infrastructure

Why the industry must spend resources wisely to drive Australia out of the current economic crisis

Rudolf Rose, associate director at DCWC, explains how the current COVID-19 crisis should influence Australia’s thinking on infrastructure.

THE IMPORTANCE OF KEEPING INFRASTRUCTURE JOBS
It’s an age-old economic principle. When people earn, they spend; when they do this, funds are further distributed, enabling even more spending. Infrastructure is one of the biggest employers in Australia, so the more we invest in keeping people in these jobs, the better the economy performs as a whole. With COVID-19’s economic fallout, it has never been more critical to ramp up impetus across our beloved industry.

For the most part, infrastructure jobs have been more secure than in other industries, with sectors such as construction deemed an ‘essential service’. But what other security is out there? For workers restricted by current pandemic measures, there is a big appetite to get people back into the workplace. According to surveys conducted throughout the construction industry, civil contractors are prepared to make significant investments in employment if government infrastructure projects are fast tracked. So capacity is there – especially for tier 2 and 3 companies with significant ability to create these employment opportunities. But what else do we need to consider?

While we’ve all been following recent government stimulus packages aimed at boosting infrastructure growth, the trick now is where to spend to achieve maximum benefit.

LinkedIn- Construction Variations

SPEND WISELY AND WITH PRUDENCE
Instead of ‘clustering’ projects in a small area, it may be more beneficial to spread the projects into rural and regional areas. The communities in these areas would benefit greatly from infrastructure investment by creating employment, as well as opportunities for training. Ultimately this translates to community spending filtering down to local businesses. This sentiment is echoing throughout our industry.

Treasury Secretary, Steven Kennedy, told a Senate hearing in October 2019, that spending big on large infrastructure projects is not the way to stimulate the economy. This point of view may have some merit, insofar as large-scale projects take significant time to plan to get the business cases and budget right. Spending more on smaller projects to match demand would make more sense – particularly when planning through to shovelling can be done within a much shorter timeline. This would allow for the main focus on larger projects to remain on planning, scoping and budgeting accurately.

Having said that, larger projects must not be abandoned in favour of the smaller ones. The smaller ones would merely provide shorter term relief in economic downturn, whereas the larger projects would stimulate the economy in the longer run. Mr Kennedy appears to reject the idea of extra spending except “in an emergency”.  That was before COVID-19 became what it is now – an emergency.

WHY IS THE COVID-19 CRISIS DIFFERENT AND HOW MIGHT IT INFLUENCE HOW INFRASTRUCTURE IS DELIVERED GOING FORWARD?
What COVID-19 has taught us so far, is that we are very adaptable. With a significant number of people getting used to working from home (and many coping well with this scenario), people may start to consider whether travelling to an office is really needed. They may think; why bother if they can achieve the same amount of work (and more) from the comfort of their own environment? This may be considered a radical approach and certainly is not without its own pitfalls, but still could be a consideration. This new dynamic also raises a number of questions around the allocation of industry resources in general.

Are train lines into the city from all around the metropolitan areas really going to be used for current or planned increased capacity? Should the spending on these planned projects be channelled to developments where digital connectivity can be vastly improved (let us face it, the NBN still struggles somewhat)? Should we invest more in renewable energy sources instead? Should there be a larger focus on innovation perhaps, and what does this look like?  Maybe if local rail network spending gets pushed back to a lower priority, intercity or fast rail could get more funding to compete with domestic air travel. Or now there could be less spent on transport and more on other forms of infrastructure. These are all alternative options if funds for planned transport projects get redistributed.

But what about the flow on? Although these proposed infrastructure opportunities may lack similarly skilled resources as for civil road & rail construction projects, they could open up training and upskilling for people to work in these industries.  This will promote increased capacity of tertiary educational institutions – again more infrastructure spending, creating more jobs.

WHO PAYS FOR ALL THIS?
While we can promote and encourage big spending on infrastructure to stimulate the economy in times of crisis, people will rightly ask where the funding for these planned projects will come from?

