The Anzac Bridge in Sydney, Australia. © 123RF
The Anzac Bridge in Sydney, Australia. © 123RF

Australia's infrastructure plan will save each household AUS$3,000

23 February 2016

Procurement will play a major role in Australia’s first 15-year infrastructure plan, which claims its recommendations will make the average Australian household almost $3,000 a year better off by 2040.

Among the 78 reforms suggested in Infrastructure Australia’s 204-page plan are increasing well-designed high density development, increasing public transport investment, growing smaller cities, moving to a user-paid road system and privatising energy and water infrastructure.

Two projects, Melbourne’s CityLink Tullamarine widening, which will add new lanes on the road connecting Melbourne to Melbourne Airport, and the Perth Freight Link were given “high priority project” status in the report.

This means they have undergone a full business case assessment by Infrastructure Australia.

The report calls for whole-of-life costs to be accounted for in procurement when new infrastructure projects are commissioned, including future maintenance costs as well as initial capital expenditure.

Procurement estimates should be motivated by consideration of the appropriate costs of a project, rather than the potential sums available through financing.

The report also called for more public procurement by competitive tendering, saying this practice has led to lower subsidies and 20% cost savings in Sweden.

Different government agencies and service providers should aim to pool resources for infrastructure projects, establishing joint purchasing centres and resource-sharing procurement frameworks to deliver essential remote infrastructure.

The report also advises projects to take account of the government’s Indigenous Procurement Policy.

This policy aims to ensure that 3% of all new domestic federal government contracts will be awarded to indigenous businesses by 2020.

“This will contribute to growing indigenous businesses and increasing employment through remote infrastructure procurements,” the report said.

It also recommended that:

  • Current procurement practices should be streamlined and coordinated, reducing costs and delivery time.
  • Post-completion reviews should be conducted more consistently on major infrastructure projects. These are not currently routine, making it difficult to identify successes and failures.
  • Develop the Trans-Tasman procurement market agreement, which would treat Australia and New Zealand as a single market for government procurement and enhance purchasing cooperation between the two governments.
  • The use of Building Information Modelling software (BIM) should be mandatory in large-scale complex infrastructure projects. Common standards and protocols for using BIM should be developed.

Another eight “high priority initiatives” were identified, which the report said would address “a nationally significant need”, but which require further assessment.

These include the Sydney Metro, Cross River Rail, a proposed new underground rail line and bus way in Brisbane and the proposed new West Sydney Airport.

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