Sir Rod Eddington: ‘The infrastructure challenges are real’

Sir Rod Eddington: unless the rail networks are right, Australia’s cities won’t work properly. Supplied

Welcome to In Conversation; an ongoing series in which leading academics interview prominent public figures.

In today’s instalment, Dr Peter Newman, Professor of Sustainability at Curtin University, sits down with prominent Australian businessman Sir Rod Eddington.

Sir Rod is the current chair of government body Infrastructure Australia (IA), a director of News Corporation and has served in many senior roles throughout a long and distinguished business career.

In this wide-ranging interview, Professor Newman and Sir Rod discuss:

  • the role rail networks play in developing and sustaining “successful” cities
  • the infrastructure challenges facing Australian cities
  • the importance of our airports and ports in ensuring the strength of our cities and our economy
  • the path to becoming a successful leader and international businessman

We hope you enjoy the interview.


Professor Peter Newman: When we first met at university you were well on the road to being a star. We met on the sporting field but you were obviously good at university as well, and you got a Rhodes Scholarship.

Sir Rod Eddington: I grew up in the bush, in Western Australia. I only came to Perth because the towns I lived in didn’t have a high school, so I came to Perth in 1963 to start secondary school. I think growing up in the bush gives you a sense of self-reliance, making do with what you’ve got, making the most of it.

The scholarship put me into a different environment: I did a postgraduate degree at Oxford and I enjoyed the research and the teaching, but particularly the research. It put me into a bigger pond and gave me a chance to swim in that pond. I think in life you just keep biting off bigger and bigger challenges if you can.

Newman: So you then moved into an academic career. Where was that?

Eddington: When I finished my doctorate at Oxford they offered me a very junior research and teaching post. Really, the only reason I stopped is I’d sort of walked into an academic career without really thinking about what else I might have done. And I decided in my late 20s if I didn’t get out and give the business world a run at that point I might never get that chance.

I didn’t know whether I would like business or it would like me and whether that was the right road to walk down. And although I still have an enormous affection for academe, particularly, I don’t regret making the switch.

Newman: So what was the route into business? Did you do the MBA or just go straight in?

Eddington: Straight in. In my time, very few people did MBAs in comparison to what young people today do. I had a chance to really begin again as a very junior management trainee with a fantastic company called the Swire Group, basically a British company but with most of its operations in Asia.

I worked for them for 18 years. Importantly it not only gave me a chance to learn new skill-sets, it also gave me a chance to live in places I would probably never have lived. I worked in Seoul, in Korea; I worked in Japan and I worked in Hong Kong and loved every minute of it.

Newman: You’re very passionate about cities. Living in Hong Kong and Tokyo and Seoul, those are pretty different cities to Australian cities, did you feel as though they had something to teach us?

Eddington: Oh yes! Places like Seoul, Tokyo and Hong Kong are big cities, high urban densities, and yet they’re cities that work well. Like you, I’ve always had a love of transport, and one of the things I saw up close was the transport networks in these cities, and also the way services come together to make the cities work efficiently.

But I also realised that cities could be places of community as well: they’re not just about economies, they’re about communities as well. They’re much more compact than our cities in the sense that Australian cities really are characterised by urban sprawl. I realised that the inner city can be a place where people could happily live as well as work, if the conditions are right.

Newman: You went into aviation – how did that happen?

Eddington: The Swire Group were the major shareholders in Cathay Pacific in Asia, and I joined them in 1979, at the same time as their first 747 arrived. Swire group had started out as shipping, then trading, businesses. JK Swire bought Cathay Pacific in 1948 for one Hong Kong dollar: look at them now. One of the things that taught me was that good business ownership and intelligent investment and development of people over a long period of time mean you can achieve pretty much anything.

Newman: From Cathay you went on to British Airways, and when you retired there you were given the job of putting together a transport plan for the UK. It’s seen today as being a very innovative step forward. How did you go about that? You were new to the business of land transport planning, but you made a real mark there.

