Project NINA information briefing

NETWORKED INFRASTRUCTURE NATIONAL ARCHITECTURE PTY LTD MAY 2012

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NETWORKED INFRASTRUCTURE NATIONAL ARCHITECTURE PTY LTD

PATHWAYS TO THE FUTURE – FOUNDATIONS FOR LIFE

PROJECT N.I.N.A INFORMATION BRIEFING

NINA - Pathways to the Future, Foundations for Life __________________________________________________________________________________ !

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TABLE OF CONTENTS INTRODUCTION 3 THE NEED 5 THE SOLUTION 8 FEATURES OF THE NINA ACCESS PATHWAY 16 RETHINKING WATER 20 HELPING LOCAL GOVERNMENT 25 REFOCUSING ON REGIONAL AND REMOTE AUSTRALIA 29 THE NINA ECONOMIC MODEL 32 INDUSTRY BENEFITS & METRICS 48 NINA INTELLECTUAL PROPERTY 57 ABOUT THE AUTHOR 60 N.I.N.A PTY LTD COMPANY DETAILS 61 ATTACHMENT 1 BILL OF MATERIALS 57 ATTACHMENT 2 IMAGES 64

“N.I.N.A©™,” “NINA ©™,” “N.I.N.A Pty Ltd©™”, “NINA Pty Ltd ©™”, “Networked Infrastructure National Architecture©™”, “N.I.N.A Access Pathway©™”, “NINA Access Pathway”, “N.I.N.A Economic Model©™”, “NINA Economic Model©™” the “Gumleaf”

logo©™ and all other graphics are trademark and copyright protected intellectual property of N.I.N.A Pty Ltd©™ and its founder Guy Dixon.



INTRODUCTION

Networked Infrastructure National Architecture Pty Ltd (NINA) has developed a new physical “operating system” for the efficient distribution of networked utilities and services globally. It is universal in its application to urban, rural and regional population centers including remote and very isolated communities. The NINA Access Pathway is a low cost, flexible, easily deployed lidded modular pathway, kerb, gutter and utility ducting system, which addresses the failure of legacy distribution systems (power poles, trenched and buried cables and pits) to deliver economies of scale and scope.

The NINA Access Pathway is the first substantive review of infrastructure distribution in over 120 years. It is a multi-utility pathway which:

• Provides capacity for multiple infrastructure based service providers, in all key markets for utility service distribution; electricity, gas, water, data, communications and lighting.

• Promotes competition in all key distribution sectors of the economy. • Would constitute, a step change in micro-economic reform and place downward price

pressure on utility service prices and inflation. • Acts, as a primary water isolation and management system by isolating storm and run-

off water from contact with road surface. • Enables, the deployment of alternate power distribution networks such as 480V that

would enable high speed charging of electric cars within home garages and at the kerb side. This may remove a key barrier to the widespread introduction of such vehicles.

• Has been designed for manufacture in precast reinforced concrete modules, which can be rapidly deployed with minimum construction interference to communities.

• Has a very long economic life (100+ years). • Has been designed to be deployed in established, residential areas as well as in new

developments and as such delivers core improvements in urban environments not just at the margins.

• Increases the utility capacity of established areas and supports infill development of housing within those areas.

• Greatly lowers the marginal costs of new service deployments. • Enables multiple utility distribution services to be deployed at low cost and isolates

rainwater from contamination through contact with road surfaces. • If rolled out nationally would transform the urban landscape of Australia, greatly increase

productivity, improve safety, lower utility access costs and be a central component in creating sustainable urban environments.

• Reduces injuries due to power poles in car accidents. • Increases urban amenity, including high quality footpaths, improved mobility for

pedestrians and a reduction in visual, air and noise pollution.

As an aggregator of utility distribution services, the NINA Access Pathway greatly reduces the cost per service of civil works associated with utilities distribution. Civil costs are the largest



component of consumer charges and underpin the monopoly characteristics of utility distribution markets. The civil costs of the National Broadband Network (in Australia) are estimated by McKinsey& Co. to represent 70% of the total project cost (approximately $30 billion.) In the same market, a plan to upgrade power poles is projected to cost (as reflected in recent price increases) $32 billion across the Australian national electricity distribution market over the next 5 years. Globally there is a need within established economies and in emerging market economies for an upgrade of infrastructure where distribution is the largest and most costly component.

This report considers in detail such a project within Australia but we believe the technology and solution proposed is equally relevant to all modernising or upgrading economies.

Within Australia, the timing is now perfect to consider a broad scale rebuild of our distribution infrastructure and would constitute the wisest use of the proceeds of the current resources boom. As an Australian dollar denominated project it would also constitute a substantive structural support for the growth of manufacturing and services in Australia at a time when these are weak. A Grattan Institute paper said:

“Australia’s 1990s productivity ‘miracle’ owed much to a series of micro-economic reforms, explicitly designed to produce that outcome by consciously exposing both private and public enterprises to greater competition, both domestically and abroad, in order to spur managers into making changes to the way in which labour and capital were combined to produce goods and services.”

The NINA Access Pathway is the next major step stage in micro economic reform.

Physical reform of distribution is possibly the last low hanging fruit in productivity gains. If implemented it would propel Australia to a world leading position of economic growth in an advanced economy. This has not been possible in the past because distributors have not invented new physical forms of distribution. The NINA Access Pathway is neither a buried cable/pit/pipe construction nor an aerial (pole) network- rather, is a surface accessible encased channel system.

NINA would enable the widespread and cost effective introduction of competition into distribution, lower barriers to entry of new distributed services, and remove the economic risk of technology “bets.” It represents an opportunity for lower cost services, greater innovation, increased accessibility and shorter times to market. It becomes possible to contemplate the ubiquitous introduction of electric cars in urban environments, it allows us to move decisively towards complete water security without the need for high desalination and/or dam building, and enables a rapid transition to low emission transportation, increased urban efficiency and reduced road accidents due to collision.

Economic growth, productivity and climate change are near constant themes of the current political debate in most countries.

The NINA Access Pathway method of distribution addresses all of these themes and needs.



THE NEED

Within Australia and globally there is a push for infrastructure renewal and innovation. This is occurring in power generation, data services, water, gas, and many new services which are expected to evolve in response to a range of growing needs. Competitive infrastructure is widely recognised as key to productivity growth and international competitiveness.

Efficient distribution infrastructure is essential for the economic success of these renewal and investment programs.

NINA estimates that utility physical distribution (access) costs are now, subject to the number of services accessed, between $150 and $230 per household per month. These costs have been, rising materially above inflation over the coming years, this trend is forecast to continue. By 2015 the cost of the current service mix will equate to approximately $22 billion per annum nationally within Australia. Physical distribution costs are an “embedded charge” and the cost is not transparent to the consumer, though it is to regulators. When separated from the final service charge to the consumer, civil access is a very substantive component of household expenditures, amounting an average of up to $44 per household per week.

This is the combined access cost across of range of services (water, gas, electricity, telecoms, data and Pay TV).

There has been no major innovation in physical distribution technologies for 140 years!

Australians remain reliant upon the existing infrastructure (buried pits, pipes and cables or overhead power poles) of incumbent distributors, these costs are termed Layer 1 costs. The civil costs of distribution are the primary barrier to competition in Tier2 (cables, routers, transformers, spitters) and Tier3 (in broadband content and functionality and in electricity “green” source etc) and above utility service layers.

The push for infrastructure renewal is being driven by:

Aging of establ ished infrastructure- across the globe economies at all varied levels of development, infrastructure is failing to either match economic growth (emerging economies) and or sustain productivity in developed economies. This highlights the need for 21st century infrastructure models.

The need for broadband- high-speed Internet access is now recognized as a key factor in overall economic competitiveness and the move to information-centric economies.

Populat ion pressure- due to urbanisation requires increases in urban utility capacity. Climate change- the associated climactic uncertainty necessitates resilient and

flexible distribution infrastructure that will survive over a long time and despite increasingly variable climactic conditions.

Carbon taxat ion (penalties) on emissions and demands to meet global or local carbon emission reduction targets are promoting new power, generation, transmission and distribution technologies.



New power sources – new power sources whether solar, geothermal, natural gas or nuclear require economically efficient access to end users. This is done through distribution networks.

New service creat ion – electric transportation, hydrogen distribution, data and control systems, intelligent management of energy grids, and other future services all require the ubiquitous presence and availability of both energy and data. Optical fibres are the nervous systems of advanced economies and enable the application of intelligence (measurement systems, control and application software).

Economic Eff ic iency – the economic performance of countries is now measured relative to global benchmarks and infrastructure quality, flexibility and adaptability are now key benchmarks. The distribution efficiency of all the above is a function of their ubiquitous presence (as many places as possible) and their competitive density (as many players as the market will efficiently bear).

The Tradit ional Approach to Distr ibution is Inadequate

Distribution is essential to the effective performance of all primary utility services and all new service models. It represents between 40-70% of end user prices for utility services.

Within Australia, for example, the Australian Energy Regulator (AER) has identified power distribution as being between 40-50% of end user electricity bills. Its model is divided into three components: Generation, Transmission and Distribution. Transmission prices are rising at significantly higher rates than inflation.

The historic primary distribution models are pit and pipe (for telecoms, gas and water) and aerial poles for electricity, Pay TV, and some data/communications.

Both these operating systems were developed in the 19th century and are no longer adequate distribution platforms for existing and new services.

These approaches fail our communities and economy for many reasons, some of which are listed below:

They are prone to collapse in extreme weather, prone to fire, earthquakes and flood damage.

Poles are dangerous to drivers, within Australia and overseas they are a frequent element in fatal car crashes and serious injury.

Digging up footpaths and roads is expensive, time consuming and results in degraded curbs, footpaths and streets.

Poles are suitable for only a limited number of utilities (cable based) and do not capture full economies of scope.

They entrench monopoly pricing and inefficient market conduct such as low innovation. They are unsupportive of efficient economic growth and are now making a

disproportionate contribution to price inflation- leading to upwards pressure on interest rates.



They increase technology risk by being inflexible i.e. long-term technology choices must be made prior to cables being buried.

They are limited in capacity and scope and lead to high marginal cost of new service deployment and slow down such deployments.

Poles and trenched footpaths are a key source of visual pollution. Aerial cables impose height limitations on the transport of goods and services within

urban environments, limiting, for example, the size of precast concrete panels used in construction.

