Amazon invests in delivery start-up Deliveroo

Deliveroo has announced that Amazon is leading a new $575MM Series G shared funding round. This will make Amazon the largest investor in this round.
Amazon joins existing investors T Rowe Price, Fidelity Management and Research Company, and Greenoaks.
According to the company, this series of funding will bring customers the food they want whenever and wherever they want it, offering even more work for riders, and helping restaurants to grow their businesses by reaching new customers.
“Amazon has been an inspiration to me personally and to the company, and we look forward to working with such a customer-obsessed organisation. This is great news for the tech and restaurant sectors, and it will help to create jobs in all of the countries in which we operate,” Will Shu, founder and CEO of Deliveroo said.
“We’re impressed with Deliveroo’s approach, and their dedication to providing customers with an ever increasing selection of great restaurants along with convenient delivery options. Will and his team have built an innovative technology and service, and we’re excited to see what they do next,” Doug Gurr, Country Manager, Amazon UK said.
The new investment will contribute to:

  • Growing Deliveroo’s engineering team based in its London headquarters
  • Expanding Deliveroo’s delivery reach in order to continue offering its service to new customers
  • New innovations in the food sector, for example through delivery-only super kitchens “Editions”, as well as new formats that will help restaurants expand to new areas at a lower cost and lower risk, bringing more choice to local neighbourhood
  • Increased support for restaurant partners, and new tools to offer riders flexible and well-paid work

Read more about Deliveroo in Australia here.

Input sought on Australia’s future supply chain

Minister for Infrastructure and Transport Darren Chester has called for submissions on a discussion paper for the Inquiry into National Freight and Supply Chain Priorities.
“The Australian Government has announced a record $75 billion infrastructure investment programme, which comprises a range of freight initiatives including the Melbourne to Brisbane Inland Rail and the Western Sydney Airport,” Chester said.
“Feedback on the discussion paper will help the inquiry examine how our investment in the freight network can boost the nation’s prosperity and meet community expectations for safety, security and environmental amenity.
“It will also further our understanding of what challenges and opportunities lie ahead, and how we can take advantage of them.
Chester noted that the discussion paper offers an opportunity for key freight stakeholders such as carriers, shippers, forwarders, primary producers, land developers and consumers to have their voices heard.
“Everybody is part of the national supply chain, whether you are a consumer, business owner, producer, farmer or freight operator,” he added.
Submissions close on 28 July 2017. For more details on how to make a submission, visit the infrastructure.gov website.
The Australian Logistics Council (ALC) has welcomed the release of the Discussion Paper.
“[The] ALC believes there is merit in engaging in a wide-ranging public debate involving government, industry and the community to ensure road funding reform proposals improve supply chain efficiency against the backdrop of an increasing national freight task,” said Michael Kilgariff, Managing Director, ALC.
“[The] ALC supports a critical analysis of the current PAYGO formula for road pricing, which is an inefficient and ultimately unsustainable approach to road pricing. As the 2015 Harper Review stated, ‘roads are the least reformed of all infrastructure sectors’, and the Discussion Paper makes it clear the Federal Government is prepared to address this problem.
“As ALC has consistently said, a reform of this nature will only succeed if the freight logistics industry is actively involved in the development of the new road pricing system. It is therefore pleasing that the Government is seeking industry comment on the options put forward in the Discussion Paper.”

Government to reconsider infrastructure spending

The Federal Government’s model for financing infrastructure projects entirely with taxpayers is soon to be replaced, putting the onus of contribution on those set to benefit most from improved infrastructure – developers.
According to the Wall Street Journal’s Vera Sprothen, critics are voicing their disapproval of a system which allows Australian taxpayers to fund investment in roads, rail, waterways, marine ports and airports in full – an investment of 1.6 per cent of GPD, the highest of all major OECD countries
“We’re spending money, but we’re losing value,” said Joe Langley, a director in Sydney engineering firm AECOM Technology’s infrastructure advisory unit.
Sprothen noted criticisms of the current system, “Concerns are growing that Australia is letting private investors profit too much from higher land and property values generated by the new transportation project.
“Australia lags behind places like Hong Kong, London and Denver, which use mechanisms to ensure private real estate developers – not just the public purse – help pay for infrastructure.”
Solutions proposed include following models used successfully elsewhere, including ‘value capture’, whereby developers help pay for projects in return for the opportunity to profit off the increased land value.
The Federal Government announced in November that value capture is a direction it is considering, and the days of infrastructure projects being fully funded by the public purse are nearing an end.

