The Commonwealth Government has released the much-anticipated Infrastructure Investment Program Strategic Review in full this morning.
The review was commissioned to assess projects funded under the Infrastructure Investment Program (IIP) and make recommendations on the merits of projects continuing while working towards a sustainable 10-year rolling pipeline that targets appropriately costed, nationally significant infrastructure projects.
RA made a submission to the IIP Strategic Review in July.
An executive summary of the review can be viewed here with key information outlined below.
Key Recommendations – Individual Projects
- 100 projects, which are not yet under construction, proceed.
- 56 projects, which are not yet under construction, proceed, noting the Review has identified risks, to be satisfactorily addressed prior to delivery.
- 36 projects, which are not yet under construction, to complete planning, detailed costings, rescoping and the allocated delivery funding is used to create headroom in the IIP.
- 82 projects which are not yet under construction, are ceased, and the allocated funding is used to create headroom in the IIP, following any payments necessary to fulfil contractual obligations.
A full project changes summary can be viewed here.
Key Recommendations – A Sustainable Pipeline
- Beginning in 2024-25, states and territories, in consultation with local governments, develop and provide the Commonwealth with an annual infrastructure plan.
- Based on these plans the Commonwealth Department of Infrastructure, Transport, Regional Development, Communications and the Arts (DITRDCA) prepare national infrastructure advice for the Australian Government annually.
- That the process of setting proposed project escalation costs to be used in business cases and project funding be approved by the Secretary of DITRDCA.
- The Australian Government fund multi-year rolling programs informed by state and territory plans and targeted to specific outcomes or corridors.
- The Australian Government works with states and territories to review the National Land Transport Network maintenance formula and agree a process to determine the total funding amount to be implemented from 2024-25.
Infrastructure Policy Statement
Earlier this week, the Albanese Government released its Infrastructure Policy Statement to guide infrastructure funding decisions at a Federal level. Aligning with the aims of the review the statement commits the Commonwealth Government to delivering nationally significant infrastructure, defined as having at least two of the below key attributes:
- Commonwealth Government contribution of at least $250 million
- Alignment with priorities as outlined in the Infrastructure Policy Statement
- Situated in or connected to the National Land Transport Network and/or other key freight routes
- Supporting other emerging or broader national priorities – such as housing or critical minerals.
The policy also sets out three strategic themes that will guide Commonwealth investment decisions on nationally significant infrastructure; productivity and resilience, liveability; sustainability.
The Infrastructure Policy Statement can be viewed in full here.
Independent Review of The National Partnership Agreement on Land Transport Infrastructure Projects
Separate from the review of the IIP, the Commonwealth Government also commissioned a review of the National Partnership Agreement (NPA) on Land Transport Infrastructure Projects, to which RA also made a submission.
This Review makes recommendations for how the new Land Transport Federation Funding Agreement should be structured to better support the Australian Government to deliver on its infrastructure investment priorities and objectives.
The recommendations also require a commitment to improving the administrative, procurement and approvals processes that support the new agreement, as well as improved risk and performance management processes to guide project-level funding commitments.
The full review can be viewed here.
RA’s position
RA has previously recommended a nationally coordinated pipeline that matches the capacity of industry to deliver planned projects in our Procurement Reform Report Update. It is pleasing to see the Commonwealth Government working towards a pipeline that meets this recommendation and where possible eases competition between states and aligns capacity more closely with the rolling 10-year pipeline. A transparent and well-managed pipeline was a feature of RA’s submission to both the IIP and NPA reviews.
Both reviews discuss the importance of rethinking risk and cost escalation calculations. This is something RA continues to push for reform on, including supporting engagement with industry at the earliest possible stage, identifying risks early, considering innovative and collaborative contract models and working towards an environment that is increasingly productive and profitable for government and industry.
With infrastructure communication, engagement and collaboration set to increase across jurisdictions through the implementation of the IIP and NPA Review recommendations, RA remains supportive of measures that lead to wider funding benefits including social factors. The benefits of a National Framework for Social Procurement as recommended in RA’s Procurement Reform Report Update should be considered as part of this reform process.
RA is pleased to see a recommendation to significantly increase funding to councils through the Roads to Recovery program, particularly for those in regional councils with small rate bases and large, ongoing road maintenance costs. This is something that was highlighted by RA in our submission to the Commonwealth ‘Inquiry into the implications of severe weather events on the national regional, rural, and remote road network’.
The IIP Review also recommends an increase in funding for the Black Spot Program while providing greater flexibility for funding by widening the scope of projects, in cost, time and nature. This increase in funding is critical in an environment where road tolls remain stubbornly high across the nation and is something RA has highlighted in previous Budget submissions.
Delivering on all these will require a lot more work – we are still at the start – and RA will remain engaged with our members, including the Australian Government and individual jurisdictions, to ensure that the outcomes of these reviews lead to lasting improvements to the delivery of new transport infrastructure as well as the upkeep and maintenance of our road network.
