inquiry. Again, I would like to state that we are very pleased to be able to be discussing issues around the funding, planning, delivery and operations of transportation projects in Australia.

I would just like to very briefly refer back to our submission and also address a different perspective by discussing the additional value that digital technologies can offer in the delivery and operations of these infrastructure projects. Firstly, we would like to acknowledge that the definition of value capture as a concept—relating back to the terms of reference—might have slight variations, however principally we believe it is the economic benefits generated via the planning and execution of transportation and infrastructure projects. Whilst we support value capture initiatives and funding models, our submission really focuses on the supporting technologies such as digital engineering, building information modelling and what I refer to in the submission as digital infrastructure to assist in deriving the maximum value of any value capture initiative. Therefore it is our belief that value capture should not alone be considered but should be part of a much broader funding approach, looking at the whole of industry.

Just lastly, I would just like to touch on some of the benefits that we covered by using digital infrastructure: transparency to stakeholders and communities, stakeholder acceptance, cost and time saving, attractiveness of PPP and—probably as importantly—operations and maintenance. The two main areas we believe that can support value capture by using digital infrastructure and BIM are around the fundability and planning process of infrastructure projects. Value capture essentially strives to generate additional revenue. This can be further supported by using digital infrastructure to reduce project risk and also to give stakeholders access to much more accurate information, which is extremely important; much more transparent information and transparency in the project as a whole.

In the planning process, utilisation of existing information is absolutely critical but as critical is linking this information and data to these key decisions on the project and importantly linking this to the design. Having those key decisions linked into design of the infrastructure project is vital. To maximise the effect of value capture mechanisms in transportation corridors, the use of this information linked into digital design practices will bring the greatest value to the project. This closes my opening statement.

CHAIR: Thank you for your submission and thank you for your opening statement. Just picking up on linking the data to design: would your data also lead authorities to give some direction regarding zoning?

Mr Casson : All information, provided that the information and data is validated and is good value, can lead to making those decisions around zoning and making those decisions around, 'Is this the best outcome? Is this corridor that we are proposing for this project the best corridor?' Having access to that information is vital. The other point that I would like to touch on around that information is that quite often that information, once it has led to those key decisions, is then lost through that tender process. Through the tender process and design process, we have data lost again. Through construction, we have this data lost. Really, what we are advocating is to have a much more transparent process. If it leads to changing the zoning or if it leads to a better outcome for the community, then we are all for it.

CHAIR: So we can use your products to determine the best corridor. We could specifically do that for the purposes of achieving the best value capture outcomes, is that correct?

Mr Casson : Yes, that is what we are advocating. We really believe that. It is not just our technology that can do this; there are the technologies that can provide this. We would like to see a much more transparent process through the planning stages of these projects, using information like demography, census data and future zoning data to achieve the best outcomes for the corridor. Obviously, there are issues that need to be overcome in terms of the sharing of that data and the security of that data, but we believe that having access to that data right through the project lifecycle is absolutely critical and underpins the value capture process.

CHAIR: One of the concerns that has arisen throughout our inquiry and various other conversations is that one of the problems with doing business in Australia is that there are too few projects and no continuum of work. When the gearing up costs and the gearing down costs are applied to a single project, it is very expensive to do so in Australia. Do I understand you correctly that we could look at an entire city with your technology and masterplan infrastructure, zoning, urban renewal and urban intensification for an entire region and then also use your technology to determine, objectively, the best rollout of such and that it can be done on a continuing basis so that the development companies could expand for greater efficiency and achieve greater efficiency as their gearing up costs could be amortised over decades of retrofitting infrastructure into Sydney or Melbourne, for instance? Is that correct?

Mr Casson : Yes. I understand your point and you are correct. Again, I want to stress that it is not only our technology that can do that. There are other technologies that can do that. One of the challenges historically has been the design community and the construction community having access to, for example, whole-of-state level grade of information that could be put into one model. That technology has not existed. That technology is now coming to fruition. Instead of looking at one individual in situ network, we can look at a whole state or a whole city. That would, as you have pointed out, drive better outcomes in terms of connectivity with rural areas—future funding, future planning and future budgeting for those rural areas. Also, being able to leverage that data in one model is somewhat achievable using technologies such as ours and others—leveraging that information and leveraging census data, as I said, and demographic data to, firstly, understand whether it is the right project. It is what we are doing here the best outcome for the community? The only way to do that is to look at the whole to the part and not the part to the whole.