Buried cables and pipes are hard to identify and frequently damaged by other digging activities.

As displayed in Table 1, the overall status of Australian primary urban “life support” infrastructure is poor.

Table 1.

INFRASTRUCTURE ACT TAS VIC WA SA NSW QLD NT Potable Water B- B- C B- B B- B- C- Waste Water C+ C B- B B- C+ B- C- Storm Water C+ C- C- C D C C+ B+ Electricity B+ B- C- B- B- C- C- C- Gas A- C C C- B+ C C A- Telecoms B- C+ C C- C C- C- C-

Source: The Grattan Institute December 2010, Engineers Australia, Infrastructure Report Card

The above report card is for those utility services capable of being delivered via the NINA Access Pathway. The ratings show a poor level of performance across the nation. An OECD Survey of Australia found that: “Australia faces a shortfall in infrastructure, which could worsen with the demand pressures exerted by the mining boom, population growth and environmental concerns. To respond to this demand and avoid bottlenecks the authorities have to bolster infrastructure at the top of their policy agenda” Source: The Grattan Institute December 2010

NINA has revisited the urban streetscape, measured it, and invented a new, unique solution.

The NINA Access Pathway is a new, patent protected invention designed specifically to address the above issues in the form of a physical solution. It is an encased distribution pathway. It removes the economic bottleneck described above by designing out the physical barriers to entry and designing in the economic reform required by Australian and global society in the 21st century!



NINA designs out the natural monopolies, which form around access infrastructure. These monopolies are predicated on high civil costs, limited capacity and long lead times to deploy competitive services. While there is only room for one pathway (as there is only one efficient space to locate it), its regulation will be easier and more transparent, and could occur at Local, State or Federal Levels. The NINA Economic Mode is predicated upon sharing economies of scope with all occupants and thus supporting competitive entry. It is the economies of scope that provides the real micro-economic reform driver of the NINA Access Pathway.

THE SOLUTION

NINA Pty Ltd has developed a proprietary, patented solution to 21st century solution for distribution infrastructure. They are:

1. The NINA Access Pathway©™ 2. The NINA Network Model©™ 3. The NINA Economic Model©™

We describe these below.

The NINA Access Pathway©™ is a low cost, flexible, easily deployed lidded modular pathway and ducting system. The NINA is neither a buried cable/pit/pipe construction nor an aerial (pole) network, rather is a surface accessible encased channel system.

It is easily manufactured as a precast concrete embedded beam. High volume production techniques can be used to generate economies of scale in manufacture, installation, and maintenance. It generates economies of scope by allowing multiple services to be safely deployed.



Once installed the pathway is accessed by removal of the covering lid, which is fastened in place and tamper proof.

The NINA Access Pathway, once installed, forms a frame around a residential block. There are approximately 162,000 street bounded residential blocks in Australia whose average characteristics (based upon detailed surveying by NINA) is shown below. The average residential block exhibits the following characteristics.

Perimeter – 800m Area – 32,000m2

Number of serviced lots – 39 Number of households (SDU, MDU, Semi, other)1 – 50 Most blocks (~80%) are rectangular and of only modest slope A high degree of uniformity exists in the general form of the residential block across

Australia’s urban, outer urban, regional, remote and very remote communities

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1 SDU=Single Dwelling Unit (Freestanding Houses), MDU + Multiple Dwelling Unit (apartments), Semi= semi detached houses (townhouse etc) other+ attached house, granny flat, shop/house combination etc.



Brunswick Melbourne – Source: Google Earth

NINA has developed a complete suite of modular pathway elements to enable the construction of complex pathways. These elements are designed to include the various requirements for streetscapes in the “average” block (shown drawn to scale below.) A selection of the standard precast concrete modular elements are shown in the diagrams (beginning p14). Other elements not shown include narrow profiles for inner urban narrow streets, the NINA Access Pathway



configured as a cycle way or incorporated with retaining walls for sloped kerbs and soil retention. Other elements can of course be designed and manufactured if necessary.

The NINA Access Pathway is comprised of a set of modular elements that allow the pathway to follow the terrain of urban Australia. Elements are joined by flexible interstitial elements that permit graduated rotations of the pathways. The laying of the pathway is gravity based inside a trench on a compacted sand bed. When laid, the pathway acts as a linked flexible chain around the block.

The concrete volume required for an average block as shown above is 53m3 in finished form. The primary elements are: a standard Bottom casting, a series of covers representing a standard curb, a standard driveway, wheel chair access and transitional elements to allow for smooth integration of covers.

Cables and pipes can be installed within the channels in designated spaces, using PVC spacers where required. Cables can be installed in waterproof conduit in areas prone to flooding. Keyed bolts and the mass of the lids control access.

Its major cost elements are:

1. Precast Concrete module production – this would require a major expansion of this industry and consume approximately 25% of current annual production. This represents approximately 45% of total costs.

2. Installation – While installation of the modules is relatively easy and simple, its scale requires skilled co-ordination, data gathering, module fitting, trenching, component manufacturing (gaskets, access cabling/piping, access boxes, waste removal and making good). Installation costs are estimated to represent 51% of total (excl. GST).



3. Transport and logistics – the project represents a massive logistics exercise. We estimate that it would require in excess of 2000 15 tonne truck movements per day. Transport is estimated to represent 4% of total.

The above costs are for the access pathway and cable, hose and pipe links - connections to individual households ~27%. Individual utility service providers install their own networks, the Layer 2 costs.

Layer 2 infrastructure providers are expected to lease, rent or buy space within the Layer 1 architecture. For broadband this is equivalent to duct access or indeed spectrum purchases for mobile networks.

Layer 2 providers are expected in turn to supply wholesale services to Layer 3 service providers. The key difference between NINA and the NBN is that there is competition at the layer infrastructure level. This has been proven essential for effective unregulated competition.



1. Standard pre-cast base module, indicative dimensions

2. Standard Bottom Casting Cover

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3. Standard Bottom Casting Cover (Driveway)



4. Bottom casting 3.6m Radius Corner

3. Bottom casting R3.6m Cover

FEATURES OF THE NINA ACCESS PATHWAY The NINA Access Pathway is a set of modular units linked by shaped interstitial elements. When joined these form a frame around a residential block. In cross-section this has a kerb, a



gutter, two primary utility channels, and a water channel. It can be understood as analogous to a spinal cord.

The cord contains power (electricity and gas), and water (potable and grey), for delivery to the home. A stormwater harvest channel provides separate pathways for rain and run-off water. This is designed to isolate stormwater, which has fallen within the residential block and has had contact with the local road surfaces (thereby preventing that water from becoming contaminated by contact with the toxic road surface). Power chambers are isolated from gas and fluid chambers.

Key Design Parameters of the NINA Access Pathway System

1. Service life +100 years. 2. Must be capable of high-scale high-quality production. 3. Low slip surfaces to be used to increase the general safety of the streetscape for

pedestrians and car drivers. 4. Must contribute to an improvement in ease of access for all residents, but in particular,

the elderly and those requiring assisted mobility (users of wheelchairs, walkers, prams etc).

5. Must allow for a general improvement in the quality of footpaths. In many areas the condition of footpaths and walkways is seriously degraded. The NINA Access Pathway supplies a safe walking surface and supports investment in pathway upgrades in general.

6. Must remove the need to excavate footpaths. 7. High quality concrete with low porosity to prevent concrete cancer or surface

degradation (spalling). 8. Clear identification as utilities infrastructure, thereby reducing the risk of damage from

construction or digging activities. 9. Rainwater falling within the framed block to be isolated from contamination via contact

with the road surface. This water can be managed separately from the existing ducting system.

10. Flexible jointing- a chain-like effect to permit moving response to settling, impacts and root lifting without compromising watertight integrity of ducting chambers.

11. Replaceable cover profiles to allow for normal evolution of urban environments (e.g. new driveways, mountable surfaces, new junction or connection points and new service delivery).

12. Compatibility with adjacent surfaces (e.g. grass verges, pathways, streetscape gardening, sealed surfaces, pavers).

13. Easy accessibility for utility installation, maintenance and repair. 14. Residual capacity for new service growth.

Overhead power lines are a form of visual pollution. Until now no cost effective, national scale, removal solution has been presented. Nor has an improved cost efficient means of power distribution been proposed. The NINA Access Pathway achieves this and more.

NINA has unique features for which Patents have been applied include:



1. The ability to closely follow the contours of the road surface and variable urban geographies

2. Two or more isolated internal channels which permit the installation of power lines and optical cables in one (the channel closest to the kerb.) A separate channel for the carriage of gas, water, copper, fibre optic, co-axial or other cables)

3. A third channel for the capture and transport of stormwater; and 4. An external channel which allows for the transit of pipes, cables and hoses between an

integrated take-out box (a unique module) to a point immediately adjacent to an end-user premise. A channel is installed across the path to connect the premise to the NINA Access Pathway™. This means that once installed no cables need to transit beneath the footpath and thereafter there is no further or future need to excavate footpaths.

5. A collection of; corner bend sections to form both corners and cul de sacs.

The base channels are covered with variable profile lids which can take a variety of forms and shapes such as a driveway, a wheel chair access point, or a wide cycle-way lid.

Uniquely the modules are linked by interstitial members which ensure both directional flexibility and watertight integrity. Some typical elements are displayed in images below.

Installation of the pathway is easy, in most prevailing geographies. It involves trenching and assembly. Service installation within the pathway involves the location of cables, pipes, and conduits in easily accessed channels. Tight dimensional controls permit substantive pre-installation of utility elements, minimising on site works. Feeder channels incorporated into the external channel of the bottom casting allow for easy access from the take-out service connection points to household meters.

Aggregated metering is also a new and potentially valuable service made easy by the NINA Access Pathway.

Survey and fitting can be done quickly and NINA is developing new technologies to automate this process.



Final module lengths are determined by compatibility with the SWL crane capacities on trucks typically used to transport bricks. Some elements are shown below:

Primary network architectures capable of being deployed within the blocks can be classified into 6 physical groupings:

Fibre Optics – broadband, backhaul, network intelligence for all services Power services – 11kV, 415V, 480V, 240V, localized DC power, lighting power and

networking power for communications services. Gas – natural, coal seam, hydrogen Water – primary potable, recycled storm and grey, hydrant services, filtered potable,

heat exchanger Legacy Cable - (Copper, coaxial), legacy communications (Telstra CAN)

Networking between blocks is done via manhole accessible links between the blocks; this permits the creation of larger loops and the laying of trunk lines.

