For nations who chose to close their schools during the COVID-19 pandemic, the debate that gripped Australia over school closures in March and April may have been perplexing. At a time when thousands of other businesses were shuttering their doors against the pandemic, on government orders, why was the Australian government so insistent that schools remain open until the Easter break, and then re-open for term two as soon as possible?
For parents who have recently had the pleasure of juggling their work schedules with home schooling, the answer is more obvious: schools serve a vital function in our economies that goes well beyond education, freeing up our workforce to be more productive during the school day.
We often discuss essential infrastructure – those assets that society can’t do without during a crisis, and it turns out that schools are a big one. A number of assets owned and managed by AMP Capital’s various infrastructure funds are fulfilling essential roles as Australia deals with COVID-19, giving our business a crucial role in supporting frontline efforts to respond to the pandemic.
AMP Capital schools projects
AMP Capital has responsibility for facility operations and maintenance at 35 schools across New South Wales, Victoria, South Australia and South-East Queensland, as Public-Private Partnerships (PPPs) with their respective governments.
The schools’ projects have all been working closely with state education departments to meet a highly variable and unusual set of needs around the lockdowns, including extended or altered holiday periods, and changed class sizes, composition and locations.
Facility managers subcontracted by AMP Capital have stepped up to the plate with deep cleans of school premises, the provision of hand sanitiser for classrooms, and more frequent cleaning of high-use areas such as toilets and staff rooms.
Australian teachers are juggling online and in-person teaching admirably through a very trying period for their students, and AMP Capital is proud to support their work through our facility management.
Royal North Shore Hospital
Australia’s medical and nursing professions also have a vastly changed set of working needs now than was the case before the pandemic, and hospital facility managers are having to adapt accordingly.
In 2015, AMP Capital purchased the Royal North Shore Hospital and Community Health Services Public Private Partnership, and in the process taking over management of one of Sydney’s most respected and highly essential health assets.
In response to the pandemic, we have participated in the conversion of de-commissioned facilities into additional clinical areas, including a new purpose-built, 40-bed COVID-19 recovery ward, at a cost of $15 million. We also have facilitated changes to allow conversion of other areas, such as non-essential research facilities to allow them to be utilised by frontline medical workers, including those responding to the COVID-19 pandemic.
Our own management team on site were happy to vacate their offices and find alternative accommodation in order to provide additional space for emergency health executives.
Throughout the process of optimising the hospital’s response to the pandemic we have been eager to provide the flexibility and prioritisation required by NSW Health, even to the extent where it was necessary to fast-track processes outside of the existing contract to make sure that the necessary changes were implemented in time.
We also waived first rights on the associated construction work, instead utilising the resources of Health Infrastructure NSW, in order to meet these delivery timetables. Ventia, our subcontractor, made their tradespeople available and mobilised resources to work with Health Infrastructure to construct the new areas quickly.
In co-operation with our retail tenants on site, we have worked to ensure that the essential workers in the hospital continue to have access to basic amenities, while balancing the financial needs of the retailers themselves, including the provision of rent relief where required.
Finally, in recognition of the extraordinary difficulties staff face in commuting safely to and from the hospital and the need for them to avoid public transport wherever possible, we’ve worked with the NSW government to facilitate free staff car parking across the hospital site.
For parents who have recently had the pleasure of juggling their work schedules with home schooling... schools serve a vital function in our economies that goes well beyond education, freeing up our workforce to be more productive during the school day."
The state-of-the-art, 60,000 seat Optus Stadium is the newest and most advanced facility of its kind in Australia, and AMP Capital is proud to be a partner in its ownership, on a 25-year concession through to 2033.
Although the football codes have shut down for the interim, the stadium has been heavily utilised by Western Australia Police as a crisis management centre, as part of their response to the pandemic. Within the facility, directions handed down from the State Emergency Management Committee are converted into workforce planning and operational guidance for officers on the ground. Legally, the utilisation of the site by the Western Australia government for these purposes was facilitated by AMP Capital lodging the alternate use as an 'intervening event', under the contract for the concession. The stadium is one of four centres being utilised by the state government to coordinate and command the state of emergency, and is at the heart of the state’s efforts to track cases and ensure quarantine compliance.
In order to accommodate its alternate use, BGIS, our facilities maintenance subcontractor, was instructed to convert the space from entertainment facilities to a crisis centre, a task which included additional wiring and reconfiguration. AMP Capital’s subcontractors are also providing additional security on site during the period.
Essential infrastructure over the immediate and longer term
The three examples listed above demonstrate clearly the role of well-built and soundly managed infrastructure assets in society’s response to a crisis of this magnitude. Of course, these are not the only assets subject to immediate demand at the present moment. Assets concerned with essential utilities such as electricity and water are to a large extent insulated from an economic downturn, particularly in those countries where manufacturing has continued. Assets that support a nation’s telecommunications networks, such as fibre, towers and data centres find themselves subject to increased demand as remote working, learning and socialisation becomes the new norm.
On the other hand, patronage for certain infrastructure assets connected with transport and accommodation may in many cases be materially affected. This is not necessarily bad news for the owner, as revenues for some of these infrastructure assets are contracted over the long term.
This essential nature of infrastructure assets can provide the asset class with strong defensive positioning through unsteady economic conditions. And in the cases above, the community is also clearly and significantly benefiting from constructive partnerships with private investment at a time of immense need.