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Infrastructure Australia’s reform plan calls for collaboration, coordination and culture

Sydney Tower Eye. Photo by Seb Zurcher on Unsplash.

Infrastructure Australia has today published Delivering Outcomes, an industry reform roadmap to address the long-term challenges facing Australia’s infrastructure sector, including poor productivity, the increasing number of insolvencies and cost overruns and delays in the delivery of major projects.

Currently, infrastructure planning, decision-making and delivery falls short of consistent best practice in Australia. Procurement and contracting arrangements are driving poor investment outcomes, a lack of project coordination is creating capacity constraints, and the potential of digital transformation remains unharnessed.

Informed by extensive consultation with more than 200 industry leaders, this new report from Infrastructure Australia underscores the need for Australia’s governments and industry to work collaboratively to advance sector-wide reform.

Infrastructure Australia Chief Executive Romilly Madew.

Infrastructure Australia’s Chief Executive Romilly Madew said: “This roadmap sets out tangible actions over the next 10 years to transform how infrastructure is planned and delivered in Australia to support a more productive, innovative, and financially resilient infrastructure sector.

 “As we highlighted in the 2019 Australian Infrastructure Audit, 2021 Australian Infrastructure Plan, and 2021 Infrastructure Market Capacity report, national infrastructure sector reform is critical to successfully deliver Australia’s historic infrastructure pipeline and support the national economic recovery, including from the COVID-19 pandemic

“With a record $225 billion in major infrastructure investments committed by governments across the country between now and 2023-24, as well as investments being planned and delivered by the private sector, it is vital that infrastructure is planned, sequenced, procured and delivered effectively to ensure we reap the economic and social benefits.

Delivering Outcomes amounts to an industry change plan. Developed in partnership with the very leaders who are critical in driving transformational change, it is a roadmap to improve the productivity of the sector, lift capacity and capability, promote innovation, embed sustainability and strengthen the Australian industry in the face of shocks and stressors.

“These reforms will ensure the sector is well placed to withstand disruptions, such as the challenges facing supply chains during COVID-19, but also ensure infrastructure better addresses the needs of the community,” Ms Madew said.

 

Delivering Outcomes – Key reform recommendations

1)      Shift from a focus on manual work on-site to off-site digitally enabled, pre-fabricated production processes, in line with international best practice.

2)      Develop and publish jurisdiction-wide, cross-sectoral infrastructure investment pipelines that outline current, funded, committed and planned public and private infrastructure activity over a ten-year horizon.

3)      Shift from current, combative contracting models to longer-term, collaborative models that integrate the supply chain.

4)      Support the financial sustainability of the infrastructure industry by adopting principles of fair return, improving benchmarking, reviewing payment terms and risk allocation.

5)      Establish and embed equality, diversity and inclusion objectives through each infrastructure investment.

 

Maintaining Australia’s international competitiveness

Peter Colacino, Chief of Policy and Research, Infrastructure Australia.

“During the 1990s and 2000s, Australia led the deployment of private capital into the infrastructure sector. However, our trading partners and competitors have caught up. It is time for a new wave of reform,” said Infrastructure Australia Chief of Policy and Research, Peter Colacino.

“We are now in competition for resources and investment with leading Southeast Asian economies, like Singapore, as well as other traditional leaders in the sector – the United Kingdom, Canada and New Zealand. Governments in each of these jurisdictions are committed to adopting international best practice, streamlining delivery, supporting collaboration and shifting gears through adopting digital practices and modern methods of construction.

“To deliver the record infrastructure pipeline, it will be essential for the Australian sector to demonstrate it is globally competitive.

“The United Kingdom’s Transforming Infrastructure Performance, the UK Construction Playbook and Project 13represent signposts to the Australian industry. Through Delivering Outcomes we have refined the concepts in these publications for Australia.

“We are already seeing state and territory governments shift their focus through their state infrastructure strategies to address these challenges.

“The structure of government and the size of our industry mean it is not possible to imitate this international experience. In developing Delivering Outcomes, we sought perspectives from industry on local conditions and implementation. The reforms we offer are a practical platform for collaboration and meaningful progress,” Mr Colacino said.

 

ACA welcomes the infrastructure reform roadmap

Jon Davies, CEO Australian Constructors Association.
Jon Davies, CEO Australian Constructors Association.

