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Tag Archives: High Speed Rail

Delivery Strategies for Australia’s New Infrastructure Consensus

Denis Bright invites discussion about of the most appropriate delivery models for best practice in bipartisan commitments to Australian transport infrastructure.

The LNP’s conservative template for a low tax, low service state presents a challenge to Malcolm Turnbull.

If the new Prime Minister wishes to preside over the delivery of new infrastructure for cities, Cabinet must come up with the financial priorities to reverse the current cutbacks in the transport and communication sectors in the 2015 Budget.

Joe Hockey’s last budget has left a cupboard that is bare of new funding. Commitments to transport and infrastructure have faced the steepest reduction in real budget expenditure.

Rather than wait for the Mid-Year Economic and Financial Outlook (MYEFO), Cabinet can proceed with a mini-budget to implement the Prime Minister’s new vision for nation building and infrastructure commitments.

This positive vision is cheered from across the political spectrum as shown by the enthusiasm for a more extensive light rail system on the Gold Coast.

So far, Malcolm Turnbull has been tight lipped about any wider commitment to infrastructure funding because the choices available within the LNP’s conservative political template are not so obvious.

Prospects for market based new infrastructure

Private sector options for the delivery of new transport infrastructure are available to the LNP within appropriate regulatory structures. The Australian Competition and Consumer Commission (ACCC) continues to regulate potential restrictive trade practices affecting transport infrastructure.

Market-based infrastructure delivery within the conservative political template of Thatcherism has been an abysmal failure from Canada to Britain and New Zealand.

In places like Mexico and Argentina, privatization of transport infrastructure has left few remaining passenger and rail freight services and new networks of expensive commercial road tollways.

However, since the 1990s, global transport infrastructure firms have emerged with the capacity to supervise the construction and management of essential infrastructure.

Even where rail track is still in government hands, freight delivery by Australian firms such as Asciano and Aurizon competes in the competitive delivery of containers and the motive power for some of the remnants of interstate passenger traffic.

Asciano’s vast transport network


ACCC has temporarily rejected a take-over bid by Brookfield Infrastructure Partners for Asciano. Brookfield’s modified proposals will be reviewed again in December 2015.

Brookfield Infrastructure Partners currently operates the West Australian Government Railway network including train movements along the Indian Pacific Route west from Kalgoorlie under an exclusive leasing arrangement until 2049.

Brookfield Infrastructure Partners is also one of the many companies interested in acquiring the Australian Rail Track Corporation (ARTC) which has been offered for privatization by the federal LNP at a potential sale price of $4 billion.

The LNP government has proceeded slowly on its commitment to privatization of the management of 8,100 kms of interstate rail tracks between Brisbane and Kalgoorlie. The final section between Kalgoorlie, Perth and Kwinana is in fact operated by Brookfield Infrastructure Partners.

Aurizon Holdings is also interested in acquiring the ARTC. This former Queensland Rail public sector carrier is currently the largest integrated rail-road freight business in Australia.

Any future acquisitions of ARTC by Brookfield Infrastructure Partners will have immense implications for Aurizon’s capacity as a freight leader. Both Aurizon and Anciano are likely to face takeover offers by other global transport infrastructure giants.

Even before the accession of Prime Minister Turnbull, there was considerable reappraisal of the decision to privatize the ARTC.

ARTC monitoring does not extend to the Queensland freight lines beyond Brisbane which carry freight trains from Asciano and Aurizon on tracks which are still owned by the Queensland Government.

In the midst of current confusion over national infrastructure policies, there are now opportunities for federal Labor to excel with a more even-handed national infrastructure plan.

So what is Bill Shorten offering to fill the confusion in federal LNP ranks?

Federal Labor’s Alternative Infrastructure Programme

In addressing the Queensland Media Club on 8 October 2015, Opposition Leader Bill Shorten signalled that Labor is also quite pragmatic about the extent of market involvement to end Australia’s infrastructure backlog.

Labor offered $10 billion to support Infrastructure Partners Australia (IPA) as the co-ordinator of transport infrastructure funding.

Logically, IPA would take on the responsibilities of an expanded ARTC with its financial support for rail track maintenance across the network.

Bill Shorten warned Australians that the Australian LNP Government’s investment in infrastructure in the June Quarter of 2015 had fallen by 20.1 per cent compared with the last quarter when Labor was in government.

