House Standing Committee on Infrastructure, Transport, Regional Development and Local Government

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Transcript: Session 3 –Australian experiences in utilising smart infrastructure

• BLOCH, Mr Kevin, Chief Technology Officer, CISCO

• BURNS, Ms Ann, APAC Utilities Lead, Accenture

• ELIA, Mr Danny, General Manager, Transurban

• McKENZIE, Mr Matthew, General Manager (Asia Pacific), Transmission and Distribution, GE Energy

• PETTIGREW, Mr Paul, Program Director, Grid ICT Strategy, SEQ Water Grid Manager

• SANGSTER, Mr Sam, Chief Operating Officer, VicUrban

• SCHMIDT, Mr Steve, Acting Director, Industry Solutions, Telstra

• SMART, Mr Alan, Deputy Chairman, Spatial Industries Business Association

• van de WORP, Mr Mike, General Manager, Communications and Control Systems, ARTC & Lockheed Martin

CHAIR—Welcome back to the ThinkFuture Smart Infrastructure 2010 Conference. This is session 3 of the conference and this is where, I guess, the rubber hits the road. Between now and 3 pm we will hear from nine industry leaders about their experiences in utilising smart infrastructure technology in their fields. Each speaker has been firmly told that they have seven minutes and a bell will sound when their time is up. The first speaker is Kevin Bloch, who is the Chief Technology Officer with CISCO. Kevin is a CISCO veteran, having joined the company some 10 years ago. He is also a noted author. Kevin will speak about being smart and connected.

A PowerPoint presentation was then given—

Mr Bloch—Good afternoon and thank you for the invitation to present to you today. We refer to intelligent infrastructure as ‘smart connected’, so excuse me if I keep using that terminology. What is smart connected? Smart is the ability to digitise an action or a measurement and the connection is the ability to have remote access to that. A key point is that both are really important. If you think about a Kindle or about your PC today, it is only as important as that which you can connect to. The real power in terms of intelligent infrastructure is in combining both of those. It is a very simple message, but we will talk about some of the issues.

I will discuss this by way of examples. The examples I will give are the ugly, which, fortunately, is not in Australia—and you will see why; the good, which is in Australia; and the future, which is not in Australia. If you cast your mind back to 1 August 2007, the Minneapolis bridge collapsed and it was a catastrophe. Thirteen people died and 145 people were injured. This bridge was supposed to last for 50 years and it was four years old. A girder had corroded and the entire bridge collapsed. Rolling the clock forward two years, that bridge has been completely rebuilt. This time it was rebuilt with sensors in all of the girders—in the surface and on the sides there are thousands of sensors in this bridge. The key message, though, is the cost of the entire bridge, which took two years to reconstruct: $234 million. The intelligence in that bridge enables the operator to monitor traffic, whether there is ice on the road—which can be defrosted—corrosion, the girders et cetera. The cost of the entire bridge was $234 million; the cost of the intelligent infrastructure was $1 million, less than one per cent.

When Barack Obama came to power, he said in his inauguration speech:

We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.

At that time he put forward $30 billion for broadband, smart grid and e-health, and that is continuing. It was interesting that, two months later, Minister Conroy, on a panel in Hanover, at CeBIT, said he would like to see a smart technology clause in every piece of infrastructure in this country. I think that is leadership and I seriously applaud that kind of foresight. Indeed, what we are talking about here is IT as the fourth utility. Some people refer to it as ‘interstructure’—the word is not so important; the concept is. It is the ability to really use smart connected technology to do that which we are doing with infrastructure in a way that can be so much more powerful for society.

Let me take you to the good. This slide shows a live example: it is the Monash Freeway in Victoria—a 70-kilometre stretch of road and the busiest corridor in Victoria. Together with our partners, we have constructed an intelligent freeway. We have sensors, we have wireless and we have video across the entire 70 kilometres. What the citizens get out of that is much better traffic flow which is much is safer and creates much less pollution. Listen to this: the cost of the entire construction that you see was $1 billion. The CISCO equipment cost $2 million, with $28 million of services—around three per cent of the entire infrastructure. That is what is possible by doing it upfront and doing it smart.

This chart is about a year or two old, but it talks about the top 500 companies in the world in terms of their expenses on IT—the small blue bubble—versus their total operational costs, represented on this slide by the green bubble. A lot of people will say, ‘We’ve gone through GFC—the first thing you do is cut the blue bubble.’ But take one per cent out of the green bubble and compare it to one per cent of the blue bubble and you get a much bigger benefit. One of the benefits of the GFC is that people have seen that, by putting more cash and investment into intelligence and connectivity, we can get massive returns in terms of business, air travel et cetera. But for infrastructure it gets more serious, because we are not just talking about operational costs of running roads and rail et cetera; we are talking about human lives, as we have seen with the Minneapolis bridge.

This next slide gives a little bit of insight into the future in terms of what is possible in delivering citizen services in new ways. This is real; this is happening. What you see on the left-hand side is somebody in their home looking at what you might say looks like an iPhone. There it is. Now it may be that you want to go to school through a TelePresence—and TelePresence now is going into the home and people can start doing learning. Perhaps you want to do some aerobics training—again, all online—and there is HealthConnect where you can see your doctor without actually having to go. All of this is now happening in Incheon in South Korea, a city that is being built from scratch for five million people. It is 100 per cent smart and connected—one common infrastructure to address several issues.

The interesting thing here is that when you look at smart citizen services—transportation, real estate, utilities, safety and security—the key point is that it is truly cross-functional. So what we are doing today with this think tank and committee is profoundly important. It is not just about what we in the communications and information technology industry can do; it is really about what we can do cross-sectorally. I applaud government for putting something like this on as it is so important. We know what Smart Connected can do. Now it is getting out there and making sure that it is truly cross-functional.

So the concept of it is really simple. The issues are not technological; they are cross-functional and cross-sectoral. I applaud the work that has been done. I think that many people have come out with some really key words today like ‘integration’, ‘cooperation’ and ‘collaboration’, because those are the secrets of a successful smart connected Australia. Thank you very much.

CHAIR—Thank you very much for that, Kevin, and also for being on time. One of the things that the committee has not discussed yet, but we will be doing so, is going and having a look at some of the projects that are being presented today and others that are raised with us. I would be very keen to see the Monash Freeway, apart from the fact that it would allow me to go to visit my mum and dad in the south-eastern suburbs of Melbourne. Certainly that has been one of the projects that have been mentioned before. Thank you very much for that presentation.

Our next speaker is Anne Burns and she leads Accenture’s utilities practice across Asia-Pacific. She is providing thought leadership in the area of corporate strategy and business transformation. Ann will be sharing her experiences with Jemena and the rollout of smart meters in Victoria.

Ms Burns—Good afternoon, everybody. Straight after lunch and me with a microphone—a perfect opportunity! There is a bell somewhere—right. This is absolutely my favourite subject. I work for one of the biggest technology companies in the world, and yet what I am about to say is probably heresy. Is everyone ready for this? There is no media in the room, is there? They are not going to put up their hands now, are they?

The technology does not necessarily do what it says on the box, and our experiences certainly across Victoria in the smart metering deployment and implementation would attest to that. Today I want to share some perspectives with you. I have not got any slides. I am going to talk to you and, hopefully, you will come away with probably four or five key things and recommendations which will inform the think tank here today.

