In the Australian infrastructure space there is currently no major transport infrastructure project that isn’t at least one of: under review; delayed, with significant cost/time issues, or even cancelled. Separate, but related, to this is significant reform underway of both Infrastructure Australia and the agreed infrastructure pipeline.
We are now 70 days into the Federal Government’s 90-day independent review of its 10-year $120 billion infrastructure pipeline. The review is intended to ensure the land transport infrastructure projects in which the Federal Government invests are nationally significant, and enhance economic and social productivity and prosperity. There is speculation that the review will recommend the discontinuation of projects that have not yet started or secured funding.
Concurrently there are also legislative changes currently going through Parliament to give effect to the 2022 independent review of Infrastructure Australia. The legislation has three main goals:
- Redefining IA as the Australian Government’s independent advisor on nationally significant infrastructure investment planning and project prioritisation.
- Broadening IA’s functions to include conducting audits or assessments of nationally significant infrastructure, evaluating infrastructure projects, developing targeted infrastructure lists and plans, and providing advice on nationally significant infrastructure matters.
- Implementing a new governance structure by replacing the IA Board with three Commissioners who would be responsible for overseeing IA’s functions and ensuring its performance.
There is no doubt that there are tougher economic conditions looming – with industry insolvencies, surging material and labour costs, and project cost blowouts. The Inland Rail Review highlighted many of the issues.
Governments are also facing major budgetary issues, as seen this week with the cancellation of the Victorian Commonwealth Games.
The total government five-year pipeline of major public transport infrastructure projects is valued at approximately $150bn, with investment concentrated in New South Wales, Victoria and Queensland. What was once viewed as a ‘construction Everest’ is now casting a large shadow in the form of major economic pressures on the industry, including labour shortages and cost spikes.
The IA Market Capacity report estimates a shortage of 70,000 – 100,000,00 workers in transport infrastructure, which has given governments the scope to delay or cancel proposed projects. Examples of delays in Victoria include the Airport Rail Link, parts of the North-East Link, and Geelong Fast Rail.
These circumstances emphasise the importance of incorporating an independent and credible Infrastructure Australia within the infrastructure framework, with a targeted and achievable Infrastructure Priority List, to address these challenges effectively.