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Industry report shows the need to fast track projects

Two of Queensland’s leading industry bodies will today release their key annual report, while calling for more Government funded projects to be made ‘shovel ready’ as a way to avoid large peak to trough cycles that damage the sector.

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The 2019 Queensland Major Projects Pipeline – a report developed by leading independent firm BIS-Oxford Economics for the Queensland Major Contractors Association (QMCA) and the Infrastructure Association of Queensland (IAQ) details a pipeline of 194 projects with combined expenditure of $41.3 billion over five years.

The report identifies eight separate recommendations to improve collaboration, boost funding and deliver the infrastructure Queensland requires.

QMCA’s Chief Executive Officer, Jon Davies noted that unless committed projects such as SunWater’s Nullinga Dam and the Paradise Dam Spillway Improvement, Adani’s Carmichael Mine & Rail and the State’s Gold Coast Light Rail Stage 3 were expedited, the report predicted a 24% set-back in major project activity in FY20.

“Large peaks and troughs in workload are the scourge of our sector and through reports like this, we’re light years ahead of where we used to be in predicting them. But the problem is that little to nothing is currently being done about it.”

“Right now, there can sometimes be years between a project receiving a positive business case assessment from Building Queensland or Infrastructure Australia and tender documents being prepared by an agency. We believe some modest investment in advancing these projects wouldn’t be wasted and can provide agencies with the ability to move quickly to procurement and help smooth out predicted dips in forward investment.”

The report identifies the greatest threats to a sustainable pipeline of projects are the identification of investable projects, availability of funds and timely investment decisions.

When projects already under procurement are accounted for, Queensland only has 15 out of 121 projects and initiatives identified for future investment on the current National Infrastructure Priority List.

IAQ’s Chief Executive Officer Steve Abson noted that this level is around two to three times lower than QMCA and IAQ would prefer to see based on share of national GDP and predicted population growth.

“We’re not seeing any projects originated in the pipeline that can really adapt our state to the impacts of climate, such as from cyclonic rains or drought.”

“We believe there’s plenty of room to think differently about climate resilience and considerable opportunity for the development of major water projects in Queensland that support regional communities and expand agriculture and industry.”

The report also identifies by 2021/22, 89% of major funded project work is concentrated in projects with an individual value of over $500m.

QMCA’s Chief Executive Officer Jon Davies said there had been a rise in the billion-dollar mega project in the past 5-10 years, with a number of these contracted in packages over $3 or $4 billion to the market, but the number of contractors with the financial capacity and risk appetite to build these complex projects is shrinking.

“Nationally, we’re seeing a growing problem in delivering these complex mega projects on time and budget, and without costly disputation. We think there should be a re-think in how these projects are packaged.”

Mr Davies and Mr Abson acknowledged the recent establishment of an Infrastructure Industry Coordination Group involving the Queensland Government, QMCA and IAQ.

“This is a really positive development and we thank the Government for its recent commitment to collaborate on these important issues. The Group will also provide a focussed approach to addressing some of the recommendations made in the report.” said Mr Davies.

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Our members.

Acciona Infrastructure Australia
BGC Contracting
BMD Constructions
Clough
CPB Contractors
Decmil Group Limited
Fulton Hogan
Golding Contractors Pty Ltd
John Holland
Laing O’Rourke
Lend Lease
McConnell Dowell
Monadelphous
Seymour Whyte Constructions