1.1.1  Even before COVID, many projects weren't going well

Even before the pandemic, there was disquiet about the scale of the public infrastructure being built. In 2019, Infrastructure Australia warned that 'while large-scale projects are becoming common place, they are also stretching the capacity of industry and government'.5

The Prime Minister said: 'We are really starting to hit our head on the ceiling in terms of how much infrastructure work you can get under way at any one time. And that's actually putting some cost pressures into the system.6

Figure 1.2: The average project under construction now is worth more than $1 billion

Average expected cost of projects under construction. $2020 billion

Note: Includes all public road and rail projects costing more than $20 million.

Source: Grattan analysis of Deloitte Access Economics Investment Monitor.

The federal Treasurer noted there were 'capacity constraints ... related to skills, to materials, whether that be bitumen, cement, diesel, our boring equipment, and the like'.7

In March 2020, the Council of Australian Governments decided that it needed to start monitoring infrastructure market conditions and capacity.8

It is not hard to see cause for disquiet. The average size of completed transport projects had been relatively steady over recent years - until 2019. But the average value of projects completed in 2019 was twice that of projects completed over the previous five years (Figure 1.3).

Some high-profile problems give further cause for concern. Sydney's CBD and South East Light Rail, and Melbourne's West Gate Tunnel have been particularly troubled. The following sections tell their stories.

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5. Infrastructure Australia (2019, p. 208)

6. Coorey (2019).

7. Caisley (2019).

8. Council of Australian Governments (2020).