The potential for Australia’s record infrastructure pipeline to address some of the country’s most pressing challenges is dependent on effective planning and proactive public sector management.
Australia is currently seeing unprecedented levels of infrastructure investment. The Australian government and states and territories have pledged a rolling $120 billion ($12 billion per annum) investment over the next 10 years in infrastructure projects.
Successful implementation of this infrastructure program will increase Australia’s economic competitiveness in the long run. However, the Australian construction sector is still challenged by cost and schedule overruns and faces a range of significant challenges to meet the future demand.
Projects are becoming larger and more complex with increasing impact on urban areas, acceleration of technology disruptions and changing community behaviour following stay-at-home restrictions.
This, combined with unprecedented level of activity, will require both strategic and tactical responses to meet the challenge of delivering projects at a time of increased costs, supply chain blockages and a lack of skilled market capacity.
Infrastructure Partnerships Australia estimates that between July 2022 and October 2024, the infrastructure sector will need to grow its total workforce by over 40 per cent, to meet demands of the current infrastructure project pipeline. This comes at a time when Australia’s unemployment rate is at a 13-year low of approximately 4 per cent and, despite borders reopening, Australia is not attracting skilled workers at pre-pandemic levels.
Demand for materials is expected to rise approximately 120 per cent over the next three years – particularly strong growth in demand is anticipated for rock and bluestone (+240 per cent), steel (160 per cent), concrete (110 per cent) and rail track (300 per cent+). This surging demand has resulted in increasing reliance on imports, presenting higher global supply chain risks, including price escalation, supply chain disruption and quality risks in the near term.
Proactive planning and productivity management is imperative
To guarantee Australia gets the best return on investment, projects have no choice but to start meticulously and proactively planning through the whole project lifecycle to ensure issues are known and the inevitable resource, supply chain and stakeholder roadblocks are continually identified and de-risked early.
This is increasingly important with shortages of skilled workers, particularly at the senior levels. To ensure we are not missing the basics we need to go back and reinvigorate our planning and performance management tools to ensure everything is being done to the standard expected proactively to minimise surprises.
Government intervention will be instrumental to creating an enabling environment for industry, incentivising collaborative frameworks and supporting market capability through setting expectations for planning and performance reporting, and accelerating digitisation of integrated design and productivity tools.