Home' Future Building Australian Infrastructure Review : Volume 3 Number 2 Contents futurebuilding 9
Volume 3 Number 2
The Hon Ted Baillieu MLA
growing our economy, it enhances our liveability
and it builds on the state's competitive advantage.
We're also putting in place the necessary
framework for Victoria to achieve best practice
for planning, procurement and delivery of these
infrastructure projects. We have established a High
Value, High Risk unit, dedicated to ensuring that
major projects over $100 million are subject to
rigorous scrutiny and avoid the cost blowouts that
have been associated with projects in recent years.
We are also developing long-term strategies to help
guide Melbourne's and Victoria's growth through
the Metropolitan Planning Strategy and the Victoria
Freight Logistics Plan.
Now, at the risk of talking about something I've
been talking about for years, and about which I am
passionate, I want to talk about construction costs.
It's all very well to have a pipeline of projects, but
that won't mean anything in terms of addressing
our infrastructure backlog if they're too expensive
to build. Tackling the issue of construction costs is
essential if Victoria and Australia are going to have
the infrastructure they need.
The escalating cost of construction is pricing us
out of critical infrastructure of the future. We cannot
have a situation in which a single grade separation
in metropolitan Melbourne on a rail or a major road
costs between $250 and $300 million. We simply
can't afford to be priced out of infrastructure and
the jobs that go with that. It's taken three COAG
meetings and a year of passionate promotion by
Victoria for federal Labor and the Commonwealth
to agree to an inquiry of any sort into the escalating
cost of construction.
We sought a Productivity Commission inquiry
and the Prime Minister resisted. We sought the
support of the BCA. We sought the support of the
industry. We had that. We pushed the case. We now
have the Commonwealth prepared at last to have an
inquiry. Unfortunately, it will not be a Productivity
Commission inquiry -- it is to be conducted by a three-
person panel, and the composition of that panel will
be critical to the success, or otherwise, of this project.
The states made it very clear that it has to be an
independent panel, and that it has to be a panel that's
resourced independently from the Commonwealth.
So far, we've had resistance from the Commonwealth
and, indeed, the South Australian and Tasmanian
governments said there was no problem [with
construction costs]. The notion that there isn't a
problem with construction costs is completely false.
In the COAG discussions around the construction
cost inquiry, there were some who suggested we
should not include any reference to industrial
relations. This is the leadership of the country
saying we shouldn't mention industrial relations in
Tackling the issue of
construction costs is
essential if Victoria and
Australia are going to
have the infrastructure
continued on page 12
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