The location of the NINA Access Pathway along the existing curb line allows it to overlay existing stormwater infrastructure, which is used as overflow. The inner water channel enables relatively clean water run-off from residential roofs and yards to be isolated from road surfaces, which may contain toxic automotive chemicals, which build up on road surfaces. This greatly increases the utility and value of stormwater, which may be retained for local use, redirection to storage, natural water flows or numerous other purposes. These features are illustrated in the following images.



RETHINKING WATER Redirect ing Rain and Storm Water

Managing water: ra in, storms, f looding, c leanl iness and a new resource.

When fully implemented, about 4.6 billion cubic meters of water per annum would fall within the boundaries of the NINA Access Pathway™. (Source: NINA Analysis, Bureau of Meteorology). This represents approximately 514 cubic meters per household per annum, or 184% of annual household consumption! The value of this water resource is also increased by its proximity to end-users.

The primary barrier to efficient economic use of this rainfall and storm water run-off is the health and safety risks posed by contamination of this water in the urban environment. While organic materials, leaf litter, animal feces, and sewerage overflows can be treated with relative ease (e.g. chlorination) the removal of heavy metals and complex chemical compounds is a major challenge, both physically and economically. The major source of such contamination is through contact with the urban road surface.

By locating a dedicated water flow path in the inner channel of the NINA system, rainwater run-off can be isolated from polluted road surfaces. This increases the water value- because cleaning large volumes of water contaminated by complex chemical pollutants is both difficult and expensive. It is better to prevent it from getting dirty in the first place.



The NINA Access Pathway system is designed to allow clean storm and rainwater to be harvested by communities, public water companies or commercial interests. It could charge for flows (volume based) passing through the NINA Access Pathway and delivered to collection networks or it could charge interested parties for the use of the system in a given area (non volume based charge).

It has become widely recognized that the design of existing storm water systems has been based upon the speedy removal of water rather than the retention of water in the community for non potable uses (gardening, washing, flushing etc) or for quality improvement to potable standards. These designs are reflective of an era where there was no water shortage in major cities and flood control was the primary concern.

Australian cities, like their global counterparts, are characterized by “hard surfaces.” These include roofed buildings, roads, paths, concrete culverts and other urban Infrastructure. These surfaces promote the rapid acceleration of water downhill towards receiving streams, rivers and the sea.

With the rapid movement of water through our storm water systems, high levels of pollution



from urban activities are transported .

Pollutants include litter and general detritus, sewer overflows, vehicle emissions, animal feces, garden fertilisers, silt and vegetation. While natural ecosystems can absorb some pollutants, metropolitan centers produce waste streams that are too concentrated and which move too quickly via concrete drains and pipes to be assimilated by receiving waters.

The NINA Access Pathway system provides choices in the management of storm water, which are currently not available. These include the option to “split” storm water into two, three or more streams.

One stream is water which has been isolated from contact with the urban road surface, but may include surface water from footpaths, gardens or other sources. This water has avoided contamination by genuinely harmful road surface pollutants such as engine oils, coolant fluids and exhaust fumes which have settled on road surfaces. Water isolated from these pollutants is useful for general watering purposes such as gardens, environmental flows back into natural waterways and industrial uses.

Another stream is water collected solely from downpipes flowing off roof surfaces. This water is substantially free of organic pollutants and when combined with “first flush” systems it is generally the cleanest urban storm water, being free of fertilizers, pharmaceutical products, chemicals and anti-biotics- all of which can impact upon the local ecological health. This water can be filtered locally and subject to testing and appropriate quality controls to be brought to a potable standard.

The break-up of storm water flows may permit aggregate flow speed to be reduced, flash flooding diminished and the more targeted treatment of road water (whose volume would be much lower).

Unmanaged flows have been accredited with causing algal blooms, fish kills, closed beaches and shrinking fisheries, all of which have direct effects on the health, prosperity and amenity of urban areas.

A national roll-out of the NINA Access Pathway would become an integral component of a National Water Management Strategy.

This is consistent and complimentary to the findings of the Senate Water Enquiry 2002-2004, whose frames of reference are described below:



“The report addresses each of the Committee’s terms of reference and was written with two major factors in mind. First, the report aims to take a solutions based approach to urban water management, rather than simply recounting a list of problems. Second, the Committee is mindful of the fact that urban water management is a shared responsibility of all three levels of government in Australia, which ensures a degree of jurisdictional complexity. The report considers the roles of all three levels, but ultimately focuses its recommendations on matters that are the responsibility of the Commonwealth.”

Should either the Commonwealth or the NSW Government adopt the NINA approach represented by the NINA Access Pathway™ then it would be a major contributor of value in the evolution of urban water management. Rainfall across Australia’s residential areas on a population weighted average (the average rainfall in areas where the population of Australia live) is more than twice the consumption per head of population.

By combining water harvesting and redistribution in a common architecture the economic value of the rainwater becomes a substantial economic contributor to the cost. Note that we have only modeled the infrastructure charge for water distribution and redistribution charges in our economic analysis, not the value of the resource. Fully captured and at a price of $2.00 per cubic meter (the current urban charge for water in the State of New South Wales is $2.13 per cubic meter or kilo liter), the value of this water resource could approach $10 billion per annum!

The following table indicates the economic value at certain efficiency capture ratios at a price of $2.00 per cubic meter:

Table 2.

Efficiency Value 0.9 $9.9 billion 0.8 $8.8 billion 0.7 $7.7 billion 0.6 $6.6 billion 0.5 $5.5 billion 0.4 $4.4 billion

Source: NINA Analysis

Potable water suitable for drinking and washing is the most stringently regulated for public health reasons. However, this is a relatively small proportion of all water usage, representing approximately 25% of water consumed by urban and townsfolk.

The NINA Access Pathway would greatly alleviate demand for water sourced from dams and



reservoirs and reduce the costs of distribution. This represents substantial economic and environmental benefits.

A further benefit of the NINA Access Pathway is that by isolating rainwater from the road surface it dampens initial “flash flood” flows, which are often of short duration but with significant impact upon communities. The system has the capacity to install a closed pipe in the channel specifically to collect “roof water” from downpipes, which can be fed into a pipe within the water channel. This is the cleanest of the environmental water flows in the built up urban environment. There is also capacity to install a dirty water capture channel under the gutter piece.

The responsibility for land and water management in Australia rests primarily with the governments of the States and Territories, and also with local government under authority delegated by the State governments (Senate Water Enquiry 2002).

Debt levels are high at these levels of government and their capacity to invest is limited. The NINA Access Pathway relieves the need for this investment and allows capital to be redirected to other service areas. NINA provides a framework to substantially reform the economics of local government.

HELPING LOCAL GOVERNMENT

“The PwC Report,” which was commissioned by the Australia Local Government Association, to look at the sustainability of Local Government finances called for a range of reforms to deal with the national backlog in local government infrastructure renewal work.

This backlog of work has an estimated cost of $14.5 billion.

This backlog has resulted from the growing gap, in many Local Government Areas (LGA), between their revenue base, the cost to deliver a broader range of services and the cost to maintain and renew the infrastructure which supports these services. 2 We understand that this phenomenon, the under funding of local government, is present in the United States

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!2!(Source: http://www.alga.asn.au/policy/finance/pwcreport/)

http://www.alga.asn.au/policy/finance/pwcreport/!

!



and in Europe as well.

A national rollout of the NINA Access Pathway would relieve LGA of the costs of maintaining curbs, increase land values, and thereby boost local government rate income. In our economic modeling, we have assumed an annual payment to local government of 10% of revenues. Upon completion, royalties would contribute nearly $3.2 billion per annum to local governments, (following a national rollout), O&M costs savings of $1-1.5 billion plus an increase in rate income by $1 billion per annum (estimated at 1% p.a. of the increase in the improved land value). A national rollout has the potential to improve LGA economics by $5.5 billion per annum. Funding of local governments to contribute to the capital cost of development would also increase their long term financial strength.

As a stable income stream these funds could be leveraged to support a major push to address, a now reduced infrastructure backlog, support greater service levels and allow for reduced or stable rates. LGA as one of the largest purchasers of utility services would also benefit by the improved productivity in these sectors and the increased competition.

The above amount would flow directly to the LGA EBIT line. This would contribute significantly towards a general improvement in the economics of LGA operations.



.Table 3. Backlog in local Government Infrastructure Spending and Income shortfalls (funding gaps)

Access Economics & MAV Financial Sustainability Summary Results

Backlog in infrastructure renewals ($m)

Underspend on existing

infrastructure renewals per annum ($m)

Est. funding gap per annum ($m)

(to cover backlog & annual underspend) to

be generated via savings or extra revenue/grants

Est. funding gap per

council per annum ($m)

% of councils

unsustainable

NSW (152 LGBs - Access) $6,300 $500 $900 $5.9 25% SA (68 LGBs - Access) $300/1 $20 $40 $0.6 38% WA (142 LGBs - Access) $1,750 $110 $220 $1.5 58% Vic (79 LGBs - MAV) $806/2 $81 $203 $2.6 10% Total NSW/WA/SA/Vic $9,156 $711 $1,362 $3.1 35% Low Case National Est imate $12,012 $922 $1,826 $2.6 Mid Case National Est imate $14,533 $1,129 $2,163 $3.1 35% High Case National Est imate $15,305 $1,190 $2,281 $3.3

Source: PWC National Sustainabi l i ty of Local Government Report 2006

Notes: 1. Access (Access Economics) estimate for SA based only the backlog developed over last 10 years and the full backlog will be

higher. 2. MAV estimate of infrastructure backlog is in 2003-04 dollars, for the period between 1997-98 – 2003-04, hence is understated.

Introduction of the NINA Access Pathway would also allow for a much higher quality streetscape, which is currently being repetitively degraded by infrastructure “upgrades”.



Above: An inner city Sydney road displays typical damage caused by utility service providers regularly digging and patching to access their infrastructure. NINA alleviated this problem by installing all physical pipes, cables and wires in the curb- lowering distribution

costs and increasing urban amenity.



REFOCUSING ON RURAL REGIONAL AND REMOTE AUSTRALIA

A major policy objective of the NBN and current economic debate has been to redress real imbalances between communities located in rural, regional and remote Australia, and those in the major city urban centers.

