May 30, 2022
As the dust settles from another federal election, the nation waits in anticipation as the Australian Labor Party (ALP) places its feet square within the stirrups, ready to take the reins of this Great Southern Land. When the writs are returned, and the election is officially over, we might ask: what will this mean for infrastructure projects in Australia? Will it be business as usual, or could we expect to see a different landscape, both figuratively and literally?
This three-part series will explore:
- an overview of government investment and insights into some of Australia’s most significant infrastructure projects and programs;
- the implications for Australian infrastructure under an incoming ALP government; and
- delivery risks across the national infrastructure pipeline.
Infrastructure is critical for Australia’s economic growth and prosperity. Road, railway, telecommunication, energy, and tunnel projects (to name a few) are integral to meeting the demands of an ever-growing population. Quite simply, infrastructure keeps things moving.
With a slew of projects currently underway, or in the pipeline, Australia’s investment in infrastructure continues to rise as the nation charges ahead with its economic recovery from the COVID-19 pandemic. The Australian Government has committed to spending $120 billion in transport infrastructure, Australia-wide, under its rolling 10-year infrastructure investment program (commencing in 2022-23)
Current Investment
Some of the infrastructure projects and programs, either underway, or in the pipeline, include:
- Suburban Rail Loop (VIC) – $34.5 – $50 billion;
- North East Link (VIC) – $16 billion;
- Melbourne to Brisbane Inland Rail (CTH) – $14.5 billion; and
- Bruce Highway Upgrade Program (QLD) – $13 billion.
Suburban Rail Loop
Heralded as a ‘once-in-a-generation’ opportunity, the single biggest infrastructure investment in Victoria’s history, the Suburban Rail Loop project (SRL) is a planned 90-kilometer rail ring line, designed to link every metropolitan rail line in Melbourne. From the Frankston line in the east to the Werribee Line in the west, the SRL promises to transform the way people connect to employment, education, health care, and each other in Melbourne. Preliminary costing estimates place the value of the project between $34.5 billion and $50 billion. The Victorian government has committed $2.7 billion towards planning and development and will commit a further $9.3 billion towards the major works on the project. The project is expected to increase connectivity in Melbourne, reduce pressure on Melbourne roads and transport networks, provide robust support to population growth, and directly contribute up to approximately $59 billion in economic, social, and environmental benefits to Victoria. Laing O’Rourke was awarded the Initial Works and Early Works package (one of seven works packages) in November 2021, with the project targeted to commence this year. The first trains are expected to run in 2035.
North East Link
As Victoria’s largest ever road project, and the biggest ever investment in Melbourne’s north east, the circa $16 billion North East Link project will deliver a 26-kilometre motorway, connecting the Metropolitan Ring Road (M80) and the Eastern Freeway/EastLink (M3). Featuring twin, three-lane tunnels (stretching approximately 6.5 kilometres), new and upgraded green land bridges, and Victoria’s first high-speed, dedicated busway, the project is expected to improve traffic flow and cross-city orbital connectivity and capacity constraints (estimated to reduce travel times by up to 35 minutes), efficiently carry up to 135,000 vehicles per day, and remove 15,000 trucks off local Victorian roads. After the commencement of early works in 2020, the North East Link PPP Primary Package, for the design and construct of tunnel works and related activities (worth $11.1 billion), was awarded to the Spark Consortium. Tunnel works are due to commence this year while the remaining secondary works packages will be put to market. Project completion is expected in 2028.
Melbourne to Brisbane Inland Rail
The Australian Government has committed up to $14.5 billion in equity investment in Australian Rail Track Corporation (ARTC) for the delivery of the Melbourne to Brisbane Inland Rail (Inland Rail) – a 1,700-kilometre freight rail line between Melbourne and Brisbane. Passing through regional Victoria, News South Wales, and Queensland, the Inland Rail project is expected to provide efficient transportation of goods between the two cities in under 24 hours, contribute more than $18 billion to Australia’s Gross Domestic Product (within the first 50 years of operation), and significantly reduce freight costs. Comprised of thirteen projects and featuring a ‘who’s who’ of contractors across the whole program, construction commenced in 2018. The first project, delivered in 2020, provided an upgrade to 98.3 kilometres of rail track between Parkes to Narromine, New South Wales. Project completion is expected in 2025.
Bruce Highway Upgrade Program
Billed as the Queensland’s largest ever road infrastructure program, the 15-year program (which commenced in 2013) is jointly funded by the Federal and Queensland governments. Spanning 1,677 kilometres between Brisbane, Central Queensland, and Cairns, the Bruce Highway is a critical component of Queensland’s infrastructure. Serving as a part of the state government’s primary north to south freight and commuter corridor, the Bruce Highway Upgrade Program, consisting of approximately thirty-eight projects, will provide increased freight movements and efficiency, support regional economic growth, connect coastal communities, and boost tourism. Project completion is expected in 2028.
Common Considerations for Infrastructure Projects
The complexities and challenges of delivering successful infrastructure projects (and avoiding crippling delays and cost overruns) often continue well into the project timeline. Alongside the inherent complexities of bidding, planning, programming, procurement, mobilisation, and construction of a project, Principals and Contractors alike will often face legal requirements, worthy of careful consideration. Project participants may require unique solutions to legal issues that arise throughout a project’s life cycle, including, inter alia:
- tender and contractual negotiations;
- contractual allocation of risk and mitigation;
- project approvals;
- legislative advice;
- claims management and support (including Security of Payment legislation); and
- dispute resolution (including executive negotiation, arbitration, or litigation).
Lamont Project & Construction Lawyers
We have the industry knowledge and experience to assist both Principals and Contractors in all major infrastructure projects. If you would like to discuss any of the matters raised in the above article or the forthcoming series as it relates to your specific circumstances, please contact Lamont Project & Construction Lawyers.
The content of this article is for information purposes only; it does not discuss every important topic or matter of law, and it is not to be relied upon as legal advice. Specialist advice should be sought regarding your specific circumstances.
Contact: Peter Lamont or Kristopher London
Email: [email protected] or [email protected]
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