Eddington: First, I got a small group of really good people to work with me on that, some terrific people in the civil service in the UK. We then went out and consulted widely. We talked to environment groups, business groups, transport user groups. We talked to people in the freight industry, the passenger industry. We looked at the rail networks, the road networks, the ports, the airports. We talked to the people who ran train companies and airlines. We travelled a lot around the UK. We looked at the journeys that mattered: the people journeys and the freight journeys. We looked at what worked and what people thought didn’t work. We also got together a small group of primarily transport economists from the academic community.

Newman: So the academics played a role!

Eddington: An important role. We sat down with them every couple of months and pressure-tested our thinking and our ideas with them. They were fantastic and I realised that they were a wonderful source of wisdom and insight into this area.

So we had the practitioners’ view, the civil servants’ view and we had the academic view. And I think we were able to weave the best insights together, to think about transport not only through an economic lens, but also to think about it through the lens of sustainability and community as well.

Newman: Do you think Australia could use that model more, to involve academics in public life in a creative way like that?

Eddington: I think that it’s a real opportunity. The whole idea is to recognise that there are different groups in any society who can contribute to the thinking on how you resolve issues, whether it’s population, or economic issues, or matters of infrastructure, an area that you and I have a shared passion for.

Big societal issues often benefit from being viewed through a number of lenses. Sometimes those viewings take you to different places, but how you resolve those issues is often at the heart of whether what you come up with is workable. The academic community is an important part of that jigsaw.

Newman: So you came back to Australia and they gave you a tough job. They said, infrastructure is stuffed, you’re the man who’s going to turn it around. You became chair of Infrastructure Australia, a new body with no track record, no other body like it in the world. What do you think the legacy of IA will be?

Eddington: The infrastructure challenges are real. We all understand them, but what do we do about them? One of the roles I think we play in IA is to highlight the importance of infrastructure, not only to the economy but to the community and to sustainability.

Having the right infrastructure in place at the right time really matters, not just to our economic well-being but to our sense of community. In order to do that you need strategic oversight of what you think the community is going to look like, what you think the community is going to look like, what are the physical and economic geographies of our country.

In order to get the right infrastructure in place it has to be a long-term planning process, that many of the big projects are ten years from deciding to do it to literally someone cutting the ribbon at the other end. If we don’t get the thinking right around infrastructure, we can spend money in areas which are perhaps less important.

Given the challenges we face as an economy and as a community, our life will be poorer if we don’t get it right.

Newman: The recent State of Australian Cities report that came out in October had 150,000 hits in 24 hours. This indicates there’s a real passion for cities in Australia and the fact that the Federal Government is taking an interest is special. Do you think Infrastructure Australia is playing an important role in that?

Eddington: I think so Peter. I think what we’ve said is that we can look at the infrastructure challenges through a number of lenses – one of them is to say critical infrastructure exists in our cities and supporting regions. Our international gateways – which are our ports and airports – are very important for a trading nation, and then there are the links between our cities.

Not just between cities like Sydney, Melbourne, Perth, Brisbane and Adelaide, but links between places like Ballarat, Geelong, Bendigo and Melbourne; between Newcastle, Wollongong and Sydney.

Most of us live in cities, much of the economic activity in the country takes place in the cities – particularly in the services sector. We’ve realised that as our economy is increasingly a services economy – that’s not to underestimate the importance of resources, agriculture or manufacturing – but as an urban nation, how our cities work is really important not only to the economy but to communities.

So I think people are beginning to take cities much more seriously than ever before and even people that live in the regions realise that unless the major cities work properly, the national economy won’t work.

Newman: Now I’ve been trying to get urban rail on the political agenda for most of my career so it was a great delight to me to see 55% of the budget that we [Infrastructure Australia] pushed for put into urban rail. How do you see the significance of that at this point in the history of Australia?