This imbalance is often reflected in community access to broadband and sophisticated, affordable infrastructure services as well as social services such as health, education and community services. Broadband access is widely promoted and regarded as hard economic infrastructure which supports the expansion of social services.

The NINA system is equally applicable to rural, regional and remote communities and will enhance access to remote household and isolated communities. It achieves this by creating fibre islands of rural townships. These islands allow the majority of regional traffic



to be handled directly by fibre access. In the process it provides many more low cost wireless base stations which can be targeted towards homesteads and outlying residences. This concept is displayed in the above image for the town of Tamworth.

Australia’s population distribution is best seen at night. Where there is light and electric power there are people. Technology is dependent upon access to the power grid.

NINA advocates close co-operation between all utility service providers to co-ordinate and co-locate. This includes water irrigation and road and rail networks. We support the Government's plan to address regional broadband blackspots and view this as a national connective network which, when combined with networks such as that of Telstra, TPG and Optus would substantially connect rural, regional, and remote Australia into the national and international fibre networks.



Rural, regional and remote communities are also organized into block formations. This is displayed in the images below. (Source: Google Earth). The roll-out of RBBP infrastructure also has the advantage of creating large loops which increase network resilience and allow for self-healing characteristics to pervade the national backbone network. This is highly complementary to the creation and support of the “fibre islands” concepts.



THE NINA ECONOMIC MODEL

“Productivity isn’t everything, but in the long run it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker. “ Paul Krugman, The Age of Diminishing Expectations (1994)

The Economic Backdrop

The rate of growth in Australia’s productivity following a decade of out performance relative to its peers in the OECD has over the past 5 years flat lined and more recently begun to decline.

Part of the national strategy to address this decline is to invest in economic infrastructure3 these are massive investments. They include:

The $40 billion NBN project- of which 70% is civil works (pits, pipes and poles) A committed $32 billion in upgrades to the power distribution networks. A $13 billion fund for improvements to water security and recycling.

Australia’s relative labour productivity in utility infrastructure has been poor relative to that of the USA and suggest that we need to lift our game. Unfortunately the relative outperformance of the USA is achieved by a more intense competitive landscape, intense competition between states for business and a more assertive regulatory environment. The current planned infrastructure investment is high cost and coming at a time when environmental policies are seeking to drive down consumption of key commodities such as power and water. Accordingly we shall most likely see higher prices and reduced consumption which is a negative event in productivity assessments.

Table 4 - Performance of utility market sector industries

Australian relative labour productivity levels, USA = 100

1980 1990 2000 2005

Market Sector

Electricity, gas and water supply 40 47 58 37

Post and telecommunications 33 51 68 61

Source: Productivity Commission, http://www.pc.gov.au/research/productivity/estimates-trends/international-comparisons.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!3!Economic infrastructure typically refers to roads, ports, water, communications, power systems and sewerage, Social Infrastructure refers to Educational, Health, Justice and Community services.



Infrastructure modernisation is necessary to stimulate productivity and improve international economic competitiveness. Australia is currently experiencing an infrastructure crisis, this is widely recognised across government, the Reserve Bank of Australia, academia, business and the community generally.

The provision of infrastructure services is a large part of economic activity. The efficiency of the provision of these infrastructure services therefore directly influences the overall productivity of the economy. Cumulative capital expenditure on distribution infrastructure is expected to exceed $150 billion over the next 15 years. This figure includes the new capital expenditure identified above ($75 billion plus an annual maintenance and expansion capital expenditure cost of approximately $5 billion per annum). This assumes no new service introduction and the prevalence of the legacy architecture models i.e. no substantive or transformative innovation. This is evidenced by the proposed use of pits, buried and trenched pipes and ducting. These platforms have not been materially altered since 1842. It is well understood that infrastructure can raise productivity in the economy if the infrastructure industries provide their services more efficiently and if the provision of infrastructure services enables using firms and industries to improve their productivity.4

NINA has carefully examined all major current plans from an economic, technology and political risk perspective and considers that:

Major broadband initiatives such as the NBN in Australia have marginal business models, under best case monopoly scenarios and are characterised by high economic, technology, and political risk.

It widely believed that the NBN, in its current form (early 2012) pass a Productivity Commission assessment as viable as a standalone project.

Upgrades to the power distribution networks while necessary to reduce distribution losses and increase reliability are high cost and are forcing up retail prices at a time when demand is being suppressed due to the carbon tax and the natural response of consumers to higher usage charges.

Investment in both an inefficient power distribution platform and an inefficient broadband platform now in the face of the NINA Access Pathway invention constitutes an unnecessary diversion of scarce capital from investment in efficient clean power generation and higher order (Layer 2 and above) broadband services.

In the case of broadband we are seeing a return to monopoly service provision in fixed network services at Layer 1 and 2 levels and for power we are seeing a reinforcement of barriers to entry into the retail distribution markets.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!4 Shanks, S. and Barnes, P. 2008, Econometric Modelling of Infrastructure and Australia’s Productivity, Internal Research Memorandum, Cat No. 08-01, Productivity Commission, Canberra, January, unpublished.



Proposed stormwater capture and recycling plans have not been substantiated and there has been a lack of viable projects to attract the funding which is available under Commonwealth Grants ($13 billion).

Local Governments are struggling to meet their required maintenance capital expenditure in roads and basic community infrastructure and in Australia are approximately $14 billion in arrears. Local Government infrastructure investment is being constrained by general inflation concerns, limitations on pricing and a competition for funds via grants.

The Victorian Bushfires Commission report identified that $30 billion should be spent to make Victoria bushfire proof, such an investment cannot be afforded on a standalone basis.

Our analysis allows us to assert that the benefits sought by the above standalone projects are achieved at lower cost, greater efficiency and with larger and broader productivity spillovers to the wider economy, if an efficient co-location strategy such as that enabled by the invention of the NINA Access Pathway is employed. Infrastructure assets are by nature large and may take a number of years of formation before they become fully operational 5. There may also be lags between the time that infrastructure becomes operational and when users are able to make use of the investments in productivity- enhancing ways. The NINA Access Pathway is unique in that, its basic unit, the residential block, becomes economic from the moment of its completion. It creates a productivity benefit for both incumbents (lower more competitive operating cots) and an entry opportunity for new infrastructure based service providers to enter that micro market “unit”. It does this in the water, electricity, communications and gas markets. In a broad based deployment across regional or geographic markets Incumbents are compensated by gains access to new markets, this in turns increases there returns to high layer platforms such as customer service and support systems, purchasing and service overheads. Maintenance costs are lowered across the board due to the removal of external threats such as trees, car crashes, storms and floods etc. Economies of scope are also made possible in maintenance services. The rollout of the network of linked blocks, can commence from known points of infrastructure presence. Examples of which are transformer stations, local exchanges or data centres. As these elements are already in place the cost of deploying new cable and pipe routes in clear easily accessed channels is low, i.e. the marginal cost of cable, pipe or power line laying is greatly reduced by the presence of a surface accessible pathway for these services which passes directly in from of end-user premises. End users are linked to connection points at the curb, by efficient pre-installed cable, pipe and line linkages

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!5!Shanks, S. and Barnes, P. 2008, Econometric Modelling of Infrastructure and Australia’s Productivity, Internal Research Memorandum, Cat No. 08-01, Productivity Commission, Canberra, January, unpublished. !



In order to measure these benefits we have undertaken detailed economic modeling and developed, the NINA Economic Model. This model has carefully measured the aggregate access market and the micro economic reform benefits that would flow from a large scale (national deployment) of the NINA Access Pathway. Key findings are:

Average households in Australia, with a weighted average service mix incur access charges of $300 per month.

There are currently approximately 8.9 million addressable household within Australia (this value corresponds to households connected to the electricity grid).

The medium growth forecast for new houses is approximately 130,000 per annum, this is not being achieved currently with the current annualised rate of new commencements (seasonally adjusted at 122,000 per annum)6

Australian households currently spend approximately $33 billion per annum to cover the distribution network costs embedded in their utility and distributed service bills, this is greater than 2% of GDP.

These rates are rising at a greater rate than inflation, the most recent increases in electricity distribution are 9% and are part of an overall 18% increase.7

The physical access networks comprised pits, poles, trenched channels, ducts and feeders into houses represent from 50% and 70% of these charges we estimate the average charge across utilities is 56%.

NINA Access Pathway can be deployed at a capital cost, which is highly competitive with the current disaggregated infrastructure plans.

NINA Access Pathway will generate higher rates of return (~20% IRR,) even at substantially lower access prices.

The cumulative capital cost is estimated at $104 billion, this represents a capital cost of $11,298 per household including GST.

The project becomes self-funding as the rollout progresses at the 7 year point assuming a 12 year national roll-out.

The project is high fixed cost with strong cash generation and a very long life. Our analysis indicates that the project would require approximately $34 billion in a mix

of equity and debt funding. Gearing can be increased with proof of concept and take up by utilities.

The use of debt funding and a general move by incumbent utilities into the pathway could see equity funding requirements fall to less than $10 billion.

The benefit to utilities from moving early is that it would lower their own capital expenditure and reduce operating and maintenance costs.

NINA Access Pathway increases competition within distribution markets and promotes new entrants and new services by removing barriers to entry and increasing speed to market of new services.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!6!http://www.abs.gov.au/ausstats/[email protected]/mf/8750.0 7!IPART June 2012 http://www.ipart.nsw.gov.au/Home/Industries/Electricity/Reviews/Retail_Pricing/Changes_in_regulated_electricity_retail_prices_from_1_July_2011/24_Jun_2011_-_Media_Release/Media_Release_-_Be_an_Informed_Consumer_if_you_are_entering_into_a_Market_Contract_for_Electricity_or_Gas_-_June_2011!



The NINA Access Pathway is essentially future proof and would be a key enabler of all technologies e.g. wireless, intelligent networking, intelligent lighting, information distribution, data collection and other current and future technologies.

The NINA Access Pathway is fireproof (indicatively 4 hours at 1500°C,) thus meeting the bushfire safety requirements.

The NINA Access Pathway does not float and, can be made waterproof for flood prone areas.

The NINA Access Pathway cannot fall or collapse and so is cyclone proof. The NINA Access Pathway is essentially earthquake proof with the advantage that ease

of access and identity reduces the risk of underground rupture or breaking of pipes or cables.