Ms COLLINS: Can you clarify this for me. Would you look at a city like Sydney and come up with a list of projects—maybe rail and the corridor and the value capture first—or would a government come to you and say, 'We want to improve public transport. We want to know which are the best corridors and where we'll get the best value capture'? Which one comes first? How does it work?

Mr Casson : I think they both have to work together. The main challenge with a city like Sydney is that, predominantly, a lot of the future infrastructure that we need to build is through brownfields and we need to shoehorn infrastructure into a hugely dense population, a hugely urbanised area. Both of those, whether it is one against the other, will have to work together to achieve the outcomes. You could look at a whole-of-Sydney approach and say, 'These are the critical infrastructure projects that need to be on the table. These are the areas that we need to develop because of their externality factors, such as urbanisation, growth through to 2030 and those sorts of things.' There is also the critical infrastructure that needs to be built now and shoehorned inside this hugely dense urban area.

Ms COLLINS: For instance, could you tell us today, if somebody were to commission you to do so, which areas would provide the most value capture for corridors in Sydney?

Mr Casson : We could use the existing data and use our groups to come up with an answer. Is that the right answer? There are other things that—

Ms COLLINS: Need to be taken into consideration—of course.

Mr Casson : Absolutely. Obviously, planners with vast amounts of experience will make those decisions. But, certainly, using technology to do that is extremely important, and looking at, as I have said before, a whole-of-city or whole-of-state approach instead of one suburb, one link or one corridor.

Mr GILES: Just further to that point, is it fair to characterise your submission on this point as saying that while there are great benefits available in order to maximise the overall returns through looking at value capture and through the technologies that your firm and other firms have, there are constraints both in terms of the institutional settings that governments have and also the practice of the tender that means that data is not being fully utilised in the first instance and then is being lost in the second? Is that part of what you are saying?

Mr Casson : That is absolutely correct. It is a huge problem not only for the design community and for the construction community; but there are obviously legality and risk issues about handover of data that need to be overcome. It is a challenge, but what we are advocating, obviously, is a whole-of-government approach to build the framework. Some of those standards for the use of this technology that are in our submission—we are very clear that underpins the value capture process. I think they work in conjunction with each other. Through that tender process, through the design process, planning, detail, design, construction, handover, commissioning, operations and maintenance there is always going to be some data lost. But by using the digital infrastructure technology, the philosophy is that you try to minimise that data loss so that at handover stage you are able to give the most—and, more importantly, the most valuable—information to the next stage.

Ms COLLINS: Just further to that, what sorts of changes do we need to make to systems, legislation or a regulatory framework to change that?

Mr Casson : At the moment, we have individual projects utilising this technology. We have got projects globally that are utilising it. I pointed out in my submission that we have Crossrail in the UK, but we actually have the North West Rail Link here in Sydney, which is utilising these technologies. The challenge that we have is that when each project starts, it starts with individual sets of standards and frameworks, and it is basically starting from point A every time we begin a project. If we had a national approach, for example, to building up standards and frameworks, building up standard templates for contracts and those sorts of things—so it is not just around digital technologies but contractual technology and legal issues that are overcome—that ramp-up time with each project would be minimised.

The analogy that I use is if we have individual projects or individual states doing this is the rail gauge issue. It will work for the state, but the minute that you cross jurisdictional boundaries, you will have immediate problems with standardisation. We advocate the recommendation of Infrastructure Australia's long-term plan that they announced a short time ago, in which recommendation 10.4 was that there needs to be a mandate for the use of this technology on all large-scale infrastructure projects. The one thing that that actually does as well is give businesses more certainty in planning and trying to deliver and tender on these projects. They are much more certain in what they need to deliver back to stakeholders and the government, and they have much more certainty in forward planning for their business.

CHAIR: One of the themes that is developing—at least in my mind—is the need to align interests between federal government, state government, councils, stakeholder landowners and developers. In regard to what you just said—having a federal or a national approach—can we use the opportunity to gain funding from a national or a federal value capture system to encourage this alignment?

That a state government can look at sourcing this income when they possibly engage in long-term planning of master infrastructure, urban renewal and urban densification in return for this pool of master funding that federal value capture represents—does that make sense?

Mr Casson : It does, and I actually have heard this pitch previously. I think there are a couple of things that we need to consider. We have to be very careful not to—again, to use an analogy—hit the states with a stick to say: 'You must do this, otherwise you won't get the funding for this.' I think it has to be a much more pragmatic approach. It is a very important approach, because it brings together disciplines that historically have not really played ball with each other through that design, construction and operation of life cycle.

