As Australia’s infrastructure sector highlights serious market capacity constraints, other countries facing similar challenges have embraced these challenges through reforms.
Civil Contractors, Master Builders, the Australian Constructors Association, Roads Australia, Consult Australia and Infrastructure Partnerships Australia have all been vocal on impact on supply chain challenges, soaring costs for materials, labour and skills shortages, productivity and cultural challenges.
The construction industry is struggling to cope with hundreds of billions of dollars of property and infrastructure projects planned around Australia, and New South Wales is reviewing its project pipeline. Many of these issues were well canvassed in the John Alexander Procurement Inquiry report.
Infrastructure Australia’s perspective is that currently, infrastructure planning, decision-making and delivery falls short of consistent best practice in Australia. Procurement and contracting arrangements are driving poor investment outcomes, a lack of project coordination is creating capacity constraints, and the potential of digital transformation remains unharnessed.
Dale Evans, Chair of the UK’s renowned Project 13, believes that the UK faces similar challenges.
Mr Evans has over 30 years of international experience in infrastructure delivery, asset management, operational management and change management within the infrastructure and construction sectors. His track record includes leading new business strategies and implementing organisational and cultural change to deliver improved performance, both in the UK and internationally.
Mr Evans said that while the UK Government is embracing reform, the Australian market is much more stretched. This all points to Australia losing its competitive edge.
“Australia’s infrastructure sector is delivering on a historic investment programme, that post-COVID-19 is of vital importance to the Australian economy, but that will be delivered through a very stretched market capability,” Mr Evans said.
“This is made more challenging by the traditional approach to procurement and engagement that has to date delivered little innovation.
“Australia is in the midst of a profitless boom. We are facing a significant investment program, but the traditional approach to procurement and engagement has failed to deliver productivity improvement, and created an unsustainable contracting model where delivery partners make marginal returns and are unable to invest in future skills and innovation.
“A completely outdated approach to procurement has led to poor productivity performance and weak digital adoption compared to other sectors.”
Mr Evans said that Australia’s Federal Government should be focused on greater industry collaboration, addressing the industry’s challenges requires a joined up response and a sector that collectively identifies, distills and adopts best practice. The government should also promote the adoption of more sustainable delivery models and enable digital transformation of infrastructure.
“In terms of the UK experience, the challenges are similar, but the market constraints are more acute in Australia,” Mr Evans said.
“The importance of infrastructure in the post-COVID-19 recovery and in enabling key government strategies has been more visible in the UK, supported through Transforming Infrastructure Performance and the Construction Playbook.
“The Infrastructure Australia reform plan has the potential to provide similar policy progression, but it needs to be adopted by government and agencies at all levels to have an impact. The core role infrastructure plays in achieving better people and place outcomes should be acknowledged. It is such a significant enabler of wider societal and environmental change.
“Government should embrace contribution infrastructure can make to sustainability, directly thought renewables, and indirectly through more sustainable construction. There is an opportunity for Australia to embrace more intelligent, digitally enabled infrastructure that really delivers an enhanced customer experience.”