Infrastructure funding needs overhaul – Opinion

Amid the mountains of briefs prepared on GST for this week’s COAG Leaders Retreat, one of the other fiscal issues that deserves equal, longer term consideration will be in Jay Weatherill’s back pocket.

The South Australian Premier will take to the meeting a bold plan to reform the federation, including long overdue reforms to how our national highways and roads are funded.

In a speech to the National Press Club earlier this month, Premier Weatherill proposed the establishment of a national heavy-vehicle road-user charging system run by the Commonwealth.

In his speech, he lamented the lack of a market-based funding system for roads, despite similar systems being in place for almost all other forms of infrastructure.

Under his plan, state-based registration and federal-based fuel excise charges would be replaced by a more transparent pricing mechanism that more closely links road use and investment.

He also offered up South Australia as the test site for different elements for the new heavy vehicle road user charging regime.

From the perspective of Australia’s freight and logistics industry – the sector to be most directly impacted by Premier Weatherill’s proposal – we believe his plan requires serious consideration by all levels of government.

Seen through the political lens, his proposal is a direct policy response to growing pressure on state budgets for road infrastructure projects.

The fact is there are growing demands on the government purse requiring the use of taxpayer’s money, particularly in the areas of health and education.

Premier Weatherill’s blueprint echoes similar calls for reform made in recent times by the Productivity Commission, Infrastructure Australia, the Harper Review and the National Commission of Audit.

These and other reports also flagged the concept of extending the heavy vehicle road reform, over time, to all vehicles, to send a more direct price signal and to help address congestion in our cities.

There is a growing consensus that the infrastructure funding system in Australia requires a major overhaul.

The key will be delivering reform that improves long term funding sustainability of key freight routes in a transparent and equitable manner.

Currently, funds raised through registration and fuel excise are smeared across the network, and not returned to the key freight routes carrying high levels of traffic.

A system where funds are arbitrarily applied across the system, with no real linkage to where the freight has come from, or is going to, is one requiring reform.

Nor is it a system that supports improved productivity levels in the industry.

Industry’s support for this reform will hinge on the extent to which it supports supply chain efficiency and reliability.

It is critical, however, that funds collected are invested in the infrastructure used by the vehicle.

In other words, the revenue follows the freight, and not lost to consolidated revenue.

ALC has long argued that funds from heavy vehicles should be hypothecated for investment in productivity enhancing infrastructure.

For this initiative to succeed, Treasuries need to drive the process forward.

Not only will it be quicker, it will be more effective if part of a broader set of reforms to change the infrastructure revenue stream.

And importantly, having Treasuries take carriage of this initiative will help to ensure a greater level of national coordination.

This is important, because in the long run, road reform needs to be national, it needs to be consistent and it needs to be coherent.

This is a reform a long time in the making.

In April 2007, COAG set out a three-phase ‘COAG Road Reform Plan’ to consider alternative models of heavy vehicle road pricing and funding.

The plan’s objective was to promote the more efficient, productive and sustainable provision and use of freight infrastructure.

Now, more than eight years later, governments have taken only tentative steps to deliver on these worthy objectives.

With studies showing the national freight task will increase by 100 per cent between 2010 and 2030, all policy proposals to improve the long term efficiency of the freight logistics network need to be on the table.

Otherwise the living standards of all Australians will be reduced.

These studies into Australia’s rising freight task coincide with a report by the Australian Logistics Council and ACIL Allen, which showed a 1% improvement in productivity would yield a $2 billion a year benefit to the national economy.

As American economist Paul Krugman said, ‘productivity isn’t everything, but in the long run, it’s nearly everything.’

