A large number of projects across Australia may be cut as the Commonwealth Government puts the nation’s infrastructure pipeline under the microscope.

Commonwealth Infrastructure Minister Catherine King has announced an independent review of the nation’s multi-billion-dollar infrastructure investment program.

Set to be conducted over 90 days, the review will examine which of the 800 – odd projects in the Commonwealth investment pipeline are actually able to be delivered with available funding and resources.

The review will be undertaken by Reece Waldock AM, Clare Gardiner-Barnes and Mike Mrdak AO – each of whom has expertise in land transport infrastructure.

Its aim will be to ensure that new funding commitments are given only to projects which deliver significant national benefit and to clear a backlog of delayed and underfunded projects by scrapping those which do not deliver value or align with national priorities.

The latest move comes as Australia’s civil construction sector faces significant capacity challenges amid a record pipeline of public works.

That, according to Infrastructure Australia projections, has driven a shortage of infrastructure workers which is currently estimated at 95,300.

The review also comes as rising construction costs have raised concerns that many projects which are currently in the pipeline may cost more to deliver compared with estimates which are publicly available at this time.

Over the three years to March, Producer Price Index data from the Australian Bureau of Statistics indicates that costs for heavy and civil construction have increased by around 16 percent.

Speaking to reporters on Monday, King said the review was being driven by concern that a number of projects that were promised under the former Coalition Government do not have the allocated resources to be delivered.

Under the former government, she said the pipeline of infrastructure projects grew from almost 150 to around 800.

However, many of these projects were left without funding or resources whilst projects were approved without demonstrating tangible benefit for taxpayer dollars invested.

Of the 800 Commonwealth projects that are currently in the pipeline, King said that 497 are valued at $50 million or less whilst as many as 160 have a fiscal commitment of $5 million or less.

Asked how many projects may be scrapped or delayed, King stressed that the government does not have any specific target number of cancellations.

Nor is there any hit list of particular projects which may be cancelled.

Rather, decisions around which projects can be delivered within the 10-year $120 billion pipeline will be informed by the review – with those projects that are yet to receive funding commitments and/or that will deliver questionable value for money facing greatest scrutiny.

King has promised however, that the Government will not scrap projects which are already in construction or which are part of Labor’s election promises.

Infrastructure and construction industry lobby groups gave a mixed reaction to the review.

Engineers Australia chief executive officer Romilly Madew has welcomed the move, saying that the review will provide an opportunity to focus investment on projects that deliver maximum value for money.

She says this is critical as the nation’s construction sector is already at breaking point, with rising materials costs and labour shortages leading to cost blowouts and delays.

However, Australian Constructors Association CEO Jon Davies reacted with caution, warning that the construction sector needs to be consulted during the review in order to avoid inflicting further pain on an industry that is already being challenged with rising labour and material costs.

Where projects are cut, Davies says that governments should allocate part of any funds which are saved to compensating those contractors who face additional costs in delivering existing projects due to uncontrollable factors such as COVID and the Ukraine War.

Davies cautioned that project delays and deferrals can undermine efforts to maintain long-term industry capacity.

“Delivery of infrastructure is not like a tap,” Davies said.

“It can’t simply be turned on and off.

“Developing teams and capabilities that are equipped to bid and deliver large projects can take years, and once assembled, it is difficult to reallocate them, particularly if there is a widespread deferral of projects.

“Having a steady and transparent pipeline of government infrastructure projects is crucial for the industry to plan and invest for the future, and project cancellations and deferrals undermine this effort.”

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