The Albanese government’s infrastructure review has recommended 82 projects should be cancelled, after finding the $120 billion program unsustainable in its current form.
Construction has not started on these projects. The review recommends the savings be used to provide “headroom” in the program which is facing a large cost overrun.
The review recommended that 100 projects, not yet under construction, should go ahead, while a further 56, also unstarted, should proceed but on the basis that identified risks are addressed satisfactorily.
Thirty-six projects, not under construction, should complete planning, detailed costings, and rescoping, with the allocated funding used for “headroom”, the review says.
The government says it accepts all the review’s recommendations in principle and will announce details on Thursday.
The review estimates a $32.8 billion cost blowout in the program, of which an estimated $14.2 billion is on projects not yet under construction.
The report says the 10-year pipeline of projects “cannot be delivered within the $120 billion allocation, even with current contributions from jurisdictions”.
Key recommendations
- 82 projects not yet under construction cease, and the allocated funding used to create headroom in the Infrastructure Investment Program
- 36 projects not yet under construction to complete planning, detailed costings and rescoping with the allocated delivery funding used to create headroom in the Infrastructure Investment Program
- 56 projects not yet under construction, proceed noting the review has identified risks that to be satisfactorily addressed prior to delivery
- 100 projects not yet under construction proceed
- beginning in 2024-25, states and territories in consultation with local governments, develop and provide the commonwealth with an annual infrastructure plan, indicating priority projects that have or are seeking federal funding over the next ten years and how they will be sequenced
- for projects in delivery, the Australian government implement an independent assurance review process that has the authority to transparently examine all project risks when the project is identified as a high delivery risk
- the Australian government adopts a policy of 50:50 (Australian government: state/territory/local government) as the standard funding split for all new projects. The Australian government retain the flexibility to apply other funding splits, particularly in smaller jurisdictions and remote locations
- the Australian government significantly increase funding to local councils through the Roads to Recovery program, with the majority of the increase directed to non-urban councils
Source: Independent Strategic Review of Infrastructure Investment
“The Australian Government cannot afford within the current program settings, to meet the identified cost pressures, nor add any new projects for delivery to the pipeline in the next ten years, without significant changes taking immediate effect,” the report says.
Some projects “do not demonstrate merit, lack any national strategic rationale and do not meet the Australian Government’s national investment priorities.
“In many cases, these projects are also at high risk of further cost pressures and/or delays. A number of projects were allocated a commitment of Australian Government funding too early in their planning process and before detailed planning and credible design and costing were undertaken.”
The review says the federal government can cease or pause federal funding to projects, to create “headroom for reallocation to merit-based projects, to fund construction once planning, design and detailed costings are complete or to relieve some of the estimated cost pressures on current projects”.
The government says it will not cut the overall size of the A$120 billion program. It is committing extra funding for a number of projects.
Top-up funding
- $2.7 billion for the North-South Corridor (SA)
- $1.75 billion for the Logan-Gold Coast Faster Rail (QLD)
- $1 billion for Metronet (WA)
- $347 million for Rockhampton Ring Road
- $200 million for sealing the Tanami (NT)
- $100 million for Western Highway corridor (VIC)
- $50 million for Richmond Road in Sydney (NSW)
- $46.5 million for Boundary Road level crossing removal in Coopers Plain (QLD)
- $25 million for the Molonglo River Bridge (ACT)
- $20 million for the Western Distributor smart motorway (NSW)
Source: Minister for Infrastructure, Transport, Regional Development and Local Government
The government has been in discussions with the states and territories over the revamping of the program, with the Queensland government — which faces an election next year — warning against cuts to its state.
Among the projects the government says it is maintaining are the Melbourne Airport Rail Link, the Milton Ulladulla Bypass, the Singleton Bypass, the Muswellbrook Bypass and the Tasman Bridge Upgrade.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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