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Optimism in infrastructure sector on post-COVID future

There is broad optimism in the infrastructure sector that the pipeline of work will continue and the shocks felt during COVID will not be long lasting.

Speakers at the National Infrastructure Summit highlighted that while there were some short term impacts during the height of COVID-19, the sector has largely been able to continue and is looking towards future projects.

CEO of Infrastructure Australia, Romilly Madew, summarised that the sector’s response to COVID-19 by setting up COVIDsafe worksites, cutting off access to overseas and interstate staff, and some supply chain issues meant a drop of 50 per cent in productivity during the peak COVID-19.

However, unprecedented collaboration between senior officials in the public and private sector meant that sites remained open in Australia, unlike in other jurisdictions, which ensured optimism and that there was flexibility around meeting contractual obligations that prevented projects from grinding to a halt.

This focus on ensuring business continuity and optimism was echoed by NSW Premier Gladys Berejiklian, who said that during the pandemic the state government’s focus was ensuring works could continue.

“Not only are we a COVID safe environment to operate but one of the few places where business continuity is assured,” Berejiklian said. “I think we can feel optimistic about the future of the infrastructure pipeline in NSW.”

What shape the infrastructure pipeline will be was a point of discussion, particularly following the federal budget. Federal Minister for Population, Cities and Urban Infrastructure Alan Tudge said the government’s focus was on projects that could begin in the next 12-18 months, and that was why there were no new mega projects in this year’s budget.

Despite this, Marion Terrill, transport and cities program director at the Grattan Institute, noted that the size of the infrastructure pipeline is still growing, with the amount of work underway in the public sector having doubled over the past five years, and the average size of projects is twice the value of projects over the previous five years.

The shift to smaller projects and upgrading existing assets such as roads and rail lines also reflected an uncertainty about what travel patterns will look like once Australia emerges from COVID-19, said CEO of Infrastructure Victoria, Michel Masson. Masson said the large transport projects which were popular up to COVID-19 may not be the right projects if demand changes.

Amid these larger trends, infrastructure builders and operators were dealing with their own challenges. CEO of Pacific National Dean Dalla Valle noted that state government regulatory changes to allow high performance vehicles through city centres to access ports was undermining the goals of these governments to shift more freight onto rail. Resetting the imbalance in fees and charges between road and rail freight would ensure that infrastructure assets are more efficiently used, with benefits for the wider community.

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