Eddington: It’s’ very important I think. One of the things that living in places like Seoul and Tokyo and Hong Kong taught me is that when cities get bigger, they reach a size of critical mass where unless the rail networks are right, the cities won’t work properly. And by the way that’s true for freight as well for people.

I think our biggest cities – Sydney and Melbourne in particular –but even in places like Perth and Brisbane and Adelaide – are increasingly demonstrating that unless we think of the rail issues, as well as the road issues, congestion, particularly in the inner-city, becomes a huge problem.

So, most of our cities have got what I would describe as suburban rail networks – rail networks that are designed to take people from the outer suburbs to the inner-city, whether it’s for work or for leisure. But we realise now that unless we have urban rail networks as well as surburban rail networks, the inner-cities won’t work properly and they’ll be a lot less pleasant places to live and work.

We also know that this is a very long journey. I arrived in Hong Kong in the late ‘70s. The building of the urban rail network – the mass transit railway (MTR) was really just beginning and now 30-plus years later, it’s still being enhanced and developed. That’s been the norm in places like Tokyo and Seoul and other big cities as well.

I think we’re beginning to realise that unless we’ve got good road and rail networks, cities won’t work properly. For a long time the emphasis was on the motor car alone – we stopped investing in our rail networks.

One of the things we’ve done at Infrastructure Australia is get governments and community to realise that it’s not a question of “road or rail” it’s a question of “road and rail”. And in big cities, unless the rail networks are appropriate, the cities just won’t work.

Newman: Ports and freight are a less sexy aspect of the transport business but still vitally important. Tell us about your approach to that and what IA’s doing to assist development in this area.

Eddington: International gateways – our ports and our airports – are a critical part of not only the national infrastructure but of the economy and community. We really are reliant upon them.

I think we’ve seen our ports grow and our airports grow without giving enough thought to the surface links particularly – the road and rail networks. As a result we often find that because the ports and airports are so successful, they become sources of congestion in their own right and that freight flows can often compete with passenger flows for space in the rail networks and road networks. There are issues that need to be resolved there.

One of the things we’ve tried to do at Infrastructure Australia is take a holistic view of our freight networks, and a holistic view of our port networks. So here in Melbourne, the Port of Melbourne is the biggest port in Australia. Clearly it’s critical for the Victorian economy, but it’s also critical to the success of the Tasmanian economy, and part of the South Australian economy, and even important to part of southern New South Wales.

International connections really matter too; they matter to our export trade, they matter to imports, they matter to our capacity as a trading nation to be prosperous and successful. They are often forgotten – most of us regularly visit airports, but we don’t often visit ports.

One of the things I did on my first day of the East-West study here in Melbourne in 2007, was to go and spend half a day on a tug on the harbour of the Port of Melbourne – the very first thing I did – to look at the trade flows in and out of Melbourne because that’s often the forgotten part of the transport jigsaw.

Newman: You’ve said that the centre of Melbourne’s going to be really important and the port is clearly now congested. Do you see that the Port of Melbourne will progressively move to Hastings to allow the city centre to expand further?

Eddington: The thing about traditional ports is that they’re often at the heart of the cities, where sailing ships could easily reach them. As the ships get bigger, and the port activity gets greater, there’s an increased emphasis on deep-water ports.

One of the challenges we face here in Victoria is to think about the role of the Port of Melbourne going forward and what role ports like Hastings have. Of course there are other ports in places like Geelong as well, so you need a broad strategy for your ports rather than focusing on just one.

In a number of big cities, the port in the inner-city, because it sits on such valuable real estate, is either been diminished or removed. I think one of the challenges is to think about that, but you can’t do that in isolation. You need to think about the economy, the current operators’ reports, the people that own and operate there, the people that work there.

It’s really only governments that can ultimately make the call on where ports are located. But I think it’s increasingly clear to us as Melbourne and Victoria continue to grow and expand and become increasingly prosperous, that we need to think long-term about our ports strategy. That may well mean thinking about ports as well as the Port of Melbourne.

