Earthmoving Industry Insight, Opinion

Delays continue with the infrastructure review

The ongoing delays to the 90-day review will have ongoing impacts on the ability of Queensland to meet its infrastructure needs in future

“Houston, we have a problem.” Or in our case “Queensland, we have a problem.”

The Strategic Review of the Infrastructure Investment Program (‘the 90-day review’) continues past 180 days. I have been told that any outcome from the review will not be presented prior to the mid-year economic update, which will likely be December 2023.

This means that it is unlikely that any project will be able to commence until late in the first quarter of 2024. Further delays will therefore increase the impact that the unnecessary uncertainty has already caused.

Some companies in some sectors are laying staff off.

Margins are tight due rising labour and other input costs rising quicker than contractors can forecast in their tenders.

Insurance is getting more expensive and difficult to obtain. Contractors are forced to shoulder more uninsured risk.

Non-cash security is also becoming harder to obtain, with a lack of providers in the insurance bond space and banks tightening requirements for providing bank guarantees.

There are skill gaps within all levels of the workforce. There is evidence of public funding tightening. Many clients are still insisting on hard dollar, all risk, contracts.

All of these are factors outside a contractor’s control that restricts a contractor’s ability to build capacity, and all present at a time when contractors need to be building for the future program that is reportedly coming down the line.

Not a single sod of soil has been turned on any Olympic infrastructure. I suspect some projects will be reclassified as Olympic infrastructure but, even so, the headline projects are yet to start. There is significant investment in rail, water and renewable energy still to start.

There is undoubtedly unaccounted private investment in projects that will leverage off the Olympics, such as short-term and long- term accommodation and civic improvement.

The Queensland government announced the Queensland’s Clean Energy Workforce Roadmap on October 25 this year. This initiative is aimed at supporting around 100,000 new jobs by 2040 through providing skilling support to desperately needed skill sets. This is a great initiative and many more initiatives that support skilling the workforce are welcome.

The reality is that a large percentage of those 100,000 jobs will be needed within two to three years if the full potential pipeline is to be realised.

Jobs require people. With theoretical full employment it will be difficult to attract workers from other industries, and if this achieved it will be at the detriment of those industries.

We will need school leavers, under-employed, or unemployed people to commit to full-time employment and a good dose of interstate and overseas migration. All these groups will need training and support.

If this can be achieved, we will also need to provide housing, transport and other services such as schools and hospitals. This is all sadly falling behind year on year. All Queenslanders will be the ones to feel the pressure of the lagging infrastructure.

All these challenges need to be addressed and none of the solutions are mutually exclusive. It will be imperative that the overlay of renewable energy and the Olympics are planned in addition to underlying fundamental infrastructure needs of Queensland. They will need to be coordinated, but not at the expense of each other.

If the underlying infrastructure delivery is under pressure, then something must go. We do not want to be in the same boat as Victoria in cancelling an international event. What makes sense is some rationality around the delivery of the renewable energy program.

There needs to be a reassessment of the types of energy projects that are needed, including the technology bases of energy generation. The location and timeline of delivery must be considered.

On current projections it would be sensible on the current technology to delay the start of some of these projects so that the industry has the capability to deliver, and that infrastructure delivery keeps pace with population growth.

It is ironic that as coal fired power is either not expanded or phased out that more new forms of electricity generation will be needed to support the growing population which will need to come first to deliver the infrastructure.

Send this to a friend