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Road and rail projects feeling the heat of COVID-19

27 March,2020 - The response by governments to the coronavirus pandemic is starting to bite into Australia’s transport infrastructure boom.

More than a third of industry players surveyed this week by Roads Australia (RA) say it’s already affecting their capacity to deliver current projects, and creating uncertainty about future project timing and funding.

“In the short-term, the infrastructure industry needs to be recognised as an ‘essential service’ to allow construction work to continue and maintain the momentum for improved transport,” RA President Michael Bushby said today.

“Maintenance and network operations staff also need to be able to continue doing their jobs to support freight and other essential services that use roads and rail.”

Roads Australia is also calling on governments to:

  • reduce payment terms to contractors to help them maintain their cash flows and pay their employees on time; and

  • provide assurances of their commitment to long-term pipelines so industry can plan and invest in capacity to support an economic recovery and deliver the next wave of infrastructure.

The Roads Australia survey drew responses from 166 senior private and public sector executives involved in the delivery, maintenance and operation of major transport infrastructure across the country.

Asked if the COVID-19 crisis was impacting on their organisations’ capacities to deliver current workloads, 37 per cent said yes and 23 per cent no, with 40 per cent saying it was still too early to tell.

Asked where their organisations were feeling the pinch, 35 per cent pointed to the immediate availability of staff, 10 per cent cited the availability of sub-contractors and seven per cent plant and equipment.

Those who nominated other ‘pinch points’ cited:

  • border and travel restrictions which had stopped the transfer of interstate and overseas staff to key projects
  • the unavailability of clients and key personnel to provide direction and sign-off on approvals
  • the loss of current and future revenue
  • lower productivity associated with working from home

the unavailability of COVID-19 preventative supplies, such as sanitisers, and basic worksite staples such as toilet paper

The survey results indicated that as of Tuesday and Wednesday this week, the infrastructure industry was largely operating at 86 per cent of its capacity of two weeks ago.

Approaching a third of respondents said off-site working arrangements were having a negative impact on the productivity of their employees and colleagues, with only nine per cent citing a positive impact.

Mr Bushby said face-to-face collaboration was traditionally a cornerstone of the delivery process for major transport projects.

“Like a lot of industries and sectors, RA members are adapting and moving away from face-to-face meetings in design offices and on project sites – and like a lot of industries, it will take time to get used to the changes,” he said.

“In the meantime, productivity may suffer in the short to medium term.”

Mr Bushby said RA members were also concerned about the long-term surety of project pipelines – particularly those in NSW and Victoria, underpinned by the Commonwealth’s $100 billion, 10-year transport infrastructure investment program.

“Transport infrastructure projects can’t be readily switched on and off, so it is vital industry has confidence that project pipelines will continue over forecasted periods,” he said.

“We’re encouraged by recent assurances from NSW Treasurer Dominic Perrottet that the NSW Government remains committed to its project pipeline, and we are seeking similar assurances from other states and the Commonwealth.

“Continuing to push on with the planning, design and construction of transport infrastructure projects, as well as ramping up road maintenance, is an excellent approach for sustaining jobs in these difficult economic times,” he said.

Mr Bushby added that RA would be sharing the survey results with governments and seeking responses to some of the practical impediments raised by respondents.