The Australian Constructors Association has welcomed the release of Infrastructure Australia’s Delivering Outcomes reform roadmap .

Australian Constructors Association CEO Jon Davies said the guardrails are in place for transformational change in industry productivity, innovation, and sustainability – it’s time to start driving.

“What is now needed is a mechanism to ensure the recommendations are implemented,” said Mr Davies.

“Owners and delivery agencies are positioned to implement the best practice framework but without a clear mandate at a national level, change will continue to be slow and piecemeal.”

The Australian Constructors Association has developed a way for the Federal Government to expedite these reforms through a new ratings initiative called the Future Australian Infrastructure Rating (FAIR). FAIR is proposed for implementation in the next iteration of the National Partnership Agreement.

“If implemented, the ‘FAIR’ initiative would create an environment where participating organisations work together to deliver the best possible outcomes for all,” said Mr Davies.

“Fair risk allocation, fair returns—the FAIR theme is dotted throughout Infrastructure Australia’s roadmap and the recent collapse of organisations like Probuild and Condev demonstrate the urgent need for a FAIR solution for the construction industry.

 

Roads Australia responds to the roadmap

Michael Kilgariff, CEO, Roads Australia.

In a statement, Roads Australia CEO Michael Kilgariff said the Delivering Outcomes roadmap for industry reform released by Infrastructure Australia today underscored the urgent need for action to reform procurement practices and enhance industry culture.

“This report presents a practical pathway to achieve much-needed reform that will reverse declining productivity, put our industry on a more sustainable footing and ensure we have the skilled and diverse workforce that will be needed to deliver a record transport infrastructure pipeline,” said Mr Kilgariff.

“There are many pressures now combining to create a challenging operating environment for those engaged in the design, construction, operation and maintenance of integrated transport infrastructure which are resulting in negative outcomes that include delays, cost-blowouts, labour shortages and problems attracting and retaining skilled workers.”

Mr Kilgariff called on the Federal Government to help facilitate the roadmap’s outcomes.

“The challenges have been clearly and consistently articulated. Industry now needs the Federal Government to work with all jurisdictions to deliver consistent, nationally coordinated action that addresses the underlying causes of these problems and promotes better outcomes for industry and the community.”

“RA’s submission in the lead-up to next week’s Federal Budget pointed out opportunities for the Federal Government to invest in initiatives that will help facilitate these outcomes. This includes investing in measures that will incentivise procurement reform and establish a nationally coordinated project pipeline, support a shared data resource tracking acute skills shortages that will produce more responsive decisions around skilled migration and training.”

“We also specifically called for the Budget to support the delivery of the Construction Industry Culture Standard once finalised, so that we are building a more resilient, diverse and sustainable workforce to deliver the significant national pipeline of transport infrastructure projects,” he added.

 

Consult Australia welcomes call for smarter infrastructure procurement

Consult Australia, an industry association for consulting businesses in design, advisory, and engineering, has also welcomed the report .

Noting that today’s environment was one in which various stakeholders including governments, insurers, constructors, and designers too often engage in various forms of contractual dispute, Nicola Grayson, Chief Executive of Consult Australia, said industry wide collaboration was critical for driving genuine reform.

“Ignoring the recommendations in the report will leave Australia languishing on the world stage as one of the most challenging and expensive places to deliver infrastructure projects,” said Ms. Grayson.

“It is time to take this issue out of the too hard basket and fast track reform. We now have clear direction from the leading infrastructure advisory body that governments across Australia can follow. The key recommendations will enable governments to become model clients and drive collaboration, innovation, productivity and better outcomes for taxpayers.”

Ms. Grayson pointed out contracting issues as key pain points of infrastructure projects.

“A tenet of being a model client is going slow to go fast, which means spending critical time working in partnership with designers upfront on developing the scope before it goes to market and early engagement with contractors on constructability. This delivers far great efficiencies and significantly reduces the pain points that we currently see during delivery.

“If we want to deliver the major infrastructure projects that will enhance liveability and productivity, designed by the world’s best engineers, and built by innovative local and international contractors, we must address these contracting issues as a matter of urgency and make long term changes that will create a more sustainable industry,” said Ms. Grayson.

To download the Infrastructure Australia’s Delivering Outcomes report, click here.


 

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