Private practice lawyers could be the beneficiaries of the near-record $22 billion infrastructure boost delivered in the 2009-10 budget, as rail, road, energy and other projects prepare for lift off.
Infrastructure and project groups within law firms have welcomed the news, noting the potential for government monies to flow into the PPP market, and assist in filling funding gaps emerging from the private sector.
"There are some significant funding challenges in a number of upcoming PPP Projects," Brendan Quinn, Freehills partner for banking and projects told Lawyers Weekly.
"The availability of some sort of government funding or government support to obtain funding is going to be very important in moving these Projects ahead in the short to medium term ... These challenges will give a direct flow through to us at Freehills."
Robert Edel, head of the DLA Phillips Fox mining and energy practice in Perth, said for infrastructure lawyers the budget was "one out of the box" that may not be repeated in our lifetime. "It's also something that will last a long time," he said.
"This isn't going to take one or two years; this will go for a number of years and run through the entire economy."
Quinn said that with the bottom falling out of the PPP sector's tradition funding base - capital markets - the record infrastructure spend could provide for some much needed relief. But the real test will be in how innovative the government can be in funding such projects.
"Given that we are dealing with a hopefully short term issue of liquidity, it would seem sensible that the governments do something more innovative, which breaches the liquidity gap but means that they are there for the time they need to be, but the can appropriately exit in due course and funding solutions can appropriately revert fully to the private sector," he said.
Edel said that the sheer number of approvals will provide a steady flow of legal work almost immediately.
"In the initial stages the first tranche of the work to come through from the funding will be environmental and native title work, heritage, land access and general approvals work," he said.
"Over time that will flow into the preparation of engineering and construction contracts, and services contracts with various consultants," said Edel. "And then in turn after that I would expect to see a lot of financing work."
Treasurer Wayne Swan pushed his budget under the promise of "nation building", using infrastructure as a means to bolster employment. He said the budget builds on action already taken by the Government since the extent of the global recession became clear, with all initiatives resulting in 35,000 building sites and the support of 210,000 jobs.
- Angela Priestley
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