Home' Future Building Australian Infrastructure Review : Volume 4 Number 1 Contents futurebuilding 37
Volume 4 Number 1
construction market, which is the most signi cant
market for civil infrastructure, it's actually dominated
a lot by the downturn in mining-related investment.
What we will see over the next ve years is
a switch away from mining-related construction
projects as the mining boom slowly tails off, but a
pick-up in non-mining investment -- particularly, in
our capital cities where we haven't been keeping
pace with infrastructure needs.
To give you an example, in terms of the outlook
for road construction in Australia, we've seen a
substantial boom, but that really has been a catch-up
from a relative lack of investment right through the
1980s and 1990s.
However, while we're in a downturn at the
moment, there is a substantial new pipeline of road
The scale and size of the projects that are currently
being planned is huge.
Not all of this can be funded by the private
sector, and it can't all come out of general recurrent
government spending, either, so it's really important
that we continue these dialogues around funding and
nancing, because from here, infrastructure becomes
harder and more expensive.
In rail and harbours work, what we're seeing is this
switch taking place between non-mine-related and
mine-related projects. So overall, they balance each
other out. We are sustaining high levels of work in rail
and ports, but we will see more city-based rail projects
and more freight-based port projects -- not necessarily
just relating to coal and iron ore, which have been
sustaining those increases over the past few years.
In terms of the utilities, electricity-related
construction will come back for a range of reasons.
Water and sewerage works are also easing from the
drought-driven increases that we had in the past.
Certainly, this was a very generational degree of
infrastructure spend in building desalination plants
and recycled water grids that we do not expect to see
replicated in the near future.
Meanwhile, telecommunications expenditure
will continue to rise as the National Broadband
Network (NBN) continues to roll out. We have a
new Federal Government with a different style of
NBN plan, of bre to the node instead of bre to
the premises. Within that, there is still substantial
construction work required to roll out this new
telecommunications highway over the next four
to ve years, and that's one of the strongest growth
markets in the engineering construction space, and
our infrastructure space.
It's been really good to see that this degree of
innovation is getting new infrastructure projects off
the ground. But what's also important is that we
don't forget the maintenance side.
We need funding to develop these assets, and the
development cost is huge.
One thing that probably hasn't been focused on
is that every asset that we build has to be maintained,
and already we have a substantial infrastructure
maintenance backlog in Australia.
We need the Federal Government's taxation review
to better identify funding sources, so that we can not
only build infrastructure for today, but also make sure
it's maintained for tomorrow.
The other issue is that of maintaining this sensible
project package pipeline. It's important in those states
that are going to see an increase in infrastructure
spend that we try to roll out these packages and
maintain the skills and contractor base in these states.
Providing the right infrastructure mix is also very
important. I believe very fervently that we will need
all types of infrastructure over the next four to ve
years -- and longer -- to meet our requirements over
We don't want to pigeonhole ourselves by saying
we will fund roads over rail; we've got to take a more
holistic view of the infrastructure market and work out
the solutions that are best in each market. One size
certainly doesn't t all in each market individually.
The other issue is: once we get to the construction
phase, how do we avoid those past mistakes? How
do we avoid the scoping issues that we might have
had in the past? How do we handle risk better than
we did in the past?
On that issue, while engineering construction in
aggregate might be declining, the actual infrastructure
that goes into non-mining applications will be rising
from 2015--16, and quite signi cantly.
While for some states the aggregate spend is
falling, for New South Wales it's a different story.
Engineering construction in New South Wales is
facing a boom over the next ve years -- and that has
to be considered if you're in the planning stages of
New South Wales will start surpassing Queensland
levels of investment in engineering construction over
the next couple of years as the mining and resources
boom winds down.
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