Both federal and state governments have already spent significant amounts of money on cash stimulus packages including JobKeeper allowances. This may well be unplanned and we, in the general public, may not really know whether funds earmarked for other areas of the economy, including infrastructure spending, have been redirected to pay for the various cash stimulus packages introduced. They may have come from some form of contingency fund in the government coffers. We certainly do not know.  However, if funds from other projects were redirected, including planned infrastructure investments, and those projects required ‘new’ funding, all levels of government may have to rethink where the capital would come from to pay for these projects. Let us face it, short term cash stimulus only goes so far – what happens if that runs out or gets wound back early?

One of the major contributors to reinvestment in infrastructure could be the sale of assets, as NSW did when they sold the state’s electricity assets. This provided a major boost to infrastructure spending and could be done again. Alternatives to this could be increased borrowing, higher taxes (GST), print more money, etc. All these have their own pros and pitfalls and identifying the healthy balance would be the key to getting this right. No option will be perfect, but some may be more perfect than others.

In any case, in our current environment loaded with uncertainty, some surety remains. As a historically vital player, infrastructure continues to play a pivotal role in boosting our country’s economy during economic downturn. The key is not only to spend wisely, fairly and equally, but to embrace the potential redistribution of funds across fresh opportunities arising out of this novel landscape.

Contact Rudolf Rose at: https://www.dcwc.com.au/contact-us

Inland rail continues major construction with added safety measures

Inland Rail’s construction is continuing along with other major construction projects, with the safe delivery of freight and transport infrastructure a high priority.

The Australian Rail Track Corporation (ARTC) has implemented additional public health and safety measures on national rail infrastructure projects during the COVID-19 pandemic.

Michael McCormack, Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development said he has the confidence that all necessary precautions are being taken to protect workers and the communities in which they operate.

“Now more than ever, we need these essential construction services and the economic stimulus to continue, not just to keep people in work, but to ensure we’re in the best place possible to build momentum when we see through this global health crisis,” he said.

“Additional measures put in place by the ARTC and its contractors to protect the health and safety of workers and the local community mean we can continue to deliver projects, such as the transformational Inland Rail.”

McCormack said everyone relies on the freight network to deliver the essential supplies such as food, medicine, and medical equipment, which are critical now more than ever.

“I thank the freight and construction workers who are essential to maintaining our supply chains and laying the ground work for Australia’s freight future,” he said.

More than 1,700 people have worked on Inland Rail since construction began, including 667 locals on the Parkes to Narromine project.

McCormack said the economic injection from this project has been immense with $89 million spent with local businesses and 97 local businesses engaged as suppliers.

More than 165,000 tonnes of ballast has been laid and one million tonnes of earthworks completed since the first sod was turned in Parkes in December 2018.

A total 70km of the 103-kilometre Parkes to Narromine section of Inland Rail is now complete, with final ancillary work under way.

Mathias Cormann, finance minister, said Inland Rail will deliver a $16 billion boost to gross domestic product during construction and the first 50 years of operation.

“Inland Rail will support 5,000 jobs in New South Wales and we are already seeing the benefits of this in Parkes and the surrounding region, with a boost to employment and supplier contracts flowing from construction,” he said.

Cormann said the government is committed to Inland Rail to build Australia’s freight capability and meet increasing demands.

“We are very happy that this vital work can continue safely,” he said.

“It is important that we progress these long-term infrastructure projects to create jobs for Australians, sustain economic activity and to support the recovery on the other side of the COVID-19 crisis.”

NZ City Rail Link ready to re-start construction

The New Zealand government has approved Auckland’s $4.45 billion City Rail Link (CRL) to resume construction after the COVID-19 lockdown.

Sean Sweeney, CEO of New Zealand’s biggest infrastructure project said his team is champing at the bit for a rapid re-start.

“We’re already inspecting all CRL sites and making them ready for a safe return to work next week,” he said.

Work will resume on Tuesday, April 28 at all CRL sites including the C1 contract at Britomart and LowerQueen Street, C2 in Albert Street, C3 at Aotea in central Auckland, Karangahape Road and at MtEden, and C8 on the southern rail line at Ōtāhuhu.

“Because of our size we’re aware of the big role we have in quickly getting the economy moving again, supporting the contracting and infrastructure industries and seeing our workers safely back on the job,” Sweeney said.

He said the paramount priority will be keeping workers and the wider community safe.

“We had some pretty strict safety measures in place before the lockdown, but next Tuesday’s return to work will be different,” he said.

