Smoothing the sharp peaks and deep dives of infrastructure delivery was on the minds of Consult Australia members who gathered to hear Victorian Minister for Transport and Infrastructure Danny Pearson in this not-to-be missed industry forum.

The Minister unpacked new infrastructure announcements in the state budget and discussed the Victorian Government’s infrastructure priorities at Consult Australia’s industry forum on Tuesday 4 June 2024.

The event was a great opportunity for members to ask questions of the Minister and better understand the Victorian Government’s priorities and pipeline, says Consult Australia’s Head of Policy and Government Relations, Kristy Eulenstein.

Some big-ticket infrastructure items have had their timelines pushed back, but spending on infrastructure is still above the 10-year average.

Balancing the books

Treasurer Tim Pallas noted in the May Budget that the Victorian Government was “moderating the pace” of some big projects – including the Airport Rail Link – to give Victoria’s workforce time to “build up and skill up” and to allow “supply chains to catch up”.

Rising costs of materials, labour and transportation have pushed up the cost of construction in Victoria by around 22% since 2021, according to the Budget papers.

Meanwhile, the state’s unemployment levels remain at the lowest in nearly 50 years. Infrastructure Australia estimates the shortfall of skills in the Victorian public infrastructure workforce won’t be addressed until August 2027. Victoria currently needs 33,000 workers to deliver on its current projects – and that supply and demand gap pushes up costs.

“In our discussion, Minister Pearson acknowledged the need to smooth out the pipeline of work to move away from the sharp peaks and deep dives we’ve experienced in recent years,” Kristy says. 

“Our members noted that smoothing this pipeline starts at the pre-planning stage, rather than with ‘construction-ready’ projects, so engineers, architects and other designers at the project front-end can better manage their workforces.”

Progress on procurement

The Minister outlined the role of the new Victorian Infrastructure Delivery Authority (VIDA), announced in February, which amalgamates the Major Transport Infrastructure Authority and the Victorian Health Building Authority.

VIDA is overseeing more than 200 projects, including the Metro Tunnel, North East Link and West Gate Tunnel, 110 level crossing removals, new hospital builds and upgrades to ambulance stations, specialist health services and early parenting centres. 

The Minister noted that VIDA would provide the opportunity to apply lessons from transport to health projects, where appropriate.  

Consult Australia’s Uplifting Productivity report drew out lessons from more than 20 projects including the Victorian Level Crossing Removal Project, “a large and complex project that used innovative procurement approaches”.

The Victorian Level Crossing Removal Project broke up work into multiple programs that allowed smaller consultants and contractors to participate. Sharing the work with various market participants provided industry certainty and ensured the government could meet value for money objectives.

Kristy took the opportunity to ask the Minister, noting his position also as Assistant Treasurer: “How can Consult Australia help drive similar procurement reform through the contracts developed by Department of Treasury and Finance?”

“Minister Pearson emphasised the role of Consult Australia in promoting best practice, as sightlines across all agencies and departments are not always clear from within government,” Kristy said. 

“We can take this as a green flag from the Minister that we must continue to push for procurement reform and productivity uplift throughout Victorian Government, including the Department of Treasury and Finance. This will be welcome news to Consult Australia’s Liability & Contracts Roundtable that has highlighted these contracts as some of the most onerous.”

This event, like all Consult Australia’s events, was a powerful and positive opportunity for members to engage with government decision makers, Kristy adds. Non-members are invited to join Consult Australia to gain insider access to government and industry leaders.

“It is clear the Minister is truly passionate about the positive impact that infrastructure projects have on everyday lives of Victorians.”

Caption on image: Victorian Minister for Transport and Infrastructure Danny Pearson, second from left, with Consult Australia’s President Tasos Katopodis, Head of Policy and Government Relations, Kristy Eulenstein and Rick Kreeck, outgoing Chair of Consult Australia’s Victorian Committee.