ALC hopes COAG leaders has Krugman’s productivity mantra at the forefront of their minds when they sit down this week to discuss Wetherill’s reform to fix our flailing federation.

Michael Kilgariff is the managing director of the Australian Logistics Council, the peak body for Australia's freight logistics industry.

Xenophon says end of auto scheme will accelerate industry’s collapse

South Australian Senator Nick Xenophon has criticised the federal government’s decision to end the Automotive Transformation Scheme in 2018, saying it will speed up the demise of the sector.

Treasurer Joe Hockey, who delivered his first budget yesterday, said the scheme will end due to the decision by Ford, Holden and Toyota to end car manufacturing. They will all have shut their factories by the end of 2017.

The predicted savings from ending the ATS are $176.7 million in 2018-19, followed by $95.2 million and $28.6 million in the two years following.

Xenophon said there would be a “manifestly inadequate” $400 million remaining in funding from 2015 in the scheme, which has been running since 2011 and assists those involved in the automotive industry to diversify.

"They have simply chopped the scheme off at 2018 without bringing that funding forward to the years in which it could make a real difference to the automotive supply chain,” he told the ABC.

"The consequence of that is that there won't be a chance for the industry to restructure and transition for the 10,000-plus jobs that are involved in the automotive products sector."

Richard Reilly from the Federation of Automotive Products Manufacturers said it would harm research and development in the sector.

The task of transitioning away from automotive for suppliers in the industry is generally seen as a difficult task. Industry expert Professor Goran Roos has predicted that around 20 – 25 per cent of auto suppliers who have not yet diversified will survive.

Image: News Corp

Ford may leave before 2016: union

Ford could cease manufacturing cars in Victoria before 2016 if the government cuts assistance to the car industry, according to the Australian Manufacturing Workers Union (AMWU).

As the ABC reports, Ford intends to continue making cars at Broadmeadows and Geelong until 2016. However, the AMWU said that any changes to the Federal Government’s Automotive Transition Scheme could jeopardise that plan.

Dave Smith, the head of the Australian Manufacturing Workers’ Union vehicle division told the Herald Sun that, of the three car makers, Ford’s position is the most uncertain.

“While Toyota and Holden seem to be quite genuine that they want to stay in Australia until 2017 and build cars, Ford’s position is not as clear,” he said.

“The component industry is very fragile, it can fall over at any moment.”

Referring to the possibility that the Automotive Transition Scheme could be altered in the May budget, Smith said, “If they decide to drop off on that, then it (the car industry) will be over very quickly.”

However, Ford spokesman Neil McDonald told the Herald Sun the company remains committed to an October 2016 departure date.

“Our aim is to continue manufacturing until October 2016. We are committed to the new Falcon and Territory models and those cars will be on sale at the end of the year,” he said.

Meanwhile, the Herald Sun reports that there have been calls for the announcement of successful recipients of funds from the Melbourne North and Geelong investment funds to be sped up.

The schemes, funded by Ford as well as the federal and state governments, are intended to boost employment in the manufacturing sector in the wake of the decisions by all car makers to pull the plug on their Australian manufacturing operations.

Broadmeadows state Labor MP Frank McGuire has called for successful recipients to be announced all in one go to give councils the chance to co-ordinate necessary training needs of workers.

McGuire claimed the government is “drip feeding” the announcements for political reasons.

However, according to a spokesman for State Manufacturing Minister David Hodgett, they are being drip fed not only so the companies are publicised but also because some of them haven’t signed contracts yet.

Rudd promises high-speed rail network

Labor has promised to deliver high-speed rail between Sydney and Melbourne by 2035, with Prime Minister Kevin Rudd pledging $52 million to get the multi-billion project up and running.

 Rudd said his government would introduce a bill to preserve a 1748 kilometre rail corridor between Melbourne and Brisbane, and set up a new committee to oversee the delivery of the infrastructure project.

"This is an exciting project for Australia's future," Rudd said.

The funding pledge comes on the back of a final report by the High Speed Rail Advisory Group which recommended completion of the first stage of a high speed rail network between Sydney and Melbourne, via Canberra, by 2035.