First and foremost, I think that everybody is doing something. When I looked at the attendee list this morning every single distribution company and retailer in this country is currently doing something—Energy Australia, Ergon, Energex, Jemena, United Energy Distribution, SP AusNet are all doing something. I think the question really is: are we all moving in the same direction? I would be absolutely convinced in telling you that we are not. A lot of the discussion today has been about collaboration, and I think that we need to be very clear on how to collaborate and what to collaborate on.

Let me share with you some perspectives. As I said before, my first perspective is that it is not all about the technology. The technology gives you the data, but the really smart part is what you do with the data. Looking at the different components of the technology, the individual components will work, but when you integrate them together it is about the magic that creates and about ensuring that data is managed, integrated and collated and becomes information—and this is the critical part—that informs consumers in how and when to change their behaviour. My first perspective would be that really it is all about the consumers. To date, we have not spent or invested sufficient time engaging consumers. That was a consistent theme this morning.

We have recently done a survey of 9,000 consumers around the world, 1,000 of which were in Australia. It was cross-age-bracket, cross-income-bracket and cross-education-bracket. Let me give you a couple of insights as to what they told us. First of all they told us that it is not just about climate change; they are very concerned about the supply issues. Many of them told us that they believe that they are already smart. They are recycling, they are turning their water off, they are not watering on the days when they are not allowed to and they are switching their appliances off; therefore, they believe they are already energy efficient. You and I would say that, for us to meet our carbon emission reduction targets, there needs to be a great deal more consumer action.

The second thing they told us was that they believe that it is down to governments and utilities to take action on the supply side before they are willing to take further action around demand. What surprised me about that was that not only are they expecting us to take action but they do not actually trust us to take that action. So 92 per cent of respondents basically said, ‘We expect you to invest in clean technology and we expect you to invest in new sources of energy, but we don’t actually trust you to do so without significant government intervention.’ There were all different types of intervention that they mentioned: control of energy prices, tariffs et cetera. So that was quite a surprise. Essentially they said: ‘I think I’m already smart and I’m energy-efficient. I want you to address the supply side before I’m prepared to further address the demand side, and I want to see significant government intervention in that.’ That is the consumer story.

Our experiences down in Victoria across several smart-metering programs attest to that. There are some neighbourhoods that enthusiastically embrace the discussion around smart metering. There are others that really are quite concerned as to what that will do for their household budgets and what that will do for their lifestyle. There are a number of complaints and discussions around the need to understand the impact in terms of their energy usage and also cost and the impact on their back pocket. You probably have a few notes around that.

Reflecting on how we do this well, there are couple of things I want to leave you with. Firstly, the implementation around smart metering and smart grids should not be considered as a business as usual activity. In the early days, probably three or four years ago, there were very active debates with folks about: ‘Isn’t this just the replacement of ageing assets? A meter is a meter.’ We still have some of those debates, but addressing, understanding and defining a smart-metering program as an integrated program, as a cohesive solution and as a significant change between the old world and the new world is the difference between success and failure. I would also hazard to say that if we do this in an incremental way, meter by meter, we will fail. If we do it as a comprehensive program supported by a mandate, there will be a significant progression, as we are seeing in Victoria.

The second thing I would say is we need to recognise that the implementation around smart metering and smart grids will fundamentally change our business model, our processes, our systems, the way we work together and the way we interact with consumers. Particularly from an industry perspective, right now the consumer relationship is owned by the retailer. The benefits, particularly around consumers, and the benefits that support the smart-metering business case and the implementation of smart grids will touch all elements of the value chain. So we need encouragement, regulatory frameworks, incentives and, dare I say it, penalties around encouraging all elements of the value chain to engage in this initiative. It is insufficient to expect consumers to change without education. It is insufficient to expect retailers to invest without some form of investment. It is insufficient to expect that this will magically happen without the industry working together.

As I said before, the technology does not necessarily do what it says on the box. Certainly in the last three years, when we have been down in the trenches implementing smart metering, I have probably seen three or four different cycles of new technology, and that is just in the last three years. Every six months we are seeing new releases, both of applications and hardware. I think, as we go forward, that will only accelerate. As we learn from others overseas and as we develop our own thinking here, we are certainly going to see that technology is going to rapidly accelerate. We have an opportunity here in Australia to be ahead of the pack. I would love to see us lead the Koreans, the Japanese and the Chinese in that debate. I think there is a strategic window in which we can do that. We have taken some great leaps forward here in Australia and I think there is an opportunity to educate others.

In order to do that, I think we need to recognise that implementing new technology is incredibly difficult. Certainly from the experience of the last three years, testing and testing again have taken up the majority of our program’s time. Every hour of that testing has been valuable. I would also say that, in terms of understanding the impacts on our operations, the sheer data tsunami that will hit us and continues to hit us on a daily and half-hourly basis is something that we really need to think through very carefully.

In summary, I have a couple of key messages to leave you with. First, smart metering and smart grids should not be considered as a cool trial or as a business-as-usual activity; it needs to be considered as a program, with a clear mandate to move Australia forward. Second, I would say right now we are stuck a little bit between the old world and the new world and we are going to run those two worlds in parallel as we have got both smart and relatively dumb meters out in our marketplace and out in our households at the same time. We are going to have to figure out how to run the old and new world together in parallel probably for the next three to five years. The final point I will leave you with is that consumers generally think they are already smart and probably will not care unless they are educated, unless they are invested and unless they are consulted in this overall process. Hopefully that has been of interest. There will be a quiz later and I will check with a couple of you at the break to see if anybody was listening. Thank you very much.

CHAIR—Thank you very much, Ann. There was so much in that presentation, it is hard to summarise it. I think there were a number of themes that came through that the committee can pick up on, particularly in relation to consumers and where the technology is versus the capacity to actually use the data generated by some of the rollout. Matthew McKenzie is the leader of GE Energy’s transmission and distribution business in the Asia-Pacific. He is going to share with us today his vision for the Australian energy sector’s potential for smart grid technology.

Mr McKenzie—Good afternoon. I think I have already used one of my minutes, so I had better move through this fairly quickly. To start off, historically the green energy debate has really focussed very heavily on generation and supply side issues—switching from coal to renewables and those sorts of things; whereas, more recently we are getting into the demand side issues such as lowering consumer demand and increasing efficiency of power transmission. They have commanded a hell of a lot greater attention, particularly since the Obama administration came out with this $3 billion of funding for smart grids and—the point that we have all touched on today—the $100 million smart city demonstration project. Notwithstanding that, we have got a really long way to go when it comes to energy efficiency. To illustrate the point, the Queensland parliament’s Environment and Resources Committee recently put out a wide-ranging inquiry into energy efficiency and in their final report they concluded:

Energy efficiency represents a sound investment for residents, businesses, communities and government given Queensland’s high energy intensity and commitment to achieving significant reductions in greenhouse gas emissions. Potentially half of the savings in greenhouse gases that will be required to meet targets supported by the Federal and Queensland Governments could be achieved through energy efficiency improvements. Despite the sound arguments, there is a considerable gap between what could potentially be achieved and what is actually implemented to improve energy efficiency.