The NINA Access Pathway, is an innovation driver of productivity growth. Innovation is widely recognised as a key determinant in productivity growth.

NINA Access Pathway greatly increases the social amenity of the urban, rural, regional and remote environments through improved walkways, soil retention, improved waterways, the removal of visual and noise pollution and reduction in urban transport emissions.

Spillover benefits are valuable and demonstrable and should be included in any productivity assessment. An example of such a benefit is that low marginal cost acces to residential households would enable the cost effective building a power distribution network customized to optimise the charging of electric cars e.g. 480V or a direct current network.

Other benefits such as reduced incidents of falls amongst the elderly which are responsible for approximately $1 billion per annum in health care cost could be reduced by improved footpaths, increased ease of mobility etc amongst this age group.



The following Tables outline some of the metric used in assessing the economic and productivity benefits.

Table 5. Indicative monthly access charges for key distributed services and utilities.

Utility Access Cost/month Mode of Distribution

Data $25 Optical fibre cable (conduit optional)

Pay TV $25 Co-axial (conduit optional) buried in footpath poles

Legacy telephony $15 Copper (conduit optional) buried pipes, pits, poles

Electricity $150 HV and LV cables, poles, drop lines

Gas $30 Low pressure gas pipe or hose (50mm) buried in footpath

Water $15 PVC, ceramic, metal, pipes buried in footpath

Street lighting $10 Pole light power charged to councils passed on in rates

Source: AER, Utilities reports, press briefings, NINA analysis Table 6. Weighted average cost per household of key distributed services and utilities. This allows for varying service penetrations and the relative size of the civil component.

Utility Network Access Cost/month

Mode of Distribution Current Civil Component “Ducting & Pole Revenue” per household per month (average civil is 56% of total access)

Data $24 Optical fibre cable (conduit optional) $17

Pay TV $20 Co-axial (conduit optional) buried in footpath poles $14

Legacy telephony

$22 Copper (conduit optional) buried pipes, pits, poles $16

Electricity $171 Copper HV and LV cables, poles $117

Gas $28 Low pressure gas pipe or hose (50mm) buried in footpath

$8



Water $20 PVC, ceramic, metal, pipes buried in footpath

$10

Street lighting $15 Pole light power charged to councils passed on in rates $10

Total $300 $169

Source: AER, Utilities reports, press briefings, NINA analysis The NINA Access Pathway economic model is predicated upon the creation of a competitive but economic access environment in which the benefits of increased economies of scope (more users of the pathway) will be shared between all parties- including the pathway owner/operator.

As modelled access prices fall as the number of occupants increase. Our detailed modelling shows that under such a scenario, higher rates of return are achieved than is possible with current "stand alone" utility investments, even at substantially lower access prices. The modelled competitive density and subsequent rates underpinning these assertions are displayed in the following tables.

The access charges are for the physical use of the ducts- what is known in the interconnect environment as Duct Access Charges. These compare to Layer 1 charges in the NBN Implementation Study.

Utilities will still be required to deploy cables, piping, isolation valves, splitters and physical equipment within the duct. This will be their own investment. However, the barrier of the cost of building and maintaining a unique physical distribution network are removed and speed to market for new services or physical upgrade such as fibre to the home or shared fibre services are effectively removed.

Maintenance of the physical network is much lower as it does not involve poles and removes the risk of accidental damage due to digging. These maintenance costs are shared, and are included in the pricing model.

The NINA Business Model allows for costs to be shared across multiple Layer 2 infrastructure-based service providers. These costs include capital (maintenance and expansion), depreciation and operating expenses. This is what economists refer to as ‘economies of scope’.

The more users, the lower the access charges become- because they are shared. This also reduces resistance to new entrants because there is a compensatory reduction in costs for existing operators. The NINA model is purely wholesale. Its clients are the Layer 2 infrastructure owners deployed within the NINA Access Pathway.

The NINA Model has asset characteristics similar to a property asset. The land is currently occupied by curbs and gutters which are built and maintained by local government. NINA believes that this land is under-utilized, largely neglected and in need of serious upgrade.



The shape and form of the NINA Access Pathway provides space which can be sold, leased or rented to Layer 2 infrastructure service providers.

Ownership arrangements may take multiple forms- depending upon the availability of capital and geography. NINA could be built using state, private or combined capital. For example, the rollout of the infrastructure may be sub-divided to different entities on local, state, territory or a national basis. Parties may wish to compete to occupy duct space in certain geographic footprints such as Sydney, Melbourne or Albury.

This is equivalent to the spectrum auction mechanism. Alternatively, a national single ownership structure may be preferred which incorporates a universal service provision. Commercial arrangements could take multiple forms: lease, rental, capital +rental, IRU or other combinations.

A peculiarity of infrastructure investment within Australia is an acceptance that it is subject to natural monopolies8 (big fish in a small pond) and that there is an important role for government regulation. This premise has dominated both the telecommunications and energy markets within Australia. Notwithstanding that the original micro-economic reform policy of the telecommunications sector, initiated by Labor Party in 1991, was to promote infrastructure based competition in telecommunications (as reflected in the 1991 Telecommunications Act) this has been steadily abandoned since 1997, when the amended Telecoms Act (1997) allowed a movement away from the principle of facilities based competition as it applied to the fixed line network and instead focused on uneconomic duplication of fixed line infrastructure investment. This occurred notwithstanding the success of the mobile telecommunications industry, which was built around facilities based competition and has since grown to dominate the voice telephony market within Australia.

The driver was an unwillingness of new competitors to invest heavily in fixed line services ably supported by regulatory pricing constraints applied to fixed voice, in particular the high charge of calls from fixed to mobile phones. The role of high bandwidth data services in the residential and SME markets was not anticipated in this shift in focus.

Risk

Major infrastructure projects with high upfront fixed costs and long expected asset lives are subject to a variety of risk, these include technology risk, (is it the right choice? will it be superseded?, Will it work?) economic risk (will its benefits outweigh the costs?, will the forecast usage assumptions be realized?, will users like it?), environmental risk (will is damage the environment? Are environmental costs reflected in the cost benefit analysis?). We consider some of the relative risk factors in the following paragraphs.

Techno logy R isk !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!8 Grattan Institute



By being active in Layers 1-3, either fully or partially, and reliant on buried and therefore largely inaccessible ducting and access routes, the NBN bears a material degree of technology risk. It is required to anticipate both long-term future capacity requirements and make decisions as to whether each household should have a dedicated fibre connecting it to a local exchange (or server), a shared fibre with dedicated capacity or a shared fibre with undedicated capacity. Under the NBN model the marginal cost of new fibre deployments is still high because its physical civil access network is inflexible. The primary fibre installation must make important assumptions as to the type of network topology and electronics to be employed.

The NINA Access Pathway, by virtue of the ease of access (open the lid rather than dig up a road or footpath), can allow for growth in fibre and changes in access electronics (splitters, routers and others). It also changes the location of the point of connection to the customer i.e. it provides a fibre, electricity, copper line, water and gas pipes to a point on the curb where layer 2 service providers can make a connection.

This means that individual fibre infrastructure owners can make choices as to the density and timing of the fibre they wish to deploy knowing that capacity expansion is relatively low cost. The risk of these choices is lowered if the marginal cost is lowered. The demand and therefore revenues are known and the time required to install new capacity is reduced. The NBN recognizes that such transitions and upgrades could be difficult in the absence of market mechanisms9 .

Economic Risk

The creation of a multi-utility pathway enables the risk associated with the investment to be distributed across multiple utility service platforms. In so doing NINA also creates future growth opportunities as new services are developed.

Our analysis indicates that a market rate of return can be achieved in the absence of major industry sectors such as broadband or electric power distribution.

The extent and rate at which current distributors would move across to the NINA Access Pathway™ does involve a degree of risk. However, as the NINA Access Pathway removes a key barrier to entry, civil access costs, we believe that the risk of new entrants entering the market on the back of a genuine innovation i.e with a lower cost structure and more appealing delivery shifts the balance of risk to the legacy providers who do not move across.

The NINA Access Pathway is a “disruptive” technology which challenges the status quo. We believe that the superior cost structure of NINA makes this inevitable- failure to do so

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!9!NBN Implementation Study, McKinsey & Co p. 442!



simply allows a competitor to enter the market unchallenged at a lower cost point and with extensive consumer backing. The greater risk is for legacy distributors to commit large amounts of capital to outdated and unpopular, high cost distribution models.

As a simple ducting access provider NINA would operate with a relatively small number of clients. These would be utility service companies who themselves have made considerable investment in infrastructure. They can be considered reliable corporate clients. NINA has the opportunity to set terms of access and default in its lease or rental arrangements, and these would include a provision regarding failure to perform.

Australia requires substantial and varied infrastructure to be provided over the short, medium and long term, estimated as ranging from $455 billion to $770 billion over the next 10 years, in order for demand to be met and our economic and social prosperity to be continued.10 Economic modeling and analysis confirms that, rather than considering such spending to be a burden, it positively contributes to the economic wellbeing of society. This well-being is maximized if the allocation of capital is to the most efficient economic use of that capital, this is what is known as allocative efficiency.

The NINA Business Model design is based around five segments, which occupy core volumes within the pathway. We have modeled up to 30 different networked service providers may locate their networks within the pathway. Liquids (water and gas) require a higher internal volume and electrical services require a dedicated channel with a larger volume for safety reasons. These are described within Table 4.

The charges indicated in the following Table 7 are substantially lower than those assumed for broadband in the NBN Study (p. 39) and for those of electricity currently being charged. For instance, the NBN study identifies a charge of $35 for a basic wholesale service in an uncontested market. Under the NINA model, infrastructure providers will compete for customers in blocks where they have a presence.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!10!Infrastructure Partnerships Australia – Submission to Australia’s Future Tax System Review Panel, 2008



Table 7. The core services and average price per addressable residence/household

Core Description Number of infrastructure providers Year 10 (Average charge per block residence accessible)

Data Broadband, Telecommunications, Pay TV, wireless, backhaul

13 ($5.50)

Electricity 220V, 480V(Car Power), Green Power(dedicated), Street lighting

6 ($14.67)

Gas Low pressure/natural/car 2 ($11.00)

Water Primary, Storm, Grey, hydrant, filtered

3 ($4.00)

Other Community networks: security, notice boards, alarms, CCTV, control (traffic lights)

4 ($6.00)

For example, in the provision of a broadband data service of 100 megabits per second, a service provider would face a per customer charge equal to the above rate divided by their market share within the block. We have assumed that in Year 10 there would be four broadband infrastructure based providers competing. Therefore, the effective access cost per customer is $22 (nominal Year 10). At 21% this is materially below the high demand assumption (best case) as modelled in the NBN Study. We have assumed Pay TV and standard telephony services will continue to operate separate networks, with their own charging mechanism (notwithstanding an increasing degree of service bundling).

