Reframing the megaproject in the age of COVID-19

Infrastructure leaders are calling for a rethink in the way that megaprojects are planned and delivered in a post COVID-19 world.

Speaking at the National Infrastructure Summit, those in the public and private sector said that going forward, new approaches will have to be taken to the construction of major infrastructure projects.

With less of a demand for trips to the CBDs of cities during the morning peak, and more distributed travel patterns, inter-urban, suburban and regional connectivity will be a greater focus, said Marco Assorati, executive director of Webuild (formerly Salini Impregilo).

“We need to ensure connectivity and good living in bigger cities, but the circumstances of COVID have driven attention somewhere else, to the need to develop regional hubs. We need to connect regional hubs with rail, roads, with technology,” he said.

Similarly, Andrew Head, CEO of Westconnex, said that in future, megaprojects will not just funnel people into and out of CBD, but improve connectivity in polycentric cities.

Linda Cantan, package director, tunnels & station PPP Metro Tunnel at Rail Projects Victoria, said that even in these visions for the future, current requirements will still need to be met, and that cities such as Melbourne were already at capacity in terms of the load on existing infrastructure. In addition, project such as the Metro Tunnel in Melbourne are being designed to free up capacity on the metropolitan network so that connections from regional cities can flow through the city more efficiently.

Another way that projects may change is through the shape of the delivery contracts. Speaking from experience, Bede Noonan, managing director of Acciona Australia said that governments and contractors needed to ensure that more work was being done in the early stages to avoid acrimonious disputes, such as the fall out from the Sydney CBD and South East light rail project, where “massive” amounts of money were spent that didn’t need to be spent.

“If you’re in that space it’s a bad space, the challenge is how to avoid that coming about,” he said.

Other panellists echoed these remarks, with Cantan noting that while there was pressure currently for projects to get into the construction phase to stimulate economic recovery, proper planning and investigation still needed to be done at the outset.

“A, make sure it’s the right project but, B, make sure that we’re setting out the feasibility appropriately, and then taking it out to market as a well-developed project.”

Value of rail construction contracts fall in 2020

While governments have trumpeted major stimulus spending projects in rail to spur the economy out of COVID-19, the value of contracts awarded in 2020 has fallen significantly, according to analysis from Infrastructure Partnerships Australia (IPA).

In 2019, contracts to the value of $27.1 billion were awarded in the infrastructure sector. In the first eight months of 2020, only $6.7bn in contracts have been awarded, a quarter of the 2019 total.

Of the contracts awarded, rail has been overlooked, with roads, water, social infrastructure and other transport receiving more money.

According to IPA, as governments have turned to small-scale stimulus projects, approvals and signatures on contracts has fallen. In many cases, these projects were already funded and were brought forward to get money flowing into the economy and increase business activity to rebound after COVID-19.

“Over the last few months, governments have taken smart steps to accelerate small-scale quick to market projects to soften the COVID landing,” said IPA chief executive Adrian Dwyer, who noted that larger projects will sustain the economy for the long term.

“This data shows we now need to accelerate approvals of large-scale projects, add to the major infrastructure pipeline, and ensure we keep pace on delivery,” he said.

“As we governments prepare for the delayed budget season, this is the time to scale up for the long economic recovery ahead.”

With the third quarter of 2020 drawing to a close, contract values could pick up for 2020 in the final quarter, with the contract for the next stage of Sydney Metro expected to be announced. Other contracts, such as those for the Narrabri to North Star section of Inland Rail, could also contribute to the 2020 total.

While rail was the smallest infrastructure sector in 2020 by contract value, it was the largest in 2019, with $11.6bn committed to the sector. In 2018, $6.6bn of contracts were awarded to rail projects.

There is over $3bn of announced funding for rail as part of state and federal stimulus plans.

Shortlists for Barangaroo, Crows Nest metro stations

Six applicants have been shortlisted across two tender process to build new metro stations at Barangaroo and Crows Nest as part of the Sydney Metro City & Southwest project.

Sydney Metro has shortlisted AW Edwards, CPB Contractors and Laing O’Rourke for the contract to deliver Crows Nest station, and Hutchison, John Holland and Watpac for the contract to deliver Barangaroo station.

The six shortlisted parties will now all move on to the Request for Tender phase of their respective contracts.

The contractor selected to build Crows Nest station will deliver two separate station entrances and enabling works to support the future over-station development. A delivery partner for that over-station development will be chosen via a separate procurement process.

The state government said the station and over-station development packages had been separated so the station build can proceed in time for a targeted opening of 2024, while the government further considers community feedback regarding the above-station development.

“This also allows the over-station development to be further incorporated into an integrated planning outcome,” Sydney Metro said, “consistent with the Department of Planning, Industry and Environment’s process to finalise the St Leonards and Crows Nest 2036 plan.”

The Barangaroo station plan will work to improve access to the Walsh Bay Arts and Culture precinct, and provide easy access to Barangaroo’s public, residential, commercial and entertainment areas and new ferry hub. The station will be built to improve pedestrian access to the northern part of Sydney’s CBD and The Rocks, and will aim to alleviate congestion at Wynyard station.