Sweeny said there will be additional constraints including restricted access to sites, physical distancing, protective clothing and sanitising and cleaning regimes.

“They will all contribute to a successful re-start in the new COVID-19 work environment, and, just as importantly, they will help ensure our workers get home to family and friends virus-free when they finish their shifts,” he said.

Sweeney said it is too early to measure if COVID-19 has impacted on project costs or construction timetables.

“It may be months before we know that once the economy has settled down a bit and we have a clearer picture on the availability of workers, and what sort of shape some of our suppliers both here and overseas are in,” he said.

“I know we have a small team of workers waiting in France because there are no flights here at the moment – that’s not a lockdown issue that‘s a wider international COVID-19 issue.

“A big plus for the project was ability of City Rail Link Ltd (CRL Ltd) and our Link Alliance contractors to be able to keep working on construction and design programmes during the lockdown – time wasn’t wasted and that’s been a big boost for our re-start.”

The project team is investigating opportunities to accelerate some work, including more shifts of work and the use of extra plant and machinery.

“Those ‘shovel ready’ ideas are still in the planning stages but our contractors will be working hard – and safely – to get CRL delivered as quickly as possible for Auckland,” Sweeney said.

Phil Goff, Auckland Mayor, has welcomed the government’s announcement to resume construction and CRL’s re-start news.

“As one of Auckland – and New Zealand’s – biggest and most important infrastructure projects, the City Rail Link will play an important role in the post-COVID-19 economic stimulus,”Goff said.

“It’s critical that CRL construction resumes quickly to help kick start the economy, get construction and infrastructure industry employees back into work and limit as much as is possible the lockdown’s impact on construction timeframes.”

In the meantime, City Rail Link is in the search for an inspiring woman’s name for the project’s Tunnel Boring Machine (TBM).

The TBM is due to arrive from China later this year in sections and reassembled at the Link Alliance construction site in Mt Eden.

The Link Alliance will start tunnelling with the newly named TBM early next year, excavating 1.6 kilometres from Mt Eden to the Aotea Station in central Auckland to connect with the tunnels already constructed from the Britomart Station.

“Tunnelling tradition dictates a TBM cannot start work until it has been given a female name, a sign of good luck and safety for the project ahead. Our search seeks to recognise the many amazing women New Zealand has produced,” Sweeney said.

Shortlisted names include Antarctic scientist Dr Margaret Hayward, transgender politician Georgina Beyer, and Maori welfare and lands champion Dame Whina Cooper.

Metronet Airport Central Station now 70 per cent completed

The construction of Metronet’s Airport Central Station in Perth is 70 per cent complete with the first roof modules installed last week.

The first girders of Airport Central Station’s 137-tonne steel roof structure have been craned into place, with the steel fabricated locally by Naval Base company Pacific Industrial Co.

The $1.86 billion Forrestfield-Airport Link is jointly funded by the Australian and Western Australian governments and will deliver a new rail service to the eastern suburbs of Perth – with three new stations at Redcliffe, Airport Central and Forrestfield.

Rita Saffioti, WA Transport Minister said that, until now, the construction of Airport Central Station has been largely underground with significant excavation undertaken to build the three-level railway hub.

The roof modules will be craned into place over a three-month period, before specially designed sheeting is installed.

“While most works to date have been largely hidden, construction of this massive roof structure marks a new phase in above-ground construction for this project – an architectural milestone,” Saffioti said.

The roof installation comes as TBM Grace, the first tunnel-boring machine, finishes its work, having broken through into the Bayswater Station dive structure on February 18.

TBM Sandy is expected to break through towards the middle of the year to complete the project, and by end of their three-year journey, the machines will have travelled eight kilometres each.

At Skybridge level, the steel frame for the link between the station entry and the 280-metre-long elevated walkway has been constructed with travelators and information screens installed.

WA Premier, Mark McGowan, said about 2,000 jobs have been created on this project alone, with more than 700 people currently employed, and 70 jobs created as part of the Skybridge project.

“The Forrestfield-Airport Link is an important part of Metronet and when it opens next year it will provide an accessible public transport link for thousands of Western Australians and tourists,” McGowan said.

