Federal Budget reaffirms infrastructure package
There were no major transport funding surprises in last night’s Federal Budget as the Government reaffirmed its commitment to its $50 billion infrastructure package.
In his Budget night statement, Minister for Infrastructure and Regional Development, Warren Truss, focussed on the ongoing delivery of the package announced in last year’s Budget.
“The Government is building for the future delivering the biggest infrastructure investment program in Australia's history,” Mr Truss said.
“One year after we announced our record $50 billion investment in world-class infrastructure, there are bulldozers on the ground building major projects across the nation.”
The East West Link remains on the Commonwealth’s horizon, with the Government confirming it will provide $3 billion to the first Victorian Government willing to build the project. It has recorded this commitment as a Contingent Liability in the Federal Budget.
The Government has also announced a Northern Australia Infrastructure Facility - in effect, a concessional loan facility of up to $5 billion aimed at encouraging further private sector investment in infrastructure like ports, railways, pipelines and electricity generation.
Major project funding highlights reaffirmed last night included:
New South Wales
- Western Sydney Infrastructure Plan: $2.9 billion with $209.7 million provided in 2015–16
- Pacific Highway duplication: $5.6 billion with $542.5 million provided in 2015–16
- WestConnex: $1.5 billion plus a concessional loan of up to $2 billion to accelerate the New M5 section with $450.0 million provided in 2015–16
- Northern Sydney Freight Corridor: $691.6 million with $100.9 million provided in 2015–16
- NorthConnex: $405 million with $143.0 million provided in 2015–16
- M1 Productivity Package: $195.8 million with $11.0 million provided in 2015–16
- Bruce Highway: up to $6.7 billion with $500 million provided in 2015–16
- Gateway Motorway North: up to $929.6 million with $50 million provided in 2015–16
- Toowoomba Second Range Crossing: up to $1.285 billion with $316.65 million provided in 2015–16
- Warrego Highway: $508 million with $101.5 million provided in 2015–16
- Cape York Region Package: $208.4 million with $48 million provided in 2015–16
- Moreton Bay Rail Link: $518.4 million with $102 million provided in 2015–16
- Western Highway—Ballarat to Stawell Duplication: $501.3 million with $73.1 million provided in 2015–16
- Tullamarine Freeway Widening (Section 1): $200 million with $19.7 million provided in 2015–16
- Princes Highway West—Winchelsea to Colac Duplication: $185.5 million with $20.7 million provided in 2015–16
- St Albans Road Rail Level Crossing: $151 million with $110.9 million provided in 2015–16
- Princes Highway East—Traralgon to Sale Duplication: $210 million with $20 million provided in 2015–16
- Perth Freight Link: $925 million with $87.9 million provided in 2015–16
- Gateway WA Perth Airport: $675 million with $139.46 million provided in 2015–16
- NorthLink WA—Swan Valley Bypass: $615 million with $66.4 million in 2015–16
- NorthLink WA—Tonkin Highway Grade Separations: $141 million with $42 million provided in 2015–16
- Great Northern Highway (Muchea to Wubin): $307.8 million with $77.1 million provided in 2015–1
- North West Coastal Highway (Minilya to Barradale): $172.7 million with $51.3 million provided in 2015–16
The Commonwealth has provided an additional $499.1 million for road infrastructure to assist the Western Australia as a result of a GST revenue shortfall in 2015–16
- North-South Corridor—Darlington interchange: $496 million with $82 million provided in 2015–16
- North-South Corridor—Torrens Road to River Torrens: $448 million with $80 million in 2015–16
- Anangu Pitjantjatjara Yankunytjatjara (APY) Lands: $85 million with $20 million provided in 2015–16
- Midland Highway: $400 million with $57.1 million provided in 2015–16
- Freight Rail Revitalisation: $ 59.8 million with $16.5 million provided in 2015–16
- Brooker Highway (Elwick-Goodwood to Howard Road): $25.6 million with $8.9 million provided in 2015–16
- Northern Territory Roads Package: $77.0 million with $35.4 million provided in 2015–16
- Regional Roads Productivity Package: $90.0 million with $49.1 million provided in 2015–16
- Tiger Brennan Drive Duplication (Dinah Beach Road to Berrimah Road): $70.0 million with $22.1 million provided in 2015–16
Australian Capital Territory
- Majura Parkway: $111.1 million with $6.9 million provided in 2015–16
Detailed project schedules are available at the Department website.
