Infrastructure Australia has today published Delivering Outcomes, an industry reform roadmap to address the long-term challenges facing Australia’s infrastructure sector, including poor productivity, the increasing number of insolvencies and cost overruns and delays in the delivery of major projects.
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.
Informed by extensive consultation with more than 200 industry leaders, this new report from Infrastructure Australia underscores the need for Australia’s governments and industry to work collaboratively to advance sector-wide reform.
Infrastructure Australia’s Chief Executive Romilly Madew said: “This roadmap sets out tangible actions over the next 10 years to transform how infrastructure is planned and delivered in Australia to support a more productive, innovative, and financially resilient infrastructure sector.
“As we highlighted in the 2019 Australian Infrastructure Audit, 2021 Australian Infrastructure Plan, and 2021 Infrastructure Market Capacity report, national infrastructure sector reform is critical to successfully deliver Australia’s historic infrastructure pipeline and support the national economic recovery, including from the COVID-19 pandemic
“With a record $225 billion in major infrastructure investments committed by governments across the country between now and 2023-24, as well as investments being planned and delivered by the private sector, it is vital that infrastructure is planned, sequenced, procured and delivered effectively to ensure we reap the economic and social benefits.
“Delivering Outcomes amounts to an industry change plan. Developed in partnership with the very leaders who are critical in driving transformational change, it is a roadmap to improve the productivity of the sector, lift capacity and capability, promote innovation, embed sustainability and strengthen the Australian industry in the face of shocks and stressors.
“These reforms will ensure the sector is well placed to withstand disruptions, such as the challenges facing supply chains during COVID-19, but also ensure infrastructure better addresses the needs of the community,” Ms Madew said.
Delivering Outcomes – Key reform recommendations
- Shift from a focus on manual work on-site to off-site digitally enabled, pre-fabricated production processes, in line with international best practice.
- Develop and publish jurisdiction-wide, cross-sectoral infrastructure investment pipelines that outline current, funded, committed and planned public and private infrastructure activity over a ten-year horizon.
- Shift from current, combative contracting models to longer-term, collaborative models that integrate the supply chain.
- Support the financial sustainability of the infrastructure industry by adopting principles of fair return, improving benchmarking, reviewing payment terms and risk allocation.
- Establish and embed equality, diversity and inclusion objectives through each infrastructure investment.
Maintaining Australia’s international competitiveness
“During the 1990s and 2000s, Australia led the deployment of private capital into the infrastructure sector. However, our trading partners and competitors have caught up. It is time for a new wave of reform,” said Infrastructure Australia Chief of Policy and Research, Peter Colacino.
“We are now in competition for resources and investment with leading Southeast Asian economies, like Singapore, as well as other traditional leaders in the sector – the United Kingdom, Canada and New Zealand. Governments in each of these jurisdictions are committed to adopting international best practice, streamlining delivery, supporting collaboration and shifting gears through adopting digital practices and modern methods of construction.
“To deliver the record infrastructure pipeline, it will be essential for the Australian sector to demonstrate it is globally competitive.
“The United Kingdom’s Transforming Infrastructure Performance, the UK Construction Playbook and Project 13 represent signposts to the Australian industry. Through Delivering Outcomes we have refined the concepts in these publications for Australia.
“We are already seeing state and territory governments shift their focus through their state infrastructure strategies to address these challenges.
“The structure of government and the size of our industry mean it is not possible to imitate this international experience. In developing Delivering Outcomes, we sought perspectives from industry on local conditions and implementation. The reforms we offer are a practical platform for collaboration and meaningful progress,” Mr Colacino said.
Notes on the development of the report
- Infrastructure Australia engaged HKA to support the development of the reform roadmap, including engagement with domestic and international infrastructure leaders. The engagement included working with international and Australian leaders from across industry and government infrastructure sectors, as well as working with leaders of industry and other policy areas to understand counter-culture perceptions on the performance of the sector and opportunities for reform.
- The engagement, alongside the parallel process to support the development of 2021 Australian Infrastructure Plan and 2021 Infrastructure Market Capacity program, represents one of the largest consultation exercises undertaken by Infrastructure Australia to inform reform.
- The reforms put forward in this report reflect the current state of the sector, key challenges and root causes impeding productivity and innovation, and collective understanding of the desired future state for the sector.