So today I am going to talk about the role of creating a more intelligent electricity network, or smart grid, in enabling greater energy efficiency and carbon pollution reduction. I note that there are many, many benefits to smart grid, such as lowering the peaks and those sorts of benefits, but I am going to focus specifically on those today. I am going to cover how and why smart grid is an essential part of any carbon pollution reduction strategy in this country. Finally, I am going to touch on the structural issues that could slow or prevent the adoption of smart grid infrastructure if it is not addressed going forward.

I will not spend too much time on this. No doubt many people have heard of the smart grid and many of you know what it is about, but for completeness I want to cover it very quickly. I think most networks in existence around the world today really are straightforward analog systems. They are not easily monitored, and they have one-way transmission, poor failure prediction and really only basic usage information provided to the consumer. Pretty much everyone still gets a bill once a month, and that is the only information they get. It is pretty much the way it was 100 years ago. Smart grid, in contrast, is a digital system that marries IT infrastructure with traditional electricity infrastructure. Hence, it is more intuitive, it is automated and it is more efficient. So the term ‘smart grid’ does not refer to one product or solution; it is an umbrella of many solutions, comprising both software and hardware.

Australia is ahead of many parts of the world in creating a smart grid, and we have a significant level of automation, monitoring, analysis and control, but we have really only just scratched the surface, and we still have many challenges. Clearly the challenges and opportunities have been recognised, as evidenced by the $100 million smart grid demonstration project in the budget last year and many of the activities that are being undertaken by all the utilities in this country.

I go back to my key message. Smart grid technology ought to be a fundamental of any carbon pollution reduction strategy in this market, for the following reasons: firstly, in very simple terms, it empowers consumers to use less without the pain; secondly, it is a fundamental part of enabling the integration of renewable power generation; and, thirdly, the technology reduces network energy losses. I am going to take a look at each of these one by one.

Firstly, empowering consumers to reduce their energy usage through demand optimisation lets consumers make simple, painless choices to control their costs and lessen their environment footprint. These applications certainly also help utilities better manage their peak loads by suppressing or shifting those loads to other times of the day. That is really important, because the peaks in Australia are growing and becoming more severe, largely driven by the spike in air conditioning penetration over the last 10 years. No doubt peak management is going to deliver that improved reliability, but there is also an efficiency play, because a really significant percentage of supply-side infrastructure is built to meet the peaks. Think of a road system that could never have a traffic jam, because we will not tolerate outages. Imagine building a road system that never had a traffic jam. It is going to be empty most of the time, and that is very much the case with our electricity infrastructure. So moving those peaks is critical.

Let us get back to the efficiency angle on demand optimisation and how it empowers consumers to painlessly reduce their usage. With demand technology, again we are not talking about a single solution but about a range of devices and control room applications that work together. Smart meters are really that enabling infrastructure. Amongst many other benefits, they allow the connectivity to the utility in the home. What that allows us to do is to give consumers the benefits of being able to sign up to a program offered by a utility that offers the non-critical loads at their home or simply changing their behaviour through the greater awareness that comes from much more detailed information about their consumption.
Going forward, these systems also have the potential to manage distributed energy resources such as solar generation, energy storage and plug-in hybrid vehicles to optimise their use from an efficiency point of view. That can be done from either a consumer financial benefit standpoint or a peak load management perspective. The interesting thing will be when those two do not align.

Let us move to the second point: the integration of renewable power generation. The 20 per cent is coming and there is no way of getting around it. Let me just say that Smart Grid is essential for that.

Maybe I will get onto the last point because that is the most important: reducing network losses. On average, taking a New South Wales example, 92 per cent of the power that is generated does not reach the consumers in New South Wales. That means that 6,400 gigawatt hours are lost. Using nominal retail average pricing at 91c a kilowatt hour, that means that the estimated value of avoiding those loses is $59 million per percentage point per annum. That is pretty powerful.

I guess the big challenge is that the one that would invest to make that saving is not the one that benefits from it—the utility and distribution network. That is really the challenge from our industry structure point of view—working out a way to ensure that the investment and the benefits align.

I will just repeat my key message. Smart Grid has many benefits but is absolutely a fundamental part of any efficiency in the carbon pollution reduction story in Australia for the three reasons I have covered. Thank you.

CHAIR—Thank you very much for that, Matthew. Thank you for reminding us that integration is not just about integration of the technology and physical infrastructure; it is also about the integration of the policy solutions across some of the silos we work in.

Our next speaker is Danny Elia, the Transurban General Manager of CityLink in Victoria. CityLink was one of the world’s first fully electronic toll roads. His topic is innovative, urban congestion solutions from Melbourne and Washington DC. Please welcome, Danny Elia.

Mr Elia—I would like to thank Matthew because he referred to roads that never get congested. He was obviously referring to the new M1! Obviously, there are not many Victorians here.

The key topic I want to cover today is one that actually came up, not so surprisingly, in a workshop on transport—and that is moving past the technology. We were talking about what we need to do to enable technology. For me today the key focus is not about Transurban; it is about the private sector and the role it can play with government in partnering to develop network solutions. That is quite important because when we talk about collaboration, we talk about collaboration across industry and different players et cetera. If you cannot get that between the private sector generally and the public sector across a 75-kilometre stretch of road then what hope have you got across the rest? I think that is an important point.

I would, firstly, like to acknowledge some of my brothers who are here today from VicRoads. If it were not for the leadership of the Victorian government and VicRoads, we certainly would not be talking about projects like this.

I will mention a couple of things by way of background. The M1 upgrade is about $1.3 billion in terms of total expenditure. Kevin referred to $2 million worth of CISCO. That is equipment being spent as part of what we call the FMS, the freeway management system, upgrade. I wish the total cost of the freeway management system was $2 million but, as Dean Zabrieszach from VicRoads knows, Transurban’s lot in that was almost $11 million and the Victorian government has invested through its vision a lot more than that.

What does it mean at the end of the day and how does it work? Moving past the technology, one of the most fundamental things is that the technology is seamless from the users’ perspective. That is vastly easier said than done. You have to sit back and say what is the toll road interested in? Safety, believe it or not, as well as moving traffic. You sit down and say: ‘We need to standardise protocols. We need to run a 75-kilometre corridor that is important to commuters to get to work every single day and get back home safely and we need to run it seamlessly, how do we do that?’

Behind the scenes there is work that goes into preprogrammed protocols. VicRoads is taking the lead and running what we call the centre to centre, the interface between the systems. For those of you who do not know, east to west the M1 is a 75-kilometre corridor and right in the middle is CityLink. You have to run it as one system. For example, if there is an accident on CityLink, do you really want to know about it when you hop on CityLink and CityLink put up the signage? You do not. What you expect is a reaction across the whole corridor, so you expect signage as you come over the West Gate Bridge to tell you that there is an incident ahead.

I think one of the key things we have seen, particularly when we have customers who focus on value for money, you do not want to pay for nothing, the focus is less about reliability in travel time and about reliability in communications. A freeway management system does that. It creates consistency across the corridor, real-time information and also dynamically puts that back into the system to manage the flow of traffic coming onto the freeway, through ramp meters. There was talk in one of the workshops I was involved in about lack of data in there for educating future decisions about investment. I am certainly more than happy to share that information broadly across the industry. I think it will be a resounding success. We are going online shortly and the project should be finished by the end of the year.