IRF – RA Conference attracts record industry support
Over 350 road industry leaders from 15 countries came together at last week’s IRF – RA Regional Conference in Sydney to reaffirm the industry’s broad commitment to achieving new benchmarks in global road safety and innovation and best practice in the design, construction and operation of road networks.
Coinciding with UN Global Road Safety Week, the Conference program included more than 90 presentations by industry leaders on themes as diverse as ITS, funding and financing, pavements and new materials, asset management, procurement, sustainability and safety.
The main Conference dinner on Monday night attracted over 500 guests who saw Reg Leach awarded the 2015 John Shaw Medal for his industry leadership in bituminous surfacing.
RA Chief Executive, Ian Webb, said the Conference had well and truly cemented its place as the road industry’s premier networking and knowledge-sharing event in the region.
“I’d like to thank all our 2015 conference and dinner sponsors for their support - WSP Parsons Brinckerhoff, Aurecon, Cardno, GHD, Jacobs, SMEC, OneSteel, Transurban, Pacific Partnerships, Altus Traffic, D’Artagnan Consulting, Golder Associates and Arup – as well as our exhibitors,” he said.
The presentations and photos from this year’s conference will be available on the RA website by the end of this week.
Consortia shortlisted for Perth Freight Link
It’s been announced this week that three proponents have been invited to participate in the Request for Proposals (RFP) phase for WA’s largest ever road infrastructure project, the $1.575 billion Perth Freight Link project.
The Perth Freight Link will create a new world class freight connection between the Roe Highway and the Fremantle Port, reducing transport costs and improving efficiency in heavy vehicle movements.
Proposals are being sought for two sections:
- Section 1 - a 5.2km extension of Roe Highway (Stage 8) from Kwinana Freeway to just west of Coolbellup Avenue; and
- Section 2 - upgrades to Stock Road, Leach Highway, High Street and Stirling Highway, spanning 8.2km.
The three consortia are:
- BGC Contracting, Laing O’Rourke, Arup and Jacobs
- Clough, Brierty, WSP/Parsons Brinckerhoff and Hyder
- Leighton Contractors, Georgiou, GHD, AECOM, BG&E and WA Limestone
Western Australian Transport Minister, Dean Nalder, said this week the consortia were chosen after the evaluation of Expressions of Interest applications submitted in March 2015.
“The consortia will now participate in the Request for Proposal stage of the procurement process and prepare detailed proposals for design and construction,” Mr Nalder said.
“Consultation and design work over the past six years has finalised the route for Section 1. However, while the most obvious route for Section 2 had undergone robust planning, it will continue to be refined.
“In this next phase we ask the proponents to also look at innovative solutions, including the potential for a tunnelling option. To help plan and cost this option some early geotechnical work has been carried out. The feasibility of other options will be considered against environmental, economic and social impacts.”
Alliance contracts are expected to be awarded in September 2015 for Section 1 and in December 2015 for Section 2.
The Federal Government has committed $925 million to the project and the State Government is contributing $650 million.
Victorian Budget targets level crossings in $2.4 billion package
Last week’s Victorian State Budget has committed up to $2.4 billion to kick-start the removal of 50 of Victoria’s most dangerous and congested level crossings, as well as $1.5 billion for planning, design and significant early works on the Melbourne Metro Rail Project.
The Budget also includes $600 million for local roads, including $150 million to undertake the next stage of the M80 Upgrade to widen the road and install traffic management equipment from EJ Whitten Bridge to Sunshine Avenue.The Government will seek a further $150 million in Commonwealth funding to complete a further section of the M80 between the EJ Whitten Bridge and the Calder Freeway.
The Government says the level crossing funding commitment will ensure it delivers on its promise to fund the removal of at least 20 level crossings in its first term.
The first 17 crossings to go under the Government’s $5-6 billion Level Crossing Removal Project have now been identified.
Last month the Government announced that all nine level crossings between Dandenong and Caulfield would be removed as part of its multi-billion dollar plan to transform the Cranbourne-Pakenham line with high-capacity trains, new stations and better signalling.