Additional $44m investment to fast track Lockyer Valley Inland Rail

The Australian federal government has invested an extra $44 million to the Inland Rail II Program (II Program) to fast track improvements.

The Lockyer Valley Inland Rail connection is one of four projects selected to be fast tracked part of the II Program.

The additional investment will assess the costs and benefits of various additional connections to the national freight rail network.

This will include investigating ways to build industry and supply chain resilience and improve market access for farmers and manufacturers through enhanced connection to Inland Rail.

Michael McCormack, Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development said the impacts of fire and drought in the Lockyer region mandated an investigation of possible expansion of the network

“Farmers and producers need to know they have access to a reliable, interconnected, national freight network that will deliver their produce to markets when and where it is needed.

McCormack said the Lockyer Valley, located between Ipswich and Toowoomba in South East Queensland, is traditionally one of Australia’s strongest horticulture producing regions and under the II Program, strategic business cases will identify opportunities to support more productive rail-based supply chains at regional centres and help build capacity on key country rail lines.

Mathias Cormann, Minister for Finance said he is very happy the Lockyer Valley component under the Infrastructure Investment Program would be fast tracked.

“Better freight connectivity and efficiency helps drive stronger economic growth and will maximise the returns for our national productivity which we know Inland Rail will deliver,” Cormann said.

“Transport costs are a significant overhead for Australian businesses which inevitably are then passed on to consumers. By maximising the community and business connections to Inland Rail, our investments to improve the interface with existing infrastructure ensures more people can enjoy high quality competitively priced and locally grown produce.”

Mark Coulton, Minister for Regional Health, Regional Communities and Local Government said enhancing supply chain efficiencies means more money stays in the pockets of local producers, building more resilient communities and industries. 

“Inland Rail provides the opportunities for cost savings, with the fast and reliable freight transport option placing our products on supermarket shelves across Australia and beyond our shores,” Coulton said.

Additional $2 billion investment to put Melbourne’s airport rail on track

A private consortium involving Melbourne Airport and Metro trains are offering to invest an extra $2 billion to build a dedicated track from the CBD to Melbourne’s West as part of the airport rail project.

IFM Investors, a fund manager owned by 27 superannuation funds, as part of the AirRail consortium are proposing to build a 6km tunnel between Melbourne and Sunshine, 12km west of Melbourne’s CBD.

IFM Investors have written to the Victorian and federal government on Thursday last week to offer a further $2 billion investment on top of the $5bn initially proposed in 2018.

IFM are proposing a market-led solution to the new track, calling for a new rail tunnel in a letter sent to Victorian Premier Daniel Andrews and Prime Minister Scott Morrison.

“A project option that includes a tunnel between the CBD and Sunshine delivers the best airport rail solution particularly when compared with a MARL that utilises the Melbourne Metro Project,” wrote IFM.

The Age reported that federal and Victorian government plans for an airport rail line will involve a route via the Metro Tunnel to Sunshine, with a new track to be built between Tullamarine and Sunshine.

In 2016 a Metro Tunnel business case rejected a 2012 Public Transport Victoria plan to run airport trains through the $11bn metro tunnel, currently under construction until 2025.

The federal and Victorian state governments had previously agreed to a $10bn joint commitment to the Melbourne airport rail link.

A Victorian government spokesperson said in May last year that part of the budget also includes additional tracks between Sunshine and the CBD that would be part of Melbourne Airport Rail Link.

Every airport rail option being assessed would include a stop at Sunshine to connect to Geelong, Ballarat, and Bendigo services, according to a Victorian government spokeswoman.

The AirRail consortium, that also includes Metro Trains, Southern Cross Station, and Melbourne Airport will request that the State Government is charged a toll every time a Metro or V/LIne train runs through the new rail tunnel for operating and maintenance purposes.

IFM says it wants to operate the tunnel over a 40-year concession period.

According to the letter, the access payment from regional trains that use the tunnel would recoup an appropriate share of the significant capital cost of building the tunnel.

IFM have stated they do not wish to constrain regional or metro services due to frequent airport trains and decisions on service, pricing, and timetabling would remain wholly with the Victorian government.

AirRail Melbourne has been ready to commence construction on the infrastructure project since 2019 and IFM is waiting for the green light to start the build. Australian rail suppliers have also contacted IFM to propose their interest as potential contractors for the project.

