NEWS

Urgent action required to secure Australia's infrastructure future

With $288 billion earmarked for investment across the infrastructure sector to support major projects over the next 10 years and heavy demand across the country for these much-needed projects, the health of the sector appears assured. However, new research from Allens in its Securing the missing benefits of Australia's infrastructure boom report reveals an industry feeling the strain of project complexity. A high volume of transport projects concentrated in Sydney and Melbourne are contributing to two major issues – an acute skills shortage and escalating materials costs.

Head of Infrastructure sector and partner, David Donnelly said the industry holds concerns the benefits of the infrastructure boom may not be fully realised calling into question the significant investments made by governments.  

'The sector faces a conundrum: there is an infrastructure deficit but there are fundamental issues creating risk in supply chain and these underlying risks threaten the economic and social benefits of the projects,' David Donnelly said.

The Allens review looks at specific infrastructure project risks and proposes a range of measures to secure the future benefits of these projects. Prominent concerns raised in the survey and market research include:

  • 77% of senior industry leaders are more concerned with the risks facing the sector than they were five years ago1
  • 90% of the future projects in the pipeline are in transport
  • Senior industry leaders say tunnels are nine times more likely than social infrastructure to cause delays or cost blowouts2
  • Data from the National Centre for Vocational Education Research indicates that there has been a 13% decrease in apprentices and trainees in construction completing their education since 20143. At the same time, the Electrical Trades Union Australia notes a 45% decline in apprenticeship and training since 20144.
  • Price rises in construction materials such as bricks, concrete and steel by as much as 20%. These costs directly impact construction companies' profit and project viability.

'Balancing the need for visionary transport projects with a commitment to a more equitable pipeline of projects spanning transport, road, tunnels and social infrastructure across the country will ease the pressure of delivering highly complex, labour-intensive projects with rising costs,' David said.

Ends

Notes for editors.

Allens is a commercial law firm working throughout Australia and Asia. Through its integrated alliance with Linklaters it provides clients access to 40 offices in 28 countries around the world.

Footnotes
  1. Allens Infrastructure survey 2019
  2. Allens Infrastructure survey 2019
  3. The National Centre for Vocational Education Research
  4. The Electrical Trades Union Australia