On top of these nine, the four level crossings already out to market at Main Road in St Albans, North Road in Ormond, Burke Road in Glen Iris, and Blackburn Road in Blackburn will be removed within the next three years.
Premier Andrews says the Level Crossing Removal Authority has already taken market soundings for four additional level crossing removals located close to the four already out to market.
- Furlong Road, near Main Road in St Albans
- Heatherdale Road near Blackburn Road in Blackburn
- Centre Road, Bentleigh
- McKinnon Road, McKinnon
The Government says it will combine these level crossings in packages of work with those already out to market to drive down costs, reduce disruption to rail and road users by combining line closures, and accelerate the delivery of the Level Crossing Removal Project.
The first package of work is expected to be awarded later this month, with all 17 contracted this year. All 17 level crossings will be removed by 2018, with extra sites to be identified in the coming months.
Other road funding Budget commitments announced last week include:
- $110 million to upgrade the Chandler Highway bridge over the Yarra River
- $40 million to deliver works this year to widen Whitehall Street and strengthen and widen Shepherd Bridge in Footscray
- $76 million for 23 projects on key freight corridors
- $20.5 million to commence the duplication of two congested sections of Thompsons Road in Cranbourne
- $90 million for a package of projects to address congestion and optimise the performance of the road network, including installation and trialling of smart signalling at key intersections and resurfacing of key regional roads
For more State Budget information, go to the Budget webite.
Victorian Government and Transurban to progress Western Distributor proposal
Transurban has welcomed a Victorian Government announcement to progress its market-led proposal to deliver a new Melbourne motorway that provides an alternative route to the West Gate Bridge and moves trucks off local roads in the city’s inner west.
While last month’s announcement does not commit the parties to a project, the Victorian Government will work with Transurban to develop a detailed proposal, investment case and procurement plan to significantly improve travel times and reliability as well as providing a new, direct freight route to the Port of Melbourne.
The proposal, which would deliver 3500 construction jobs and 4500 indirect jobs, incorporates the delivery of three key sections:
- Western Distributor – a proposed tunnel and elevated motorway that connects the West Gate Freeway with the Port of Melbourne, CityLink and the CBD, providing an alternate river crossing and easing pressure on the West Gate Bridge. This is estimated to increase the river crossing capacity by 60 per cent.
- West Gate Freeway widening – two additional lanes from the M80 Ring Road to the West Gate Bridge, boosting capacity of the corridor by approximately 50 per cent.
- Webb Dock access improvements – upgrading Cook Street and the West Gate Freeway-to- Bolte Bridge ramp to complement works already underway and improve safety and access from Webb Dock. The proposal includes the roll out of a state-of-the-art freeway management system to manage the flow and entry of vehicles on the motorway, such as overhead lane use signs, electronic on road message boards, ramp metering, CCTV and automatic incident detection systems. This would complement existing managed motorways along the M1 corridor in the south east and the M80 corridor in the west.
Transurban will now work with government through Stage 3 of the process, which is expected to take up to six months, whilst also commencing discussions with the local community and stakeholders.
“Our proposal minimises impacts on local communities, removes the need to acquire any homes and supports motorists and trucks looking for alternative connections to the city,” said Transurban CEO, Scott Charlton.
“It is a project that will evolve as we discuss potential transport solutions with the local community and work continues with the State Government.”
Consortium named for Woolgoolga to Ballina
The Pacific Complete consortium, comprising Laing O’Rourke and Parsons Brinckerhoff, has been identified as the preferred Delivery Partner for the NSW Government’s Woolgoolga to Ballina Pacific Highway upgrade.
The $4.3 billion project is Australia’s largest regional infrastructure project. NSW Roads and Maritime Services will deliver the project using a Delivery Partner model similar to the approach used for the construction of the London Olympic infrastructure.
The project involves the duplication of approximately 155 kilometres of road to a four-lane divided road on the Pacific Highway. The upgrade will begin six kilometres north of Woolgoolga and end approximately six kilometres south of Ballina.
Work is due to be completed by 2020.
