Infrastructure Australia report reveals shift away from transport projects

Soaring building costs and a shortage of tradies caused $15bn worth of construction delays to Australia’s infrastructure pipeline, new analysis shows.

Soaring building costs and a shortage of tradies caused $15bn worth of construction delays to Australia’s infrastructure pipeline, new analysis shows.

The nation’s peak infrastructure advisory body also found that Australia-wide investment in roads and rail projects fell by $32bn in the past financial year, while spending on buildings and renewable energy projects rose to $71bn and $16bn respectively.

But in contrast to other states, transport will remain the dominant spending focus for Victoria’s $62bn, five-year major public infrastructure pipeline, making up $41.1bn.

This includes $6bn of the $34.5bn Suburban Rail Loop East project until 2027-28.

Transport will remain the dominant spending focus for Victoria’s $62bn, five-year major public infrastructure pipeline.

Adam Copp, chief executive of Infrastructure Australia, said the past 10 years had been a “transport infrastructure boom” but more work would now come from addressing the housing crisis and energy transition.

“The trick will be making sure that we maintain the skill base that we have in Australia … around the delivery of transport infrastructure,” Mr Copp said.

Victoria’s overall pipeline, the second largest in the nation behind NSW, decreased by about $9.5bn in the past year following the completion of some transport projects and not as many new projects coming online.

“Victoria has some really big projects that are under delivery like North East Link, Metro Tunnel,” Mr Copp said.

The Metro Tunnel is one of the big projects under construction in Victoria. Picture: David Geraghty

Nationally, buildings – including health facilities, residential housing and offices – made $20.6bn of the spend on infrastructure over the past year.

Renewables projects and transmission lines came to $0.2bn.

Mr Copp said financial challenges were very real in the wake of Covid and 7 per cent of planned construction work had been hampered by delays.

“Construction materials on average cost around 30 per cent more than they did three years ago and with ongoing skills shortages we simply don’t have the people power we need to get the job done on time – our analysis shows 7 per cent of the (national) pipeline, or $15bn of planned construction work, has been hampered by project delays.”

Turbines at Australia's largest planned wind farm at Rokewood, Victoria. Picture: NewsWire/Nadir Kinani

States with major transport projects that have been or are close to being delivered are now looking at how they can leverage those assets, such as housing around transport hubs, Mr Copp said.

Workers on those transport projects are also set to seek opportunities in the renewable energy sector, with a six-fold increase in construction expected nationwide.

“We will need to look at how we upskill some of that workforce going forward,” Mr Copp said.

“The engineering firms are shifting from transport to renewable energy and energy transition.”

There’s a shortage of 32,000 workers, including engineers, scientists, architects, tradies, and project management professionals. And regional Australia, where the work will be, is expected to face the brunt of the challenge.

Mr Copp urged governments to ensure there was supporting infrastructure such as houses for workers, space at ports for wind turbine blades up to 70m long, and that the roads were able to handle oversized loads.

He said there were also underlying cultural issues that were holding back productivity – which has stagnated for more than three decades – and driving people, including women, away from the construction industry.

“This should be an industry of choice, but the reality on the ground is it’s a harsh working environment – we see burnout, stress, and incredibly poor mental health and wellbeing,” he said.