An excellent case has been presented to support reliance on the social market to deliver nine key transport infrastructure projects. These projects include rail access to the new Sydney Airport, new commitments to Melbourne’s Metro rail projects, Brisbane’s cross-river metro rail link, the light rail extensions on the Gold Coast and major motorway projects in most states.

Prior to the accession of Prime Minister Turnbull, Sydney’s airport project at Badgerys Creek was offered a $3.8 billion motorway and tunnel space for a future unfunded rail connection. Now Prime Minister Turnbull is committed to new rail access.

While Prime Minister Turnbull’s team is currently working on the specifics of its market-based approach, Labor has time to refine its initial proposals to add new financial traction to the proposed IPA.

Adding financial traction to IPA

In these days of national political consensus over rhetorical commitment to new transport infrastructure, more financial traction could be given to an expanded role for Bill Shorten’s IPA.

Labor can learn from the manner in which corporate giants like Brookfield Infrastructure Partners hedges long-term investments in infrastructure with financial gains from equity management funds.

Brookfield Asset Management Fund is a specialist in property development, renewal energy, infrastructure and private equity management for a total of $200US billion with recent links to Brookfield Business Partners in Bermuda.

In a touch of irony that a major multinational company has been a financial adviser through the Brookfield Asset Management Fund to the Investment Corporation of Dubai. This fund operates a sovereign wealth fund to promote new age investment and infrastructure at home and abroad.

Financial activities on behalf of the IPA could multiply the Australian government’s financial support for longer-term infrastructure projects by inviting investment equity from entrepreneurs and corporations in a safe government guaranteed hedge-fund which takes risk-taking investment on financial markets and in established companies.

The McKinsey Global Institute notes that investment in environmentally sustainable infrastructure is now a major niche in the global economy as countries with differing levels of development try to counter the productivity losses from congestion in sprawling cities.

As well as transforming transportation and planning options for Australian cities, the IPA could become an innovative investor and project manager internationally adding more traction to Australia’s currently reduced overseas assistance programmes.

Work has commenced on urban subway systems in both Hanoi and Ho Chi Minh City (HCMC). Most of the funding for the first subway line in HCMC has been donated by Japan and the construction is a Japanese-Vietnamese joint venture which is now scheduled for completion in 2020.

While Australian governments have cut overseas assistance programmes, Japan has embarked on Win Win Approaches to overseas assistance to assists both donor and recipient alike.

The IPA could provide opportunities to share Australia’s renewed commitment to the social market internationally. This would not be beyond the resources of Australia as a significant middle ranking economy.

The financial commitments of overseas sovereign wealth and pension funds have been summarized by the Sovereign Wealth Fund Institute (SWFI). These funds have become an important resource for governments of differing political complexions.

Portfolio assets of major sovereign wealth and pension funds (Billions $US)


wealth 2

Sovereign Wealth Fund Institute (SWFI) 2015 (http://www.swfinstitute.org/public-fund-league-table/)

Sovereign wealth funds do not exist only in distant overseas capitals.

The Queensland Investment Corporation (QIC) successfully handles the investment of superannuation contributions and other financial transactions assigned to it by the Queensland Treasury Corporation. QIC thrives on both canny financial transactions and real investment acquisitions.

Labor’s IPA could follow this model by attracting capital from local and international corporations and entrepreneurs who need a safe haven for both short-term and long term deposits.

QIC uses capital equity for profitable investments on the financial market and in the acquisition of targeted enterprises with a real future.

The QIC has successfully acquired the Iona Gas Storage Facility west of Melbourne on 8 October 2015 for $1.78 billion and the profits are expected to flow back to Queensland from the December Quarter of 2015.

QIC recorded a profit of $100 million in 2014-15 and assets under management base of $73.8 billion on 30 June 2015.

Meanwhile, Bill Shorten has developed a well argued case for staying with the Australian social market to fund assist in delivering nine key infrastructure projects. These commitments include Airport Rail for Badgerys Creek, Sydney, Melbourne’s Metro Rail Project, Brisbane’s cross-river rail metro link and key motorway projects across Australia.

