The major report by the Productivity Commission (PC) on Public Infrastructure was recently released, 900 pages of solid stuff.
The key recommendations are:
- the urgent need to overhaul processes for assessing and developing public infrastructure projects. Numerous examples of poor value for money arising from inadequate project selection (Canberra’s Light Rail got a special mention)
- more spending under status quo will simply increase costs to users, taxpayers
- private sector involvement in infrastructure provision and/or financing delivers efficiency gains only if well designed and well implemented
- evidence of recent significant increases in construction costs – mining construction boom are partly to blame, but no single factor
- the industrial relations environment remains problematic – problems are much greater for some sites, unions and states
- governments should use their procurement policies to drive reform.
Some of these recommendations struck a chord. So I spoke to the PC Assistant Commissioner who worked on the inquiry.
I’d had experience in this field in the 1990s when in Industry Department – we developed a Construction Industry Reform Strategy to get rid of rorts and bad work practices via a Code of Practice for federal construction projects i.e. conform to the Code or lose the ability to tender.
It was a great collaborative effort – we developed it with the Department of Employment, and then Minister David Beddall established a Board (Ern Macdonald, Lend Lease; David Chandler, construction manager Parliament House, Martin Ferguson, then Australian Council of Trade Unions; Graham Duff,
John Holland).
An Authority schmoozed and implemented. Result – cost savings of 20 percent and higher were achieved across various model projects.
M5 widening
Fast forward, and the M5 widening should have been a model project.
To explain, the M5 is the main motorway into Sydney from Melbourne-Canberra-Liverpool-Campbelltown etc.
It is an embarrassment and a huge source of frustration for commuters and businesses.
The widening of the westwards carriageway will be completed soon after two years, and then work on the eastwards side starts in another two years.
In the meantime, there are huge economic and social costs.
A large part of the problem is the lack of night work.
We suspect it’s a combination of workplace relations, inflexibility, and a basic lack of forethought.
If major slabs of work were done at night, time savings of 20 percent are possible.
Given that Minister Truss is talking about $50 billion being spent on infrastructure, much of it on roads, the potential savings pay for a lot of educational support and hospital beds.
But there are no change agents.
The construction function at the federal level has disappeared (remember the Department of Administrative Services?) as has the Construction Reform agenda.
The Commonwealth Treasury and Department of Infrastructure have a passing interest, but don’t get involved in industry productivity.
We therefore raised the issue with NSW Transport and a couple of the big construction groups.
‘We already do a lot of work at night’ was one response.
As a regular user of the M5 at all hours, I know this is a huge exaggeration.
I’m waiting on a written reply, but it’ll be a Bill Lawry straight bat.
Over to the National Roads and Motorists Association, but it would be good to see local councils getting fired up too.
New York City approach to road construction
“Traffic volumes during the day make it difficult to close some roadways without a major impact on the community. [The Department of Transport] tries to do emergency work during the day and routine maintenance at night. Crews can work faster at night, in most cases, night work is completed two to three times faster than the same work done during the day. This results in significant cost savings and increased productivity.” Extract from the New York City Department of Transport’s website
Investment links to the world
We’re currently developing a program to scope regional investment proposals for players in Asia, Europe, North America and South Africa. Meetings with business chambers are being scheduled.
Allied with this is a move to develop alliances with cluster and network groups in Asia, to provide a collaborative framework in which these investments can prosper.
To this end, a group of Cockatoo Network members met in Canberra to identify reciprocal opportunities. In summary:
- China – huge opportunities – low-lactose dairy is one hot spot
- Philippines – mainly back office IT
- Indonesia – Jogjakarta has a strong education sector, plus to tourism, spices, fruit
- Thailand – automotive and parts, metal fabrications, food processing
- Singapore – financial and insurances services, education, petroleum, water treatment
- India – Bangalore is hot spot for IT. Delhi has a strong automotive cluster, Hyderabad in Computer Aided Design/Computer Aided Manufacturing. Medical tourism and telemedicine
- Malaysia – ICT at Cyberjaya, plus alternative fuels, agrifood
- Bangladesh – mainly textiles and apparel – muslim attire is a specific opportunity
- Vietnam – eco-tourism, dairy and other agrifoods.
If your council is interested in building your local economy via international investment, please contact us.