Once finished, a train journey between the two cities would take only two hours and 44 minutes.

The journey would stop in the Southern Highlands, Wagga Wagga, Albury Wodonga and Shepparton.

Rudd said the 2035 rail plan would be cheaper than the Coalition’s paid parental leave scheme, The Australian reported.

"Put that into context – what is more necessary for the nation's future?" Rudd told reporters.

"A high speed rail network which links these vital cities along Australia's east coast, or an unaffordable, unfair paid parental leave scheme?"

The second stage of the project, from Sydney to Brisbane, would be built via the Central Coast and Newcastle.

According to a pre-feasibility study released by the Labor government in April, a fast train rail line between Melbourne and Brisbane has an estimated price tag of $114 billion.

The study found the rail line was viable, with the possibility of returning $2.30 to the economy for every dollar invested.

The line could carry 84 million passengers a year, with 19 million trips between Sydney and Melbourne.

Although no money was handed down for the project in the budget earlier this year, the $52 million promised by Labor would be used to finalise the track alignment and stations locations with state governments.

It would also conduct market testing to identify private sector interest and capital cost estimates.

Transport Minister Anthony Albanese talked up the economic benefits of the project.

"This is a project that stacks up," Albanese said.

"What's more it would lead to the creation of jobs, some 10,000 jobs during the construction phase."

Tony Abbott says a coalition government would focus on quick wins when it came to infrastructure funding.

"I'd much rather spend money now to get better outcomes tomorrow, rather than in 40 years' time," he told reporters.

Port funding anger in Wollongong

Wollongong Lord Mayor Gordon Bradbury is angry at the level of funding committed to infrastructure in the Illawarra after the privatisation of Port Kembla, and is demanding answers from the NSW government.

He moved a motion on Monday night that will see council write to the state government to express its concerns over the way the proceeds from the lease have been distributed.

$100 million from the $760 million deal is to be shared across five local government areas for infrastructure projects, The Illawarra Mercury reported.

However, Bradbury said this shows a huge disparity to Newcastle who have been promised

$340 million, or half of the proceeds from the lease of its port, which will be spent on revitalising the CBD.

Bradbury is seeking an urgent meeting with NSW Premier Barry O’Farrell and Treasurer Mike Baird to seek a similar level of funding.

‘‘This is a slap in the face of the greatest order,’’ he said.

‘‘From my perspective it’s something we need to be cohesive on as a council.’’

The proceeds from the leasing of Newcastle Port is in addition to $120 million committed to Newcastle's revitalisation and takes the Hunter Infrastructure and Investment Fund to $690 million.

Keira MP Ryan Park said Illawarra residents were being treated like "second class citizens".

"I am gobsmacked that they would make an announcement that separates two cities that are very similar in economic conditions and are going through similar economic challenges by such a huge amount of money," he said.

"We are talking about hundreds of millions of dollars of difference for the sale of similar assets, and that is simply a disgrace."

"We've got to remember that this money [from Port Kembla] is going to be spread from one end of the region to the other and all the way out west to Picton and beyond," he said.

"Newcastle's money is concentrated in and around where their asset was, which always should have been the case in Port Kembla.

"I have never seen a government treat two communities – which are very similar in their economic challenges and in the types of forecasts they face – so very differently when it comes to funding of infrastructure."

In another blow for Wollongong, the government delivered just one fifth of its promised $100 million in the recent budget.

Park said this would lead to delays in getting vital Illawarra projects up and running.

"This flies in the face of what the Minister for the Illawarra – who is off duty – said a few weeks ago," Park said.

"He categorically said that these projects would be up and running and at least commenced by the end of this year."

A NSW Treasury spokesman said the government had not allocated the total $100 million next year because a consultation process on how to spend the money was under way

He said the money would be delivered in the future.

Kiama MP Gareth Ward said Labor MPs were "misrepresenting the situation" relating to the sale of Newcastle's port, because the Illawarra had received $270 million from the long-term lease of Port Kembla.

He said $170 million set aside to build the Berry Bypass was also part of the region's allocation.