In the US we have implemented a hot lane strategy with the state of Virginia, once again trying to do something about the occupancy rate of cars, which are almost equal to skateboards, which is a tragedy. So we are trying to promote an occupancy rate that gets to three or over is a big thing and we look forward to the results of that, and that should come on line in about two years. So I think it is about sharing learning and getting data back out there into the industry. I think we can all learn a lot from each other. I appreciate the committee inviting us to speak.

CHAIR—Thanks very much for that, Danny. I would be very interested in coming and having a proper look at your project, as a user myself of that road fairly frequently to get from western Victoria into the south-east. You do not see the technology, so it is terrific to have you here today. We are going from roads to rail. The next speaker is Mr Mike van de Worp, the general manager of communications and control systems with the Australian Rail Track Corporation. Mike is going to speak to us today about advanced train management systems as well as national train communications systems.

Mr van de Worp—Thank you for giving me the opportunity to talk about something I am quite passionate about, railways. I understand the deputy chair also has an interest in rail, which is good. We cannot go too far without meeting some steel somewhere. There is not much rubber meets our road, but that is all right! Imagine turning up at a rail company and saying, ‘I’m from IT, I’m here to help.’ Imagine the reaction: ‘No thanks, we have got enough email.’ So when I turned up at ARTC they described the 13,000 kilometres of track that they either owned or operated and the state of the systems. I was welcomed; I got a chair at the executive table and directly report to the CEO, but he expects results. So it was all right when I first walked in. Now the rubber has hit the road and we have had to very rapidly do similar things to the work that was done to standardise the rail gauge.

A PowerPoint presentation was then given—

‘What on earth is he talking about?’ you might ask. When we inherited this system there were disparate rail gauges for each of the states. There is now one rail gauge, so you can go from port to port, Brisbane to Kalgoorlie to Perth, Melbourne if you wanted to go in that direction, and you will still run on standard gauge. We have even got a roundabout here on the map you can go round a couple of different ways. That is a major achievement.

What is the next cab off the rank? The systems that we operate. NCTS was a radio system. We had analog radio and it changed every time you went past a boundary. I will try to Steve Schmidt, who is going to talk about Telstra’s role in providing us with a standard, single outcome operator experience for comms. So we have fixed the gauge, we are in the process of fixing the comms, the national trains communication systems, and we took the route of outsourcing, not owning, the infrastructure. We started thinking about it in the days of CDMA: how could you go from an analog system to a digital system which would give us a data rich experience for the future integration of control systems? So IT in rail in ARTC also includes communications, control systems, signalling that all the underlying processes.

We have had a fairly recent event where we have taken some brand new Cisco kit to have the leading equipment in Australia for virtual environments for our business systems. We are working with cloud from Telstra. We have got leading-edge equipment in the rail industry. We do not talk much about it but we have come a long way from the pictures I am about to show you, a brief history of the thing I love and am about to illuminate.

On this slide you can see mechanical interlocking. That used to be working, up until about 12 months ago. That is medieval. All those bits down the bottom there, those rods, get pulled from a lever and you check whether the switch is in place before the signal can move. If it gets hot, the rods get longer and the signals droop. Very sad. So what? This was still in use up until a couple of years ago. This slide shows how you operate it. Talk about technology! I walked in and said, ‘My God, this is the lowest common denominator. It will not take much to fix this.’ Was I wrong? Yes. So what we have done now is this: there are over 30 or 40 of these on each line; we took 200 of those cabins and we consolidated them into a central control system. Back on the Australian map, we have got a control system in Broadmeadow, one in Adelaide and one out in Junee, and that controls the whole interstate network. That centralisation was possible through some work on the next G and next IP networks, but also from infrastructure we own and will have to replace shortly, and are slowly shutting down.

So what? The next technology—this is coming in here, by the way; the one you can see in this slide still exists—was coloured light. The coloured lights have a visible distance of two to three kilometres. So what? If you have a train that is 8,000 tonnes, it might take that long to stop. So you have to tell the bloke whether he has a red there then the one behind is yellow and the one around the corner might be yellow and the next one green. You cannot fill that with a train because he has to take all that space to react. So if you have one train following another, he has got at least two sections and you have to cut the rails, put electricity through them and put the signals up—little cabins full of electronic relays. This is modern. We are going to replace that as well. Why do we want to replace it? Lightning is an issue even out in the middle of the Nullarbor. If you have that sort of equipment you have the drivers looking out for it and they have to know where it is and they have to stop at it. He has a little button he has to push every 60 seconds to make sure he is alive, but they can do that in their sleep. If he nods off and goes past a red light, his mate has got to wake him up—he may well be asleep. This is all tongue in cheek; they do not do this in reality. It is not true.

So what can we do? Our railway is usually one strip of rail, and maybe a second one where you want to pass trains, because it is not a good idea to put them together, opposing each other. In this slide there is a passing track. We would get him put into the siding or the passing track and run another train through the other way. Because you have got to use two or three sections between trains, that takes a long time. We have only really got one piece of infrastructure; we are unlikely to duplicate the rail, so we have to make the best of it. There is the central control system we now operate trains with. You can see the sort of networks. I am very conscious of the time.

What are we going to do? We are going to bring to the industry advanced train management systems. That will take all of that stuff along the track away, except for where the switch is. You still have to move that bit of steel to make sure the train driver gets into the siding before the other bloke turns up. But the revolutionary thing is that we are going to centralise all of our processes. Rail signalling uses interlocking. That slide shows pulling that lever and the rod, testing that the other thing went. I said it was medieval because there used to be things called swords and irons in it. That was how your interlocking worked. Nowadays they interlock in the field with lots of relays. We are going to do away with all of that. We are going to have a central authority management server based on a banking computer which obviously needs to be highly reliable. You do not want too many cents rounded off in every transaction! So we think we can use that.

We are going to put the whole track map in it and from the track map the dispatcher will tell the train how far they can go. You can see from this slide that once they get how far they can go, in their little computer in here, the train will continually calculate how long it will take to stop—depending on whether it is going downhill, uphill; loaded, unloaded. We have not sorted rain out yet. Normal breaking around about there; emergency breaking around about there. Trains only get two or three shots to stop. They use a big long air brake. It could take 30 seconds to come on. So the drivers are always very cautious about stopping. What this allows us to do is park another train right there and allow him to come right up to it and know that if there is no intervention that train will stop.

So we have an authority going to the train and enforcement in the train. That is revolutionary. The Europeans are trying to do this but they stick things onto the tracks. We did it in the Pilbara—I come from BHP Iron Ore, I was also there to help—and we put a thing in called ATP, but we put it all on track. This leapfrogs anything anybody else is doing. So we are spending $90 million over three years and three months to build a trial to prove that it is safe. Instead of the trains travelling so far apart, they can travel much closer. Instead of one block—being the distance shown here on this slide—and having to have signals in between, there is nothing there. We are about at the end of stage 1, here on the slide—we are a month and 21. In September this year we are bringing a course 1 into trial between Koongamia and Stirling North on a bit of dark track.
I have shown you the sophisticated signalling. The unsophisticated stuff is still done by paper. If I were a dispatcher I would call the guy on the train and go, ‘Jimmy, you can go from A to B—you had better write it down and tell me what I said.’ He writes it down and reads it back, the dispatcher draws a line on a piece of paper to remember that that guy has got that bit. We truly are coming out of the Dark Ages.

