Can Infrastructure & Road Works Lead Us to a New Path? 1

Tuesday, January 5th, 2016
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A recent Australian Construction Industry Forum (ACIF) report has forecasted greater fallout from the fading mining and resources boom than what was previously anticipated, with a more substantial long-range downturn in engineering construction predicted for 2018/19.

Although the outlook is grim, compounded by further reports that the housing boom may have peaked, the blow may be cushioned in the medium to long term by public sector infrastructure projects already in the pipeline, for which government funding has been allocated, with NSW and ACT expected to lead the way.

In the case of NSW, the 2015/16 State budget has accelerated funding to fast track a raft of big ticket transport and road infrastructure programs such as Sydney Metro; Parramatta Light Rail; key regional road upgrades; delivery of the NorthConnex project; Wynyard Station upgrade, Western Harbour Tunnel and the Walsh Bay Arts Precinct. Also announced as part of the Sydney Metro development is a new underground station at Barangaroo.

Significantly, Badgerys Creek has been officially declared as the site for Sydney’s second airport with site preparation works expected to commence mid-2016 and the airport scheduled to be operational in 2025. Other major projects include the SIMTA Moorebank Intermodal Terminal Facility Rail Link, the New England Highway road works and the White Rock Wind Farm that account for approximately $450 million in total investment.

In the ACT, there’s $52 million allocated to progress Stage 1 of the Capital Metro Light Rail Project, for which the successful consortium for delivery and operation is likely to be awarded early next year. The City to the Lake project is also progressing following submission of a Works Application to the NCA for the West Basin Waterfront.

Large new railway and roadworks projects have contributed to a rise in QLD Civil Engineering projects such as the Cross River Rail, Gateway Upgrade North Project and Kingsford Smith Drive Upgrade. Compared to Q3 2014, there’s been a steep rise in project values by some $8 billion this past quarter. A range of road safety infrastructure projects have been funded through the Bruce Highway Safety Package, with more committed to upgrade the Warrego Highway between Toowoomba and Miles and the Gold Coast Light Rail connection to the heavy rail network in readiness for the 2018 Commonwealth Games.

Victoria has seen strong growth in both the Civil Engineering and Industrial projects such as the Westbrook Estate and Department of Defence HMAS Cerberus Redevelopment Project, at a combined value of $440 million. Following the decision not to proceed with the massive East West Link, others still in the pipeline include the Western Highway, Tullamarine Freeway, the M80 and Princes and Western Highway duplications.

In South Australia, the Commonwealth has committed major funding to the first priority sections of the North-South Road Corridor upgrade, including the Northern Connector.

The Tasmanian Freight Rail Revitalisation Program is progressing with the contract for track renewal works on the Melba and Western Lines recently awarded to VEC Civil Engineering. Expressions of Interest have also been invited for Hobart Airport runway works. Increased economic activity is being enhanced by the roll out of irrigations schemes with capital costs shared by the private sector.

Crossing to Western Australia, infrastructure spending is focussed in the next 12 months on building the first stage of the Perth Freight Link. At $1.6 billion, the entire project would have formed WA’s largest road infrastructure project to date but doubts have now been cast over funding for the second phase, which has been shelved for at least a year. The WA government is reviewing its priorities, possibly focussing on a shift to light rail including the stalled MAX project, which could encourage more private sector development. Work is scheduled to start on Stage 1 of NorthLink in 2016 after John Holland was selected as the preferred proponent.

Nationally, the $12 billion Inland Rail Melbourne to Brisbane freight corridor project is on track following a technical and engineering advisory tender being advertised nationally in October. The project will create a 1,700-kilometre freight link including 600 kilometres of new lines and is expected to create 16,000 jobs during a 10-year construction period, relieve road congestion, reduce transit time from Melbourne and Brisbane by more than 10 hours and stimulate the economy by opening up regional areas.

In this month’s Annual Ministerial Infrastructure Statement, perhaps Deputy Prime Minister and Minister for Infrastructure and Regional Development Warren Truss said it best when he echoed the sentiment that a more productive economy will depend on private sector funding partnerships with state and local governments to deliver critical future infrastructure needs.

“There is no magic pudding of funds,” the Minister said.

He emphasised the “huge reserves of untapped potential” of Australia’s regions which need to be harnessed to attract diverse industries and investment in a post-mining boom economy.

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  1. Barry

    The focus on road building made be good for the construction and engineering sector as well as a Keynesian means of propping up the Australian economy in the wake of the mining boom's sudden end, but it's bad for the sustainability and long-term transit prospects of our major cities.