Finance Finance News Construction sector urges infrastructure reforms

Construction sector urges infrastructure reforms

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Roads, rail, bridges, tunnels – developing infrastructure is a core responsibility for governments.

It is also the source of much frustration, with cost blow-outs and missed deadlines the norm.

The body representing engineers, architects and consultants, Professionals Australia, says mismanagement of public infrastructure projects costs $6-7 billion a year.

Its CEO Chris Walton says governments have outsourced so much infrastructure work that they now do not employ enough people to properly procure projects and monitor their progress.

“It’s like renovating your own house, not being clear what you want, changing your mind, re-working, not managing it properly and giving the builder a blank cheque,” he argued.

“It’s just simply penny wise but pound stupid for government – and that’s federal, state and local government – to cut the people who are actually critical to managing the projects and saving that money.

Senior Labor MP Anthony Albanese has seen it first hand.

“When I became the infrastructure minister in 2007 I asked how many planners there were. There were none,” he said.

He says he took steps to reverse the trend, but admits he came under pressure to keep outsourcing.

“From time to time, there were suggestions from the Department of Finance or from other sections of the bureaucracy that we could make some savings by getting rid of some expertise,” Mr Albanese added.

He warns that is a mistake – one he fears some state governments are still making.

Productivity Commission inquiry

The concerns have been raised in submissions to the Productivity Commission’s inquiry into public infrastructure, ordered by the Federal Government.

The Assistant Minister for Infrastructure and Development Jamie Briggs says the Abbott Government will look closely at that inquiry’s findings.

“If the Productivity Commission find ways or makes recommendations which can alleviate those issues then we’ll certainly look at them,” he said.

“We’re not having the Productivity Commission’s inquiry to have it sit on the Commonwealth bookshelf.”

The Civil Contractors Federation says if the Government wants to reduce the cost of infrastructure, the dominance of a few major construction firms needs to be addressed.

Its CEO Robert Row says small and medium sized contractors need a look in.

“Unbundling, as we call it, of contracts and that is breaking them down into smaller sized packages, allows for greater industry participation and it develops the industry in Australia,” he argued.

Chris Walton from Professionals Australia says a new approach is needed for scoping, managing and maintaining infrastructure.

“Government is becoming a one-trick pony in how it rolls out infrastructure. What it needs to do is to have its own expertise so it doesn’t have the wool pulled over its eyes,” he added.

With Tony Abbott declaring he wants to be known as the infrastructure prime minister, Jamie Briggs says there will be big changes.

“We need to get more for less and more quickly and that’s our aim,” he concluded.