The electorate is still waiting for the details of Malcolm Turnbull’s market-based model for the renewal of Australian infrastructure. It might be a long wait if the LNP infrastructure plans come from the political template in which tax cuts for more comfortable families take precedence over important national priorities.

A real opportunity exists for Bill Shorten to highlight the LNP’s current indecision about the best model for the delivery of market-based national infrastructure. By adding an investment fund to the proposed IPA, Labor could have a real opportunity to avoid the excesses of an ideologically-based market approach.

denis-bright-150x150Denis Bright (pictured) is a registered teacher and a member of the Media, Entertainment and Arts Alliance (MEAA). He has recent postgraduate qualifications in journalism, public policy and international relations. He is interested in developing progressive public policies that are compatible with commitments to a social market model within contemporary globalization.


Are some solutions just too easy?

Does it seem to anyone else that we are in election mode?

In reality, we are always in election mode but both sides seem receptive to ideas at the moment so how about we revisit the extra 58 fighter jets Tony ordered in his first flush of having the keys to the Treasury.

In 2002 John Howard went to the United States and signed Australia up in the early stages of development of the Joint Strike Fighter.

In 2009 it was a Labor government that ordered the first 14 of the aircraft for Australia.

In April 2014 Tony Abbott announced Australia would acquire another 58 Joint Strike Fighters at a cost of around $90 million per plane; $24 billion has been budgeted to purchase and operate the aircraft until 2024.

And while we are at it, do we really need 12 new subs?

In February the Defence Minister said the project will be worth around $50 billion.

Has anyone noticed that we don’t have long range bombers and aircraft carriers either? If we really want to do undersea work wouldn’t it be better done by robot craft/drones for a far smaller cost?

Wouldn’t subsidising the car industry to make low emission cars, building high speed rail, installing FttP NBN, and investing in renewable energy and sustainable practice all bring more jobs and a better return than war toys? The shipyards could build research vessels or hospital ships or cargo vessels – you know, constructive things.

Wouldn’t lifting people from poverty and investing in health, education, and affordable housing be of more benefit to our society?

Wouldn’t investing in childcare and aged care be better than investing in warfare?

Research and foreign aid are surely more important?

Come on Malcolm…think of all that extra money. Think of the jobs that could be created. Scott…you could be a hero. Can we please consider this very easy way to solve so many problems?


No courage, no vision, no plan

In 1946, after World War II, gross debt in Australia peaked at 120% of GDP. Despite this, in 1949, the government of the day had the courage and foresight to embark on the largest construction project undertaken in Australia, the Snowy Mountains Hydro Scheme.

The Scheme cost $1.16 billion and was completed in 1974. By then, gross debt had declined to around 8 per cent of GDP.

In the 25 years it took to build, more than 100,000 people from over 30 countries came to work in the mountains to make true a vision of diverting water to farms to feed a growing nation and to build power stations to generate renewable electricity for homes and industries.

The project is often used as an example for multiculturalism, having employed thousands of migrant engineers and labourers. Their influence radically changed Australian culture for the better in the years that followed.

Sixteen major dams, seven major power stations (two underground), a pumping station, 145kms of inter-connected trans-mountain tunnels and 80kms of aqueducts were constructed. Even before the Scheme was completed, it was named as one of the civil engineering wonders of the modern world. The Snowy Mountains Engineering Corporation now sells its engineering knowledge overseas.

Today, Snowy Hydro continues to play a vital role in the growth and the development of Australia’s national economy, by diverting water that underwrites over $3 billion in agricultural produce and by generating clean renewable energy.

Snowy Hydro currently provides around 32% of all renewable energy that is available to the eastern mainland grid of Australia, as well as providing fast response power to light up the morning and evening rush hours of Sydney, Brisbane, Canberra, Melbourne and Adelaide. Water flow from dams is much easier to turn off than a coal-fired power station.

Had the government of the day worried about the “debt and deficit” disaster, this nation-changing project may not have gone ahead. Thankfully, they realised the future return on their investment and the immediate advantages of the employment and skills training it provided.

Abbott had his chance to be part of a similar boost to our nation with the NBN. He chose instead to go with the rhetoric contained in the daily talking points provided by the red-shoe wearing Mark Textor and destroy this productivity enhancing reform for no reason other than he wants to be able to say he achieved a surplus just like John Howard. He patently doesn’t understand its potential. Gillard started it so it must be destroyed.