Will we be able to do this? I believe so. This slide is the first software drop from the control system—that is Stirling North to Winnowie. It shows that the dispatcher has allowed that train that section and nothing else can have it because the central computer has given it out and will not give it to anyone else. You do not need anything else in the field. Here is a close up with no signals—that is very exciting for those signals people in the audience. Normally it is full of signals and track circuits. All you need to do is click and turn and those switches will move in the field.

At this stage this is purely a trial. We have only just got those drops. It runs on the Telstra network with an Iridium backup—Steve will talk more about this. This slide shows that it goes through the cloud. This is what the driver’s environment is, and this is a flash loco. In here he has a couple of gauges to tell him how much air pressure he has and what speed he is going. He only knows the direction because he can see out the window. There are hundreds of bits of gear he has to attend to. We are going to simplify it. We are taking something from Lockheed Martin that they use to track submarines and we are putting it in the train. We have a data map of the track and the train—GIS stuff. When the train goes through a tunnel, it does not get the GPS anymore, the gadget shown here will tell him where he is. If he starts to diverge off a switch it says, ‘Hang on, we’re moving sideways. We are either tipping over—bad news—or we are going sideways into a siding’, so it has resolution beyond GPS.

That is the key to how we can beat the Europeans. This is the key to how we can bring this to Australia. We talked to the drivers and asked, ‘Instead of those gauges, what else would you like?’ Well, they came up with this damn thing: what speed you are allowed to go, what speed you are actually going now, how far you want to go, how far you are allowed to go and a track profile in terms of speed. So you can see on this slide that if a driver is allowed to go 90 and he is doing 70, this rolls that way. That little grey area is the train. The train is sitting on the gradient—shown here—so he is going uphill, he is going to go flat for a while, then violently downhill—so watch out for the brakes. Then he goes uphill again, and he is allowed to go all the way up to here to this yellow thing and there is another train sitting there. So that is the track structure.

So this simple screen in the train replaces all of those gauges, and would also allow us a lot more direct control of the train. This has just been agreed to by a few drivers’ forums, and the key to getting this up is to get acceptance. I will leave this information as it can be distributed. It describes all of the functions here. There are two or three ways to show each of the authorities and each of the allowable distances, and if he or she does not take action the train will stop. So that is what we want to deliver. That gives us better throughput, it is safer and it is reliable, and I think that is what the industry needs. That is what you will see on the wayside—maybe with a little shed over here in which to put something to run that switch. It is simple and it is centralised. If we want to change and put new things in we do not have to go out to a field in the middle of the Nullarbor. We just tack something onto our computer. Thank you.

CHAIR—Thanks very much for that, Mike. There is definitely something about people who love trains, I think, in terms of their detail. It is terrific to have the opportunity to have people from so many different sectors in the room at once, because there are lessons to be learned from what Mike is doing in the rail sector right the way through to road, energy and water as well. So thank you very much for being here to share your experiences when you are right at the start of a pretty complicated process.

Our next speaker is Alan Smart. He is Deputy Chairman of the Spatial Industries Business Association as well as being Marketing Director and Principal Consultant working in the Canberra office of ACIL Tasman. Alan will speak with us about the application of geospatial technologies in smart infrastructure. Thank you very much, Alan.

Mr Smart—Thank you. It is a pleasure to be here today. Geospatial systems are often not fully understood in the general community, although I suspect from my discussions around the room today that we are talking to a room that is at least half full of geeks like me. Digital mapping systems, called geographic information systems, or GIS—accurate positioning systems provided by GPS systems or other systems—combined with IT, web map and web connections give a lot of power to an operator to manage a lot of information. They are used in a number of areas—important areas increasingly—in infrastructure. They are used in planning and development—in development approvals and in planning itself; in design and construction; in managing assets; in emergency management; in system optimisation in environmental management; in undertaking operations through things like navigation systems, intelligent transport systems and emergency response systems; and in managing energy grids, as we have heard today. They are increasingly becoming part of business operations as well in terms of demand management, water conservation, managing emissions and even building customer relations.

I want to look at one or two examples to give you an illustration, but the first important point I want to make is that we are entering an era when there is an unprecedented capacity to collect data, whether it is from airborne laser scanning aided by accurate positioning or whether it is by an operator on the road entering data in his PDA. All of that can be captured into single systems which can be used later on for either operations planning or even customer management.

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This probably is quite a good example of how different layers of information can be combined for road planning. This is a system that is in operation in Australia now. We have the source data, which is usually basic mapping data. The power of the system is that you can then combine that to produce some derived data, which gives you areas in which you would not want to put a road—like flood prone areas or slopes that are inappropriate. You can then combine that with data that gives you where you can put the road in terms of these different databases. Combining that with, if you like, a cost service, which gives you least-cost options meeting all of those objectives, and with where you want to go and you can get optimised road planning very quickly and very effectively. It is much more effective than what we used to be able to do.

This is a really interesting example. It was actually used from technology developed out of the CRC for Spatial Information. It was developed by a company in Perth. It is a real-time hazard monitoring system. It demonstrates how you can use layers of data from different sources—in this case from the Bureau of Meteorology, Geoscience Australia et cetera—and combine that in an algorithm which will warn you when you have a hazard approaching your piece of infrastructure. That can then be transmitted automatically to a PDA or by an SMS message and can identify and bring on the response mechanism far more quickly than in the past. This is now being marketed quite substantially in North America as well as in Australia.
More broadly—and this is an example from Energex—spatial forecasting is now spatially enabled. If you are in the energy business, knowing precisely where your loads are is quite critical because often your capacity is defined by peak loads and optimising the system requires a spatial understanding of the load direction. You can take this kind of information and combine it into grids and polygons for optimising things like substations, and this is again a system that is spatially operated. It helps Energex optimise the location of their substations, add additional capacity when it is needed and take out investment where it is not needed.

Looking at another example, Aurora Energy in Tasmania has a totally spatially based system, and this system provides information on a wide range of issues. That can be faults, it can where the crews are and where they are operating, it can be online weather and it can also be down to customer impacts of outages. This is just a brief sample of how they use this system. But one of the things they told me when I spoke to them is that they have now automated their Dial Before You Dig service and they have substantially reduced the amount of resources they had to put into that program and have been able to redirect them to other areas, because the system now gives the warning automatically and is monitored only by one or two GIS people.

We did talk extensively today about smart grids, so I will not really go into any more detail on that other than to mention that this is not only about smart meters enabling consumers to manage their energy consumption more effectively; it can also enable the grid manager themselves to optimise the use of their own system by having meters in different parts of the grids. They can use it to monitor home area networks and, in the longer term, they are even looking at giving customers the capability to monitor their appliance use through web applications.
We spoke extensively about the savings that were possible through these options, and this slide shows the Smart Grid, Smart City demonstration project that Energy Australia is running at Newington in Sydney. You can see that they have already started to quantify the customer energy savings and the water savings that you can get through these kinds of technologies and approaches. More importantly, they can reduce peak demand, providing enough power for more than 30 homes, reducing greenhouse gas emissions and achieving tangible water savings. So these are not unimportant technologies.

