Home' Future Building: The Australian Infrastructure Review : December 2011 Contents 14 futurebuilding
Volume 2 Number 2
The architect of Victoria’s infrastructure future
Continued from page 11
‘Getting people to and from work is a major factor
in the livability and productivity of a city. That’s why we
are moving quickly to progress projects like Regional
Rail Link – which will deliver the largest uplift in
capacity for Melbourne’s rail network since the City
Loop – and increasing the number and reliability of
services on the network.’
Creating a better transport system is another
priority. It’s not just about liveability. It’s a key part of
building the economy.
‘Good transport is about moving people and goods
efficiently and effectively. High rates of population
growth in Victoria have meant the transport task
involves moving more people and more goods
leading to big increases in people using public
transport, congested roads and a growing pressure on
our ports,’ says Baillieu.
‘There are things we are doing now to address
these challenges. Actions like putting more trains on
the tracks; putting more money into the maintenance
of the rail network; building the Regional Rail Link;
creating the Public Transport Development Authority;
and upgrading key roads around Melbourne and
‘But we also need to plan for the future. Part of
this is about looking at new connections to the rail
network, such as Doncaster and Rowville rail lines,
and a new link to Melbourne Airport.
‘It’s also about developing a shared vision for
Melbourne and Victoria through our metropolitan
planning strategy and regional growth plans so we
understand where people will live and work in the
future, and then take appropriate steps to plan for it.’
Like Bendigo Hospital, the Regional Rail Link is
a testbed for more change. Baillieu’s government is
working to manage the industrial relations issues in
this project. It has also announced changes to the
tender process to minimise risks and cost blowouts.
The big question is whether he sees this model being
rolled out more widely across the state.
‘These changes will allow Government to
identify which tenderer provides the lowest risk to
the Victorian taxpayer at the tender stage and over
the life of the project,’ he says.
Looming large over Baillieu’s infrastructure plans
is the sharp rise in construction costs.
According to industry research company
Macromonitor, cost inflation on building and
construction projects is starting to accelerate and
will continue to rise over the next two years. Drivers
pushing up costs include rising metals and fuel
prices, price increases for cement and concrete,
which were delayed by the GFC, a tighter labour
market and the introduction of the carbon tax.
Baillieu says his government plans to work with
Canberra to ensure the infrastructure is delivered.
‘Construction cost pressures are due to a number
of factors, including the cost of raw materials,
the level of competition within the industry,
competition for skilled workers, and labour wages
and conditions,’ he says. ‘This is why the Victorian
Government is seeking to work in partnership with
the Commonwealth Government and Infrastructure
Australia to address these underlying causes of rising
construction costs, including an improved approach
to industrial relations for major projects, developing
the capacity of our labour force, and deepening the
‘We understand that Victoria must achieve value
for money in its infrastructure spending and as
part of this I have encouraged the Commonwealth
Government to work with us to tackle rising
construction costs. Inflated construction costs result
in delays and increased overall project costs, and
essentially restrict our capacity to invest in vital
Lifting productivity, he says, is a central priority.
‘The construction industry accounts for about
nine per cent of Victoria’s workforce, but the
productivity of Victoria’s construction sector has
declined by 0.2 per cent on average each year since
2003-04,’ he says.
‘The main driver of higher living standards and
economic prosperity is improved productivity, and
this is a key focus of our Government.
‘It is not enough to simply rely on population
growth to support economic growth. We need the
best value for effort in this state, and this includes
building the infrastructure that is required to drive
economic efficiency and productivity growth into
Creating a better transport
system is another priority. It’s not
just about liveability. It’s a key part
of building the economy.
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