Tony’s wants his big contribution to be more roads whether we want them or not.

He seems oblivious to the heat island consequences of thousands of kilometres of bitumen, the pollution caused by more cars on the road, and the effect on climate change from using fossil fuels.

He doesn’t care about cost benefit analyses or the priorities outlined by Infrastructure Australia or the lack of parking in the cities.

He doesn’t seem to understand that if we got cars off the road by investing in urban public transport it would free it up for road freight or that if we built a high speed rail between Melbourne and Brisbane that it would free up the rail lines for rail freight and the airports for air freight.

Climate change think tank Beyond Zero Emissions found that a high-speed rail network on Australia’s east coast could be built for $84 billion and the system would be faster, cheaper and cleaner than air travel. To put this in perspective, the budget allocated $36 billion over 5 years to be spent “building the roads of the 21st century”. State and federal governments spend a combined $18 billion each year on roads.

HSR would allow people to travel from Sydney to Melbourne in two hours and 44 minutes, and Sydney to Brisbane in two hours and 37 minutes – potentially faster than flying once you take into account time at the airport.

Its design envisages a network powered by 100 per cent renewable energy, reducing greenhouse gas emissions from regional travel by 150 million tonnes of carbon dioxide over 40 years.

The rail link would also turbocharge regional development.

“High-speed rail will allow people to live in cities like Shepparton and Goulburn but commute to Sydney or Melbourne for work,” CEO Dr Bygrave said.

“It would allow people to live outside of urban cities but still work in them. It’s a pretty important nation-building exercise.”

This would make living in regional areas more attractive, and in turn alleviate pressure on house prices in capital cities.

“High-speed rail would revolutionise interstate travel, and would also be an economic game-changer for dozens of regional communities along its path. That’s why the politicians need to exercise vision and think way beyond the current political cycle,” Mr Albanese said.

The HSR advisory group was disbanded after Abbott won the election and the funding for long term planning was cut in the budget.

While politicians continue to foolishly and needlessly pursue a surplus, we are committing intergenerational theft by refusing to invest in the infrastructure they will need in the future.

This government has no courage, no vision, and no plan.


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Planes, trains, and automobiles

In September 2008, the Daily Telegraph blared:

“Kevin Rudd should ask himself: am I the Prime Minister or the Foreign Minister? Kevin 07 has become Departure Gate 08.”

In 2009, newly crowned LOTO Tony Abbott said:

“Kevin Rudd loves a crisis to give him an excuse to run to the airport and jump on a 747 and go off and do photo ops with [then British prime minister] Gordon Brown and Barack Obama. I accept that Australia’s voice should be heard in the councils of the world, but it would be nice to hear the prime minister’s voice at home occasionally.”

Deputy Liberal leader Julie Bishop accused Mr Rudd of harbouring an “obsession with chasing the global limelight”.

Tony picked up the criticism again when Rudd resumed the leadership in June 2013, saying:

“I think he wants to campaign for the prime ministership of this country from the front of a 747. I don’t think the Australian public are going to really warm to that but I think that’s the temptation before him now, to not only be Kevin 747 but maybe Kevin A380 and spend most of the next few months out of the country.”

In contrast to his rhetoric in opposition, since getting the keys to the plane, it is hardly any surprise to hear that Abbott has made 11 international trips, the same number as Mr Rudd made during his first 12 months in office.

At the beginning of this year it was briefly reported that:

“The $600 million lease on the current RAAF fleet of two Boeing 737 business jets and three smaller Challenger 604 aircraft will expire next year and the government will seek agreement from media companies to limit criticism of any decision to opt for bigger planes. Any negative publicity would be limited to plush add ons such as gold taps or marble sinks.”

This report is disturbing for a number of reasons. Tony wants bigger planes fitted out in VIP luxury so he can fly his media pack around with him, along with hundreds of businessmen, whilst directing the media to not criticise the decision or presumably risk losing their free ride.

Every major media outlet has correspondents in other countries. If Rupert wants to fly extra people in I am sure he could afford to do so. After all, the ATO just gave him $882 million for being good at shifting money around. (One wonders why they chose not to appeal that decision).