Where are we? I did some work about three years ago looking at the application of these technologies in Australia. At that stage I think we were in the early adopter stage. We have moved a little bit beyond that now into being early majority. The issues around this are the awareness, skills and economics but also good policy. From the spatial industry’s point of view one of the key issues is access to public data, whether that be road centre lines, property boundaries or indeed the location of infrastructure. The development of Spatial Data Infrastructure Australia is one of the key priorities, I think, to realise the potential here. Thank you.

CHAIR—Thank you very much for that, Alan. Spatial technology has certainly been described as perhaps the skeleton over which all infrastructure should be built. Thank you very much for sharing your experiences and your knowledge with us today. Our next speaker is Sam Sangster, the chief operating officer of VicUrban, the Victorian government’s sustainable urban development agency. Sam will be sharing with us VicUrban’s experience in utilising smart infrastructure. Welcome, Sam.

Mr Sangster—Thank you. It is a pleasure to be able to be here today and share some of the learnings in our business. For those of you who are not aware of VicUrban, we are the Victorian state government’s sustainable urban land developer. We are all about developing sustainable innovations and enhancing Melbourne’s future liveability. One of our key roles is in de-risking innovations and allowing industry to pick up and learn from us. We have a two-part role in that we will actually come up with the innovation, create the intellectual property and then share it with our competitors. It is a slightly interesting business model. We are also the master developers behind the Docklands, and so I was delighted with the comments that Professor Batterham made this morning. I do want to make one quick note: he mentioned that his friend lived in a tower with just two families; the 2006 census actually has 906 families in the Docklands, and we think there are about 1,200 there today. Again, the wonders of modern technology—a quick email to my team and I had those numbers back within half an hour of him making that statement.

I want to cover just a couple of things today. I am going to talk about fibre to the home, but we also have innovations of a similar ilk around water-sensitive urban design. Even six-star housing in and of itself as an innovation fits into this paradigm. One of the things that we focus on at VicUrban is innovation as being in three parts. First, innovation design is really the R&D and piloting processes, and that is not necessarily a space that we as an organisation play in. We are probably more focused on the next two parts, which are commoditisation and commercialisation. I want to spend a minute talking in my address to you today about the commoditisation piece in particular. We think that the commoditisation phase of innovation is probably the most important piece of innovation of itself because it is actually about taking the ideas and figuring out how to apply them at scale, at a micro level, on a house-by-house basis: if you are a residential property developer, how do you take these great ideas, get a consumer to accept them and then get a builder to actually build it on each house? It is easier said than done sometimes, let me tell you. The commercialisation phase is the bit where you, hopefully, make the money, because you have the processes nicely refined. It becomes then a matter of efficiency in terms of rollout.

One of the things that we got a lot smarter about was understanding what sorts of partners we need at different parts of innovation. One of the key things we discovered is that you actually need quite different partners at each of those stages. The partner you might select in the innovation design phase might be quite different from the person you select for the commoditisation phase.

The sort of people you want with the innovation phase are the creative types, the flexible people. I am an accountant and a lawyer and I spend a lot of my time in rooms with designers and architects and planners. It slightly does my brain in from time to time dealing with the other side of my brain—but that is okay.

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Mr Sangster—I put ‘smaller’ up on the slide there. That could be quite pejorative and it is arguable I guess. What I really mean is that the delivery partner needs to be able to reflect the other attributes. Typically, in our experience, that comes from people who have a greater ability to take on risk. One impact of the GFC that we have seen is that changes in the insurance industry, particularly around professional indemnity insurance, have made this really hard, because we are finding that the consultants we typically used in this space are now almost unable to do things they cannot get insurance for. So we are having interesting conversations with them—if it is not an insurable risk, they will not take it. And that is a really interesting potential impediment on innovation. It has been a real focus of ours in the last six to 12 months, about finding contractual mechanisms to unlock that.

By contrast, in the commoditisation phase, it is really more about process development and it is also about developing the actual industry. I will show you some examples of how not to do fibre to the home in just a moment—one of the key things we learnt about fibre to the home that we really did not think about at the start, and I am saying that reasonably openly.

Governance—by ‘governance’ this really wraps into the other piece, and you will see some of the examples and I will show you some pictures in a moment from some of our early development on fibre to the home, where we really did not spend enough time thinking about the auditing and control processes for the activities in the field. You can apply that to any innovation you are rolling out. It is the check processes and the auditing processes and then the warranty that can be offered to the consumer at the end of the day for the product and the installation of that work in a domestic building context. That is very important.

One of the issues around governance is also, in a property development sense, dealing with local government. We have had lots of interesting instances of dealing with local governments and statutory planning people who are approving our design plans who do not want to accept the innovation, because they do not understand it or because their maintenance groups do not how to maintain the asset they are going to inherit in the medium term. We have water-sensitive design. We have things called ‘swales aurora’ in the city of Whittlesea that has caused all sorts of interesting debates around maintenance issues.

Lots of people say lots of nasty things about builders. We love builders. They are a very important part of our business chain. We do not build houses; we build the land on which they come along. There are some incredibly creative people. One of the things I would like to say is that they have very amorphous business structures. You talk about a domestic builder, but they are very rarely vertically integrated. They typically are not much more than a procurement and a supply chain business when you actually unbundle it. So the way you need to look at how you implement smart infrastructure in the domestic building structure is to think about the entire supply chain that exists out there.
One of the examples I would like to give you is that in the six-star field one of the improvements that can be made is in the skinning of domestic buildings. Everyone knows brick; everyone loves brick. Brickies are typically subbies who come with their own particular peculiarities. Hebel brick panels are a vastly cheaper product. It is easier to install, quicker to install and has greater thermal products. One of the reasons some builders now are really leaping onto the Hebel panels is not because of cost but because CSR, which is one of the major suppliers, is taking control not just of the supply warranty of the material but of the installation warranty. And they are taking the role of educating the subtrades. So it is interesting to think: if you apply this to other pieces of smart infrastructure, who is going to be that equivalent, that will provide that simplicity of warranty. I talk about these things, because the consumer wants their house warranty when they are getting a new house and it is a key point that all the builders are looking at.

Builders have an awful lot of subcontractors and an awful lot of suppliers, and so the role we discovered we needed to play in rolling out fibre to the home was actually a system integrator to join the dots between all these parts of the supply chain and the telecommunications aspect of fibre to the home to make it work. If you do not do that, this slide shows what happens. This conduit should be 300 millimetres below ground; it is not quite in the right spot. This should be in the wall and it is 1½ metres away from the wall. This is my favourite photo—anyone who is an electrician or has any trade will know that fibre should not be in an orange conduit, and it should never be bent with heat burning, which is what has been happening here—and, by the way, the slab has been cut, potentially impacting on the structural strength of the entire building. The conduit shown is supposed to be underground. I have actually covered up the names of the guilty here so you cannot see them on the slides—I did not want to embarrass them. This example might not be so obvious—this is where the fibre-to-the-home box goes inside the garage. It took me eight goes to find the conduit. That is how not to wire. This might be less obvious too, but you are actually not allowed under the law to combine power and data. Someone has done that—they actually pushed out the fan button and put in a switch.