Electricity is a more expensive service due to the fact the power requires its own isolated channel. This is for safety, principally to avoid sparking with gas, electromagnetic interference, and shorting due to flooding.

NINA will also support lower and more competitive electricity pricing. Electricity distribution (pole and line) charges are currently estimated at 50% of the total electricity bill (IPART Reference). With average bills forecast to rise to approximately $800 per quarter, the distribution component will represent a cost to the consumer of approximately $107 per month.



With efficient distribution and higher voltage rapid charging, electric cars become a more competitive alternative to fossil-fuel based cars. As the NINA Access Pathway is designed with this scenario in mind, electric power will become a substitute for liquid fuel bills, which we estimate are currently $100 per month per small car. Current fuel distribution systems incur significant direct distribution costs ( including fuel trucks, petrol stations, refineries). These costs represent a significant component of fuel bills, and are likely to be at least equivalent to current electricity distribution. There are also substantive indirect costs e.g. to the environmental and health which can be avoided by mass distribution of transport power, irrespective of the generation source.

Assuming 40% of revenues for both services distribution per month, the combined power distribution charges would be $147. Under the NINA model the aggregate access cost for all competitive power distributors is approximately $70. This leaves a substantial margin to cover the costs of new cabling and high voltage transformer networks. Importantly, for power distributors, the NINA Access Pathway does not require replication of ground based transformer networks as these are already located along the pathway. Our design incorporates plans for an We believe this will be sufficient to induce price-competitive current and new generators, and distributors, to enter the electricity market.

The NINA system reduces the need for both purpose-built and car-park dedicated electric car fuelling stations. By removing the need for this infrastructure, significant savings are made whilst still promoting the mass take-up of electric cars in city and urban regions.

A more complete and competitive power distribution system will also support investment in upstream generation. The economic efficiency savings of having both a curb-based and house-based rapid charging system should not be underestimated.

Execut ion Risk

NINA proposes a series of manufacturing, construction and activation trials comprised of small groups of blocks in differing locations (inner city, urban, rural and regional.)

The aims of the trials are as follows:

-Test designs for ease of manufacture and installation. -Test survey process, data capture, ordering and quality control. -Test stakeholder participation by investors, communities, Federal, State and Local

Governments. -Test impacts on legacy systems, streetscape and environment. -Develop greater cost visibility and review designs for cost efficiency. -Allow infrastructure suppliers to test cable, pipe and network element installation

processes. -Test community reactions and responses.



NINA believes a trial that targets approximately 1,000 residences (SDU, MDU, Semis and Other) would cost approximately $25 million. This is not representative of whole of project costs, but is for information gathering for systems processes, construction and commissioning.

Pol i t ical Risk

The political risk to the government from a “nation building” project such as the NBN is high. This occurs due to the sum of the above risks, but also due to the specific and aggregate public perceptions of the project. Some examples:

1. The NBN may assume ‘lifeline’ characteristics such as is the case for the current Telstra copper network where 99.999% (five nines) service reliability is required for the standard telephone service. Many people, particularly the elderly, rely on the telecommunications networks for access to ‘000’ and services such as Home Alert Monitoring and home security systems. Failure to perform a lifeline function if required, or assumed by the public, would lead to grave perceptions of incompetence and/or negligence.

2. The term “white elephant” has already been used in discussion about the NBN. This could be amplified if a superior solution such as the NINA Access Pathway is deployed. Unlike the innovative NINA Access Network, the NBN Study does not consider alternative access methodologies (largely because they have not existed). Such pressure could come from offshore when an obviously superior method is applied.

3. Some areas (LGA) may insist upon a NINA deployment, and then offer access to alternative competing Layer 2 service suppliers, this may cast the NBN rollout in an unfavorable light compared to NINA.

4. If the access methodology indicated by the NBN is widely employed, then damage to footpaths and streetscapes will occur. As the NBN struggles to turn around poor economics is will seek to increase its use of power poles and consequently visual pollution will also increase. The Federal Government should anticipate rather than underestimate public dislike for power poles. The current inactivity of public opinion about power poles is due largely to the lack of an economic alternative. Some LGA are actively lobbying for the placing of power lines underground. By establishing a long-term solution with multiple benefits, the government is in a position to win broad approval. The NINA solution permits the long-term resolution of a range of infrastructure needs. By working to support the distribution plans of the power companies, these large capital works objectives can be better achieved at lower costs. This is achieved by rolling-out in sync with the power companies. This concept applies similarly to water and gas. It is better to tackle the problem directly because repeated abuse of footpaths and roadways will continue to generate community resentment. and lost productivity

5. The government is exposed to the accusation that the NBN is a return to full government ownership in telecommunications. NINA is a move to increased



competition and definitive structural separation.

By solving many different problems the NINA model is resilient to incidental disaffection that may be generated in the process of implementation or operation. An example might be reduced road-width in a small number of cases. (Note: NINA has developed a thin profile-stacked chamber form, and tight radius bends for narrow streets, typically in heritage areas.)

Regulatory Risk

The NINA Access Pathway is simple in its technology and will be highly transparent in cost structure and capital costs. Accordingly, subject to access being available on reasonable commercial terms, (see ownership discussion) it should be very simple to regulate.

NINA effectively sells three simple access services:

1. Space within the pathway to place cables, pipes, linkage elements, valves and splitters.

2. An access link comprised of cables (fibre, electric, copper), and water and gas pipes/hoses running from the channel take-out box to the household via the external open sided access channel. Consumers exercise choice in the selection if the primary utility platforms to which these lines are connected. We term this as bringing the consumer to the curb. NINA would provide a switch-over service.

3. A multi-utility house mounted metering box. NINA anticipates there may be intense competition for space within the ducting. This could be rationalized by the employment of an auction (similar to spectrum auctions). The NBN Study recognizes that the Layer 1 network is 'simple to regulate' (NBN Study p. 441). It is a feature of the NINA business plan to seek pre-commitment from utility services providers as areas are rolled out, thereby reducing uncertainty as to revenue streams and their commencement date.

The NBN Report also recognizes the risk of the NBN Co monopoly expanding its scope and highlights the following competitive risks.

While the NINA Access Pathway poses a risk of becoming a monopoly in the long term, this can easily be mitigated by the following actions.

1. Limit the scope of geographical ownership and allow bodies such as Local Government to invest in the NINA Access Pathway.

2. Allow LGA to compete between each other for business and low cost of living.

3. Review design standards to allow increased multi-utility access of each channel and structurally separate channel ownership.

4. Support a pricing model that shares the benefits of increased occupancy between



the pathway owners and the tenants so as to encourage new entrants into the Layer 2 market.

Conduct R isks

Vert ica l in tegrat ion up the log ica l stack

As the demarcation between Layer 2 and 3 is ‘blurred,’ this could see the NBN effectively "competing against its customers." 11

Under the NINA model, the access pathway provider benefits from an increase in the number of utilities using the network and is not engaged at Layer 2. NINA does not necessarily believe that the NBN should not offer Layer 2 services, but that this service should be structurally separate so as to provide flexibility for Government of its ownership of a Layer 2 element. In the future it may wish to sell this element, operate it commercially or position it as a USO provider or as a National Information Distribution service similar to the ABC.

Vert ica l in tegrat ion into other markets

The NBN network offers a 'national backhaul transit product'- thereby competing with carriers such as Optus, Telstra and Vodafone (who are expected to be substantial wholesale customers).

Within the NINA Pathway, capacity will exist for the provision of backhaul services via the established fiber distributors or for low cost deployment of competitive backhaul. Unlike the NBN model, Points of Interconnect (POI) can be ubiquitous and subject to the competitive dynamics between primary infrastructure providers.

Table 8 – Comparative Analysis NBN vs NINA NBN passive & active layer

Single Utility Model National Power Network Upgrade

$32 bn over 5 years ~7m households addressed, civil component (pole, trench, duct)

NINA passive layer

Multiple Utility Access

Cost per premise $2,000 - $10,000 $2500 $5,000 - $11,000

Asset life 5 (active) - 30 years 30-40 years 100 years

Rate of Return Low Low High

Technology risk High Moderate Low

Economic risk High High Low

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!11 NBN Implementation Study, McKinsey and Co.



Regulatory risk High High Low

Political risk High High Low

Table 9 - Competitive Density and Access Charges12

Service Providers Competition Year 1 Year 4 Year 6 Year 11 Year 12

Broadband 2 3 3 4 4

Pay-IP TV 2 3 3 3 3

Power Distribution 2 3 3 3 3

Telecom- assumed Telstra 1 1 1 1 1

Water 2 3 3 3 3

Car Power 2 3 3 3 3

Public Lighting 1 1 1 2 2

Gas 1 2 2 2 2

Backhaul 1 1 2 2 2

Wireless 1 1 3 3 3

Control 1 1 2 2 2

Other 1 2 2 2 2

Number of Clients 17 24 28 30 30

Multi-Meter Service 17 24 28 30 30

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!12

Does not include GST, assumes indexation against inflation of 2.5%



Table 10 - Assumed Civil Access Charges $/month

Effective Monthly Access Rate

Broadband $11.00 $7.81 $8.12 $6.72 $6.86

Pay-IP TV $11.00 $7.81 $8.12 $8.97 $9.14

Power Distribution $22.00 $15.61 $16.24 $17.93 $18.29

Telecom $6.00 $6.39 $6.64 $7.34 $7.48

Water $6.00 $4.26 $4.43 $4.89 $4.99

Car Power $6.00 $4.26 $4.43 $4.89 $4.99

Lighting $6.32 $6.73 $7.00 $3.86 $3.94

Gas $22.00 $11.71 $12.18 $13.45 $13.72

Backhaul $12.00 $12.77 $6.64 $7.34 $7.48

Wireless $12.00 $12.77 $4.43 $4.89 $4.99

Control $12.00 $12.77 $6.64 $7.34 $7.48

Other $12.00 $6.39 $6.64 $7.34 $7.48

Multi Meter $1.76 $1.25 $1.07 $1.00 $1.00

Funding and Financing

A Major Cash Generator and Value Creator for Generat ions

Analysis has suggested that the NINA Access Pathway has the potential to become the largest single cash generator within the Australian economy and one of its most valuable assets.

