Government Commits to Better Infrastructure Practices

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Monday, December 15th, 2014
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Guidelines regarding project delivery are to be reviewed and updated by early next year, and greater take up of Building Information Modelling is set to be encouraged under the federal government’s response to wide ranging infrastructure reforms recommended by the Productivity Commission.

Releasing the government’s response to the Commission’s inquiry into public infrastructure, Assistant Minister for Infrastructure and Regional Development Jamie Briggs said unsatisfactory practices in the selection of projects and a general lack of planning was leaving the nation without the infrastructure required for the future and was acting as a barrier to private sector investment.

Briggs said the government had accepted and agreed with the majority of the reforms and had already made progress in some areas, including, for example, overhauling the governance structures of Infrastructure Australia and tasking the newly revamped organisation to develop a 15-year plan for national infrastructure.

He said, however, that the government would work to improve project selection and governance by:

  • Reviewing the National Guidelines on project delivery including Public Private Partnerships, Alliance Contracting, Traditional Contracting and Design and Construction delivery models, to provide for greater transparency, accelerated delivery, better risk allocation and better value for money.
  • Publishing a national best practice framework for evaluating projects, incorporating a nationally consistent approach to the use of benefit cost analysis, as well as providing a framework for considering broader benefit and cost assessments, including assessing productivity gains and wider economic impacts.
  • Giving in-principle support toward the adoption of best practice technology and processes including Building Information Modelling (BIM) and inverted bid models to reduce project costs, albeit with individual jurisdictions retaining flexibility to determine the benefits of such technologies and processes on a case by case basis
  • Working with states and territories to examine options to streamline tender processes and facilitate greater competition.

“Poor project selection and a lack of planning is leaving Australia without the infrastructure it needs for the future and is acting as a barrier to much needed private sector investment,” Briggs said.

“To address these issues, we will implement new arrangements under our Infrastructure Investment Programme to improve the delivery of infrastructure in Australia, generate more private sector investment and ensure value for taxpayers’ money.”

Briggs’ response follows a damning assessment by the Commission surrounding infrastructure procurement practices in Australia, which talked about ‘numerous examples’ of projects which delivered poor value for money because of inadequate project selection and called for a fundamental overhaul of project assessment and development processes.

Engineers Australia (EA) welcomed the government’s acceptance of a recommendation that the Department of Industry publish regular projections of labour demand for public infrastructure project. The government says the Department of Industry will continue to monitor the labour market outlook for specialised occupations on an annual basis including for those occupations which are considered to be critical for infrastructure projects.

EA expressed disappointment, however, about the rejection of recommendations to beef up funding to the Australian Bureau of Statistics to enable the collection of productivity and other construction sector data including separate data for building and civil projects. The government said the ABS was working with the Department and other agencies to identify information gaps and needs and that no need for additional funding was considered necessary at this time.

The new project delivery guidelines will be updated by early next year, while the final release of a proposed framework for evaluating key projects was released last month.

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