In June 2019 the Victorian government announced that Rail Projects Victoria (RPV) will be developing a detailed business case for Melbourne Airport Rail.

The Victorian state Government said the business case will be delivered by 2020 and will assess station and procurement options, value capture and creation opportunities, and economic analysis of the recommended solution.

AirRail Melbourne proposed in a 2018 blueprint that 20-minute travel times will be expected to the city, using dedicated rollingstock.

“Our ambition is to have a train journey to the airport from the city that is fast, affordable and meets the needs of travellers,” a spokesperson for federal Minister for Urban Infrastructure Alan Tudge was quoted by The Age last year.

NZ City Rail Link commences next stage of construction

Building works have started on the Aotea underground station in central Auckland part of New Zealand’s City Rail Link (CRL).

Dale Burtenshaw, deputy project director for the Link Alliance consortium which is building the stations and tunnels for the CRL project, said construction of the Aotea station under the intersection is “massive in scale”.

Construction of the station, platform and tunnels continues will continue below ground until 2021.

Wellesley Street West intersection with Albert Street and Mayoral Drive will close to road traffic from Sunday, 1 March 2020 and is set to reopen in a year.

This follows the removal of the information hub building in the middle of Beresford Square last month to construct the station under nearby Karangahape Road.

The CRL is set to be a 3.45km twin-tunnel underground rail link up to 42 metres below the Auckland city centre.

The depth of the two new underground stations will be 11m at Aotea and 33m at Karangahape Road.

The CRL will extend the existing rail line underground through Britomart, to Albert, Vincent, and Pitt Streets, and then cross beneath Karangahape Road and the Central Motorway Junction to Symonds Street before rising to join the western line at Eden Terrace where the Mount Eden Station is located.

The project was launched in 2017 and is estimated to cost $4.419 billion by the 2024 completion date.

Hundreds of millions of dollars being invested in New Zealand’s KiwiRail network

The New Zealand Government has announced a further $109.7 million rail investment in Northland rail freight on the KiwiRail network.

This follows the injection of  $211 million to upgrade Wellington networks and services for Auckland rail.

Greg Miller, KiwiRail Group chief executive, said the Northland investment will enable hi-cube container freight to be transported by rail in the region for the first time ever.

$69.7m will be spent on lowering tracks in the 13 tunnels between Swanson and Whangarei; reopening the currently mothballed rail line north of Whangarei, between Kauri and Otiria; and building a container terminal at the Otiria rail yard, in Moerewa.

“Currently 18m tonnes of cargo is moved in and out of the region every year. Of that, around 30,000 containers leave Northland by road. Most aren’t able to fit through the tunnels, but this investment will change that – opening up a whole new market to rail,” Miller said.

“The tunnel work will have a huge impact on how freight is moved in and out of Northland.

“I’m really impressed by the ingenuity of KiwiRail’s engineering staff to be able to lower the tracks in the tunnels – which is a lot less expensive than boring bigger tunnels.”

This is the second Provincial Growth Fund (PGF) investment in Northland rail, following the $94.8m provided to make significant improvements to the Northland Line between Swanson and Whangarei, announced last year.

An additional $40m will be used by KiwiRail to purchase land along the designated rail route between Oakleigh and Northport/Marsden Point.

Miller said works in Auckland have already commenced, and will be completed in about four years.

“The third main adds an extra rail line between Westfield and Wiri in South Auckland, a section of line that is congested with freight trains going to and from Ports of Auckland and Port of Tauranga, and increasingly frequent metro commuter services. For CRL to deliver the level of commuter service Auckland needs, the 3rd main is crucial,” he said.

David Gordon, KiwiRail chief operating officer – capital projects and asset development, said work on the Wairarapa Line will start later this year, following the government’s $96m investment announced in 2018.

“$70m will be spent on improving the signalling system and track approach to Wellington Station, particularly the area north of the stadium where the Johnsonville, Hutt Valley, and Kapiti Lines all come together,” Gordan said.

A $15m investment in carriages for the Capital Connection service will allow KiwiRail to fully refurbish ex-Auckland Transport carriages including new interiors, seats, and toilets.