Once fully deployed to the expected 11 million households, (which would take approximately 15 years), it would generate revenues of approximately $26 billion per annum. It would operate with an EBITDA margin of between 75% and 80% (including royalties), generating approximately $20 billion of EBITDA and an NPAT $13 billion. This would support an equity market asset value of indicatively $152 billion, at 7.7x EBITDA multiple or $188 billion at a long term PE of 13.6x. Natural growth would be generated by housing growth and new service development.

It is a highly fixed cost and long-lived asset with a design life of 100+ years. NINA has undertaken, detailed economic modelling, to support these claims and welcomes and



encourages detailed consideration by the Australian Productivity Commission. We have to date identified more than $10bn per annum in productivity gains.

The following Table is illustrative on a per household basis for a full suite of services but does not include the value of the water harvest, capital cost is inclusive of GST.

Table 11 – Per Household Economics - Indicative

Per Household Economics $/annum Capital Cost $11,298.21 Revenue Ducting $1,200 Access links from curb $1,000 Total $2,200 Opex $440 EBITDA $1,760 Depreciation $475 EBIT $1,285 Interest $373 PBT $912 Tax $274 NPAT $639 FCF $1,114 WACC 7% Growth 2% Annuity Value per household $24,222 ROA 11.9% ROE 22.7% Annuity Value per block $1,211,123

The following Table shows primary physical service capacities for the NINA Access Pathway as illustrated. The capacity of the pathway is increased by using increasing the depth of the channel walls, which has only a minor impact on concrete volumes and trench costs.

Table 12 - Distribution Modes

Utility No of Suppliers Mode of Distribution

Data 3 - 4 Optical fibre cable (conduit optional)

Pay TV 2 - 3 Fibre cable, co-axial (conduit optional)

Legacy telephony 1 Copper (conduit optional)



Electricity 1 - 3 Copper HV and LV cables, in conduit

Road Power 1 - 3 Copper cable, NINA Power Mushroom

Gas 1- 3 Low pressure gas pipe or hose (50mm)

Water 2 x 125 mm diameter

PVC Pipe

Storm water capture

1 per zone Open channel diversion, closed pipe isolation of roof water

Other 4+ Subject to service and available volume

Total 17-27+

The research underpinning these estimates is detailed in the report NINA: Pathways to the Future.

Other Benef i ts - Spi l lovers

A Game Changer in Emissions Reduct ion

NINA Access Pathway has the potential to be the single largest carbon reduction initiative in Australia’s history by enabling the near universal take-up of electric transport technology. As and when generation shifts to clean sources such as hydro, nuclear, geothermal, clean coal or others, carbon is progressively removed from all points in the transport value chain. The primary inhibitor for the take-up of electric cars is the need for battery recharging. NINA overcomes this by enabling the low cost and universal establishment of distribution of 480V power to all households and curbs. At 480V the recharging of electric cars can be achieved in indicatively 40 minutes as opposed to 3-4 hours under a 240V power source.

A Better L iv ing Environment

The NINA Access Pathway will transform life in urban environments allowing safer, better quality footpaths, which will no longer be degraded by utility infrastructure. Pedestrian mobility will be increased and the incidence of falls among the elderly due to degraded footpaths will be reduced.

Information systems such as transport monitors located on light poles, improved lighting, notice boards and other elements all become possible with the synergies of power, intelligence, light, energy and water within the streetscape.



A substantial proportion of new housing growth is expected to be infill redevelopment. The NINA Access Pathway will compliment such infill by making a wider choice and increased capacity of infrastructure available as well as improved resource utilisation through water recycling. It will also promote the increased use of electric cars, which will in turn lower emissions and street noise.

INDUSTRY BENEFITS & METRICS

The NINA Access Pathway will support growth across a range of industries. These include:

1. Precast concrete, bricks, construction materials 2. Telecommunications, data, control systems, Pay TV 3. Water Harvesting, recycling and distribution 4. Electric Car businesses (manufacturing, supply, support) 5. Urban design, 6. Construction 7. Lighting 8. Gas distributions,

This is a vast project that would be the work of a generation, transform Australia into a more competitive, productive society and make it a more beautiful place to live for the vast majority of its citizens.



The NBN operating within the NINA Access Pathway could deploy high speed data and communications networks within the pathway as a tenant/lease holder, where it could trial a complex suite of wholesale and retail communications services. Pay TV, Telecoms and wireless service providers.

The construction materials industry is currently struggling. NINA would support this industry and act as a stabilizer for demand. This in turn would support investment in precast concrete solutions which is certainly ideal for long life assets.

Brickworks Pty Ltd stands to be a major beneficiary of urban streetscape renewal as it is the largest manufacturer of paving bricks.

Industry will benefit from the Economies of Scope – The NINA Access Pathway is designed to carry a variety of distributed services and space exist for up to 30 operators to be present in water, gas, electricity, data, telecommunications, mobile base stations, backhaul, controls, information feeds, data collection, water harvesting metering etc.

There is space for multiple 1st, 2nd and 3rd tier telecommunications companies in Australia to link blocks and towns throughout urban, rural and regional Australia. This is a pro-competition solution.

Competitive connectivity within the Australian residential market will lead to global best in class outcomes both for service innovations and for pricing. Competition can exist in the wholesale service backbone, backhaul and retail.

A range of new data based services becomes available as the infrastructure is rolled out.

NINA believes that there would be strong public and political support (across the spectrum) for this system to be deployed nationwide and applied retrospectively to established urban environments. It can demonstrate superior economics, and superior social outcomes. It would welcome and support a detailed study by the Productivity Commission or other such reputable body.

The construction of the NINA Access Pathway on a national scale would represent the largest urban renewal and micro economic reform program in Australia’s history. We use the term urban renewal deliberately as the installation of the system lays the foundation to solve a wide range of challenges necessary to bring urban communities into the 21st century.

The principal economic challenge is the provision of low cost, flexible and competitive customer access for the distribution of competitive current and future utility services. However as discussed previously the NINA Access Pathway also provides a foundation for urban environmental restoration, water recycling, stormwater capture, energy efficiency, lighting, improvements to road safety and community information systems.

We believe it would be the largest urban renewal project in the world and if applied successfully in Australia a role model for the rest of world.



Essentially simple, installation requires the laying end to end, in a shallow trench, typically dug around a residential block a series of precast concrete modules of varying shapes to conform to the line of the original kerb and in so doing frame a residential block. The modules are linked with interstitial members which impart flexibility, directionality and watertight integrity.

The major challenge is to scale up the precast concrete industry to meet the objective of near complete coverage in 12 years.

The Physical Dimensions and Metrics

The quantum of Australian residences whether, Single Dwelling Units (SDU), Multiple Dwelling Units (MDU), Semis and Other, used in this report are as per the definitions and quantities detailed in the Australian Governments National Housing Supply Council – 2nd State of Supply Report 2010 (the Housing Report)13. Estimates of the location and distribution of these households is as per the Australian Bureau of Statistics (ABS) 2007 Population Census.

The Housing Report establishes a starting value for the National Housing Stock of 8,530,200 in 2009. The report also identifies 3 “Household Projection Growth” scenarios covering the next period 2009-2029. The 3 growth scenarios Low, Medium and High represent average new household growth figures over the forecast period as follows:

Table 13

Household Growth Scenario

Average per annum growth over 20 years

Low 135,280

Medium 161,490

High 183,320

Source: Housing State of Supply 2010, NINA Analysis

In the Housing State of Supply Report (HSS) the household is the basic unit of analysis. A household consists of one or more persons, one of whom is at least 15 years of age, usually resident in the same private dwelling. The persons in a household may or may not be related. They must live wholly within one dwelling. The growth in the number of households is a function

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!13http://www.fahcsia.gov.au/sa/housing/pubs/housing/national_housing_supply/Documents/StateofSupplyReport_2010.pdf!!



of population growth (net of births over deaths plus migration), the average number of persons per household in Australia is currently 2.5514.

NINA forecasts and analyses use the Medium projections in the HSS as a basis. The percentages of household dwellings by SDU, MDU, Semis and Other is estimated by the HSS and shown in the following Table 7.

Table 14.

Residence Type Proport ion of households l iv ing in th is type

SDU 75%

MDU 14%

Semis 9%

Other 2%

Source: Housing State of Supply 2010, ABS

NINA has conducted a survey of random residential blocks (using the telephone book to randomly select a name, identifying where that random person lives and counting the number of lots within the block identified and then measuring the perimeter, area and slope. The shape of the block was also recorded (rectangular, polygon). Approximately 60 blocks were surveyed including locations in most capital cities and a broad geographic spectrum of rural and regional towns.

The average characteristics identified are shown below:

Table 15.

Feature Value

Perimeter at kerb (m) 788

Area bounded by kerb Area (m2)

30,855

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!14!Australian!Bureau!Statistics!



No. lots 36.4

Rectangular 79%

Polygon 21%


The State of Supply Report was used to assess the number of households which when translated to the number of buildings allows us to estimate the number of average blocks over which the national housing supply is distributed.

The national Average composition of households by residence type are shown as follows;

Table 16

Residence Type Percent of Households

SDU 75%

MDU 14%

Semi 9%

Other (shop/flats, granny, caravan etc)

2%

Total 100%

We have assumed that the ratio of households to residence types is as follows:

Table 17.

Residence Type Households

SDU 1

MDU 8

Semi 2

Other (shop/flats, granny, caravan etc)

1



This then gives us the base number of building types:

Table 18.

Residence Type No. Bui ld ings

SDU 6,384,455

MDU 151,082

Semi 394,467

Other (shop/caravan) 148,153

Total 7,078,158

We have assumed that these relative proportions remain stable over time. This is a conservative assumption as there is evidence of a rising trend (see HSS) towards use of apartments, units and flats as family sizes decline and more people chose to live closer to the cities, or transport corridors and high land value in inner urban areas dictate the construction of apartments, this is particularly the case in Sydney and Brisbane. The costs associated with addressing apartments are lower. Note the primary cost drivers in the NINA Access Pathway is precast concrete volume and length of access cable and pipe runs.

