The Federal Government has handed down the findings from the Infrastructure Investment Program Strategic Review.
The review was announced in May this year and was conducted to review projects under the Infrastructure Investment Program that did not have sufficient funding or a strong enough business case to justify Federal investment.
Some of the key findings of the review, contained in the executive summary (where all key findings can be viewed), include:
- The ten-year pipeline of projects cannot be delivered within the $120 billion allocation, even with current contributions from jurisdictions.
- The Australian Government cannot afford within the current program settings, to meet the identified cost pressures, nor add any new projects for delivery to the pipeline in the next ten years, without significant changes taking immediate effect.
- A number of projects were allocated a commitment of Australian Government funding too early in their planning process and before detailed planning and credible design and costing were undertaken.
- The number of projects in the IIP tripled between 2015 and 2022, with the majority of new projects added before the COVID-19 pandemic. Too many large-scale projects are receiving funding commitments without adequate planning, costings and programming to sufficiently manage the significant increase in delivery costs within a volatile market.
The recommendations of the report suggested that 100 projects proceed, which are not yet under construction. Further suggestions recommended that 56 projects, which are not yet under construction and have risks identified, proceed.
It’s recommended that 36 projects, which are not yet under construction, complete planning, detailed costings, rescoping and the allocated delivery funding is used to create headroom in the IIP.
The recommendations of the review also outlined that 82 projects that are not yet under construction, be ceased.
Please note that these are just some of the key findings and recommendations outlined in the review. To view the full executive summary, click here.
To view the full list of the projects affected, click here.
Roads Australia CEO, Ehssan Veiszadeh, said industry and government can now look forward with a greater degree of certainty.
“The IIP Review has placed some strong guardrails around future infrastructure funding, providing some much-needed clarity to transport stakeholders,” Veiszadeh said. “We must continue building transport infrastructure to meet population demand, matched with industry capacity.
“Recommendations that focus on managing project escalation costs and risk allocation are crucial to the ongoing health of the transport. We’ve also seen recommendations to boost funding for regional councils and road safety which will make a difference to the quality and safety of infrastructure across rural areas.”
Civil Contractors Federation Victoria CEO Lisa Kincross said the scrapping of 12 major infrastructure projects in Victoria is a significant blow to the industry.
“Now is not the time to be cutting income-producing work and jobs, especially in the run-up to Christmas and the continuing cost of living crisis heavily impacting hard-working Victorian families,” she said.
“Cutting infrastructure projects only creates more pain – congested roads, housing without supporting infrastructure, boom and bust cycles and loss of skilled labour. This decision hurts our industry, the community and the state’s economy, particularly trade-based businesses in regional areas that rely on a sustainable pipeline of work.”
For Infrastructure Partnerships Australia, the review provides welcome clarity, but questions remain.
“Reviewing the program was always a prudent move, and the Government has rightly concluded that the core aspects are vital to meet Australia’s economic aspirations and population growth demands,” said Adrian Dwyer, Chief Executive Officer, Infrastructure Partnerships Australia.
“This announcement answers some important questions on the pipeline, but it also poses new questions that will need answering.
“Australia has enviable population growth and unmet demand for infrastructure. That’s a high-quality problem to have, but it’s a problem nonetheless.”
The Australasian Railway Association has welcomed a funding boost for key rail projects set to deliver critical transport for the future under the infrastructure review.
The independent strategic review of the Infrastructure Investment Program confirmed an additional $1.75 billion to be invested in the Logan-Gold Coast Faster Rail, $1 billion more in Western Australia’s Metronet project, as well as confirming funding of $61.8 million for planning and development of the Western intermodal freight terminal at Truganina, Melbourne, to connect Inland Rail.
ARA CEO Caroline Wilkie said the review provided much-needed certainty around the pipeline and, importantly, an increased focus on delivering significant rail projects that enable economic growth and thriving communities.
“We are in the midst of a once-in-a-generation infrastructure pipeline that will greatly enhance how Australia moves its people and freight and it is critical that we have the right planning and processes in place to make the most of this opportunity,” Wilkie said.
“Having certainty around infrastructure projects ensures a viable and sustainable local rail supply chain which minimises disruptions to contractors and suppliers and enables better workforce planning and capability and reduces costs.”