Engineering construction market set to collapse, says new report
The current decline in Australian engineering construction is set to become a sharp collapse over the next few years, negatively impacting industry employment and the broader economy, according to a new report from BIS Shrapnel.
Released this month, Engineering Construction in Australia 2014/15 – 2028/29 predicts total work done in the sector will fall by a steeper than expected 13 per cent in 2014/15 and another 15 per cent in 2015/16, with further substantial declines in the subsequent two years.
Altogether, activity is expected to fall 40 per cent from its 2012/13 peak of $130.3 billion, to $79.6 billion by 2017/18.
The report says the sharp fall in engineering construction will more than offset rising residential building activity, in turn driving down total construction industry employment and output until 2017/18 and keeping Australian economic growth constrained below three per cent.
Mining and heavy industry construction is the key segment of the market feeling the heat from the resources investment bust, with activity projected to fall 60 per cent over the four years to 2017/18, following a peak of $60.6 billion in work done in 2013/14.
According to the report, the engineering construction market is also being negatively affected by sharp declines in publicly funded infrastructure works. Since 2011/12, publicly funded engineering construction has fallen 15 per cent in real terms. BIS Shrapnel expects publicly funded work to fall another 13 per cent through 2014/15 alone before stabilising in 2015/16.
“Public investment has been falling for several years now as local, state and the Federal Government tackle the problems of weaker growth in revenues, higher budget deficits and higher levels of debt,” said Adrian Hart, Senior Manager of BIS Shrapnel’s Infrastructure and Mining Unit.
“Major infrastructure projects have been completed without being replaced by new work – resulting in a de facto tightening in infrastructure investment.”
According to Hart, the sharp contraction in resources investment presents a policy dilemma for the Federal and State Governments, which provide the bulk of infrastructure funding.
“Although publicly funded infrastructure works still remain high compared to the experience of the 1980s and 1990s, the reality is that those decades represented a period of significant underinvestment in infrastructure which the 2000s boom went some way to rectify,” said Hart.
“But there is still a long way to go. Considering the severity of the downturn in resources-related work, it makes sense for governments to help smooth out the cycle and offer a sustainable and secure pipeline of infrastructure projects.
“The good news is that the current economic environment is actually highly supportive towards public infrastructure investment. These factors include historically low costs of capital, lower rates of construction cost escalation and tighter construction margins, and a strong market appetite for existing infrastructure assets."
Overall, the BIS Shrapnel report indicates that the biggest winners in the engineering construction market through the next five years will be those who tap into the coming cycle of non-resources infrastructure activity, with roads, railways, telecommunications and water offering the strongest growth in work.
While resources-related engineering construction will continue to fall through to 2017/18, BIS Shrapnel predicts that non-resources infrastructure work will start rising again from 2015/16, with particularly strong growth apparent towards the end of the decade.
However, Hart cautions that the infrastructure upswing will only be gradual at first, and will not go anywhere near offsetting the impact of falling resources investment.
“The fact is that progress on public infrastructure investment is highly unbalanced across Australia,” said Hart.
“While NSW is leading the next infrastructure investment cycle given the large number of funded projects now getting underway, it will take longer for other states to catch up.
“Recent election results in Victoria and Queensland will delay the upswing in those states as new projects, plans and governance processes are developed, while WA and SA will suffer from weaker growth in revenues as the resources boom continues to unwind.”
For more information, go to the BIS Shrapnel website.
NT Budget commits $587.1 million to transport infrastructure
Last month’s Northern Territory Budget has committed a record investment of $587.1 million to transport infrastructure. Minister for Transport, Peter Chandler, says the record investment aims at connecting people and creating jobs in the Territory.
Budget highlights for roads infrastructure, fully funded by the Northern Territory Government include:
- $11.5 million for the duplication of Vanderlin Drive
- $28.5 million for Litchfield Park Road
- $2.5 million to seal Lajamanu Road
- $5 million for Wollogorang Road – Robinson and Calvert crossings
- $25 million to complete the seal for the Mereenie Inner Loop – Larapinta Drive
- $5 million to upgrade transport access at Gapuwiyak, Galiwinku, Maningrida and Ramingining.
An estimated additional 219 kilometres of new sealed roads will be constructed as a result of the 2015 budget.