WA is currently experiencing a significant increase in infrastructure development activity. The level of private sector investment is also high and driven by the resources sector and construction of new housing. This level of activity has benefits but is also putting pressure on market delivery capacity.
The planning, delivery and operation of government infrastructure is a complex, high-stakes activity impacted by a number of external factors and involving both government and the private sector. There are a range of existing policies and frameworks in place to guide constructive outcomes, in terms of review, market capacity, procurement and funding.
Sector challenges and opportunities
Public sector infrastructure skills vary across the state agencies and government trading enterprises (GTEs).
While most state agencies and GTEs rely on private sector capacity for delivery, complementary public sector skills are critical in planning, procurement, project management and contract management.
Public sector procurement occurs in the wider construction market where it competes for resources against much larger value private sector investment, which can be susceptible to market fluctuations. In procuring works, the public sector seeks to balance trade-offs in delivering projects on time and on budget against the need to meet diverse social policy and market sustainability outcomes.
As part of an overall governance framework, project assurance is an independent process that assesses health and viability throughout the life of a project or program. WA’s current assurance practices are less developed than those of many other jurisdictions.
A lack of capacity and competition exists in the local contracting market for major projects, which could lead to an increase and concentration of risk.
Accurately forecasting how long it will take to deliver a project can sometimes be challenging. The rollover of underspent project cash‑flow allocations from one financial year to the next is a significant issue for overall State Budget management.
Across some state agencies and GTEs, there is strong existing project delivery capability, supported by forums for information sharing and centralised expertise. Greater consistency in the delivery of major projects should be adopted by agencies, with support from reforms already underway at the Department of Finance, to improve efficiency, harmonisation and to enable centralised capture and analysis of performance data.
Longer-term partnerships between project delivery state agencies, GTEs and industry provide incentives for contractors to build assets that perform well and are cost-effective to operate and maintain.
Given limited public funds, the WA Government should consistently review alternative infrastructure funding options to ensure it can continue to respond to growing community needs. Some project proposals may have associated revenue opportunities or specific sources of potential funding that could be explored to supplement traditional tax-based sources.
The Bunbury Outer Ring Road project involves building a 27 km free-flowing highway bypass around Bunbury, linking Forrest Highway to Bussell Highway. The total project budget is $852 million and construction is expected to be completed by early 2024. Although still in the early stages of delivery, this major infrastructure project demonstrates the application of several principles discussed in the Strategy. This includes the use of a collaborative procurement model, industry sustainability, Aboriginal participation and the use of recycled materials.
For further information, refer to: https://www.mainroads.wa.gov.au/projects-initiatives/all-projects/regional/bunbury-outer-ring-road/