It will be interesting in 50 years to look back and see where the Port of Melbourne (as we think of it today) is and where much of the economic activity is in other ports around the state.

Newman: Looking to the future, there’s a few opportunities and a few clouds. The NBN, and fast-broadband networks generally, are a major part of emerging economies. It seems that this will actually make our cities even more important and the nodes – the centres where people get together – even more enhanced, rather than scattering people, the way people first thought fast broadband and the internet would do.

Do you see that as the outcome, that our cities will become even more important?

Eddington: Absolutely. The idea that because technology improves and that you can Skype from your living room you won’t want to come into the inner-city for work and for leisure is, to me, absolutely wrong. We are social animals at the end of the day and we recognise that co-locating core functions in inner-cities is essential to the economy.

Getting financial services, legal services, media, government and education together in agglomerations (as the economists call them), is really important. The main advantage that enhanced communication will give us is that we can communicate with people in other parts of the world – particular in Australia where we live on an island – without always having to go there.

I don’t think the role of enhanced telecommunications will decrease the role of cities – quite the opposite Peter, I think it will enhance them and make their functioning even more important.

Newman: On the darker side, there are the issues of climate change, of sustainability, and of water. The general liveability of our cities, how they attract us, the outdoor life that we grew up with, that you want for your kids – are we going to be able to cope with these challenges, do you think?

Eddington: I think we must cope with them. Necessity is the mother of invention and those of us that live in cities will always wish to be able to have the advantages that come with living in cities. At the same time, we want our green spaces and our parks and our gardens and our playing facilities.

One of the great things about living here in Melbourne is we’ve got the best of both worlds, in many ways. We’re sitting here in Collins Street: the MCG is 15 minutes walk, the Rod Laver Arena, the National Gallery of Victoria, the Botanical Gardens. I think if you get it right you can live in the city and have the advantages of a city lifestyle without cutting yourself off from the great outdoors – something that’s so important to we Australians.

Newman: Finally, you’ve obviously been a leader from very early on and you were part of teams with people like John Inverarity and Rod Marsh who were genuine leaders from very early on. They must have had an influence on your life and you continue to be in touch with them.

What’s your reflection on leadership? Perhaps you can tell us about what you think John Inverarity is going to do for Australian cricket.

Eddington: Many of my role models were people I played sport with and for. I was part of a group of young Western Australians who loved their sport and found their level of competence – if I can use that term – quite easily and quite readily in the sense that we played for different teams.

Right from my early days at school I learnt the value of sport. I learned a lot of lessons on the sporting field – some of them quite hard. But the people that helped form me – and you were part of that many years ago – are still good friends. We’ve talked about John Inverarity and Rod Marsh who are now two national selectors [for the Australian cricket team] and I think they’ll do a first-class job – “Inv” as chairman of selectors and Rod as one of the two selectors.

They’re both great thinkers about the game and both great leaders in their own way.

Peter Tannock was an important part of the University [of Western Australia] footy club when you and I played there – a terrific leader. I learned a lot about leadership [from him], and you learn leadership lessons in unlikely places too.

I think I learned a lot from people that were very successful as leaders, but I learned a lot from others as well in little nooks and crannies in life. “Take good ideas wherever you can find them”.

Sport probably taught me more about leadership than anything else and there are lessons I’ve never forgotten and that apply to this very day. One of them is “don’t take yourself too seriously” and another is “treat defeat as a lesson, not a loss”.

One of the things about sport is that defeat comes your way on a reasonably regular basis, regardless of how good the teams you play for are. You learn from that, and get on with your life. No point feeling sorry for yourself when things don’t go your way, or when you let yourself or others down. Pick yourself up and move on. They’re lessons I learned from my sporting days and I’ll never forget them.

Newman: Well, it’s been a pleasure Sir Rod. Thanks very much.

Eddington: Thanks Peter.