According to the latest Queensland Major Projects Pipeline report, the value of the state’s major construction and engineering future is expected to reach $62 billion across the next five years.
The report, released by the Queensland Major Contractors Association, found that the value has grown by almost 25 per cent in the last 12 months..
Now in its tenth year, the annual report evaluates the current market outlook and medium term major project construction pipeline across the state.
QMCA CEO, Andrew Chapman, said, “The Queensland Major Projects Pipeline reports $62 billion worth of projects, with significant growth in rail and road transport and energy.
“The state’s resources market remains affected by global conditions, and while there is strong interest in growth in base metals and other minerals for the new energy storage solutions, coal (thermal) and other projects are stalled in the short term.
“Renewable energy projects continue to develop, and in the future hydrogen energy production-related infrastructure will be needed too.”
The report also identified a significant improvement in project funding, with funded projects accounting for $35.5 billion of the total pipeline.
“136 major projects are funded, which is fantastic news for the industry and for Queenslanders who will directly benefit from significant investment in construction and engineering, through supply chain and employment opportunities as well as through access to economically beneficial assets delivered in the coming years,” Mr Chapman said.
“Funded works currently peak in 2022/23 – but could surge higher in 2023/24 – reaching $17 billion in construction work undertaken in 2023/24 alone, if all projects proceed.”
The report outlines several opportunities to enhance the pipeline, increase funding options and create an infrastructure legacy for the state.
“The SEQ Olympics represents a once-in-a-generation opportunity for infrastructure investment, and we predict an uplift in the pipeline from 2024 onwards as the Olympic infrastructure and legacy infrastructure starts to be delivered,” Mr Chapman said.
“We also have the opportunity to create infrastructure assets that look beyond the window of the games and create a legacy of economically beneficial infrastructure that Queenslanders can benefit from for the next 50 years.”
“A unified approach from all levels of government is required for success, and we would encourage the federal, state and local councils to progress the SEQ City Deal as soon as possible,” said Mr Chapman.
The transition to zero net emissions is also an opportunity for the state’s construction and infrastructure sector.
“We will need new and upgraded transmission lines, roads, rail infrastructure, ports, pipelines and more to support the state’s aim to be a global leader in renewables and clean energy,” Mr Chapman said.
“In addition, investment in transmission networks and energy generation through solar, wind and pumped hydro should all become stronger elements of the project pipeline in the years ahead.”
With all levels of government facing spending and budgetary challenges, the report urges more to be done to look at sources of funding, appropriate partnership models and debt.
“We would encourage government to review the potential benefits of asset recycling, private sector operating leases, and public-private partnerships and consider the idea of good debt,” Mr Chapman said.
The report also identifies the potential barriers to delivering the state’s $62 billion project pipeline, including resources and skills, productivity, sustainability, global demand and project approvals.
“Construction materials supply and costs are increasing dramatically, and this is unlikely to ease for another 18 months as global demand outstrips supply,” Mr Chapman said.
“New technologies, artificial intelligence and machine learning can deliver significant productivity gains, and we must be open to new methodologies and ways of working to improve performance,” said Mr Chapman.
“From a project approval perspective, it still takes too long to scope projects, complete business cases, gain approvals and funding and have them ready for the market to deliver.
“With the SEQ Olympics just over a decade away, reform is required to ensure that we can deliver the infrastructure required to hold the best games ever.”
Access to labour is one of the key areas of concern identified in the report.
“We are competing with the southern states for resources, both New South Wales and Victoria have significant project pipelines, close to double that of Queensland’s,” Mr Chapman said.
“This is a challenge from a labour force perspective, and when coupled with the fact that Queensland is lagging in apprenticeships and trainee numbers, a labour shortage is a real possibility.”