The other point that I wanted to make, to consider and have the committee consider, was that there is an enormous focus on the short-term planning, design and construction here. One of the projects that we are working on is the High Speed Two rail in the UK. One of the things that they recognise is that this project leaves, probably, a 150-year legacy. HS2 is a new high-speed rail line that goes from Euston in London right up to Birmingham, and then they are planning phase two to forks off and go to Manchester and Sheffield. The 10 years that it is going to take to plan, design, deliver and construct really are insignificant when you look at the 150 years that it is going to take to operate and maintain.

If you have a good value capture system that is planned well and uses all the data, we believe that some of that revenue generated can actually go back into the operation and maintenance for that 150 years. That is just one project that is utilising this technology.

CHAIR: Looking at value capture and planning, it would appear that Australia has an incredible imbalance in its settlement—centred around Melbourne and Sydney. Yet, the corridor between is land that is very low in cost, which would appear to make a perfect storm of opportunity to apply value capture and high-speed rail to provide timely connectivity with regional areas such as the Southern Highlands, the Goulburn region, Shepparton and Albury to those nearby larger cities. Have you given any thought to that opportunity? When you think of the 150 years—and the generations and generations that will benefit—value capture could not only fund it but also subsidise the maintenance. Even to keep the value of those regional cities low, continued value capture could keep fares low, which would therefore increase the viability of living in these nearby regions.

Mr Casson : Yes, so one of the things to stress is that there has been a lot of planning inquires around high-speed rail in Australia. We are advocating for more action and reports on high-speed rail in Australia. I think the example that I just gave actually provides a good synergy between what is proposed here, in terms of the connectivity of some of our rural areas, and what is happening in the UK and trying to connect some of those—I might use the same word here—more rural areas into central lines and then up to Manchester and Birmingham, some of their economic hubs. I think that that is a very important point that we have, as you mention, two huge economic hubs that are really reaching a point—we are having huge issues around trying to contain urban sprawl and urban growth. We need to, we believe, concentrate more on the connectivity of those rural regions, which can—as you pointed out—drive more innovation, better revenue and better growth in those areas. We believe high-speed rail is the conduit to do that. As you pointed out, the planning phase and design have to be executed very well. Planning of that, potentially, 150-year to 200-year project is absolutely critical.

CHAIR: You mentioned you were involved with the North West Rail. At what stage did you get involved?

Mr Casson : We have been working with SMEC, one of the lead contractors on North West Rail as part of a joint venture with KBR and Mott Macdonald, two very large global engineering firms. They are utilising our technology to do the design work on the North West Rail Link. One of the requirements from the stakeholders is that they are to use building-information modelling, BIM, as a philosophy on the project. There are certain requirements, in terms of digital delivery, and our technology is being used to facilitate that digital delivery not only back to the operator but also to the government and to the contractor who was building the North West Rail Link.

CHAIR: What date did you get involved?

Mr Casson : We have been involved for well over 12 months on this project.

CHAIR: In regard to value capture, as this had been an expected project for some time—and there has been any amount of speculation and development along that corridor for more like 12 years than 12 months—the question is that with the benefit of hindsight, had you been involved 12 years ago and master planned the entire project with a suitable value-capture system, how much better off would we have been?

Mr Casson : It would be a little bit dangerous to speculate on how much better the project would be if we were to use value capture linked with digital engineering, digital infrastructure. The very important point with North West Rail is that the New South Wales government recognises the value of digital engineering on this project and recognises that this is an extremely complex project that is being built through a brownfield site that, probably—you are correct in saying—should have been planned and thought out well before we had that north-west growth that we have had over the past 10 years.

Getting back to the point, without the use of digital engineering, some of these disciplines and bringing together a lot of the engineering, bringing together the contractors and the companies trying to build this, it would be difficult to do. Digital engineering has helped overcome some challenges around the coordination of design, around the collaboration between not only the contractor but also the designers and the planners and also helping, greatly, the delivery around the operations and maintenance for the life of this project.

Mr GILES: One thing I was really interested in, in your submission, was the reference to the possibilities of digitally aided design's incorporation in building both stakeholder and community support for public acceptance. In this case, it is of value capture but, perhaps, also of a depoliticised and better approach to infrastructure investment. You go on to refer to Crossrail as a particular project example. Do you have any wider reflections on how digitally aided design can deliver that kind of public acceptance of a new way forward for infrastructure?