This is how you do it: you put the conduit 300 millimetres below ground in sand. You actually put the conduit in before you pour the slab—a novel concept. You actually wire it properly in accordance with Australian standards—there actually are Australian standards for this—and you test every point and then you can provide a warranty that is meaningful for the consumer.

CHAIR—Thank you for that, Sam. Again, it is fantastic to have people from so many different sectors here. I think there are lessons that can be learnt right the way across these sectors as we go on. Certainly VicUrban has been very generous in sharing some of those lessons certainly within the state of Victoria. Our next speaker is Paul Pettigrew. Paul is the managing director of Mach Technology, a next generation technology solutions and consulting company. He is going to speak on the South-East Queensland Water Grid ICT Strategy program.

Mr Pettigrew—My talk this afternoon is on the South-East Queensland Water grid, where I will be leading the ICT strategy over the next 10 years. Some of you may be aware of the South-East Queensland Water grid and the initiatives that were done.

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Broadly speaking, a decade ago there was major drought and the dams were empty. It was affecting one in seven Australians across quite a large area. When I was getting my head around the scale of this I asked one of the longstanding 40-years experience water engineers how many pits and pipes we had; what sort of distance it covered. He said it was enough to go around the globe twice. So we have a significant amount of pit and pipe and valves all the way through the water and the waste water systems in this area alone.

The reform broadly went through a few steps. The first reform was to cut consumption. That is where there was a large amount of visibility in the press about getting water usage down. It was very visible—pensioners can’t water their gardens, you can’t wash your house, don’t hose the path. So community awareness became very high. From there, we were really starting to think that one dam was full but the other was empty, and how do you actually provide water security. That is where the concept of the water grid came in and, broadly speaking, being able to move water around the region and mix it with different sources such as desalination. There was a $9 billion investment in that particular area.

In this area the businesses were largely vertically integrated and run by the local governments within their boundaries. So, from that government structure and financing, right the way down through to the end of the solution delivery, it was a vertically integrated business. The reform we now have is there are four state government owned entities, largely looking at the dams, desalination plants and major trunks, and local government entities which are looking after, then, the further distribution and then the retail relationship with all the customers. So where we had vertically integrated businesses in a number of entities, we now have an integrated supply chain. That was really the institutional reform and now, thanks to last week, the dams are pretty well full. I heard the minister speak earlier this week and the word ‘efficiency’ popped in there a couple of times, so we know what is coming next.

I thought I would give you insight on the way we are approaching this. One of the lessons I have taken from the other discussions today is to think about the smart infrastructure first, embed it up front. It is a lot easier, quicker and smarter and you will get a surer result. A few years ago when the drought was very much a crisis, I think it is fair to say that the smart infrastructure was not given the same airplay and consideration as was a dam about to run empty and a town like Toowoomba running out of water. We are now living with the legacy of that thinking.
The way we are approaching it is very much from an integrated supply chain and value chain. We are applying an enterprise architecture based approach so that we have some well-understood disciplines and methodologies and can produce some deliverables which business and technology people can work with. There are a number of considerations with customers as well and I will also cover a little on the operational versus strategic decision systems.

This would be hard enough inside one entity. There is a represent Ergon and Energex I know quite well. They have a shared services entity called Spark and it is hard enough of them with just two. We have two levels of government, regulators and multiple entities to work with. Our project is very much in the centre here which is very much the glue to bring all of these entities together so that we can focus on information transfer and the data standards around that.

This diagram really highlights the difference between the physical supply chain and what were referred to as the value chain. These are very important distinctions. From the physical perspective it is quite easy for everyone to understand—it is a water pipe, it is a dam, it is going through a pump station, it goes through my water meter and comes out my tap and the waste water goes back out in the other direction. It is pretty easy to understand the physical side. The other side is the information that needs to flow between each of these entities and then the broader discussions such as critical infrastructure security and policy and whether the grid is operating efficiently—it is a lot more subjective. That is where the knowledge systems and the data comes through to enable the efficient management of the grid as a whole system and also those extra value added services to come through for each of the community members and for the customers. Again, there is the interaction with other entities such as electricity.

When we think about it in the customer context, when I was growing up we had a couple of different types of pipe coming in when I was in the bush. We had black PVC coming from the dam—sometimes it was a bit smelly and sometimes it was good—and we had the rainwater tank. What we have now typically in urban is a number of water sources coming through. Everyone is infinitely familiar with the potable water supply or drinking water and sewage going back out as waste water. Recently people have been talking about greywater, like water coming out of the washing machine: where do I put that now and what impact does that have on the environment? We also have treated water, purified recycled water. We may not be ready as a community to drink it but are there other uses for it, particularly in business not just residential. We have a number of different water sources going through the house. We have local collection systems and people putting their own rainwater tanks in. Just with water alone in a residential house it is quite a complex picture.

If we overlay that with the other utility services—telecommunications, electricity, gas, drinking water, recycled water—bringing all these things together in a picture so that the consumer can make the right decisions and change their habits, that is where we start to get the loop closing with the community. From there different opportunities will present. There is a demand management side of things. There is also participating in community information, which currently does not exist. The best analogy for that is the way social networking in web areas is starting to take form. Imagine school kids participating in this as well.

The top side of this is a really important piece—that is, the data management and getting that information exposed not just to the front end and the consumer but also to the back-end systems.  We are also talking across a very complex supply chain. This is one of the diagrams from our pack which really illustrates some of the knowledge and decision systems across the top. Then you have the control systems within each of these businesses. There are and skill in one is a delicate relation to balance there as well.

Where we are heading with this—and this is my last slide—is how we actually have a diverse set of utility providers able to come together and achieve value out of this new supply chain from a reformed water industry and what is in it for them. Having a regulatory compliance stick and simply saying, ‘Give me this information,’ alone is not going to cut it. So we are looking at things such as better situational awareness around incident management and emergency response. In respect of whole-of-grid performance, looking at the grid as a strategic asset and then perhaps overlaying that with other critical infrastructure is grid asset information. Geospatial is obviously a key capability, and other people have touched on that. Hydrology and water modelling is very important as well. We cannot move water around South-East Queensland as quickly as electricity can move around, for example. Finally, there is risk management.

In conclusion, South-East Queensland is a very good litmus test of what is actually happening with a large-scale, smart infrastructure reform. A lot of the thinking now is thankfully catching up on what it actually means to do that in terms of information and data so that we can start to get some of the benefits and the efficiencies from that, from a hard business case perspective and also out to the community. Thank you very much for the opportunity.

CHAIR—Thanks very much, Paul, for sharing with us a very complex picture in terms of the work that you have been doing and also the importance of the interaction between smart infrastructure and social behaviour. I think you have also tapped into some of the themes that Ann talked about in terms of where consumers are up to and where we might like them to go and what we might need to do to get them there. Finally, I welcome Steve Schmidt. Steve is Acting Director, Industry Solutions, at Telstra. Steve is going to discuss the role of telecommunication companies in smart infrastructure, including transport. Welcome, Steve.

Mr Schmidt—Thank you. It is great to be here today. At Telstra we spend a lot of money each year enhancing our Next G and Next IP networks. There seems to be a little bit of discussion on those at the moment, so I would like to talk about something a bit different, if I can. I want to share with you a couple of case studies about how to use telecommunications or smart communications to capture some economic benefits and a better user experience on trains and buses in particular.

