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.”

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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National Infrastructure Summit speakers and agenda announced

As Australia looks to invest in infrastructure as a way to build the country’s economy out of the COVID-19 crisis, the National Infrastructure Summit has arrayed some of the most significant leaders in this space to discuss the opportunities ahead.

Opening the virtual conference on day one, October 14, will be NSW Premier Gladys Berejiklian, who is looking at an expanding rail infrastructure pipeline in the state, with new Sydney Metro lines recently funded and moving ahead in the contract process.

For a federal view, day two will be opened by Deputy Prime Minister, Minister for Infrastructure, Transport and Regional Development Michael McCormack. With the conference taking place days after the delivery of what the federal budget, which is widely expecte to include more infrastructure spending, McCormack will highlight these commitments as well as other projects such as Inland Rail that are always underway.

The program also includes discussions between Romilly Madew, CEO of Infrastructure Australia, Marion Terrill, Transport and Cities Program Director, Grattan Institute, and Cathal O’Rouke, who will pick over what impact COVID-19 has had on the infrastructure sector.

With logistics impacted by new trends during COVID and the acceleration of others, Dean Dalla Valle, CEO of Pacific National, and Maurice James, managing director of Qube will be joined by Marika Calfas, CEO of NSW Ports and Brendan Bourke, CEO of the Port of Melbourne to analyses these changes.

Alan Tudge Minister for Cities, Urban Infrastructure and Population and NSW Minister for Water, Property and Housing Melinda Pavey will give ministerial addresses, followed by a Q&A.

Other panels include a focus on infrastructure funding and post-pandemic transport.

This year, the conference will be delivered virtually via online events platform Brella. The platform will provide an opportunity for networking and viewing speaker and sponsor information.

For more information, click here: https://www.nationalpolicyseries.com.au/afr-national-infrastructure-summit/.