Tony Abbott paid a visit to China last April, accompanied by a record number of over 700 businessmen who together represented over half the value of the Australian stock exchange. Few realise that this was the first ‘outing’ of the REAL ‘Team Australia”.

“Five state premiers, along with 700 business leaders, including three billionaires are with the prime minister. The government has dubbed it “team Australia“.”

There was also a trip to Indonesia immediately after Tony’s coronation where he hosted 20 business heavyweights including the big banks, mining companies, and health care companies. Among them was Anthony Pratt, CEO of Visy, and Australian’s second wealthiest person according to BRW. Surely he owns his own jet. Must we fly James Packer around the world when he wants to land deals to build more casinos?

In August it was revealed that:

“DEFENCE Minister David Johnston has blown more than $100,000 sending empty VIP air force jets across the Nullarbor to pick up colleagues from WA, including Finance Minister Mathias Cormann.… the VIP planes (RAAF Boeing 737) fly 3000km to Perth empty of passengers. The “ghost flights’’ cost up to $16,000 each, ­excluding wages. On the return trip, MPs and their wives enjoy fine wine, craft beers, cocktails and gourmet hot meals. MPs’ children have also taken the flights, ­according to passenger lists.”

Perhaps our airlines would be doing a bit better if they were supported by our politicians. It is also rather incongruous that government representatives attending conferences get bumped from Tony’s flying circus to make way for photographers and billionaires.

No discussion of planes would be complete without a mention of our squadrons of fighter jets that we may or may not see in a decade or two. As I have said before, I consider this an enormous waste of money as what we need most are planes that can do humanitarian drops or disaster relief or evacuations or search and rescue. We will not be engaging in dog fights and to waste tens of billions on a training jet to play war games in is a ridiculous waste of resources.

Trains don’t get much of a run with the Abbott government. Despite Infrastructure Australia identifying the Melbourne Metro rail tunnel as a project of national significance and placing it at the top of its priority list (the board was subsequently replaced), despite the Gillard government offering funding for the project that was marked ready to go, Tony Abbott is determined to build roads instead. If states want public transport they will have to sell assets because Tony wants thousands of kilometres of pollution-producing bitumen heat islands to be his legacy.

Australia and Antarctica are now the only two continents in the world where there is no high speed rail project underway, though we have no hope of the discussion to progress under this government even though the reasons for it seem compelling. Traditional rail lines could be opened up for freight and fuel guzzling planes would largely be replaced for the trip between Melbourne, Canberra, Sydney and Brisbane. Regional areas could be revitalised giving the option for people to relocate with an easy commute when necessary without having to queue up at airports or joust with trucks on our congested highways.

Not content with buying himself some new planes, Tony Abbott has also just bought a new fleet of bombproof BMWs. The $6.2 million fleet can withstand AK47 fire, attacks with explosive devices or armour-piercing weapons. I’m just wondering how many AK47s and armour-piercing weapons are in circulation in Australia. I hope they have special resistant paint because they are far more likely to get egged which is a real bugger to get off if you don’t do it straight away.

One wonders why we are paying the money to a German company when Holden won the tender process. Abbott said Holden had not even submitted a bid for the tender, something the company says is incorrect. Abbott’s critics claim opting for BMW was all part of discrediting Holden around the time it announced it would cease Australian operations.

We have been assured that it had nothing to do with Bridget Abbott being given a gig as a “brand ambassador” for the BMW Sydney Carnival in 2012. Just as Louise Abbott got the job in the UN and Frances Abbott got the $60,000 scholarship, she was no doubt chosen on merit. Successful accreditation of courses and extension of fee loans to colleges such as the one that offered Ms Abbott the scholarship are also entirely unrelated events. But I digress into murky waters.

As well as Tony’s new fleet of BMWs, we have the endless use of comcars by MPs. Unless a very ‘helpful’ employee steals your diary and goes to the trouble of matching your movements to your cab dockets going back over several years, who would know what the cars are being used for? Apparently if you need to justify claiming travel and accommodation, just get your photo taken visiting something even if it DOES mean keeping all your colleagues waiting.

I have suggested before how much we could save by building an accommodation wing at Parliament House. Those who choose not to stay there pay for their own accommodation and travel to and from work. Those who make appointments during sitting time for places outside Canberra should also pay for travel out of their generous electoral allowance or use the private vehicle provided to all MPs. Not having free RAAF jets and chauffeured limousines at their disposal might make them a little more circumspect about dashing off for parties and sporting events.

