New South Wales has been urged to delay procurement and commencement of new large and complex infrastructure projects until other massive scale projects are well advanced in delivery.

But works to raise the Warragamba Dam Wall in outer South-Western Sydney are recommended to go ahead to address flooding risk in the Hawkesbury-Nepean Valley.

Releasing the state’s 20-year infrastructure strategy, Infrastructure NSW made 57 recommendations across nine areas to help the state derive maximum value from its capital works program over the next twenty years.

Overall, the strategy recommended that NSW continue to pursue an active program of capital works moving forward.

But it suggested that the state move away from reliance on huge megaprojects and instead focus on more medium sized projects and works which can be delivered in staged programs.

Further, in light of current resource constraints, it recommended that the state delay the timing of a number of new large and complex road, rail and water projects which are proposed but not yet in procurement until existing megaprojects which are currently underway are well under control and in an advanced stage of delivery.

Projects for which timing should be reconsidered include:

  • The Beaches Link project which will offer new direct connections from the Northern Beaches to the Warringah Freeway and North Sydney.
  • Stage 2 of the Parramatta Light Rail Project
  • Stage 2 of the M6 Motorway Project
  • The central tunnel for the Great Western Highway Katoomba to Lithgow upgrade
  • Any further Sydney Metro or rail projects (Sydney CBD to Zetland, Western Sydney International Airport to Leppington or Campbelltown), and
  • Major regional dam projects (New Dungowan and Wyangala).

In its strategy, Infrastructure NSW argues that the procurement of new large and complex projects would be particularly challenging in light of current resource constraints on existing projects.

At any rate, it argues that medium sized projects along with smaller investments which can be delivered in staged programs often deliver higher payoffs where project are well selected.

“This 2022 SIS recommends that the NSW Government continue with a formidable program of investment, but one that achieves a balance between megaprojects and medium-sized and smaller investments that can be delivered in staged programs,” Infrastructure NSW says in its report.

“This approach is commended by the high payoffs of well selected smaller projects, more manageable project cost risks as well as limited capacity of government and the construction industry to deliver more megaprojects in the near term.

“At present, NSW and other jurisdictions have several megaprojects on foot creating high levels of demand. At the same time, construction industry capacity, supply chains and skills have all been stretched by COVID-19 and other world events. It would be especially challenging to deliver additional megaprojects in a cost-efficient manner in coming years.

“Faced with these realities, Infrastructure NSW recommends reconsidering the timing and sequence of a number of large, complex projects that are not yet in procurement …

“… These projects should be re-sequenced to ensure that they commence only when existing large, complex projects are in stable and advanced delivery.

“Resequencing will require reassessing business cases prior to investment decisions in order to re-test the relative benefits of each project.

“In a constrained construction market, it is even more important that investments and delivery resources are directed at the major projects that will deliver the greatest benefits.”

The latest report comes New South Wales and Australia more generally face challenges on major project delivery as the nation works through a record pipeline of major public transport projects.

In its latest forecast, Australian Construction Industry Forum said it expects the dollar value of work done on infrastructure construction to go from already elevated levels of $65.0 billion in 2020/21 to $75.3 billion in 2023/24 as work continues to ramp up on large-scale projects which are already underway.

These include Melbourne’s METRONET, Sydney Metro, the Inland Freight Route, Melbourne Airport Rail Link and several large road projects.

With this in mind, Infrastructure Australia estimates that the nation’s infrastructure sector is currently facing a shortage of 67,000 infrastructure workers across various occupations – a number which it expects to peak at 92,600 as at February 2023.

This includes shortages across project and construction management, several categories of engineering and structures and civil trades labouring.

Despite recommending that future large-scale projects be delayed, Infrastructure NSW stresses that the state should not ‘down tools’ on planning for major projects that will be delivered in the future.

Instead, major project options should be explored to a level that allows corridors and critical sites to be identified, protected and considered for purchase.

In addition, the report recommends several investment priorities.

These include:

  • Annual recurring investment programs in improved rail services between cities, better public transport within each city and a focus on better digital connectivity in targeted precincts
  • Both major and local investment in economic precincts such as the Western Parkland City which will surround the new international airport in Western Sydney.
  • Continued investment in local projects such as road congestion pinch points, station upgrades, expansions to schools, local hospitals and community support services but with a wider focus to also incorporate green open space, quality civic places and local access to services through walking or cycling.
  • Greater focus on creating or supporting local museums, galleries, performance spaces and sporting facilities in more communities
  • More funding in routine forms of investment to maintain service reliability of existing assets and better understanding of which assets are vulnerable to severe weather events, public health crisis or cyber security threats.
  • Investment in growth area infrastructure (economic infrastructure and community infrastructure) to support new housing supply in greenfield areas as well as in established areas where major transport investments have been made. This includes greenfield areas such as North West Sydney, South West Sydney, Greater Newcastle and the Hunter; regional centres where Special Activation Precincts and Regional Job Precincts will create demand for homes; and established metropolitan areas around new Sydney Metro stations and light rail stops.

Whilst the report suggests that many new large and complex projects should be delayed in timing, it recommends that the raising of the Warragamba Dam Wall should proceed in order to address a serious flood risk.

Located approximately 65 kilometers west of the Sydney CBD, the dam supplies 80 percent of Sydney’s water storage.

At current, the dam is not built or operated to manage or mitigate floods.

Under a plan to manage flood risk in the Hawkesbury-Nepean Valley, the dam operator WaterNSW has proposed to raise its height by an additional fourteen meters.

According to the proposal, the raised dam wall would mitigate floods by creating ‘airspace’ in a dedicated flood mitigation zone around 14 metres above the current full water supply level.

This flood mitigation zone behind the wall would capture and temporarily hold back floodwaters coming from the large Warragamba Catchment.

After the flood peak, the floodwaters would be released in a controlled way – reducing flood levels downstream and potentially devastating impacts on downstream communities

But the plan has drawn opposition amid fears it would drown old-growth forests and result in the inundation of some cultural sites.