Mr Casson : Sure. One of the by-products of using digital infrastructure is that the design, predominantly, is done in 3D. The community as a whole—and I say this with respect to the community—finds it very difficult to read engineering plans. If there is a community meeting around a large-scale road or rail project in which, historically—and, in some cases, it still happens regularly—engineering plans are put forward to try and communicate what that design intent is going to be, what resumptions are going to happen—how much land is going to be resumed for that project, which is a very sensitive issue—how the project is going to be staged and constructed, it is extremely difficult for someone who does not have an engineering background to understand that. It is somewhat easier for someone who does not have an engineering background to look at something that is in the third dimension, 3D, and get a full understanding of how that project is going to be constructed.

The point I want to make about 3D and digital engineering is that 3D is a very accurate representation of the design. The design is done, and the 3D is a by-product of that. There is not a lot of Hollywood that goes into it. It has to be real, and it is accurate. That is one of the key differentiators with what is happening at the moment, and that is the key point. If you are going to stakeholder and community consultations, you want—for good or bad—stakeholders and the community to fully understand what your intent on that project is going to be. The best way to do that is way back at the planning stage, where you have all the information that is helping you make those decisions and you have that 3D design that you can use, even internally between your internal stakeholders, to make those decisions.

Ms COLLINS: Apart from the 3D design being useful, in terms of public acceptance, I assume that the figures and the value capture and the calculations as well as what is required in that corridor allows it to gain some community acceptance as well. It is not just the design.

Mr Casson : Yes, most definitely. We really focus on the 'i' of building information modelling, which is the information. The information, here, is absolutely key. The 3D design is just a by-product of those decisions and that design. You do not, necessarily, fully design in 3D; it just happens. The information is what underpins that whole project. If you have good information and you have good collaboration and you have good information practices, that will drive better outcomes through that design life cycle. Again, we want to make the statement that we believe good technology information underpins a good value-capture scheme.

CHAIR: Can you project uplift in the regional areas linked by high-speed rail between Sydney and Melbourne?

Mr Casson : If we had the information, the technology could give you those figures. I referenced, in my submission, the Crossrail project. Even though Crossrail is not high speed, technically, we know the Crossrail authority stated that the commercial office values around the Crossrail stations will increase by about 10 per cent over the next decade. And residential capital values, around Central London, immediately around those Crossrail stations will increase by 25 per cent and 20 per cent in the suburbs. So there is that uplift.

We have to be careful of drawing any assumptions that this is driven by digital engineering. But digital engineering has been integral as a part of that process in the design of Crossrail.

CHAIR: Was it a mistake that they did not seek to capture some of the uplift in property values in their value capture and that they only had a levy on businesses?

Mr Casson : I think that they considered that. However, I think that they have had a look at the longer-term prospects. One of the other things they have done with Crossrail is that they have increased the property tax over a much wider area because they recognise that the value capture that project has brought—not just to the corridor, but to greater London—is much larger. That is one of the mechanisms they have used to increase that value capture.

CHAIR: So they are not considering the increased revenues through property taxes as value capture?

Mr Casson : I think that they are. I think it is part of their value capture scheme. It is part of the value capture.

CHAIR: As I understand it, it is only the levy on the operation of business. But it is neither here nor there. Would it be appropriate for Australia to consider instead of stamp duties having a land tax system that could be utilised for a fairer taxing system to tax those who have the unearned benefit of property going up when their land is benefited by infrastructure accompanied by zoning?

Mr Casson : I think that you would have to look at that at a project to project level. You would need to look at that initially for those individual projects rather than project that over every single project. It would have to be the right project. We are in our infancy when we are looking at value capture here, but we would need to look at that in situ at the moment and then probably broaden that in the longer term.

CHAIR: I think we are all done with questions. Do you have anything else you wish to offer?

Mr Casson : Not from my end. Again, I would just like to thank you, Chair, and the committee for the opportunity to present to you on this extremely important topic. The importance of this has never been greater than it is now, especially when we have such a need for better public infrastructure and better connectivity.

CHAIR: Is it never better than now because of the previous lack of long-term planning?

Mr Casson : I think you need to look at the industry as a whole. We are advocating reform across the entire industry not just in a digital sense, but also in a contractual and legal sense. We really think that it needs to happen sooner rather than later. We also call on the government once again to consider to mandate the use of digital infrastructure and building information modelling on large-scale infrastructure projects in Australia.

CHAIR: Thank you very much for your submission and for your contribution today. It has been most helpful. Thank you for attending the hearing today. The secretariat will send you a draft transcript of proceedings so that requests can be made to correct any errors of transcription. Thank you very much, Brett.

Mr Casson : My pleasure. I wish you all success for the remainder of the inquiry.