Most of the criticisms I have made in this article could be directed at either of the major parties, though some are unique to Tony. But it is Tony who has been lamenting waste and Labor’s debt and deficit, Tony that has mercilessly attacked the most vulnerable for the sake of a number on a piece of paper, Tony that has been telling us that nothing is free and we all must help to fix the problem.

All of us except Tony, that is.

High Speed Rail

Australia and Antarctica are now the only two continents in the world where there is no high speed rail project underway.

As part of the agreement to support the minority Labor government, the Australian Greens secured a $20 million feasibility study into high speed rail. That feasibility study demonstrated that it will cut pollution, enhance business and passenger transport and generate positive economic returns.

Melbourne to Sydney is one of the busiest air routes in the world. High speed rail could alleviate the need for a second Sydney airport. Once fully operational (from 2065 if we start planning now), HSR could carry approximately 84 million passengers each year, with express journey times of less than three hours between Melbourne-Sydney and Sydney-Brisbane.

Line 1: Sydney to Melbourne (2 hours 44 mins) comprising of Canberra to Sydney (1 hour) and Melbourne to Canberra (2 ½ hours).

Line 2: Sydney to Brisbane (2 hours 37 mins) comprising of Sydney to Newcastle (40 mins); and Newcastle to the Gold Coast and Gold Coast to Brisbane.

Once complete, the High Speed Rail would stretch 1,750km linking 11 major cities and regions all the way from Melbourne to Brisbane. The preferred alignment includes four capital city stations, four city-peripheral stations, and stations at the Gold Coast, Casino, Grafton, Coffs Harbour, Port Macquarie, Taree, Newcastle, the Central Coast, Southern Highlands, Wagga Wagga, Albury-Wodonga and Shepparton.

The estimated cost of constructing the preferred HSR alignment in its entirety would be around $114 billion (in 2012 dollars) which sounds like a lot of money until you realise it is what we hand out in ONE YEAR in tax concessions (estimated to grow to $150 billion per year in 2 years.)

HSR would substantially improve accessibility for the regional centres it served, and provide opportunity for regional development. It would allow cities to compete with each other. While Sydney might be more attractive at the moment, it is also much more expensive, so the opportunity to save costs by moving to regional areas that had easy access could be an option for some businesses.

Thousands of jobs would be created in the construction phase and, unlike roads, the HSR would provide ongoing employment for railway employees and associated industries.

Better transport connections mean reduced production and transport costs, higher productivity and greater competition between regions. Mobile phones and laptops now allow for business to be continued during train travelling time.

HSR will move millions of air and road trips on to rail. It will open up space on the existing rail network for freight, taking hundreds of heavy goods vehicles per hour off the roads. In so doing, It will also help cut carbon emissions.

The groundwork has been costed by the Parliamentary Budget Office at $664 million over the forward estimates period. This includes preparing a detailed financing and investment plan for the project, surveying the best rail corridors with the relevant state and local governments, securing ownership of those routes, and confirming the development and operation plan of the project through an inter-governmental agreement. The Environmental Impact statement (EIS) has been costed at $570 million. This seems a small amount to invest to ensure the viability and benefit of what seems a very worthwhile investment.

The Greens have already adopted this as a policy priority. I believe Labor should join them in making this a reality.

In August the ‘High Speed Rail Advisory Group’ chaired by former Nationals leader Tim Fischer found “no insurmountable issues that preclude Australia proceeding with high speed rail as a priority.”

That group was abolished by the Prime Minister in November.

Something to ponder: Some commentators argue that high speed rail is 20th Century technology. Video conferencing, apps like Hailo, and Google’s driverless cars are a cheaper and more up-to-date model for doing business and getting around. Then there’s the Hyperloop scheme suggested by PayPal founder Elon Musk. He claims it could propel pressurised capsules between Los Angeles and San Francisco in 35 minutes. I doubt that these are as relevant in Australia due to our huge distances but perhaps interesting thoughts for urban or interurban application.

Also by Kaye Lee:

Some of my best friends are corrupt

Who are the real whingers?

What makes a good politician?

Letter to all Coalition MPs


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