"When we went to tender for [Port Kembla] we expected to gain $500 million and before we even went to tender we made it clear we would return $100 million for a new infrastructure fund and $170 million for the Princes Highway," Ward said.

He said the Illawarra had received roads and infrastructure funding from past Labor governments and this was why the $100 million needed to be spread across the whole region rather than being concentrated as it was in Newcastle.

"I make absolutely no apology for the fact that I lobbied exceptionally hard to ensure that not only did the port return an upgrade to the Princes Highway … but that $100 million went to suburbs like Shellharbour, Kiama and Shoalhaven," he said.

Funding plan for Ulan Road slammed by local council

A funding plan to fix a road used heavily by mining companies in the NSW mid-western region has been slammed by the local mayor for slugging the regional council with a multi-million dollar bill.

Under the plan handed down by the NSW Department of Planning and Infrastructure, the Mid-Western Regional Council will have to pay $13.34 million of the $33.5 million to upgrade and maintain Ulan Road under a funding plan proposed over twenty years.

However, Mudgee Guardian reports that over the next five years, the capital works bill would exceed $18 million, with the council having to find an additional $9.4 million.

Mayor Des Kennedy said council studies show 75 per cent of the road’s traffic is related to mining.

Kennedy said council was being forced to increase expenditure on the Ulan Road from an average of $600,000 per year to $2.4 million per year and that director of general of the department, Sam Haddad, was favouring mining companies.

“Developers in NSW are required to fund infrastructure upgrades needed to service their development. Why now, has Mr Haddad decided council should subsidise the impact that three developers are having on our infrastructure? The generosity he has shown the coal mines is clearly at great cost to this community and has us asking some serious questions of the Department.”

Kennedy said the extra funding the council was being forced to find for Ulan Road is more than it spends on three pools, libraries, the airport, tourism and events combined. 

“Imagine cutting all these services to maintain one road that is used mainly to service three coal mines,” he said.

 “These international mining companies employ a lot of people in our region and provide economic development opportunities, and for that we are very grateful. However, they need to take responsibility for the impact their developments have on local infrastructure.”

However the regions miners say they are paying their fair share for the upgrades.

Glencore Xstrata’s Ulan Coal, Moolarben Coal and Peabody’s Wilpinjong Mine have stated that the NSW Government’s strategy is a “fair and reasonable share of costs”.

 “We accept without question that we have a responsibility to contribute to an upgrade that is important to the safety and welfare of the local community,” a mines spokesman said last week. 

“However, we believe the contributions should be fair and reasonable. 

“The funding determination considered evidence from all parties and included an  independent engineering review. 

“This showed that significant portions of Ulan Road did not meet the minimum requirements under Austroads standards for the local traffic identified in traffic studies.

“That is council’s responsibility, and the funding allocation has taken this and future  maintenance into consideration.”

The mines said they would support the council in any applications for funding.

 “But just like our employees, as ratepayers we also expect council to invest in the  development of local infrastructure and improve its maintenance of local assets.”

The spokesman said council criticism was disappointing. 

“Coal mining in Ulan has been part of this region for 90 years,” he said. 

“The three mines currently provide direct employment for more than 3000 employees and contractors. 

 “We have each created a number of community partnerships that contribute significantly to improvements in health, education and welfare in the area.

“We have also assisted council with contributions to infrastructure development that total more than $20million over the past five years, over and above annual payment of almost $3 million in rates.

“Any suggestion that we are not committed to improving services and supporting the local community is well wide of the mark.”

A spokesperson from the department also said it was disappointed by the council’s response.

“Where a clear relationship was established between certain coal mining developments and usage of the road, the mining companies have been required to fund the road’s upgrade accordingly,” he said.

“The department’s decision on how to split the cost between Council and the mining companies was based on detailed road usage data and independent advice, as well as a range of historical and technical factors. It was also based on strict legal and merit assessment requirements.

“It should also be noted that the funding required is over a 20-year time frame.”

The department also said it would support the council’s bid to apply for state or federal grants.

Image: abc.com.au

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