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We are working on a project with a couple of state governments at the moment. Basically, we would like to put a Wi-Fi hotspot on a bus and allow users to access the internet and, at the same time, use the telecommunications pathway to provide real-time passenger information about where the buses are, how many passengers are on the bus et cetera. If you have communication to the bus you are really unlimited in the amount of information you can pull back from that situation. The goal here is really to promote public transport. One of the issues with the bus, which you will know if you have ever tried catch one, is that you show up at the bus stop and wonder: ‘Did I just miss it or is it going to be 10 minutes late? Where is it?’ If you could pull out your phone and know it was going to arrive in 30 seconds it would much easier to catch. You could jump on it, do your work, enjoy the experience while you are on the bus and take advantage of that.

The other thing we can do is integrate some other systems on the bus to improve employee and passenger safety with real-time video surveillance or a passenger or an employee panic or duress button. We are working on some technologies there through running a push-to-talk service over our Next G network. It would not be a sort of conference bridge, where you call and you wait six seconds for someone to answer. There would be the ability to set up group calls, press a button and, in fewer than 500 milliseconds, speak to people. We think that there is a good market for that in this particular segment. We could also put a smart communications system in the bus to integrate to the ticketing systems or other real telematics et cetera.

I make one point on near field communications. We ran a trial with the National Australia Bank some time ago where we put the participant’s credit card details onto to their SIM card and then they could use their phone to pay for things. So you could walk into a shop, buy a coffee, tap the device and it is paid for through your credit card. We think there is opportunity here through an advertising medium to provide advertising on the bus, while you are there. You could have a situation where, through GPS and geofencing, a company like McDonald’s, say, could advertise free coffee at around the next corner and give you a 50c coupon. So you could walk up to the screen and you could tap it with your phone. You get off at the stop at McDonald’s, you get a nice fresh cup of coffee and then you tap, you pay and you redeem the coupon, all seamlessly. So there are a number of technologies that can really improve the user experience in that sector.

I will not go through how it works. I will throw up a slide of high-level communication architecture here. I am really sorry about this—you cannot avoid the cloud scenarios. I do not intend to go through this, but we often talk about telecommunications and it is often referred to as a cloud. Many of our customers are saying just that—that they do not care about the bits and bytes, the routers, the fibres and the infrastructure. They are actually after services. They want to look after their business, they want to look after their customers and they just want to use things. They do not really care how it works. Nobody really sits there and tries to understand how SMS works. You just type it, send it and it happens. The complexity and intelligence sits within the network.

What we are trying to depict here is that there is a centralised device that can aggregate multiple pieces of infrastructure and intelligence and send that through our wireless network into a cloud computing hosted infrastructure, where applications can sit under a shared model, where people can use it dynamically and then send that information off to a business or a train control centre. That is what we are trying to get here, and I guess what we are doing is developing fairly sophisticated managed services tool sets to manage this within a 24 by seven ITIL or managed services framework. So, again, it is about outcomes.

I will talk about a broader vision. Mike mentioned that we worked with the ARTC on their trains. It was great to be able to play with some trains! When we spoke to ARTC they knew that the economy was growing and the population was growing and we had to make better use of the infrastructure that was there. The options were to build billions of dollars or hundreds of millions of dollars worth of parallel track or get the trains closer together. So we had to move away from a voice-centric environment: ‘Jimmy, are you there?’ ‘Where are you?’ ‘Just give me a few minutes and I’ll let you know.’ It probably was not that bad, but it was voice-centric. What we are doing is moving to a data-centric environment with precision around GPS technology.

To get the service availability up, we surveyed our network coast to coast and we looked at the coverage, which was rather challenging. If you have ridden a train, you will realise that trains are generally in deep cuttings where they need to go through a hill and radio propagation does not always get to those spots. So it was a fairly sophisticated engineering approach to give them uniform coverage along the track. We realised we had to build, I think, another 70 or 78 new Next G sites to provide that continuous coverage in order to extract the benefits that Mike mentioned earlier.

Mike also mentioned that the trains were going through around 14 tunnels as well. So our engineering team got together with ARTC and we actually put satellite coverage inside 14 tunnels, which was an interesting achievement at the time. We also provided PMR radio coverage. The point is, we moved from a disparate system which was old and antiquated and had various hand-offs into one homogenous system nationally. We are working on getting those trains closer together to extract the benefits.

You will notice that the architecture here is very similar. Again, I will not go through it. We are working on a national architectural approach to these sorts of infrastructure problems, and it is about outcomes. We have Mike’s flash loco up there in the corner, where we have consolidated two tonnes worth of radio equipment and seven different radios into that little box down there in the corner. I am not sure if that is quite right—yes, he is nodding his head. Those are some of the achievements we made.

The focus is reducing pressure on infrastructure. If we take a look at what we can achieve with trains or buses and we cast ourselves into the future slightly, we have the option to actually personalise transport. You could get to a stage where you have walked out of a meeting, you are standing on the corner, you pull out your phone, you pull up a webpage and you say, ‘I need to get from A to B.’ You type in A to B, the GPS coordinates come up and give you the optimal car and says. ‘Choose this car because they will be here in one minute and they are happy to share a passenger.’ You click ‘yes’, it goes off to the vehicle, they acknowledge, ‘yes’. Their GPS coordinates lock, the car pulls over where you are, you jump in and you share rather than buying another car. That is not that far away.

In fact we are working with a national rental car company at the moment where they have rental cars parked at airports and strategic locations. Why do that? Why not just have your cars scattered over the city? It really does not matter where they are. We should be able to walk out of a meeting and if there is a rental car, again using our phones and near field communications to make a payment, the infrastructure that we have enables us to walk up to the car, tap it, unlock it, get in, punch in a code, start the car, drive it around the block or four blocks, wherever we are going, get out and lock the door. It is paid for and the car stays there. It does not matter; the next person will find it. It is all about optimising things.

My last point in closing is that there is also a lot of focus on personal use. With six or seven billion people on the planet and three to four billion people using mobility a large portion of the future will be machine to machine. There is talk of 50 billion machines around the world. As economies of scale are addressed the price of chipsets will drop dramatically. If it is $100 today, it is $50 tomorrow and it could be $5 or 50c into the future. We have tremendous opportunity before us and it looks very positive. Thank you.

CHAIR—Thank you very much for that in sharing some of the really exciting possibilities of smart infrastructure, but also reminding us that much of the technology that we have today is actually in application. Some of this is not rocket science, although some of it is. There are some fantastic applications already occurring and it is about trying to get the policy settings right from the committee’s perspective and the government’s perspective to get some of the spread of this happening a lot faster. Thank you very much.

Can I ask you all to thank Kevin, Ann, Matthew, Danny, Mike, Alan, Sam, Paul and Steve for their presentations this afternoon. The parliamentary colleagues will know that it is actually unusual for us be running a bit early but we have a few minutes which is just terrific. When we have speaking opportunities in the House, we do not get the opportunity to go over in time at all because a light goes on up on the clock, basically, your microphone gets turned off and the Speaker sits you down. I want to thank the presenters for being not only on time but ahead of time.

Proceedings suspended from 2.58 pm to 3.24 pm

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