Following the project’s cancellation late last year, the Victorian Labor Government and the East West Link consortium reached an agreement in which the consortium retained $339 million already invested in the project. The State Government put consideration into re-purposing the $1.5 billion in unspent funding for the proposed Western Distributor project. The 2015-16 Federal Budget, however, has emphasised that the East West Link is still a priority for the Australian Government and that if it won’t be building the link, it wants its money back.
“In a sense, it’s not a surprise. The Federal Government has been clear [the East West Link] is part of their agenda. I think the government was pretty open about that,” says Team Leader Infrastructure Advisory at AECOM Anthony King.
Mr. King says the East West Link would still benefit Victoria’s road users and the fact is, part of the sector will want it and others will want the money spent elsewhere: “We all recognise infrastructure will always have a degree of politics about it.”
The East West Link aside, Mr. King says overall that there were some strong commitments to the infrastructure sector by the Federal Government.
“There are a couple of really promising things in the budget,” he explains. “There
are some really exciting things, and we think there’s absolutely potential to unlock some activity in Australia’s north.” Mr. King is referring to the Budget’s allocation of $5 billion to establish a loan facility for northern Australia’s major infrastructure projects including ports, railways, pipelines and electricity generators. A further $100 million will be used to improve the region’s cattle roads and supply chains. The Federal Government has also allocated $499 million for road infrastructure in Western Australia. This follows a GST revenue shortfall in the next financial year attributed to falling iron ore prices and mining royalties.
While Mr. King agrees that the funds allocated to the north and the west are beneficial to growing and maintaining the country’s infrastructure, he says the Budget has left out Australia’s centres of production: the cities. “The big infrastructure challenges facing Australia really relate to the cities and that’s really around the congestion and resilience of the transport networks, including the roads,” he says. Mr. King explains that the Government needs to start looking at the congestion levels of the country’s metropolitan road networks for the next 30 or 40 years.
He says that relieving congestion is not just about moving people around. It’s about taking into account where they live, where they work and addressing it on a national spectrum: “It’s really recognising the problem and recognising that everyone has a role to play.”
Mr. King says the Victorian Budget, however, provides key incentives to tackle these issues. The proposed Melbourne Metro project and the removal of 50 of the region’s most dangerous level crossings are positive inclusions. “Victoria has gone down a very clear path and we were hoping for a bit more pragmatism [in the Federal Budget],” he says. “There were some good things in the Federal Budget, but clearly the Victorian and Federal Budgets have some differences of opinion.” Mr. King says that he recognises that the Victorian Government has a different role to play. However there needs to be national consensus and more flexibility as a whole.
Mr. King says the potential privatisation of the Australian Rail Track Corporation and the $700 million invested in the national Roads to Recovery Program are positive investments included in the Budget. He asserts that the Federal Government needs to recognise that the Roads to Recovery Program funds could be invested in at a wider network to include the likes of roads, rail, bike lanes and footpaths.
Overall, Mr. King says Infrastructure Australia’s 15-year plan is a step in the right direction. As included in the Budget, the newly established Infrastructure Australia, an independent statutory body, will work on a 15-year pipeline of infrastructure projects. The organisation aims to give certainty to industry and ensure funding is used to deliver the best infrastructure at the right time. “That’s a great thing,” Mr. King says. “But there needs to be a lot of flexibility.”
Richard Yeo, Executive Manager of National Interest Services at ARRB agrees that Infrastructure Australia will be a positive influence on Australia’s growth and infrastructure spending by looking at the bigger picture.
Dr. Yeo explains that Infrastructure Australia’s 15-year plan needs to surpass the rotations of government. Producing policy based on sound research can help direct governments to take the right course of action when it comes to infrastructure investments. “Then we all come to the same conclusion regardless of the party in power,” he says.
Dr. Yeo points out that there’s not a lot of new infrastructure spending included in the 2015-16 Budget as compared to other areas such as small business. He says this is not a proactive position to be in, especially when the Government is trying to build to a good fiscal position. Money can be invested in a project, but the Government needs to be more forward thinking, especially in relation to research. “If there’s a gap in knowledge, there’s a gap in the process,” says Dr. Yeo.
He says the first instalment of $10 million allocated to the Medical Research Future Fund in the Budget is great for public health. A similar approach in the Budget for infrastructure research could help grow the economy. He gives the example of the National Guide to Transport System Management report, which forms the basis for nationally consistent infrastructure project evaluation. ARRB was tasked with updating the parameter unit values for this report. The overall report had not been updated for a decade. “Nothing’s static, and you’ve got to update design methods and guidelines to incorporate the latest technology and approaches,” he says, adding that investing a small fraction of the infrastructure funding into research can go long way to maintaining and growing the knowledge required to build for the future transport needs.
“Australian roads are typically designed based on past experience rather than what might be expected in the future,” says Dr. Yeo.
He asserts that internationally, the methods for building roads and operating networks are constantly changing, while Australian roads are often being built without consideration of new innovations, advanced materials, or sustainability. He says emerging techniques for predicting incidents and congestion hotspots often aren’t taken into account in the design process or operation of Australia’s roads. Dr. Yeo says there’s nothing in the Budget to fund this kind of research.
Dr. Yeo says the Federal Government needs to better promote adopting and adapting the best international practices based on sound evaluation to grow and harmonise the country’s infrastructure. He says that the harmonisation of technology and principles across Australia’s infrastructure, focused on improving the experience and level of service for road users is needed.
Dr. Yeo says this research should be taken into account in the Federal Government’s agenda as a small fraction of the Budget’s funding for infrastructure.
He agrees that the 2015-16 Budget is reasonably balanced in addressing key national issues such as the improvement of beef roads in Northern Australia, Queensland’s Bruce Highway, and the Pacific Highway in New South Wales. But, he says, the Federal Government needs to better prepare for the future.
Dr. Yeo exemplifies autonomous or driverless vehicles. He says that the mining sector is already well advanced with this technology, and it is only a matter of time before these driverless vehicles are going to make it on to Australian roads. Dr. Yeo says that we need to start thinking about trials and implementation at a national scale for when the time comes.