Infrastructure Planning, Procurement, and Finance of Western Sydney Airport (Case Study Sample)

Infrastructure Planning, Procurement, and Finance of Western Sydney Airport
Name
Student number
Institution Affiliation
Western Sydney airport
Executive summary
Western Sydney as a city and region has faced a lot of challenges such carrying about a half of the Sydney’s population and having few job opportunities to serve the population. The federal government projected that building of an airport in the region would spur the economic growth and create job opportunities. The project as well faces challenges of infrastructural planning, procurement strategy and infrastructure finance. However, for the project to run all the said infrastructures had to be obtained to facilitate the construction of the airport, (Merom & Close, 2003).
The paper is addressing how the company has done infrastructure planning procurement and financing of the project. The infrastructure which includes transport infrastructure, energy infrastructure and telecommunication infrastructure have facilitated proper operation of the Western Sydney project. Thus the entire infrastructure of the Western Sydney had to be improved. The transport network that flows well brought about easy movement into and out of the airport.
The method of procuring the materials is also a critical aspect. The procuring team adopted the best procurement method to obtain the best materials for the project. These include but not limited to building a successful procurement strategy; which explains how the team build successful strategy for procuring materials. Supplier relation management system as a strategy helped the firm to relate with the suppliers and come up with the best supplier.
The entire project needed to be financed. There are different methods of financing that the management of the Western Sydney airport project used. They include government funding and Corporate or On-Balance Sheet Finance. Federal government of Australia used best methods for efficient project financing.
Introduction
Western Sydney is a multicultural and dynamic region. Currently is the home for nearly a half of Sydney population. However, only about 30 per cent of jobs are found in the region. Western Sydney economy is the third largest economy in Australia, and its population is expected to grow with more than one million in 2030s. Due to this, the government had to increase its economic growth project in a mid to cub the fast growing needs of employment.
Demand for air travel services in region of Sydney is increasing at a very high rate with projections that it will double in the next about 20 years and the growth will continue to increase. Sydney airport would therefore not accommodate this high demand. The Sydney government had to construct the Western Sydney airport to counter the highlighted aspects.
This case study therefore seeks to come up with a study report pertaining the infrastructure planning, procurement, and finance of Western Sydney airport. It will assess the business case and procurement strategy for the project and will look into public perception on opportunities and risks.
Infrastructure planning
Infrastructure planning is an important part of the local development framework process. This planning policy points out that in order to build a sustainable community, the government need to not only provide employment opportunities and housing alone, (Miller, 1995). But also ensure that the entire process of development comprises necessary social and physical infrastructure too. It’s well known that in Western Sydney that the city transporting infrastructure needs more investment. This is also very true in other parts of the whole world. Why do we have more projects not under construction?
The direct argument is many countries and states suffer from insufficient fund. However, in most cases its lack of proper allocation of the available resources and disagreement on what should be done. For the Western Sydney project to gain momentum, various parties have been aligned. Some of these parties are the organizations that depend on the transport network in Western Sydney to link them to suppliers, customers and even the planners in the government in charge of building those trade channels. These infrastructure factors includes but not limited to;
Transportation infrastructure
Transport infrastructure for Western Sydney airport comprises of bridges leading to the airport, roads, and transporting vehicles. There has been a concrete plan by the government of Australia to create a more prosperous and strong Western Sydney by investing around $3.0 billion over the next ten years in main infrastructure upgrades that will leave Western Sydney a better region economically, (Short & Kopp, 2005).The infrastructure plan of Western Sydney involves transport linkages and major roads that will basically capitalize on gaining economically from building of an airport in Western Sydney, while boosting local economy of the region.
The investments have relieved pressure on already existing transport and other infrastructure and unlock the capacity of the economy in the region by slashing down travel time, creating more local jobs and easing congestions on the roads. Some of the programmers include; upgrading of The Northern Road to at least four lanes from Jamison Road to Narellaan, building of new West-East motorway to the airport from The Northern Road to The M7 Motorway.
Energy infrastructure
Energy infrastructure includes transmission facilities, distribution of power, and generators to serve as a back in case of power shortage. The Western Sydney airport project needs enough sources of energy to serve not only the airport project but also the entire region. Currently the New South Wales (NSW) electricity grid is the only supplier of power in the region, (Hensher & Ellison, 2012). The Australian government therefore had to invest heavily on the energy infrastructure so that the project could not run out of energy as well. The projected airport in Western Sydney has attracted more inhabitants to occupy the job opportunities that will be created by the said project. This hence has created a need for more supply of energy to meet the rising demand.
Telecommunication infrastructure
An efficient telecommunication infrastructure is a very critical aspect of any organization. In any firm there is a need for frequent exchange of information from one department to another or to the rest of the world (Lenzen & Foran, 2004). Telecommunication infrastructure allows a rapid exchange of information among individuals in different locations of a business and even links them to others in any part of the world.
A basic office building in a business has kilometers of telecommunication cables which must be properly installed and well managed so as to provide important communications. The projected airport in Western Sydney required a well-organized and systematically telecommunication connection cable for easier communication. The client will be able to reach the airport easily and even book their flights with comfort from their houses that are connected with the said cables.
The business case and procurement strategy
Procurement is the acquisition of supplies, services and materials which an organization or business needs so as to operate successfully. Procurement strategy refers to a method or plan selected to project into the future, such as goal achievement and solution to a problem. It involves a planned approach to cost-effective purchase of organization’s needed supplies, considering several factors and elements such as budget and funding, the project risks, opportunities and timeline for the procurement among others.
Figure SEQ figure \* ARABIC 1: How to build a successful procurement strategy
Figure 1 describes the components of coming up with the most successful procurement strategy. The figure contains inputs such as business unit data, market/economic data and corporate financial data. On the other hand, there are outputs which include spending forecast data, operations and earning/budget impact (Puschmann & Alt, 2005). The management of Western Sydney airport had good strategy plan, did proper budgeting and well aligned its capital project. In market data, the management monitored major trends and major commonly indices. Moreover, in corporate finance data earning projections, tax treatment, cost of capital and growth projections were well assessed and implemented. The monitoring and feedback was also done hence coming up with a successful procurement strategy.
Development of efficient procurement strategy (sourcing strategy), to begin with, is important to assess and evaluates the aspects that the company is going to work with. These details may include availability of resources and how they are supplied, the timeline and the budget, the project’s or business’ objectives. By assessing these items, the procurement team was able to plan effective procurement strategy, which was as custom-made as it’s practically possible for the Western Sydney airport organization. The main point here is to ascertain that all information of the plan will take part in gearing the company towards achieving the organizations set goals. An important point of concern was; “why is the organization making purchase these materials?” The reply should be in line with the company’s goals and objectives.
Other critical parameter that was well planned for during brain storming stage is the option of creating or making the materials with sustainability and cost as the main determining parameter , and considering whether the other established airport resources would comfortably support the action to be taken for a long time.
Supplier relation management (SRM)
Supplier relation management is a segment and a strategy approach, done on the whole supply...