Infrastructure Australia’s latest market capacity report is “a solid blueprint” for improving delivery, writes Matthew Colton.
Australia has a massive pipeline of projects underway or planned.
The pipeline accounts for over $230 billion in public sector infrastructure investment.
It covers projects valued over $100 million in New South Wales, Victoria, Queensland, and Western Australia, and over $50 million in South Australia, the Australian Capital Territory, the Northern Territory, and Tasmania.
Infrastructure Australia's latest market capacity report provides a comprehensive analysis of how effectively the market can deliver this pipeline over the next 15 years.
Australia needs infrastructure to support growth – but demand is outstripping supply
The Australian Bureau of Statistics reports that the country's population in 2022 was 26 million people.
By 2071, it and projects this figure to reach between 34.3 and 45.9 million people.
Australia's major cities are expanding rapidly, and need substantial housing and infrastructure to support projected population and economic growth.
The market capacity report, however, cautions that rapid construction growth poses risks of cost blowouts, delays, and poor project outcomes - unless capacity grows alongside it.
Skills shortages across the infrastructure sector present a significant barrier.
With major projects underway across transport, energy, water, and social infrastructure sectors, demand for civil engineers, project managers, and infrastructure professionals is outstripping supply.
Build the right thing, and build the thing right
To build projects on time and on budget, as well as operate and maintain new infrastructure, requires planning for skills development and immigration.
Industry efficiency and effectiveness also needs to improve – a key theme for the ICE and Australian Contractors Association in recent years.
Reaching net zero
The net zero transition also features prominently in the market capacity report.
Upgrades to Australia's electricity transmission network, renewable energy investments, electric vehicle infrastructure, battery technologies, hydrogen, and major public transport projects are crucial to these ambitions.
However, coordination issues across government create uncertainties, and access to finance remains a barrier for some sustainable infrastructure.
Recommendations
The report makes sensible suggestions:
- improve decision-making frameworks;
- standardise form of contracts;
- invest in skills;
- expand dispute resolution mechanisms; and
- quantify project pipelines at state level.
That said, more focus on shaping better urban environments for people – for example, through integrated land use and transport planning – would be wise.
Australia’s dependence on complex mega-projects makes systematic cost overruns likely.
Speeding up smaller scale upgrades – such as improving regional rail signalling, level crossing removals, and active transport – could not only grow capacity more evenly, but better serve communities.
The report also could’ve more substantially covered the capacity for infrastructure policy to enable wider national priorities such as environmental sustainability, COP commitments, equality of access, and social unity.
This would ensure infrastructure investments serve public interest goals more meaningfully given the vast sums of taxpayer money allocated.
A solid blueprint
The report outlines Australia's mammoth infrastructure growth pipeline and market capacity challenges well.
While further evolution in strategic priorities is needed, the guidelines provide a solid blueprint for improving infrastructure project planning, procurement, and delivery in the face of booming demand.
Addressing the identified constraints in skills, decision-making capabilities, contract management, and sustainability planning will be instrumental to making the most of Australia's largest ever infrastructure programme.
*The ICE welcomes guests to share their views about infrastructure policy issues on the Infrastructure Blog. These views are the views of the individual.
If you’re interested in writing for the Infrastructure Blog, please email [email protected]. The ICE reserves the right not to publish articles that have been submitted.