Locat ions

The Australian Bureau of Statistics in its 2007 Census classified where Australians live in the following groupings and proportions:

Table 19.

Locat ion Percent of Populat ion

Major cities and Concentrated Urban Environments

68.5%

Regional Urban Environments

19.7%



Outer Regional 9.5%

Remote 1.5%

Very Remote 0.8%

Total 100%

The current population of Australia is 22,878,27015 NINA’s survey has identified that its architecture is applicable to major cities, regional urban and a substantial proportion of outer regional population groupings (hamlets, villages, communities of 20-40 houses).

While the precise composition of outer regional residences is unclear we assumed that 50% are eligible. In reality the only substantive exclusions are individual homesteads or micro communities where distributed utility services (water, sewerage etc) are currently unavailable. In many of these cases the NINA Access pathway is a logical and economic means to upgrade the social amenity of these communities. Note that from a broadband perspective backbone connection may be via microwave into a micro hub (server) serving the community.

Accordingly, based on these assumptions 92.95% of Australia’s population is addressable. We encourage readers to consider the range of possibilities for remote communities once the NINA Access Pathway has been installed and they include communal septic tanks (micro sewerage treatment, rainwater harvesting, common bottle gas distribution, communal electricity distribution from solar, wind, diesel or other sources, data and communications services. NINA has developed a PVC casing model of the Access Pathway for temporary (<10 years) applications such as mining and construction villages, temporary camps etc.

Applying the above metrics we have estimated that there are approximately 162,000 average residential blocks in Australia each with an average of 50 households.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!15!ABS!Population!Clock!16!April!2012!



The project therefore has the following indicative overall dimensions:

Table 20

Feature Dimension Quant ity

Length kilometres 151,000

Mass Million tonnes concrete

142

Residential Blocks 2010

162,000

Residential Blocks 2023

192,000

Households 2012 millions 9

Population Accessed Millions in 2023 24.2

Population as per cent In 2023 92.95%

Per annum build rate for completion in 12 years

Households ‘000s 880

Per annum build rate Blocks 18,746


NINA estimates that the project would require approximately 40 manufacturing sites with a capacity to produce 860 tonnes of precast concrete per day. Currently the world's largest precast concrete plant is located in Thailand with a capacity of 880 tonnes per day. This plant has been designed for the casting of houses. The NINA components are smaller and more suited to high volume manufacturing.

This is a massive project, made feasible by viable economics at a smaller scale or slower rate of deployment. It is the work of a generation. The public dislike for power poles and degraded footpaths is widespread.

The project will commence at a small scale and expand driven by strong popular demand.

In 2002 16 Sydney Local Governments petitioned IPART to review the economics of locating power lines under ground, these Councils represented over 1.7 million people. IPART determined the project uneconomic though not without merit. It did not, consider any



alternatives to trenched and buried cables, co-location or integration with a stormwater system, why? Because, the NINA Access Pathway had not yet been invented. It is now!



NINA INTELLECTUAL PROPERTY AND TECHNOLOGY

NINA is committed to the preservation of its intellectual property and believes that substantial value rests therein.

The concepts and inventions discussed herein are subject to a patent application pursuant to the Patents Act 1990. The Patent Pending Application Number is 2010903400. NINA has filed under the international Patent Co-operation Treaty (PCT), been given a World Intellectual Property Office (WIPO) opinion which determined all claims as novel, all as having industrial applicability and a large number as involving an inventive step and so meeting the requirements for a grant of patent at the national stage of application. NINA has commenced filing for national grants and will over the next 6 months file in all the G20 (including the EU as a whole) plus SE Asia and the central Asian Republics in accordance with WIPO rules. All material, designs, logos, research are copyright and the property of N.I.N.A Pty Ltd and all works are the original art and invention of the inventor Mr Guy Dixon. NINA is seeking to commercialise it intellectual property and will actively discuss licensing, partnerships, and joint venture arrangements.

We believe that economic opportunities represented by this new technology are vast and that there is wide scope for commercialisations in the context of both private and public infrastructure. Key investors include:

Australian Governments at the Federal, State and Local levels may wish to adopt the NINA Economic Model as part of a broad microeconomic reform agenda to increase the economic efficiency of the national distribution and water management infrastructure. NINA represents a viable, alternative, economic reform policy, which delivers improvements to living environments via improved distribution technology, communications technology, water efficiency, fuel efficiency, (leading to carbon reductions), competition, productivity, international competitiveness) and increased urban accommodation efficiency.

International governments, the model is particularly relevant to Europe, USA, India and China where the deployment of new distribution infrastructure may be constrained due to historical or cultural needs to preserve certain environments, environmental and political pressures. The NINA Access Pathway is ideally suited to play a role in the rebuilding and earthquake proofing of Christchurch and or Japan as it is flexible, vibration, fire and rupture resistant, and easily accessible in the case of natural disasters.

Government and PRIVATE industry should the government adopt a public private partnership approach, this reduces the amount of capital required by the government but still gives them a seat at the table as an owner and options to sell at a later date.

Private – private industry is expected to seek to develop new access infrastructure, as this would create a new property asset class. Private investors may form numerous



structural forms: individual entities, groups of investors organised into infrastructure development fund/trusts, financed owner operators.

Areas could be released by local government area or wards, Local councils in relinquishing the control of curbs and gutters would avoid maintenance costs and gain revenues. This may be done in blocks e.g. local, state, regional or even national geographic coverage.



LICENSING

Use of the NINA concept, its designs and networking solutions are subject to the issuance of Licenses to manufacturers of the elements and owners of the installed systems.

Manufacture License

A manufacturing license must be issued for the manufacture of the primary building blocks; the modules, interstitial connectors, and related accessories. These may be regional, national, international or project specific in nature.

Usage Licenses

Operators must have an operating license to build and use the NINA Access Pathway. NINA represents a new infrastructure “operating system” in which a large range of new and copyright operating and networking systems are made possible. NINA will issue operating licenses and is committed to the broadest promotion of the use of the NINA Access Pathway system.

A license for use of the NINA Access Pathway is a precondition for the manufacture of modules and for the rollout and use of this system. The valuation of patents is estimated as, the value of the economic benefits they bring, this valuation is enhanced by deliberate protection and declaration, NINA has from its conception sought to protect its Intellectual Property, which includes it designs, network and economic models, declared advantages through the IP Patent Application process, Trade Mark and Copyright Law and other legal protection. We look forward to meaningful discussion with genuinely interested parties to promote the technology and the opportunities they represent for the benefit of all parties.



ABOUT THE AUTHOR Mr. Guy Dixon, BE, MBA (UNSW) is the inventor of the NINA Access Pathway, he is an engineer and holds a Masters Degree in Business Administration from the Australian Graduate School of Management at the University of New South Wales. Mr. Dixon has worked extensively in the fields of engineering, design and construction, telecommunications, regulatory economics, finance and valuation. He was formerly Associate Director – Australian Telecommunications Equity Research at Credit Suisse First Boston, Commercial Manager for Regulation and Interconnection at Optus Communications and a Senior Engineer at Whollohan Grill & Partners (now Worley Parsons). For the past 3 years he has dedicated himself to researching the physics and economics of utilities access within the urban landscape. The outcome of that research and development has been the NINA Access Pathway, the NINA Networking Model and the NINA Access Pathway Business Model. Mr. Dixon is a passionate advocate for the efficient re-building of the urban environment in ways, which place people, and the health of that environment at the centre. He is also a passionate in his belief that good economics and a healthy environment go hand in hand. In January 2010 he formed Networked Infrastructure National Architecture (NINA) Pty Ltd with partner Mr. Fabrizio Sassoli di Bianchi to bring his research and observations to fruition. This resulted in provisional patent applications being filed for the NINA Access Pathway and Network Model in July 2010. Mr. Dixon is the CEO and Founder of NINA Pty Ltd. Mr. Dixon is a passionate creator and innovator. He believes in the power of creative thinking to create a better world for everybody.



N.I.N.A Pty Ltd Company Detai ls

National Infrastructure Networked Architecture Pty Ltd is a registered Australian Business.

NINA Pty Ltd is the owner of the intellectual property, invented by Mr Guy Dixon, which is the subject of Australian Provisional Patent Application Number: 2010903400.

The above patent application has filed for and on behalf of N.I.N.A Pty Ltd by Baxter IP, Patent, and Trade Mark Attorneys with a priority date of 30 July 2010.

Company Detai ls:

Trading Name: N.I.N.A Pty Ltd

ABN: 51 141 576 212

ACN: 141 576 212

Type of Entity: Private Company

Owners: Guy Andrew Cotterill DIXON

Mr Fabrizio SASSOLI DE BIANCHI

Mr Jason Contos

Public officer: Guy Andrew Cotterill DIXON

Registered Business Address: 5/21 Trelawney Street

Woollahra, NSW 2025

Australia

Contact: Mr Guy Dixon

Email: [email protected]

www.ninaaccesspathway.com (under construction)

Mobile: 0408 414 391 (preferred)



Attachment 1 – Bi l l of Materials: Sydney average residential block. Mass of concrete per block: 837 tonnes Volume: 364m3 Estimated number of blocks nationwide: currently 162 000. Illustrative of estimating detail and modeling.



Attachment 2 – NINA Pty Ltd – IMAGES Image 1. Before- Inner Sydney Streetscape showing power poles and degraded footpaths due to utility presence.



Image 2 – After installation of NINA access pathway, clear streets, and unrestrained tree growth, less invasive lighting.



Image 3 &4 –The modular elements used in the block architecture. Networks of linked blocks display adjacent access lines to houses, terrain and contour matching and illustrative water collection tank.

Image 5 -NINA Access Pathway with a raised back wall for improved soil retention and stability.



Image 6 - Utility and Service ingress/egress node to household access channels.



Image 7 – Damage caused to an inner urban commercial centre footpath following a utility

“upgrade.” The streetscape had been recently been repaved by Local Council, Oxford Street, Paddington NSW as part of an upgrade of the commercial centre.



Image 8 – Typical urban block configuration: Brunswick Melbourne. Source Google Earth Pro.



Image 9 – Regional Block configurations: Goulbourn, NSW.



Image 10 – Remote Area Block configuration – Broken Hill NSW



Images 11-12 Images of car crashes involvng power poles (Source: Web: Australian Media)



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