Calls for Gladstone to be part of Inland Rail route

Gladstone Region Mayor Matt Burnett is calling on the Australian Rail Track Corporation (ARTC) and state and federal governments to review and invest in connecting the Inland Rail to the Port of Gladstone.

Gladstone Regional Council has provided its submission to the Senate Inquiry into the management of the Inland Rail Project by the ARTC and the Commonwealth government. 

Burnett told the senators via teleconference at the hearing in Brisbane on Thursday that extending inland rail to the Port of Gladstone was a “strategic priority”.

Burnett said it doesn’t have to be “Gladstone vs Brisbane,” because the route alignment “can be both, so there is no reason it can’t be both”.

“The Australian rail network is an important network, so why not include central Queensland as well,” he said.

“The Port of Brisbane has issues with capacity, costs, and efficiencies, which I believe strengthens our case for the line to come to the Port of Gladstone. The Toowoomba to Brisbane project is reported at an estimate of $6.7 billion, alternatively the route from Toowoomba to Gladstone is projected at $1.2 to $2.7 billion.”

The Gladstone mayor said “there is no doubt Brisbane is a distribution centre” but it’s “heavily congested”.

“Our port has the capacity to grow to more than 300 million tonnes per annum which is more than double the import and export tonnage currently experienced.”

Burnett said The Gladstone Regional Council is calling on the Australian government to finalise and release the study into the extension of the Inland Rail to the Port of Gladstone. 

“The Australian Government should work to align with regional councils and other key stakeholders to invest in the Inland Rail extension to the Port of Gladstone to advance the case for this important piece of regional enabling infrastructure,” he said. 

AusRAIL: McCormack highlights rail spending, King calls for skills focus

Minister for infrastructure, transport and regional development Michael McCormack and shadow minister Catherine King have highlighted their parties’ distinct transport commitments at AusRAIL Plus 2019.

“It’s been a strong and positive year for rail. Since I last spoke to you, much has happened in two key areas over the past year. With a focus on freight, we are on track to deliver the Melbourne to Brisbane Inland Rail, which is a world class infrastructure project,” McCormack said.

“With a focus on commuters, in the past year the government has made a significant commitment to faster rail and we are investing heavily in metropolitan rail with our state government partners, through projects such as the Sydney Metro Greater Western in NSW and Metronet in Perth, Western Australia. Over the year, we also saw the 20-year National Freight and Supply Chain Strategy and National Action Plan agreed by all governments.”

McCormack highlighted Inland Rail’s latest milestone.

“The first section of greenfield track, the North West connection, opened in August with the first trains already running on this track. This new link is scheduled to join up with the newly upgraded Parkes to Narramine line by mid next year.

“Almost 900 people worked on this section and local businesses are benefitting, in concrete, transport, fencing, earth moving, drainage, electrical and other suppliers to the tune of $41.2 million in local contracts, so we’re well on track with Inland Rail.”

In terms of passenger rail, McCormack highlighted government’s Faster Rail Plan which will be overseen by a new National Faster Rail Agency. There are business cases already underway.

“We’ve committed $2 billion to help deliver faster rail between Geelong and Melbourne, and we’re getting on with our $5 billion commitment to deliver the Melbourne Airport Rail Link,” McCormack said.

In response, King called on the government to use its current infrastructure spend to leverage better investments in training and new technology.

“Strong investment gives government as seat at the table in planning our cities and regions,” King said.

As part of this King says the opposition intends to identify and respond to the impacts of these investments on the workforce.

“With rapid change in technology deployed in transport networks, what is often overlooked is the impact of this change on the workforce. The pace of change can often be confronting. Technology can be our ally in achieving greater productivity, and it does not always have to come at a cost to jobs.

“Transitioning jobs in industries like transport doesn’t just happen, it has to be planned.

What’s why last month, Labour leader Anthony Albanese announced Labour in government will establish Jobs and Skills Australia.King described the party’s vision of a workforce forecasting and research under a similar model to Infrastructure Australia.

The body would assess the skills requirements for services where “government is the major funder and where demand is expected to change”, such as transport. It would undertake workforce and skills analysis, and conduct capacity studies. It would be expected to review the adequacy of the training and vocational system.

“This will include the manufacture, operation and maintenance of our public transport network,” said King.